Join us with Brian Points as we delve into the art of shaping cities, the challenges of housing shortages, and the impact of global politics on local economies. Tune in to learn about urban planning and local economies!
To learn more, check out his website or check out his LinkedIn profile
This is the Kestrel Country Podcast, where we discuss the people, places and events all around Kestrel Country. Oh, brian points, thanks for coming by today. Thank you you, mike. Yeah, the fun conversation. Yeah, glad to be here. So first off, I always like to start about. You know just who is across the table from me. So where'd you grow up? What brought you to Moscow? That kind of thing, what's your background?
Brian:Yeah. So I grew up in Boise, Idaho, and I moved to Moscow in the early 2000s to go to the University of Idaho and I didn't, I'd say, for the first two years in Moscow I didn't understand the city all that well, Because if you go to U of I, you don't necessarily have to leave campus. I mean, it's a university right. Yeah. But then in the latter couple of years and then especially after I graduated, I was like okay, this town is actually really cool. I could like to kind of stick around here.
Mike:What was that like, coming from growing up in Boise? Had you been to Moscow before?
Brian:Was it just kind of like oh?
Mike:this is where the university is. It's up there in the north someplace.
Brian:I knew it pretty well actually because my brother went to college at U of I and he's 10 years older than me. It pretty well actually, because my brother went to college at u of I and he's 10 years older than me. So I remember, um, we'd come off oftentimes for christmas because he would work during christmas breaks. Then we just spend the whole you know holiday up here and like going to tri-state. And what else did we do? We where logos school is? I remember my sister and I playing around on the playground out there in like you know 1990 or something, um, so yeah, all of the, the stuff that that is Moscow I knew about long, long ago before I ever moved here, gotcha.
Mike:Was it kind of the? Was that the choice to go to the university of Idaho? Was that particular, uh, for what you wanted to study? Was it because your brother went there? Was it kind of, at that time, like, that's where you go Most people?
Brian:at the time. Uh, I graduated in oh one from high school and at the time there was, you know, boise state did not have the best like academic reputation. I I don't know if that's fair or not, but that's that. It was what it was.
Brian:And it didn't have any of the football reputation yet right, it was developing that that kind of happened right about at that time and it's an interesting kind of case study of how do you build a university off of a football program, because they have now like ascended the U of I in most metrics and the reason that people know who they are is because they won the Fiesta Bowl in 2009 or whatever it was. So, yeah, it wasn't. I didn't consider that really an option. It I didn't think that hard about it. I don't know.
Mike:It's like yeah, that's a place where people go. I need some people who went there, yeah.
Brian:And what did you study? I studied history as an undergrad actually uh which is weird cause I'm an economist now but um, that was what I was interested in. And um, I actually had a professor of history when I was just kind of I was in the whole general studies what am I doing here? You know, change my mind every three months, kind of setting for you know my first year or two. And then I had a history professor named Richard Spence, who is the best history professor that has ever existed. He taught a class on Russian history two semesters and then a class on Middle Eastern history for two semesters, and I was like I will listen to this guy talk for as long as I can sit here, because it's just that good.
Brian:So that's kind of why I went in that direction. I was just drawn to it. So anyway, not the usual track that people take to become an economist, but that for me. I didn't really even have interest in economic sciences and data and that kind of stuff until after I graduated and I got a job working at Lightcast, which at the time was called Emsi, and I really did find myself drawn to it, but I didn't have any of the you know kind of credentials to really do it. So then I went to California and I got my master's in economics at UC Santa Barbara in 2012,.
Brian:I guess it was.
Mike:Yeah, so did you ever? Did you? Did you go pretty quickly from undergrad into MZ? No, I was. We both worked there at the same time. Yeah, did you go pretty quickly from undergrad into MZ? No, we both worked there at the same time. Yeah, I think I was?
Brian:I want to say it was three or four years or something.
Mike:Were you doing anything in history? I was actually very interested. Yes, I did. Okay, there you go.
Brian:Wow See, this is well.
Mike:I love history too, yeah.
Brian:Well, this will come back because, with the work that I do at points consulting, I think both of these things are really relevant. So, um, yeah, I I was interested in being a museum curator actually, and I I had a internship at the Basque museum in Boise and then I had an internship in Rhode Island at, um, um, you know, giving like house tours of this house that was built and you know the colonial, colonial era, it was awesome, like they're they had, um, the uh colonial kind of uh tax collector lived at that house and they like tarred and feathered him during the stamp act and like it had an awesome history.
Brian:Um, Georgia, Whitfield, you know, ate there one time and I was just like, oh, this is so awesome because their history of the East Coast is so much older. Yeah, there's so much stuff that happened there. So anyway, it just wasn't. I think I would have been happy doing it. But you know, I'm glad I discovered what I did. It was kind of became an opportunity through the what was in front of me. It wasn't really like intentional necessarily, it was just like oh.
Brian:I like doing this. Well, I better go get a degree so I could do it better, you know.
