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Industry Update by Matt Cole

by Matt Cole, President & CEO

As the weather breaks this season, we find ourselves in a very similar cycle to previous years. March, April and May tend to be our busiest months, followed by June, depending on how much spillover there is. We have had more than our fair share of rain this spring which helped to push some of that work out into June.

This year we found ourselves with a few less staff members than we would prefer to have for the “season crunch.” I attribute this to it being a very busy market in our industry and to the very tight employment situation on Cape Cod. Skilled workers are working, and I believe unemployment in the building trades is as close to zero percent as we’ve seen in many years. Thankfully, at our size, we are able to adapt to less staff better than most. We ask for your patience and we seek to communicate scheduling changes to manage expectations so we can avoid any surprises.

When you zoom out of the bubble of life and work on the Cape, we see greater uncertainty in a rather unpredictable political climate, both at the state level and national levels. Budgets and budget priorities are changing. Interest rates have started to rise after many years of stagnation. Large companies have taken unusual steps. IBM, as one example, is eliminating a remote-work policy for many of its employees after 20 consecutive quarters of falling revenues.

As we saw during the “Great Recession,” Cape Cod is, and always will be, a heavily sought-after destination for second-home owners. The Cape is a built-out environment with very little empty land. The National Park has preserved and kept a significant amount of (continued from cover…)  land  undeveloped or underdeveloped. Supply will always be tight. No matter which direction the global or national economy turns, we expect to stay busy as a leader in our local market. We will continue to recruit the most talented individuals in our industry to provide the very best service to our clients. To do this we need a larger available labor pool and we need more affordable housing. For many that means year-round rental housing.

One way to introduce more housing is to consider where pockets of density might be appropriate. We must evolve our zoning codes, town-by-town to make this possible for land owners and developers. I applaud the Town of Orleans for its recent zoning change, which will allow for a greater number of apartments to be built along the Route 6A corridor.  And yet, this zoning change does not guarantee that a single unit will be built.

Barnstable County has some unique challenges. It is one of six counties in the US with at least 200,000 residents and at least 20 percent of its housing units seasonal. In comparison to the five other counties, Barnstable has the highest median resident age (51.7) and the greatest density of seasonal units (149 per square mile). (More info can be found here: capecodcommission.org/index.php?id=553&maincatid=536) The seasonal nature of the Cape attracts many to purchase homes for use only seasonally or to rent their homes seasonally in summer months. This all leads to too few units for year-round residents. A recent study commissioned by the Cape Cod Commission indicates that we need to add 4,000 new housing units over the next 10 years on the lower and outer Cape. Putting this in a different context – in Eastham in the 1980s, we used to see, on average, more than 130 new house permits each year; in 2014, 22 new house permits were issued. In Eastham, 128 of 423 renters pay more than 30 percent of their gross income on rent, a common threshold used for affordability. School enrollment at Eastham Elementary has dropped from 355 students in 1999 to 177 students in 2015. Greater housing production will not overrun our schools – at least not overnight.

This challenge is not new and it is not insurmountable. As I said recently at a business round table, we need many arrows in our quiver when we attack this problem. Some of these include smarter zoning that allows for areas of greater density; initiatives that serve those that don’t qualify for Affordable housing subsidies but can’t afford median cost housing; accessory dwelling units (ADUs); initiatives that support and encourage first-time homebuyers; private-public partnerships; and many other initiatives.

I love the concept of 2 ½-story development in town centers – retail on the ground level, office or residential on the second floor, and residential apartments on top. I lived in a similar building in South Norwalk for a period of time as I transitioned out of NYC back to Cape Cod. The new zoning in Orleans allows for this concept downtown. The necessary pieces are starting to fall into place. To be successful, we must embrace private developers and partner with them, not chase them out of town. A key component is rental units, and they must be year-round rentals if we are to solve the largest part of this challenge and make this special place a sustainable home for those of us that service the seasonal economy.

 

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