Building the Future: Young Developers Look at Growth
Today's newcomers in the development world are the industry drivers of tomorrow, and they're being shaped by a different economic and cultural climate than their predecessors.
Like others of their generation, they expect different things from their careers: more flexibility, more room for quicker growth and greater rewards beyond the financial. And they have an idea of what the growth of the future will and should look like, with the current recession playing an important part in their education.
"Now is the time we can learn about cycles in the market, which teaches us how to problem solve to earn a living," said 31-year-old Jay Story, who recently started a commercial real estate firm in Boise called Story Commercial. "We've only heard the stories about the bad times with creative financing, high interest rates and unemployment, but during the good times, we don't pay much heed to those stories as developments just seem to come together and everyone makes money. Now is the time to learn how to be smart in our business."
Story, like all the young professionals in this article, is on the leadership committee for the Young Leaders Group, a division of the Urban Land Institute, which focuses on promoting responsible and sustainable land development. The group members agreed that the economic downturn and slowdown in lending and building separates the smart projects from the crowd. Ryan Skene, a 32-year-old site manager at the new flexible-use office facility VengaWorks in Meridian, said the economic climate is like a wildfire, cleaning out the bad and giving the good a chance to start over.
"The smarter people are going to overcome (the economy), and the really good developments will make it through," said Adam Richins, 30, an attorney for Boise-based Stoel Rives.
"(Before,) everyone was becoming a developer, and everyone was out of their comfort level," added Ashley Ford, a 34-year-old principal land use planner at Rose Law Group Borton. "Everyone was able to make mistakes and still make money at it."
But not these days. For the group of young development professionals, smart development means several things: it means renewable projects with energy efficiency aspects; it means cutting out sprawl, instead focusing on infill and planned communities that capture trips; it means building the kinds of homes people can afford; it means investing in developers that won't go belly up when a dip in the cycle hits.
"Lending is reverting back to a risk-managing basis, which is what it got away from," said Stuart Kerber, 27, a relationship manager at Western Capital Bank. "The reality is there's still money out there for developers, there are banks willing to make loans, there are clients who can get loans; it's just that the banks are looking more towards secondary and tertiary sources of repayment. They're really looking at the inherent risk in managing product. They're recognizing the fact that real estate can go down in value."
There's some reserve in the group's outlook, too. Shelley Bennett, manager for development group Brix and Company, said as smart developers return the market to health, their success could "push it back into an upward spiral, and everyone's going to want a piece of it, again."
But the young professionals hope the recession will stick in the collective memory of the generation and lead to regulations that won't allow smart principles to be forgotten.
The young developers listed a few positive aspects of the recession: it gives professionals a chance to explore other business opportunities or to consider further education, and it lets them focus on forming the relationships that will ensure they're ready to take off running when growth becomes more active. But still, work is tough to find and funding – private and public – is scarce.
Jed Glavin, a planner for HDR Engineering, said youth is both a detriment and a blessing in a market where many are losing jobs.
"(It's) bad in the sense that I don't have the multitude of experience to be assured another job if things turn dire, good in the sense that my responsibilities and dependents are few if I did lose my job," the 28-year-old said.
But even with jobs being lost, there are opportunities for professional growth. Kerber said the economic growth of the future will come from startups, not from big companies like Micron. And Skene and Bennett mentioned promising companies they're seeing form and grow in places like VengaWorks and the Water Cooler in downtown Boise.
"(The downturn) pushes people to do things they always thought about doing," Skene said.
Dave Phillips, a 30-year-old landscape architect, is another one of those who felt the push, recently starting up Phy.la Design in Boise.
"I spent seven and a half years in a very comfortable spot, and now (the economy) is kicking me in the right direction," he said. "It's definitely frightening, but it's fun. I'm doing what I've always wanted to do."
Overall, they're optimistic about the future.
"While I know it's certainly a difficult time for everyone, this is a great time to be a young professional," said Steve Zabel, 30, a commercial lender with Idaho First Bank. "We are living in a world of tremendous adversity and I believe in order to achieve success at the highest level you must be able to react to adversity with poise, purpose and an open mind. The only opportunity we have to master those traits is to experience adversity, and that is why this is a great time to be a young professional in the development industry. No one can teach what we are having to learn today."