In a little less than a month, Georgians will participate in a historic election for our state (in fact, some are already participating via our early voting system). The word “historic” applies to this election because we have an unusual number of major races for state office on the ballot: U.S. Senate, Governor, Lt. Governor, 13 congressional seats, Secretary of State, Attorney General, School Superintendent, Insurance Commissioner and numerous others. Everyone always says that the next election will shape the future for years to come, but the difference is that this year it isn’t hyperbole — this really is a once in a decade opportunity to shape our state’s political future.
For the real estate world, the words change and opportunity are largely interchangeable. Market movement creates earning potential, and upward movement is what most firms and investors are looking to see. The question is, how does the political world influence market movement?
In an immediate sense, the Nov. 2 ballot will determine the fate of a fairly large volume of building systems work, depending on whether or not Amendment Four passes. This Constitutional Amendment would enable energy performance contracts in Georgia, and — in essence — would unlock a large volume of work in construction, engineering, controls and other facilities fields, as well as providing a substantial amount of legal and lending work. Initial estimates of year one job creation run well into the thousands if the Amendment passes.
Over the long term, future development patterns in metro Atlanta will be substantially shaped by our next set of leaders. Water and transportation remain the core public policy challenges for the region, particularly as compared our peer states in the U.S.
From a transportation standpoint, the current funding and service structure for mass transit in the metro region is clearly untenable. The patchwork quilt of transit agencies covering the region needs to be joined together into an adequately funded, regional transit agency that provides commute alternatives to residents. Additionally, we must find a long term funding stream to replace dwindling gas tax revenues so that we can expand the metro area’s network of roads and bridges. The way these problems are solved will shape whether we continue to grow with higher density, transit oriented developments, less-dense suburban communities, or some other alternative.
In the commercial and industrial spaces, our ability to provide adequate water supplies — and affordable energy — will control whether we make the shortlist on the business expansions and consolidations that drive large real estate deals. While there has been a great deal of discussion about the litigation with Florida and Alabama over access to Lake Lanier’s water, the hard reality is that even if we win that lawsuit, we will still need additional water supply capacity. Consequently, ensuring that we are able to provide continued access to water will remain a core challenge for policymakers over the next decade.
Finally, demand for real estate of all types will be shaped by how effectively our leadership capitalizes on renewed economic growth. Seasoned real estate veterans know that fortunes are most likely to be made in the very early days of an economic resurgence, and the same is true of the economic success of states. If our leaders keep the tax and regulatory burdens low, while still finding creative ways to invest in a trained workforce, intra-city freight networks, and improved port/airport facilities, Georgia will be ideally positioned to capitalize from an economic recovery. Conversely, if we fail to do these things, those benefits will fall to wiser and stronger competitors.
In the short term, smart public-private partnerships are the only real option government will have for major infrastructure investments, since it cannot deleverage its own balance sheet by raising taxes without incurring economic harm. If our leaders have the skill to negotiate mutually beneficial partnerships — and handle the criticism that often comes with such negotiations — then we will have a chance to invest in new schools, reservoirs, roads, bridges, rail and air facilities during the downturn.
Heading into the election, the real estate community certainly has reason to hope that good things will be in store. If nothing else, the economic downturn has focused attention away from divisive issues, and toward the core values virtually every American shares — the chance to earn a good living, save for the future, and give back to our communities. Political candidates are clearly seeing this, and we have every reason to hope that our newly elected leaders — as well as those we re-elect — will move forward in a united and purposeful direction at the state level.