Mike:Yeah, so you got your, your master's in economics and that allowed you to just do more with you came back to no, did you come back to MZ at that point?
Brian:I did so. I bounced around a number of times because after grad school I went to Virginia where I had a job working for a consulting company doing economic analysis. Didn't work out great, just didn't really like living there. I was a long way away from my wife's family, moved back to Moscow where I worked for MZ a second time, did that for a couple of years and then went to Indiana to work for a different company, just because I kind of felt like for me to do what I wanted to do, that was the better place for me to do it. More consulting type yeah right and the uh.
Brian:the offer that they gave me is like hey, come live here for a couple of years and then you can work remotely from wherever you want. I was like, hey, that sounds pretty pretty good deal, especially in 2016. Yeah, that was before before it was cool, yeah, um. So I took, took that option. I lived there for two and a half years and then moved back to Moscow again. I worked for that company. For another, I want to say it was a year, year and a half remotely, before I started points consulting in 2019.
Mike:Yeah, awesome, yeah. And so what particular type of economic, what, what type of economic consulting are you doing?
Brian:It's the easiest way to describe it is. We live at the intersection of economic development, real estate and land use, so anything that involves some convergence of those factors is something we're interested in doing. It doesn't matter if it's government, nonprofit, for-profit, what state you're in, that's something we care about.
Mike:Okay.
Brian:Yeah.
Mike:And is that the same type of thing you were doing before with?
Brian:a previous employer. It's it's shifted over time. We, um, the company that I previously worked for, I'd say that their real professional strength was in workforce and economic development. Um, so workforce development is kind of the. The describes the process of getting people from the educational system into jobs that are meaningful. So there's, you know, all the apprenticeship, job-based training, educate, higher education, secondary ed, all that stuff you know. So there, the consulting company I worked for was really focused on helping make those pipelines make sense and work efficiently and that kind of stuff. And then they touched on economic development, which is basically the process of selling and building a regional economy to have greater job opportunities and greater prosperity, job opportunities and greater prosperity. So I was touching on those same topics, but again I was. I was really just kind of gravitated towards things related to real estate and housing, cause I just it was some of the more interesting things that I did.
Mike:Okay, yeah, so are you. You mentioned lots of different types of clients, right From, maybe, municipalities, governments and others. Is that most typical that you'd have a government or a paragovernment type organization that is looking at that? That's saying basically, hey, we want, we want to, our job is to grow our local economy and so we've got whatever this land or we're looking at when you say land use, like zoning issues and that kind of thing.
Brian:Yeah, absolutely so. The more often than not right now that's the norm is working with a city, a county, a quasi governmental organization which might be like an economic development organization or something like that, and they're hiring us to understand their local housing market. And when we do that, we we deep dive on the data. We talk to a ton of people, we do a community survey so we can get you know the full breadth of people's perspectives on what's working, what's what's not working, what's missing that they might want to see.
Brian:We look, look at the comprehensive plan, the land use plan, the zoning code I've read so much zoning code you wouldn't believe it and then we point out where the gaps and inefficiencies are. That might be, you know, preventing supply and demand from kind of meeting up, because ultimately, as economists like you, want to let the market do what it needs to do, but there's a lot of ways in which it's not doing that for various reasons. So that's the what we try to do and I always tell the cities that we're working with is, like you know, perhaps this entity, you know the city of such and such, is the one that's paying us, but we're really working for the citizens, because the citizens are going to be the ones that are going to benefit from better housing stock, more, you know, appropriately suited to their needs. It's going to be really quality market research for anybody who's in real estate or um, or development or anything like that.
Mike:Yeah, Okay. So when you say that intersection of real estate and economic development mostly are you talking about residential really like housing, yeah, housing.
Brian:Mostly what you do Right. So let me first go the other direction to acknowledge some of the other stuff that we do. As an example, we're working with the city of La Grande Oregon and it's a two-phase thing. The first phase was showing that the city of La Grande Oregon and what we. It's a two phase thing. The first phase was showing that the city boundaries were too small to fit the level of economic growth that we forecasted. And the second step is actually helping them expand that urban growth boundary by looking at the uh you know, the soils data, the uh, the drainage stuff, the floodplains, all that kind of thing to tell them all right, if you need 150 more acres over your next 20 years is what we forecasted, it can go here, here and here. So talk to those landowners about annexation.
Brian:That one's a more commercial and industrial kind of oriented project. Another example would be uh, we're working with the city of Caldwell down in Southern Idaho to do a uh, business incubator feasibility study. So the the city is Caldwell is growing like crazy, as you might imagine. Um, and they're. So their uh commercial real estate prices are skyrocketing. Uh, they don't have any more space and kind of downtown. So the the city has this idea of like can we just set aside a place with some subsidized rent basically and programs to kind of help people get out the gate so then they can spend their companies off and develop big corporate campuses and leases and all that kind of stuff? So we're helping them figure that out. And that one again is more kind of commercial, industrial oriented.
