The Real Estate Wonk: Company town - Baltimore homes ...

Pete from Highlandtown, one of my favorite commenters here (though I love you all), touched on a subject this week that everyone in the region should be giving some hard thought about: Are we a company town? And if so, are we going to go the way that all company towns eventually do?

"In my opinion, much of the 1995-2008 gentrification in Canton/Fed Hill/etc., was due to our proximity to DC," said Pete, who sees neighborhood change at an up-close-and-personal level doing interior demolition and basement excavations for rehabbers. "Im sure that most of your readers know people that commute to DC (or its suburbs) every day. In many ways we have become a suburb of DC. There is nothing wrong with using our proximity to DC to our advantage. But we are very vulnerable to gas price increases, and Federal Budget cuts."

He's sure that if Washington wasn't carved out of Maryland and Virginia in the 18th century, Baltimore's situation would be much more dire, and he's worried about the outcome when the spiraling federal deficit is finally attacked in a real way. He's hardly alone.

Some local economists warned for years that the rapidly increasing amount of federal contracting dollars flowing to Maryland would inevitably have to stop growing, at the very least, taking the accelerator off a prime source of new jobs in the area. (Local officials say they're hopeful that the big federal agencies in Woodlawn, the Social Security Administration and the Centers for Medicare and Medicaid Services, will be A-OK thanks to the aging baby boom generation.)

So much of the I-95 corridor is tied up in some way with Uncle Sam, whether directly (more than 56,000 people work at Fort Meade, enough to populate a small city) or indirectly (think federal research grants to Johns Hopkins, No. 1 recipient of federal science and engineering bucks).

The Johns Hopkins institutions are themselves big players in Baltimore, with more workers than any other private employer in Maryland.

"Baltimore has become a 'two industry town,'" Pete wrote. "We seem to survive solely on Johns Hopkins and the Federal Government. We need to diversify our economy. Or we will suffer the same fate that Detroit did, when its main (and pretty much only) industry ran into trouble."

This matters to housing because people usually need jobs to buy or rent. A healthy economy keeps a region from bleeding population.

There's some talk about more diversification. Coping with tighter federal budgets is the raison d'etre of Blueprint Maryland, launched by a banker now running for Congress. (Here's a Q&A from last year.)

What would you suggest?

How hard do you think your neighborhood would be hit if budget cuts come and there aren't non-government-related jobs to take the place of the ones that disappear?

Source: http://weblogs.baltimoresun.com/business/realestate/blog/2012/02/company_town.html

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