This recession has shown us the power of investing in towns with a diverse employment base because the impact it has on rents, vacancies and prices of real estate. Towns like Windsor are getting hit hard because of Chrysler’s woes and there is very little real estate investors who own in the city could do about it.
Thinking about lack of a diverse employment base I asked a question to David A Wolfe, professor of Economics at my Alma Mater University of Toronto..why don’t more towns diversify it’s economy?
He told me that “every town recognizes and appreciates the importance of diversifying their economy, it’s a question of how will they.”
There are three problems a city government faces when trying to create jobs:
- Not enough funding. 85-90% of spending comes from the higher level of governments.
- Government policy is only one variable that develops an economy and there are multiple variables in causation (think the butterfly effect)
- time lag on results (you don’t see the results until 10 years in the future).
So who got in wrong and who got it right?
Windsor mobilized the federal government funding 10 years ago to build University of Windsor/Chrysler Canada Ltd. Automotive Research & Development Centre. They got it wrong.
Waterloo mobilized federal and provincial funding to expand university of Waterloo into a world leader in research and innovation and spun off RIM and many other exciting start-ups. They got it right.
Now lets us look at things that are happening now to see where there are signs of a future.
Hamilton – Building the McMaster Innovation park
Saskatoon – Built the synchrotron
Vancouver- Transitioning away from resources and has one of the most diverse economies in Canada.
Calgary – Using oil sands exploration technology for logistics
Kitchener/Cambridge/Waterloo – Research/Technology Park, expansion into medicine and pharmaceuticals, and environmental sciences.
Think jobs, think population growth, think real estate growth.
Brian Persaud from Real Experts Inc has been a REIN member since 2005 and currently buying property in specific neighborhoods in Edmonton.