Mike:Wow, yeah, yeah, that's cool, that's, that's. Those are always the things that I enjoyed the most at. Mz back when it was working with that kind of development.
Brian:Yeah, yeah, like. Well, why don't you come work for those people?
Mike:I'm busy, I got stuff going. Yeah, Like those people is just kind of cool, right, they're, they're looking at at being very proactive. How do we grow our town? What do we do? What's the right mix? You know what companies can you attract, and then the wins are always really cool. You're like, yeah, they you know attracted, you know X, Y, you know manufacturer to their town, and then it grew and all that stuff Like there's, it's cool, they're cool stories.
Brian:Yeah, another way that to kind of describe what we do, and I made a YouTube video about this because I felt like I just kept getting the answer.
Brian:Asked the same question over and like what do you guys do is we work in the background before the big news breaks. So at some point in some regional newspaper it's going to say new company arrives hiring 3 000 people over the next 10 years. Or you know developers building 750 new houses on the south side of town, like we've been working with that client for like two years before that happens in the background and that you know that's our job. But we're helping them understand like, does it make economic sense? Or that, is the city going to be a good partner on it? Um, or is the developer going to be a good partner? Just like putting all those puzzle pieces together to to get it to fit. So it's. You know, those things, those types of things, take so much background work, especially world that we live in now, for better or worse. Cities have an incredible amount of discretion over virtually every step of the process. So there's lots of discussions with city council and planning commission.
Brian:So we're involved in all those kinds of things.
Mike:Wow, and how long have you been doing this?
Brian:So I've been in consulting for, I think, going on years, and I've been uh owned points consulting since 2019.
Mike:Okay, yeah, yeah. Five years, yeah, five, nice, that's a big milestone. And how many people do you have working for you?
Brian:We've got five uh, including one intern, but that intern is becoming full-time staff this summer. So, we'll be looking for more interns and then, you know, we kind of just take it step-by-step, but I hope and expect we'll continue to grow and continue to hire more people around here.
Mike:And you're doing projects all over the country.
Brian:Yeah, so uh, kind of take a random sample for right now, um Colorado, oklahoma, now Um Colorado Oklahoma, alaska, oregon, idaho, georgia, uh, those are just the ones off top of my head. So we've got um 15 ongoing projects right now and that's uh some of the locations.
Mike:Okay, but and you have done locally right, so close to home yeah, Is the housing study that you did for Moscow-Polman area? Is that the closest you've worked? I mean, it's in our backyard.
Brian:Yeah, is that the?
Mike:only work you've really done locally.
Brian:No, I've done other stuff too for the city of Lewiston, the Nez Perce tribe, some private developers. I've occasionally done just kind of these mini market scan studies. If somebody is like, hey, does this idea make sense? Can you help me figure it out? Um, and those ones aren't. We have some of those, a smattering of them, that they don't go public because it's basically you know they paid for that research somebody's doing like a feasibility study.
Brian:yeah, okay, so a few of those, but yeah, but probably the most well-known local one that we've done was the uh Ploos regional housing study, which was in 2019. It was one of the last projects I did before I started my own company. Okay, so that was with your previous.
Mike:It was yeah Okay.
Brian:But you know it? Um, and in fact it it's. I stayed with that employer for an extra three months to finish that project. Nice, like, let me out of here.
Mike:I stayed with that employer for an extra three months to finish that project.
Brian:Nice, Like let me out of here. But I couldn't because I needed to get the job done and it would have just kind of rocked the boat too much if I left.
Mike:Yeah, so tell us a little bit about that. Yeah, so it was in 2019. Who were you doing the study for and what were some of the major things you guys found?
Brian:Yeah, so we did the study for the Partnership for Economic Prosperity, which has since folded up, but it was at the time our regional economic development organization for Latah County and there was a number of partners involved in it City of Moscow, city of Pullman, wazoo, and so on. The, I think, the local realtors organization kicked in some money at that time too.
Mike:So and so it was.
Brian:they were a Latah County accounting development organization but they partnered with the others to do a regional so it was pretty unique in that sense that most of the studies I've done since then are for one jurisdiction, in a sense like the city, montrose, colorado, city of broken arrow, oklahoma, but this was like regional and it crossed two states, which, uh, is tricky. You know, legal, legal infrastructure, uh, real estate and development stuff is just very different between washington and idaho. So, yeah, so, uh, so some of the biggest things, I mean we projected that there was a pretty dramatic shortage of housing for the Palouse area. Multifamily, which is a code word for apartments, more or less, is a kind of takes care of itself. You don't necessarily really need to advertise it because there are developers that know how to do it and they know what metrics they're they're looking for and then they build when you say know how to do it, know how to do the analysis themselves, they know how to build that type of housing.
Brian:Oh, okay, you know, because it's a different skillset than, um, you know the financing is different, the building styles are, you know it's, it's commercial because it's multi-story and all that kind of stuff. So, um, you know that what the thing about multifamily is, that you know, if you could chart this out my brain thinks in charts, so this will sometimes be less interesting if I'm doing things with my fingers but multifamily goes at this low boil and then it's like boom, a hundred units. And then it goes back to like nothing for like five years and it just does it.
