Real Estate Journal — 2018 Forecast — January 12 - 25, 2018 — 15A
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M id A tlantic
2018 F orecast
By Neil Stein, Kaplin Stewart Meloff Reiter & Stein Making Real Estate Great Again – Compromise or Combat?
Y es, I added a question mark to the title to em- phasize that any fore-
new development to adapt to the changing needs of our popula- tion. For example: • Millennials are techno- logically savvy, mobile and environmentally aware. They are keen on building careers and postponing families. They prefer a walkable, transit-oriented urban setting, but educational debt and limited job opportuni- ties severely restrict their cash flow. They seek small affordable city living spaces to rent that are internet-connected to al- low a home workspace, or are close to employment centers or collaborative open workspaces. There is no time for traditional “brick and mortar” shopping.
Social media marketing and online shopping experiences will do just fine. • With millennials’ growing need for more affordable hous- ing, multifamily demand will continue to grow. • Senior housing demand will continue to grow, with a present inventory that does not meet the needs of a group projected to grow significantly in the next decade. More affluent empty- nesters and seniors have opted to move to urban areas where shopping is walkable and public transit is good, leaving behind large single-family suburban homes. Local zoning codes and state
regulations will often lag behind these trends. The outdated defi- nition of a “family household” as consisting of only individuals re- lated by blood or marriage, must be revised to recognize a declin- ing portion of family households and an increasing portion of non-family households. A more modern definition will allow builders to create smaller and more densely designed devel- opments. “Right-sizing” is a term used by the Urban Land Institute to describe how the real estate market is adapt- ing to changing demographics, technological advancements and economic realities. It seems certain that many
local government units will not voluntarily allow their own regulatory schemes to give way to state and federal preemption. We have entered a new age of populism, dominated by social media, in which one person’s crusade can become a coalition behind a cause, electing local candidates to office and proceed- ing forthwith to enact new and more stringent regulations. Ab- sent a clear indication of federal or state preemption in any given area, it would appear the 2018 battle lines have been drawn. Let the games begin! Neil Stein, Principal, Kap- lin Stewart Meloff Reiter & Stein. n
c a s t c ome s with uncer- t a i n t y . O f course, much of this uncer- tainty ema- nates from the Pr e s i den t ’ s influence on t he f e d e r a l
Neil Stein
government. Sweeping changes to the tax code have arrived as have the rollback of a great many regulations. Other chang- es, such as the travel ban, are mired in litigation without any possibility for a compromise solution. It seems as though Re- publicans and Democrats have become the political equivalent of Eagles and Cowboys fans and the courts seem willing to jump into the swamp. Uncertainty is never good for the economy or real estate. Worse yet is conflict among fed- eral, state and local government. While the rollback of overly restrictive federal regulation is good for development, more lenient federal oversight will often conflict with state and lo- cal regulatory schemes. For ex- ample, while the federal defini- tion of a “wetland” may allow for more acreage to be developed, state and local regulations may still provide for contrary defini- tions and expansive restrictions. These conflicts may result in more litigation, with accompa- nying years of uncertainty. In any event, from a land use perspective, 2018 will require from the cannabis industry could benefit New Jersey’s economy greatly, in addition to impacting public health and tourism. Another large impact here could be to banking. The federal government declares marijuana as a Class I drug, so there will be issues with getting loans or financing from national banks. However, the Murphy Administration has been advo- cating for a State Bank which could get the state around those obstacles. This will certainly be a hot topic in 2018. There is truly a lot ahead of us, and I for one am excited for what change could bring. Real Estate professionals such as myself will continue to fore- cast the coming changes and effects, but there is of course continued from page 14A The CRE industry is resilient and . . . continued on page 18A
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