VOL. 4 ISSUE 3, JULY 2020
THE MINNESOTA HOUSING INDUSTRY NEWS SOURCE BY HOUSING FIRST MINNESOTA • HOUSINGINDUSTRYNEWS.ORG
New home under construction in Cottage Grove, Minn.
Housing expected to lead in economic recovery Q&A with national housing expert Dr. Elliot Eisenberg The sudden impacts of COVID-19 brought historic disruption to the housing market and the broader economy in the relative blink of an eye. With the state shuttered for an eight-week period stretching from mid-March through mid-May, large sectors of the economy were sent into a freefall of unfamiliarity with no model from which to gauge a recovery. As the initial COVID-19 surge has moderated and the economy is now in the early stages of reopening, some clarity is emerging. Housing has been one of the early sectors of strength. But unemployment remains high and will be the key data point to measure the velocity of the recovery. National housing expert Dr. Elliot Eisenberg recently sat for an interview with James Vagle, vice president of advocacy at Housing First Minnesota,
to discuss the COVID-19 impacts on housing and the broader economy. The interview was conducted on June 4 and has been edited for length. JV: How would you describe the phenomenon of COVID-19’s impacts on the economy and on housing? EE: Economically, this was like having a car accident without seat belts and air bags. This is the biggest recession we have faced in 90 years, since the Great Depression. The single thing we had (consumer spending) was gone. There is only so much you can spend on toilet paper. We couldn’t do anything as consumers, and our economy collapsed. The 10% decline in GDP is five years of economic growth up in flames. The Great Recession decline was 5%, this will double that loss in three months time. The good news is that if this ends by June, I really think the recession ends by then.
JV: Was the federal CARES Act the right decision? EE: It was a good move, a great move. I give Congress a good grade. Given the speed at which they had to produce it and the quality of the outcome, I give it a B+. Were their mistakes made? Sure. But compromise, speed and amount of money involved, almost all of the boxes were checked. It saved the day. Had the government been as delayed as it was in the Great Recession, by even two more weeks this spring, we would have seen the stock market meltdown. They staved off the worst possible outcomes. The key thing now, is we are going to need more. JV: Is housing beginning to form a V-shaped recovery? EE: Yes! I rate housing and autos both in a V. This is going to be very short. CONTINUED >> PAGE 12
INSIDE THIS ISSUE
Continued COVID-19 Coverage
Coronavirus delays energy, electrical code hearings PAGE 4
State budget turns from surplus to deficit PAGE 9
Will COVID-19 change buying habits? PAGE 11
Land development goes digital Virtual meetings and digital applications replace counter visits and in-person meetings With city halls closed and public meetings going virtual, the land development process has increasingly moved to digital platforms over the past 2 ½ months. Under Minnesota law, local government bodies, city councils, and county and township boards have 60 days to take action on a development application, with the possibility of a
60-day extension if needed. After the 60-day window, any application not voted up or down is considered approved. In the early days of the COVID-19 pandemic, land market experts were worried about a prolonged period without processing CONTINUED >> PAGE 7 HOUSING INDUSTRY NEWS
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