Metropolitan Charlotte - the Good, the Bad & the Ugly

I was thinking the other day after reading a few trade journals about how well Charlotte has weathered the recession and is moving forward.  The prudent money, however, is still using a measured response to the lack of construction over the last five to six years, not to mention the pain and suffering incurred by developers, contractors, bankers, etc. that is still somewhat fresh in our minds.

But oh to be in Charlotte.  It’s turned out pretty well.

The Good

Think about it, Charlotte, like many cities, has:

  • Pent up demand due to lack of construction;
  • Low interest rates;
  • Considerable capital flows into metropolitan Charlotte investment opportunities;
  • The label as an “18-hour city;”
  • A large complement of millennials.

As the new Emerging Trends from the Urban Land Institute and Price Waterhouse Coopers states on Page 4:

  • “Charlotte is rated in the top 10 for investments – as is Brooklyn, New York.  And they are also listed as best places for development in 2015.”  That is good news.  We are recognized as we begin 2015 as a place for investment and we are mentioned several places within the Emerging Trends publication.

The Bad

We all know we are thought of as a banking town.  There are financial issues associated with this label that will impact us all, such as:

  • Over One Trillion Dollars of student debt;
  • Continuously adding to the deficit and the difficulty in approving budgets at various governmental levels;
  • The job gap.

As much as we want to talk about immigration issues, there is a looming jobs gap for workers across the labor spectrum.  From unskilled to skilled to technical workers there appear to be, at least demographically, issues we must face as many of the millennials have been absorbed into the market even though some of us boomers are hanging on.  This seems to be the number one issue moving into 2015 and beyond.

The Ugly

There are issues that we seem to not understand how to address.  For example, what do we do about:

  • Event risk;
  • Infrastructure neglect;
  • Uncertainty of bank regulations.

Many investors are skittish about event risk.  We talk about terrorism, we hear it nightly on the news.  The focus of local news appears to be tragedy, shooting, etc., etc., etc.  Event risk has a way of cooling enthusiasm and ultimately investment.  How do you protect from this?  I’m not sure anybody knows the answer.  Is it a more understandable or enforceable foreign and domestic policy?

It is well known that our infrastructure is deteriorating.  What will we do?  Will we do as some have  and privatize much of the infrastructure development?  Are toll lanes on I-77 and other areas part of the solution?  Many of us like to complain about pot holes and toll lanes, but there aren’t many of us that have more substantive and realistic fixes for the problems that loom on the horizon.

Some have expressed concern about relaxing Dodd Frank.  What will happen?  As we see a political shift in Washington it may well be that banking regulations recently instituted will be diluted.  Typically, such actions are harmful to the economy, but at least they’re beneficial to the appraising and consulting business.  It will be interesting to see how the uncertainty concerning bank regulations moves forward in 2015 and beyond.

The Overall

All in all there’s a lot more good than there’s bad and ugly.  Who would have thunk Charlotte would be receiving such accolades from not only national but international investors and that our financial markets would continue to expand.  It’s good to be a Charlottean.  Let me know your thoughts;  where you think I might be “off base,” or if you have any suggestions or solutions to the bad and the ugly.

Happy New Year to all, and I wish everyone a prosperous 2015.

Skeet Harris