Chamber's Preview speakers upbeat about 2006

By IAN MYLCHREEST
BUSINESS PRESS
Friday, February 03, 2006

The array of speakers at the Chamber of Commerce's Preview Las Vegas were almost uniformly bullish on the economic outlook for the valley.

Las Vegas Convention and Visitors Authority CEO Rossi Ralenkotter described another record-breaking year for the tourist industry -- more visitors, more hotel rooms and a bigger gaming take. He predicted a destination resort that would have over 200,000 rooms within a decade.

He also previewed the "Vegas Alibi" campaign that asks visitors to imagine themselves into all kinds of exotic roles. The next phase of the authority's "Las Vegas Stories" ad campaign that centers on the "What happens here, stays here" slogan, was greeted with laughter and applause. UNLV Economist Keith Schwer was equally upbeat about thefuture. His only apology was for underestimating some double digit increases such as gaming revenue and the flexibility of the housing market as higher prices made condos the new starter home.

Population growth will continue but at around 4 percent as it did in 2005. That should keep the economy humming along well. For the second year in a row, Schwer and his number crunchers believe the local economy will continue to hum along with sustained growth but without 2004's run-up in house prices.

Schwer did warn that the local housing market could soften if speculators pull out of the market or if the "creative financing" of mortgages forces sales as interest rates rise. The number of homes are not well understood, he said, but some 16 percent of Las Vegas homes are not occupied by owners.

Only three things, says the economist, could derail the Las Vegas economy this year: Terrorism, a flu pandemic or a major fiscal crisis. They are possible but not likely.

Florida land use lawyer Charles Siemon was the only one to strike a pessimistic note. He described development in recently urbanized areas like South Florida and Southern Nevada as wasteful and one of the root causes of the crisis in affordable housing. The lack of land is the main driver of house prices, he argued, noting that in many areas it is no longer possible buy and house by spending only 35 percent of the median income.

Siemon offered various solutions to create affordable housing such as mandates for new developments. That, he said, had worked in New Jersey. Other ideas included increasing the density of housing and abandoning regulations such as minimum lot size, house size and parking requirements.

Another idea that, Siemon says, offers great promise is land trusts. Land would be owned in perpetuity by a municipal trust and thus it would not be a factor in the cost of housing. Owners could still build equity in the structure.

Finally, he announced, that if he were king, he would make affordable housing part of public infrastructure that government would be expected to provide like roads and sewers. He did not elaborate on the tax revenue needed to support that proposal.

Concluding on an upbeat note, Siemon said that while he was pessimistic that his home state could solve the affordable housing issue, he said Southern Nevada was five years away from the crisis facing South Florida. He also said Southern Nevada was energetic and inventive enough to find solutions.

Realty America Realtor and spokesperson for the Greater Las Vegas Association of Realtors, Dawn Lane, said she was very excited by Siemon's proposals. "What I took away from what he was saying was that as we plan these 'huburbs' around the valley we have to include affordable housing." She says we should include affordable housing in new developments and would revisit zoning to achieve greater density.

Lane also backed Siemon's call for affordable housing to be treated as infrastructure. "He was only calling for tax breaks for developers," she said.

The morning ended with a rousing presentation from real estate guru Richard Lee. He remained very bullish on the prospects for "manhattanization," hinting that the failure of the high-rise condo projects had been exaggerated in the media.

He put up a map illustrating the site of "huburbs," which are hubs across the valley that include residential, retail, entertainment and commercial space around a mixed-use development. They have emerged in Summerlin, Green Valley and along the Strip, as well as the northwest and southwest valley. He told the audience that every one of those hubs had great opportunities for anyone willing to figure out what property or service was missing.

His only question was: "Where will the huburb form in North Las Vegas?"

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