Brian:most places it does that, including moscow, pullman, you know, um, because you build a huge apartment complex and then those builders know that we are going to fill this gap for x period of time and then we're going to wait for it to absorb and then we'll go do it again, right and um, and we're actually it's worth mentioning that we're blessed that we don't have to really think that hard about that, because there are so many rural and semi-urban places in the country that no multifamily developers pay attention to at all, like they have no idea what the market is or it's like well, I could build 500 in this city, you know, in the next 10 years.
Brian:Why am I going to drive 70 miles away to go do that? But we actually, you know what?
Mike:because the university, university market.
Brian:It's a it's a captive market. The builders know that they can make money doing it. It just takes care of itself. Single family is kind of our pinch point, um. So we found there was a shortage and that to meet the shortage, it was going to be something like 270 new uh new units, single family units per year over the next, uh, 10 years. So that would be, you know, 2017 to 2027, um, so at the time, that would have been essentially doubling the production levels for Latah County, um, and I I just looked today cause I was curious and we're not close to that number still, so the shortage still exists.
Mike:And the shortage in that case seems to have that gap is getting bigger than right. Yeah, if we're not, we're not keeping up.
Brian:Yeah, so that yeah, I mean it is, but also in a sense like they're um. Tracing out what the demand curve looks like is always kind of a mystical exercise, cause you only see the people who show up and what and who actually transact right.
Brian:So, what does that whole other dimension on to the up and to the right look like? Like? How steep is it? How far does it go? It's, it's a bit of a mystery, so, um, but that's that's our guess. That mystery is that if we do, you know, 270 a year, that will pretty efficiently meet the market and, um, you know, we'll also kind of help keep costs in a re, probably bring them down and keep them, at least keep them from increasing at a really radical pace, like housing prices.
Mike:You mean Housing prices.
Brian:Yeah, so, um, but we've never accomplished that, so we haven't really yet to experience that. And again, this this was a study that was done in 2019.
Brian:Um, I'd love to yeah, a lot has changed Turns out, um, you know, for a minute, there in 2021, we were, you know, latah County. I don't remember the numbers, but I was looking at the in-migration statistics and the IRS statistics and it was like you know, we were one of the higher growth counties in the state in terms of in-migration which was one of the highest growth states which is yeah, right, so we're probably in the top 10th percentile.
Brian:You know that would have been 2020, 2021. It really tapered off after that. Um, I was, you know, I I expected at that time and I told people that I think this is there's an idiosyncrasy to this, like it's not going to go away, but it's also not going to sustain at this level, and I think I've turned out to be right about that. Um, at least until the next insane thing happens, and then we'll see.
Mike:Yeah, yeah, so did that when you were looking at a shortage. Was that similar to the national trends of kind of post 2008,. You know the post the housing crash, I know that nationally that's the case that you know. Basically building fell off and has never recovered.
Brian:Like we're.
Mike:Moscow. Pullman is not alone right, basically the rest of the country where we are short housing units at a national level.
Brian:Yes, at a national level. That's still the case. Now, I do see markets, cause this is, you know, housing permits is something that we track in every region we work in. I see places where in 2017, 2018, even 2020, that it exceeded where they were at in 2006. So it has happened in some places. It tends to be in the south pretty often, sometimes in the west in certain types of markets, but, as all real estate is hyperlocal, so it's you know, when you read articles and stuff about the national market, it's like, oftentimes, I think that's true, but also that means nothing for this particular market, right, um, so, but what you're saying is yeah, that's that's true.
Mike:We haven't we haven't gotten back to that level, um, and it's, it's tough to get back to that level.
Brian:Did you guys identify some of the main roadblocks to that? Yeah, we did Um. So you know I'll say that. And again, so it was two, two counties, two cities, a lot of kind of smaller towns outside of the big towns. Um, the city of Moscow has done a lot of really proactive policy stuff on housing and because of that you see a market for the size of town that we're at.
Brian:The articulation of housing options that we have is really pretty advanced.
Brian:So the fact that you can, you know you've got a large lot single family like, like you know, up on the other side of mountain view, you've got kind of your historic district that's kind of more urban density, and for russell you've got a couple of kind of pockets with multi-family and then you have all the other stuff out on the east side of town, like white avenue, where they did some experimental, um, what you call planned unit development or pudUD type of stuff at, like Tiempo Commons and some of those places that you don't just go build that stuff.
Brian:A builder is effectively walking hand in hand with the city to say I'd like to do this to achieve more density so I can bring costs down and things like this, and a lot of cities are really hard to work with on that stuff. But the city of Moscow is pretty good. City of Moscow has been great about figuring out what, what we should do about accessory dwelling units. That can oftentimes be a point of contention in a lot of communities too. So so the city of Moscow, I'd say there was less to less like low hanging fruit, to just be like do these things?
