Developers See Hope for Those Who Hang On : Building: O.C. executives express post-election optimism in informal survey. Many look forward to change under Clinton Administration.
Buzzwords for 1993: Change. Hope. Survive.
Those words are not from President-elect Clinton. Rather they come from Orange County developers, consultants and real estate lenders, who are hopeful that the new Administration in Washington will bring with it renewed consumer confidence and a boom in home buying.
About two dozen executives expressed their optimism in a post-election questionnaire distributed last week by Roxburgh Agency, a Costa Mesa advertising and public relations firm specializing in real estate. The informal survey asked them to gauge the effect of a Clinton presidency on Southern California’s economy and their own businesses, among other things.
“Many believed that if Bush was reelected it would be more of the same,” said Claudia Roxburgh, president of the agency. “Given the way things have been going in the past three or four years, the word ‘change’ sounds great.”
Even though the area’s developers and home builders have historically been a Republican lot, there were no sour grapes about Clinton’s victory. That was no surprise to Gordon Tippell, the incoming president of the Building Industry Assn. of Southern California and chairman of Taylor Woodrow Homes California Ltd. in Newport Beach.
“It’s not a great surprise that there’s hope,” he said. “We certainly need hope. The public was really asking for change, and they got it.”
Tippell said that “almost everyone” expects interest rates to rise because of new government spending and inflation.
“We’d welcome some inflation,” he said. “The difficulty arises after the honeymoon period is over and if it goes like during the Carter years. But I doubt, in the context of a world economy, whether that’s going to happen.”
Many of those questioned will wait for Clinton’s first 100 days in office before they guess at what the long-term effect of his presidency will be. A few are banking on new blood in the White House to give at least some short-term release of pent-up demand for homes.
“It eliminates elements of uncertainty and creates optimism,” wrote Dave Cunningham of Cunningham-Barisic Development Corp. in Orange. “We have been leaderless and we now have a leader. Consumer confidence and comfort will increase . . . much the same as was brought about by Reagan in 1981.”
Not all, however, were that upbeat.
“Hello, inflation!” wrote James Kruse of Schneider Commercial Real Estate in Anaheim.
The major fears: higher taxes and more environmental regulations.
One executive who didn’t want to be identified wrote: “Go to the archives and pull out 1976 Carter days. The upcoming four years will be Carter II re-enacted. . . . Clintonize your business plans.”
Many developers said they look for renewed spending on infrastructure, job training and affordable housing.
“The Southern California real estate industry has already reacted favorably to the election results,” wrote Marc Simmons, director of sales and marketing at VED Corp. in Yorba Linda. “I am hearing ‘buzzes’ of optimism throughout the industry.”
Builders’ views were tempered by concerns about lenders’ reluctance to make loans.
“The big hang-up continues to be financing,” wrote Patty Carmichael, vice president for sales and marketing at Grupe Development in Newport Beach. “Without a change in financing, the real estate industry will be in a stalemate.”
Over the next year, the developers and home builders said, they foresee some growth in higher-density, detached homes, as well as real estate sold at auction.
“We are optimistic that we will see some recovery in 1993 but do not expect a dramatic turnaround,” Simmons of VED wrote. “The motto has been ‘stay alive till ’95.’ ”
The survey also asked respondents to predict what words and phrases will be heard most often next year. The most complete answer came from Kruse: “Environmentally, midlife, multiculturally, balanced, economically, multilingual, debt-free, community-conscious, fat-free, monogamous, graffiti-less . . . fulfilled while working!”
Understandably, developer Kathryn Thompson was among the most gung-ho about Clinton. She broke from Republican ranks and campaigned for him.
“Clinton understands the importance of the American Dream and the importance of construction in moving the economy out of the sluggish recession,” Thompson wrote.
