It wouldn't be December without the requisite “look back” at the past year. And what a year it's been. I can almost hear the conversations decades from now, comparing the issues and challenges to come with this year's crises: “Remember 2008? This is so much [insert your own adjective] than that time.”
Personally, I believe that 2008 will go down as a year of firsts. The United States elected its first black president. The federal government unveiled its largest bail-out package in the history of the modern economy. U.S. retail sales dropped to the lowest levels since the Commerce Department began tracking the figure.
In the multifamily industry, too, the firsts have been piling up. Consider some of the news coming out of the REITs' quarterly reports this year. In the fall, Ric Campo, chairman and CEO of Houston-based Camden Property Trust, announced the first layoffs in the company's history—79 employees that led to a $4 million annual reduction in salary expense. At Equity Residential, deal flow was so clogged that the Chicago-based REIT experienced the first quarter where it did not buy a single asset.
And, for the first time, it seems to me people around the country are being forcefully vocal about what is going on. A few weeks ago, I attended the Enterprise Community Conference held this year in Baltimore. Craig Nickerson, director of the National Community Stabilization Trust, a national nonprofit that connects investors with local organizations working to stem the rise of vacant and abandoned properties, voiced the collective sentiment of the more than 1,000 attendees present. “I'm really angry,” he said. “We've been working for years to gradually improve our neighborhoods, and in a period of months, all of our progress was reversed. I'm mad as hell.”
Indeed, with foreclosures rampant across the country, credit largely unavailable, and many cities and governments worriedly wringing their hands, there has been a lot of discussion about where to place blame and who might be responsible for the recovery at a local level. So what did Enterprise do in response to this environment? They decided to focus on just one key question: Where do we go from here?
For instance, during one session, representatives from housing authorities across the nation went into great detail about the extent of their economic stabilization plans. In California, Los Angeles Housing Department general manager Mercedes Marquez discussed an 18-month foreclosure mapping project that helped the city understand and refine its massive community investment undertaking, which includes the launch of a nonprofit holding company that will buy, redevelop, and eventually sell foreclosed and vacant single-family and multifamily properties.
Across the country, in New York, city officials are launching a progressive “mission-driven” brokers program in 2009 that will help improve stability in neighborhoods by incentivizing brokers to facilitate sales so that units are owner-occupied. The goal is to stem the tide of investor-owned properties that are sitting vacant in several of the boroughs neighboring Manhattan. “This crisis is evolving, and we need to evolve our programs accordingly,” said Shaun Donovan, commissioner of New York's Department of Housing Preservation and Development.
Too true. The market—and the world—seems to be evolving daily. And when all of that change happens, the dust settles, and we turn the corner into the new year, my hope is that we can look back and think of 2008 as the worst year of this decade. And 2009? Let's hope that's the first year of the recovery.
Shabnam Mogharabi, Editor