Brian:you know cause they're. They do a lot of a lot of the things, um, so I think more of the, the barriers for, uh, for Moscow and Latah County is just, uh, it's hard. We have a um. One of the one of the intentional kind of barriers that are put in place is the prohibition. It's kind of an anti-sprawl technique in a sense, that you can't subdivide lots beyond a certain number of times, over a certain number of years and stuff. So yeah, we experience a benefit from that that's.
Brian:You know, honestly, like we all kind of like driving in rural areas too, right, we don't want to see just constant sprawl spreading out in every direction. But it does mean that it kind of limits your options for building outside of the city limits. And we don't have enough builders. Yeah, I mean that I shouldn't just say builders, because what I mean is we don't have enough general contractors, we don't have enough subcontractors, we don't have enough tradesmen and we don't have enough developers, developers. So now I, since the study was finished, I had a lot of conversations with people who in that whole world that want to get into the weeds on. You know our numbers and, like you know if I built 500, in one year would I be okay, right.
Brian:Well, nobody's ever done it before.
Brian:Yeah exactly Like we. We have kind of a chronic shortage. So there would certainly, you know, absorption would not be as fast. But maybe you know, like 270 a year or 501 year, when you're already like consistently super low, Maybe that would work. Just you know it's you need, which again comes down to the kind of unique geography of our area. We're not going to have builders come down from Spokane or Coeur d'Alene, we're not going to have them come up from Boise, we're not going to have them come east from Tri-Cities. We're too far away. So we're a build your own.
Mike:Well, yeah, that's always been the way I've thought about it is. I'd be interested to get your take on this. We're in this weird catch-22 is the wrong term but kind of this weird in-between state, right, where we're growing. So we have that demand that you're talking about, but we're not large enough and we're growing at a pretty good rate, right, but our size we're still starting from a place that's small and so you know you're not going to have a KB Homes or Pulte, come in and build 500 housing units for example no, you're not Because they one.
Mike:that's a low end for them, right, like that's probably minimum what they would want to do. And then there's the question of, well, yeah, what would that do? Could you sell them all? Yeah, you know, based on our rate of sales, right, granted, that's dealing with the inventory we've had. It's like, yeah, you wouldn't, I mean not, certainly not right away. Yep, you know, um. And then there's the issue of, I don't know if the study got into this at all, but, um, price, right. How does that work when, if you, let's say, we need 270 more housing units every year, well, if those 270 housing units are $700,000 plus, that's probably not actually what we need, right, like, that's not going to deal with it.
Brian:But now If you build 500 units at $700,000,. You might have problems getting-.
Mike:Yeah, you just might, you might, yeah, especially at 7% interest rate, that kind of thing, and yeah, so I'm curious where that fits in, because it seems like that's one of the challenges again nationally, not just here is that new construction costs are so high that it's like that's not necessarily where the greatest need is or the greatest demand is for housing, and when your replacement costs are that high, then obviously that's just going to continue to drive up. You know existing home prices too.
Brian:Yes, exactly, so the um, I agree with everything that you said. I I think that Moscow is in what I would call an awkward adolescent stage growth, where we have some characteristics of being young and I have, you know, a little kid, and we have some characteristics of being young and we have, you know, a little kid and we have some characteristics of being more mature.
Brian:So you see these awkward kind of things where it's like we at the same time get on the list to get a target and to get a chick-fil-a and stuff like this, but we also have, you know, no uh, you know hr hortons of the world are going to look at us Right.
Brian:So you were not big enough and we're far enough. You know it would be one thing if we were where, say, cheney is located Right, like where you're. What is that? 30 miles from Spokane, we'd have a lot fewer problems because those builders could do projects there and get their subs to show up Right.
Brian:But where we're at, that it's too far away for them so again the, the build your own kind of thing and there's some, some blessings to that, you know. You see, builders that kind of get the community Um. They have a pattern of of how to do things. They we, we do have some more. Usually those big builders don't do innovative very well. They, they cut cookies super well, whereas you know, some of those developments we talked about on the east side, some of the, you know, I know you had the wins company folks on, like the stuff that they're doing. It's companies like that that are like let's do this differently, cause it'll be good for the community. You know that's um, those types of things often get crowded out when you're in bigger cities.
Mike:Yeah, yeah, that makes sense. So have you. You're obviously you were just going back looking at some data. Housing starts we're still not there. Have you revisited anything else from that study or kind of have any ideas of you know where are we at now and what's the forecast?
Brian:It's. You know it, it'd be hard to like. I'm a very data driven guy and my hands are in numbers all the time for different areas. I'm not day to day living in the Moscow, you know, pullman real estate market to be able to to say like there's little anecdotesotes that I found on occasions where somebody asked me or because I was interested. But you know, I would love to do an update on it. You know, and I think even if it was just like pulling 10 metrics and doing a white paper it's like five pages that would be useful.
Brian:But I haven't had time to do that so is there?
