School, Katrina, and the Economy, Stupid
October, 2005It seems that when we go back to school, everyone starts to complain about parking at our nation's universities. In most cases, it's due to what they consider a "lack" of convenient parking.
Baby boomers' grandkids are entering college and need more space, so they build classrooms on surface parking lots. They attempt to replace the parking with structures, but that takes time and money, and usually doesn't keep pace with demand.
Naturally, the parking is no longer close in, since the close in spaces are taken for classrooms, so the new parking is on the edge of campus, and all hell breaks loose when students find they have to leave home earlier to get to school in time to park and walk to class.
The solution? Raise the cost of parking on campus to meet the true cost of building and maintaining the parking facilities. This will force those students who can't afford the higher prices to take public transportation, which will have plenty of riders and put on extra buses to handle the problem.
Or that's what would happen if the free market were allowed to operate.
Gee, if I remember correctly, I drove a Honda 50 when I was in college, at least until my third year, when I had enough seniority to get a parking pass. Most of the other underclassmen either rode cycles or motorbikes. Perfect -- cheaper, quick, park anywhere... Oh yes, and when it snowed, I walked 40 miles through 10 foot drifts just to turn in my Poly Sci paper.
Got the following from Ed Urrutia of Denison Parking; he lives in New Orleans:
"I would say that the parking industry is totally shut down for at least three months, and that could stretch into six to eight months.
"After that, one has to wonder how long it will take for tourism and conventions to return. Those activities drive a major portion of the local economy, including hotel- and French Quarter-related parking.
"I would venture to guess that it will be a year to establish any sense of normalcy, and that parking demand will suffer for quite some time after that."
I also heard from Herb Anderson, a longtime New Orleans resident and President of Imperial Parking. He spent the first week after Hurricane Katrina with chain saws, clearing trees from streets. Water wasn't the only problem in the area.
I'm glad that all the dire predictions we were hearing during the awful first days were so much hot air. Looks like the Big Easy will be bouncing back sooner than anyone thought.
A report I receive periodically on executive recruitment says that executive compensation is going up, up, up: The economy is booming, profits are really up and execs are exercising their stock options. Look for compensation packages with restricted stock options to start seeing the light of day soon.
It's also reported that the job market is booming, but there simply aren't enough applicants for the jobs. With unemployment under 5%, employers are looking for good people. Most have jobs, and the second or third tier of unemployed are now coming to the surface. If you are good at what you do and want to change jobs, now is probably the time.
As for the housing boom, or boomlet, or balloon, there is doom and gloom on every corner. Prices can't keep going up. Well, sure they can, as long as demand is outstripping supply. And from what I can see, houses are being built by the thousands in the 'burbs and people are buying them.
Why not? If you lock in a loan interest rate, can afford to pay it and don't plan to sell, then so what? If the price of your place fluctuates, then why do you care? The only problem comes if you want to sell in the near future. Most people can assume that their compensation is going to increase over the years. So they will become more and more comfortable in their homes. Those that got variable rates better look out, because when interest rates do rise, they could get the shaft, instead of the house.
Housing is sort of like stock, only better. As Warren Buffett says, "Buy any 10 stocks, hold them for 30 years and you are rich". Same with housing. Everyone I know who has kept their homes 15 years or more are beside themselves with glee. Certainly there are pockets, somewhere, where prices are stable -- but I don't know where they are.
A friend is quitting his job, selling and moving to the countryside in Tennessee to retire. His home in California will be bought by a young family with a professional income, and he will retire in a great place to fish and play golf. Plus, he will pay cash for his retirement home. Why? He kept his house for 20 years and didn't move. Works everywhere and every time.
We have a couple of additions to my favorite magazine this month. Death by Parking is resurrected about 40 years later. Read about the exploits of Paul Manning and his SON in Los Angeles in the 21st century. Plus we've added a new feature focusing on the groups I believe make a huge difference in our industry, the state and regional associations. Look for a page or so on them every month. And you may have noticed last month, a new revenue sleuth taking to the pages of PT. Consultant Larry Donaghue brings his hundreds of ways you can lose money in garages through the eyes of his alter ego, DC McGuire.
Oh, this is our 100th issue. Can you believe it? Lots of great history to come next year during our 10th anniversary celebration.