Journalists are feasting on the 2000 Census results because the numbers reveal compelling stories and are ideal for snappy graphics. During the last week in March, for example, the Census Bureau dealt Detroit a “blow to civic pride,” according to The Detroit News, when it released data that showed the city's population fell below 1 million for the first time in 80 years. The actual count was 951,270, down from the peak population of 1.85 million in 1950. On the other side of Lake Michigan, the Census story has been a bit more uplifting. The population of the Windy City has actually grown by 112,00 since 1990 and now stands at 2.9 million.
Question: As interesting as those numbers may be to Census junkies, what's the significance to the commercial real estate industry? Should we care?
Answer: In a word, “plenty.”
“Ultimately, the Census data is the best benchmark that we have for looking at underlying market demand, both on a broad scale and at a very micro level,” said Mark Obrinksy, chief economist for the National Multi Housing Council in Washington, D.C. “This is the key raw data in looking at both past trends and projecting for the future.”
It turns out that our country's population is bigger than first estimated. Based on monthly sample surveys, the Census Bureau initially estimated 274.5 million people, but the actual count released in December of 2000 listed 281.4 million, a difference of nearly 7 million.
What's interesting is that in each of the past three years the home ownership rate has reached record levels, yet the apartment industry continues to fare quite well in terms of demand, according to Obrinsky. “There are a lot of reasons for that, but one is that the population has been bigger than we thought all along. My estimate is that the [new figures] probably mean an additional 350,000 or 400,000 apartment renters that we couldn't find in the previous data,” he said.
In Florida, meanwhile, the Hispanic population has exceeded the black population in growth percentage for the first time, according to Cynthia Shelton, vice president of business development for Orlando-based Commercial Net Lease Realty and president-elect of the CCIM Institute. Retailers that are pursuing the Hispanic consumer or marketing a product of interest in the Hispanic culture are likely to fare well in Miami, Tampa and some parts of Orlando, Shelton said.
“Even in the CCIM network, we are delivering marketing materials in the Spanish language. You have to start looking at how you market to these people — that includes the product as well as the developer or real estate broker. So, if you are bilingual, you are going to have a better shot [at a potential transaction] if you speak Spanish than if you don't speak Spanish at all.”
Historically, the Census has always generated a lot of interest, Obrinsky said, but the attention it now receives is a reflection of an information-intensive society. “The general availability of computers makes it possible for more and more people to use large amounts of information. In addition, the Census Bureau as well as other government statistical suppliers are trying harder and have been more successful in making large data sets available to the public, either at nominal charges or in many cases free of charge,” Obrinsky concluded.
For cities in the South and West that are enjoying a population boom, the local chamber of commerce offices are working in overdrive these days. In Rust Belt towns like Detroit, the best spin control is to tout the suburbs.
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