Mike:so you said partnership for economic prosperity is no longer folded since then. Right, what's the state of economic development for Moscow? Latah County, I guess.
Brian:Yeah.
Mike:Did anybody take up that mantle Right Like who would hire you to do the study?
Brian:Yeah, If it was now, it would probably be one of the cities or, you know, Avista has always been a big player in these types of things because they care about economic development too. Yeah, economic development in Latah County I mean this gets to the other side of the story is that people don't follow houses, they follow jobs and then houses follow jobs, so that's almost always the pattern.
Brian:Follow jobs, so that's almost always the pattern. And statistically, you know the models and the papers that have been written on the topic. That's that's how it goes Right. Um, but it's very much like a. Oftentimes the things work very much in parallel.
Mike:Yeah, I was going to say that's where maybe my earlier term of catch 22 could fit better, where, yes, that's the case case. But I know I've talked to people who are like, well, I couldn't move my business there because there's not enough housing, yeah, so, yeah, it seems like that's a, so it's a it's a huge speculative thing for a developer to be like you know, 300 new homes, here we go, when there's been no announcements about.
Brian:You know new company expansions, like you get the hesitancy. Hesitancy when nobody's ever done something to that scale before, um, but that so usually what had happened. So Boardman, oregon would be a good example of a place that's gone this, this route which um is. You know, if you go West from here towards Portland, it's kind of in the middle of everything and historically it's always just been kind of a. You know a small town with a port and a bunch of cows, but next time you're driving through, get off because it's like there are factories everywhere, like the place is booming. It went from um, maybe. You know, I think uh, 10, 12 years ago was like maybe a population of a thousand. Now it's's like 12,000, you know, like, and that's that's all. Economic development driven job growth by the Port of Morrow County local economic development organization. Port of.
Mike:Morrow. That's see, that's a flashback Cause I was like 10 years ago that's about when I was trying to sell packaging in Boardman, Oregon, Like that's why I know Boardman. But it was like it was a long time. It was 10 years ago or more. So yeah, we used to. I used to go sell stretch film there and bags because it was like agricultural processing in the Port of Morrow. Right, there was about it.
Brian:Yeah, well they're, they're banging now they need some stretch packaging. So, um, and when that's happening simultaneously, anybody who's in the development community is like, hey, let's put you know, 200 departments right there. So it happens like at the same time because people are paying attention to it and there's, you know. But if there's no signals that housing could feasibly even be developed, then that is a red flag to the people who work on this flag, to the people who work on this, whether that's, you know, uh, department of commerce for the state, the local economic development districts have a hard time selling it. Uh, the, uh, that site selectors who are kind of the, you know, the real estate agents of the economic development world, they, they're like this isn't going to work, where are you going to get all these people? Uh, so you gotta have both kind of moving at the same time. But it's more likely. I have more often than not seen a job announcement followed by a housing announcement than a housing announcement followed by a job announcement. Just put it in those terms.
Mike:That makes sense yeah. Yeah, the jobs, job, yeah, and the jobs is what that's. That's all the data that everybody's watching right now, anyway, too, right on the national level. It's the jobs, data and data and it's yeah, we're not going to see a bunch of foreclosures as long as unemployment's low like you need jobs to pay those mortgages and that kind of thing.
Mike:Yeah, yeah, yeah, interesting. Yeah, it'll be interesting to see where where it goes. I was, I feel like it. We're in this funny town where it's. It is kind of small and yet it's the universities.
Mike:So it feels a little bit bigger and yet you know it's, it's growing, it's pushing, but yet it's, you know, hard to really maybe break through some of those barriers. Yeah, but I mean, since your study there are two, you know you mentioned Wynn's company, their development North of town, Eddington, south of town, like there's some stuff, there's some lots right now. So at least there is a little bit more of a runway anyway for development which you know, preceding that there was hardly anything for quite a while.
Brian:Yeah, right, and you know the the. You mentioned the cost per square foot, right, like that. That's all that's partially driven by these labor shortages, but it's also driven by those distances to move the materials and the quantities at which people can buy them, and the difference in that is really stunning. I don't have a current number for Moscow. Do you know, like, what's the cost per square foot for a single family?
Mike:I don't. I mean I know if you're going to go hire a builder. From what I I've heard, they're kind of in that 225, 250 a square foot.
Brian:So 250 a square foot the project we're doing outside of Tulsa. Their cost per square foot this is per their building permit data for 2022, 125. Wow yeah that's a bit of a.
Mike:It's been a long time since it's been that bit of a difference.
Brian:Yeah so again, if you're anybody who's in that national landscape, you're like Ooh that doesn't look so good.
Mike:Yeah, yeah, yeah. You just don't get the economies of scale here at all. You like Boise area, right Called. Well, we're at. You know, we were visiting family and it's like, yeah, you just see basement after basement after basement or foundation going in. All that. You know that economy of scale of just cranking on those houses.
Brian:It's incredible.
