On Wednesday, February 12th, the Hauppauge Industrial Association-Long Island (HIA-LI), held its 26th Annual Economic Summit at the Hyatt Regency. A diverse panel of experts was assembled to interpret and discuss the results of a survey and opinion poll intended to take the pulse of the Long Island Economy. The panelists included Rich Humann, President and CEO of H2M Architects, Janine Logan, Senior Director of Communications & Population Health at Nassau-Suffolk Community Council, Dr. John Nader, President of Farmingdale State College, Kevin O’Connor, President and CEO of BNB Bank, and Jim Coughlan, Principal of TRITEC. The panel was moderated by Bob Quarte, a Managing Partner at AVZ Certified Public Accountants, the firm that conducted the survey.
Quarte began the panel by highlighting the Hauppauge Industrial Park as a significant contributor to the Long Island and Metropolitan area economy. He went on to review 2019’s data that showed economic expansion, low unemployment, an increase of 10.1% for home prices in Suffolk County, and an economy confidence rating of 6.8 out of 10. Quarte also pointed out that healthcare is the market sector with the highest potential for growth and that other employers are finding it difficult to fill jobs requiring skilled labor. Quarte went on to ask Jim Coughlan about his thoughts on the current status of the commercial real estate industry. Jim responded that the industry is stable with room for growth because of favorable interest rates. He cautioned that New York is experiencing an out-migration because of its tax laws and that the real estate industry is facing additional threats because of prevailing wage and rent control legislations. Though TRITEC is looking for opportunities in other markets out of state, he is bullish on the Long Island economy because of great potential in office, industrial, medical, residential, and mixed-use commercial real estate.
Quarte asked Rich Humann, President of H2M, about the foreseeable impacts of the projection that a third of jobs will be remote in 2030 and what the challenges would be with hiring and retaining employees in the future. Humann responded that retention needs to be a priority in an employee-centered labor market and mentioned that in 2019, H2M increased its staff by more than 100 people and experienced a 10.8% turnover. H2M connects with local partners and educational institutions for recruitment and provides laptops to all employees for remote work capability. Humann added that remote work promotes work-life balance and can save on costs for office space.
Dr. John Nader was then asked by Quarte if college is a must for everyone, and whether high schools are preparing students for work in a trade. Nader responded that not everyone needs a college degree, but everyone does need an education. He emphasized that there are a lot of opportunities in the trades and that colleges are working with high schools to prepare students. He also stated that micro-credentials and certificates are given serious consideration by employers and are another option for people wanting to learn.
Janine Logan continued the discussion on jobs, highlighting that the healthcare industry will never stop growing. There are opportunities in homecare, preventative care, primary care that can be attained with a with a certificate program rather than a college degree. A growing market in healthcare is mental health, specifically in children. Today, one in three children will suffer from an anxiety disorder, where about ten years ago, this statistic was one in six. Social workers in addiction, anxiety, and other mental health fields are needed, especially in pediatrics, since statistics show that one in six students contemplate suicide. She commented that these jobs are high paying as they are labor-intensive and cannot be done remotely.
Queuing a new topic, Quarte asked Nader if colleges collaborate with businesses enough to prepare students for the working world. Nader responded that Farmingdale State College works hard to build a connection with the non-profit sector and the Nexus Center for Applied Learning to demonstrate a pipeline to employment. Applied learning helps students ease into a career, especially when they are working while in school.
Quarte asked Coughlan who would be left to buy houses if millennials and people over fifty-five years old are leaving. Coughlan responded that owning a big empty house is a challenge, so empty nesters tend to downsize. He shared that millennials do want to buy homes, but taxes are too high, and prices will have to come down eventually to make sales. Living near downtowns affording an active lifestyle, and near transit, is an appealing option for young professionals who are not ready to purchase a home as well as for downsizers ready to sell their homes.
Quarte asked Kevin O’Connor his opinion on interest rates. O’Connor responded that we saw a raise in rates, and he doesn’t agree with the President’s take on negative interest rates. He thinks the federal government should raise rates based on the economy, which is looking good until 2021. Quarte continued by asking Nader his thoughts on student loan forgiveness. Nader responded it is too broad of a policy, and that he would rather see an expansion of Pell Grants. He also shared that he wished students were more informed about loan options and that they should seek cheaper money from the government instead of a private lender. There is a disproportionate share of debt, and most people who default on student loans owe less than $10k and did not complete their degree. Continuing the discussion of proposed legislation, Quarte asked Logan her opinion on Medicare and the idea of Medicare for all. She responded that Medicare is here to stay, however, Medicare for all seems workable, but the devil is in the details.
At the conclusion of the panel discussion, Quarte asked each panelist about their confidence in the Long Island Economy. Coughlan was optimistic and rated the economy at an 8 out of 10. Logan was cautiously optimistic and rated the economy an 8. Humann was more confident about the local economy but concerned about a dysfunctional government, rating the economy an 8.5. Dr. Nader finds LI robust, constructive and positive, but is worried about the cost of living for people coming from out of state and rated the economy an 8. Finally, Kevin O’Connor rated the economy at an 8.5, recognizing the positive effect of collaborative efforts on issues. An AVZ employee shared the results of a survey given to audience members who were asked to rate the economy on their way into the event, which averaged at 7.4.
Quarte opened the floor to audience members, where the first question was directed to Logan, asking if there proactive rather than reactive practices in mental health. She responded that when dealing with youth, doctors ask the parents to leave the room to discuss state-of-mind, sexual health, or addiction. She noted that more mental health walk-in emergency clinics are opening, like DASH, that just opened in the Hauppauge Industrial Park. Places like this can provide aid for things such as anxiety, suicidal thoughts, and addiction.
Another audience member asked Coughlan his thoughts on the commercial industrial market. Jim responded that repurposing of facilities is becoming more popular as there is less than a 4% vacancy in industrial areas. It’s a tight market, and refurbishing is considerably less expensive than building a new facility.
An audience member asked Coughlan about the potential for condos on Long Island since there are not many small, starter houses for young home buyers. Coughlan responded that he believes there is a market, but TRITEC has not done that yet. He said that in Garden City, there are some flats available to purchase, but it is hard to convince an investor to take part in a condo project, and banks are not lending money for them. He does recognize the demand, and Long Island needs to expand on many housing options that are not single-family homes.
The symbiotic relationship between all the industries represented on the stage at the HIA-LI summit is essential to the creation of jobs and a variety of housing options on Long Island. TRITEC is proud to contribute to downtown revitalization. With the success of New Village at Patchogue, we are excited to see how upcoming projects like The Wel in Lindenhurst, and Alston in Ronkonkoma, will both attract and retain residents and breathe new life into our communities.