Since a large part of the business of community economic development is preparing an inventory of available sites for new and expanding companies, many people equate economic development with real estate development. While both involve land acquisition, development and sale, it’s easy to think they are similar. But when viewed with the perspective of a time horizon, real estate development and economic development are very different.
Real estate developers are concerned with the now. Current conditions are paramount to the success of their projects. These professionals must take into consideration whether we are in a bull or a bear market, who’s currently in local, regional and national political office, local occupancy rates for various types of properties, interest rates and their potential for change and an annualized view of the economy. The questions they must ask before launching a project are where are we now and how we will react to today’s realities?
In economic development, all of those topics are background chatter. Economic developers are not concerned with the now, but are looking ahead as much as three decades. The long time horizon of economic development makes the concerns of today’s real estate developments inconsequential. We are working specifically on the future needs of our community and region, and those future needs may vary from the apparent needs of today. The question economic development professionals must always ask is where do we want to be?
That’s not to say that economic developers and real estate developers don’t work together. In fact, their collaboration on the ebb and flow of land and properties, both local and regional, are essential to the success of both development models. It’s just a different perspective, but all part of the necessary land development that drives us forward and helps to insure a strong and resilient future for our community, our region and our state.
By Slater Barr, President
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