Mike:Yeah, Plus it's flat and. I mean there's a lot of other things that help. There are hindrances here, but yeah, yeah, I think one of the things that I don't know if you've looked at it but would be interesting is looking at some of the commercial real estate too, because I know from being in the real estate business this is mostly anecdotal which I know talking to an economist is probably anathema, but in a market like this size, it is anecdotal.
Mike:Mostly anecdotal, but I mean, for a long time when I was selling real estate commercial real estate was kind of at this a little bit of an equilibrium as well, where there really wasn't a whole lot of supply but there also wasn't hardly any demand and so there were a few vacancies around, there's a little bit on the market.
Mike:But you know, it was just kind of sitting there and then I feel like in the last two years all that vacancy got taken up and all of a sudden it's like yeah, there's just nothing available. But we're kind of still it feels to me anyway like we're still a little bit bumping up against that lack of demand. It's not like there's a ton of demand where, similar to what you're saying, a developer could come in and build a bunch of commercial right Right, but it's, the thing that's changed is essentially all the supplies gone and so vacancies are practically zero. Um, I know, obviously residential rents have gone up, but so have commercial rents. Like it's just really changed that landscape a lot and it seems like that's another place where if we're going to attract, if we're going to get those jobs that are going to help you know, fill some of that housing.
Mike:We're going to need more space.
Brian:Yeah, so my read on the commercial market in Moscow is that it's still pretty immature but it has matured a lot just in the past five years, just because you've actually had like real companies taking real sizable leases and, um, so those, those places that were kind of sitting around for a while didn't, you know, weren't really being taken up or taken up. And then it's like, oh, now we have nothing, or next to nothing, and I think it just comes back to the. You think about the. You know commercial is going to be driven by, uh, small businesses in a town like this. We'll look at the small businesses that we have in Moscow right now. They're, they're in mostly in the kind of card table, in the garage, you know second bedroom kind of stage of development.
Brian:Um, like, like my business was, you know, four years ago I didn't need an office, but I, I took a commercial lease, just, you know, a couple months ago it's, you know, maybe, only a you know 1600 foot, um, little place that can fit five people in.
Brian:But where am I going to be five years from now, 10 years from now? We'll extrapolate that out by the number of businesses that are in the same phase that I am and that you're in and you know all these people that we know. So it it goes in. The market's always trying to find equilibrium, but when supply and demand are both pretty small, it tends to come in these like punctuated points where it's like you know, all of a sudden supplies way up and then all sudden demands way up and it's just like boom, boom. They're kind of battling with each other and, as that happens, you start to see people see more of an opportunity to be like okay, maybe we can actually build a you know, 20,000 square feet of flex space, because you know we're consistently seeing prices go up in low vacancy.
Mike:Right, yeah, yeah, that's interesting, yeah, um, so what's next for points consulting?
Brian:Um, so we are.
Brian:Um, one of the things that we're trying to work on is just get really good at the analytics on, uh, housing in the U?
Brian:S and uh, these markets that we're working in are, uh, all very different and very interesting, so it gives us kind of a lab to experiment with.
Brian:You know, we're in some communities where the median home price is, maybe, you know, 700 and one's 500 and one's 250.
Brian:And it's like, oh man, you like we're trying to build models to be able to forecast population growth, housing unit growth, split that out between multifamily, single family, the stuff in the middle, the middle density stuff, and be able to say, like, how do the metrics actually affect affordability in this area? Like, you know this as a realtor that every customer you have has a slightly different situation, right, well, we're not dealing with individuals, we're dealing with thousands of people in statistical kind of databases at a time. But I want to be able to tell that story accurately and say you know what percentage of households in this location can afford a median priced single family home? No idea how hard that question actually is to answer. Like we're doing that right now and I feel like we're doing it at. Like we're doing it better than anybody else I've seen, but I still give ourselves a C because we're not able to. There's so many other databases that we need to kind of bring into to be able to do that.
Brian:So we're going to keep doing cool stuff like that. Um, we're going to, uh, you know, keep, uh, building on our good reputation to get more of the type of work that we want to do. Uh and uh, you know, in 10 years, who knows where we'll be?
Mike:Yeah, yeah, well, that's, that's exciting. I mean, that's fun stuff. I said those are the things that I think are I find interesting and really do affect so many people. Yeah, it's weird to think about too, though. How do do you guys look at, like, how do national politics, how do national trends affect that stuff then? Because it's like the Fed and interest rates affect that a ton, right, I mean talking about when you talk about affordability, really in America today you're mostly talking about mortgages, right, like because that's what most people's metric is, for what can I afford? Is that monthly payment? And when you have nothing else really changed that much in a market but interest rates more than double in the last year, it's like, yeah, man, that that changes everything.
Brian:That's the single biggest thing. And you know I'm not a I'm not a macro forecaster and I'm also, like you know, for for a lot of folks that are in real estate or mortgage or development, like the interest rates are the single biggest metrics. I feel like there's actually a lot of people who know, who have a more informed opinion about where interest rates are going to go than me, because kind of more of their livelihood depends upon it. Um, but you know we, yeah, we do track that. Um, you know I have my my own theories about where that kind of stuff is going to go, but I also, um, you know, um, you know we've seen enough kind of black Swan events for a lifetime in the past.
Brian:You know, three years that I'm also hesitant to, you know, to say like I have 90% confidence that I know what's going to happen. Like you know, the, with the election coming up. I also heard somebody say recently that it was like greater than 50% of the free world's leaders are up for election in 2024. Because this also involves Mexico and a few other places and it's like, well, that's an element we don't think about very often. No, yeah, so there's crazy stuff that could happen. I don't know if you saw what happened down in Argentina, where they uh from out of years of socialism they elected a libertarian economist and it's like whoa, that's crazy, like what's going to happen in that place? Um so uh, and then you know, potential for international conflict like that always drastically affects what happens domestically with our economy.
Mike:I don't know who's going to get elected.
Brian:In terms of the interest rates, the outcome is probably pretty similar depending on who it is. But those are all some of the types of things.
Mike:So that stuff is in your mind but at the end of the day you're really mostly focused on a particular area, a particular place, what their local dynamics are. Yeah, and that's probably less. I mean it's always impacted by those national things, yeah, but I mean, at the end of the day, somebody's got to make a plan and move forward.
Brian:Speaking of that, though, one of the most fun projects that we ever did was the uh, the economic impact of the greater Idaho concept. So that was one we did. Two and a half three years ago.
Mike:I didn't know you guys were involved in that.
Brian:We did. That's awesome, yeah. So, and my goal with that was to write a report that it doesn't matter how red or how blue you are, you can read it and be like. They tried to be as fair as they possibly could and I think we accomplished that. But the problem with accomplishing that is that both sides are also mad at you for doing it.
Brian:So, um, so it was a really in-depth type of thing. You know, we looked at, like, how does this affect, uh, uh, you know, income tax? Uh, between you know the people who are in that in between place, how does it affect economic growth? What sectors are going to benefit? What about transient tax? What about sales tax? What about marijuana tax? Like we, we looked at all that kind of stuff and it was that was an extremely political situation and in fact, we've still. That report has been published for two years and there was a moment for about a week where the Idaho State House was discussing it and that's it. The Oregon State House hasn't really paid much attention to it and it's just it's not seriously on their radar yet, but it's always in the background and you know, I continue to see like big news publications writing about it all the time.
Mike:Yeah Well, it's interesting because I just listened to a podcast with the guy, a guy who runs the greater Idaho something or other.
Brian:I can't remember the guy's name, but probably Mike uh MacArthur, I think maybe, yeah, guy from Eastern Oregon.
Mike:Yeah, and it was interesting, and I don't know, maybe he was talking about your study, but he certainly made it sound like, yeah, we've done the homework to find out that this is actually an economic benefit for both states at the end of the day, there is a, you know, political filters. I'm sure you could spin it in either direction.
Brian:Yeah, yeah yeah, but from and this has been a while, but from what I remember, the state of Oregon would save a billion dollars in annual cost. It's a lot of money. Yeah, it's amazing.
Mike:Yeah, because he was saying yeah, they're really statistically more of an economic drain. The eastern part of the state is.
Brian:So that's the politically difficult thing, though, is that how do you simultaneously sell Oregon that this is a dead weight and you don't want it, but then turn around, you know 180 degrees and be like these are great counties, you need these counties, uh.
Brian:But so really, what we found is that it would save, uh uh, the Willamette Valley a billion dollars a year, and it would cost the state of Idaho 300 million a year, but you can start to find some unique tax tools for covering $300 million. So one of them would be this is getting super nerdy, but it would be like a weight mileage tax for that particular district, which the state of Idaho it's currently unconstitutional, but it's constitutional state of Oregon. So what they said is like well, what if we had an MOU for a period of years where these any semis driving on these roads have to pay tax according to the existing Oregon laws, and then that gets fed back to the state of Idaho and then, over time, the it kind of equilibrates, because you know those counties become more like Idaho and start to appreciate the uh, a lower minimum wage and less regulation, all that kind of stuff that actually helps economies grow.
Brian:So it's true that we found it could kind of be a benefit to both. But you have to kind of squint and turn your head and say this is going to happen, and this is going to happen.
Mike:Yeah, that's fascinating squint and turn your head and say you know this is going to happen and this is going to happen. Yeah, that's fascinating. It's one of those things that it seems like that's just so far out and ridiculous, yeah, and then you hear a couple of people tell you maybe that's, maybe it's possible, it'd be pretty cool, yeah, but anyway, well, thanks, brian. Yeah, appreciate the time. Super interesting and yeah, hopefully somebody pays you to update that study.
Brian:Yeah, we'll see, we'll have you on again. Yeah, we'll see.
Mike:if somebody on this listening to this, that's right, make it happen, make a pitch, all right, thanks. Thanks for joining us. Like, share, subscribe. We'll see you next week.