NH Seacoast are Weathering the Fiscal Crisis Well

NH Seacoast are Weathering the Fiscal Crisis Well

Some of the reasons why this area, and particularly the city of Portsmouth, have escaped the forces that have crushed some parts of the country which are even more affluent than ours were outlined by Nancy Cramer, economic development program manager for the city, at the annual "State of the Seacoast" forum held by the Seacoast Board of Realtors this past week. They point to a city that remains vibrant and fiscally sound in the face of a national crisis — at least for the time being.

"Current economic indicators for the city show a continued low unemployment rate, modest job growth at 2 to 3.5 percent for the past five years, stable housing costs, a stable real-estate market and strong private investment," Cramer said.

The reason for all this revolves around the quality of life here, Cramer said. She pointed to the vibrant downtown; great access via an interstate and local highways, and rail and bus service to and from the Boston area; high-quality city services; good schools and a university nearby; a low crime rate; a host of cultural opportunities; and a highly educated work force.

The fact that 6.8 million visitors come to the Seacoast each year also doesn't hurt, she said. The city is well positioned to meet the needs of those tourists with 110 restaurants; historic and cultural venues, including Strawbery Banke, The Music Hall and the Prescott Parks Arts Festival; and a strong Chamber of Commerce tourism program, Cramer contends.

There has also been a huge amount of private investment in the city, primarily because of, but not limited to, Pease International Tradeport, she told the audience at the forum.

"You can't understate the importance of the tradeport to the local economy," Cramer said.

In 1991, when the Air Force closed Pease air base, the region lost 6,400 jobs and 5,000 residents, the economic development program director said. Now, the tradeport built on that site houses 7,000 employees working at 231 businesses, with a projection of 10,000 employees when the tradeport is fully built out.

Many of those employees live locally and feed the city's businesses, which, in turn, generate tax revenue. The property on the tradeport also generates a significant amount of property tax to the city, with a total assessed value of $333 million, Cramer said.

In addition, four of the city's top 10 employers are located at the tradeport. They are the U.S. Department of State Passport Center, with 900 employees; Lonza Biologics, with 650 employees; the National VISA Center, with 550 employees; and Newmarket International, with 252 employees.

The other top city employers are the Portsmouth Naval Shipyard, with in excess of 4,800 employees; Portsmouth Regional Hospital, with 1,020 employees; Portsmouth city government, with 937 employees; Liberty Mutual Insurance, with 837 employees; Erie Scientific, with 350 employees; and LabCorp, with 225 employees.

However, the diversity of employers is what makes the city unique and able to ward off some of the effects of the economic slowdown, Cramer said.

"Ninety percent of the city's employers have fewer than 100 employees," she said.

The cultural and artistic community in the city is one of the largest in New England and contributes an estimated $38 million to the local economy.

"We are the only municipality in the state that has a cultural commission," Cramer said in reference to the city's support of this segment of the local economy.

With nearly 35 percent of its population holding associate's degrees or better and 20 percent with some college education, the educational level of the work force makes this area prime territory for new businesses. This, coupled with a relatively low overall tax burden, has given Portsmouth an unemployment rate that is consistently well below the national average.

In May of this year, the unemployment rate for the region, which has Portsmouth at its center, was 3.3 percent, while economic factors have driven the national rate up to 5.2 percent.

With all these positives there have to be some negatives, and Portsmouth's negative is the affordability of its housing, Cramer said.

"It's one of our Achilles' heels here," she said.

Both the cost of a home and rents are high in the city. With housing split just about evenly between rentals and owned units, the median price for a single-family home in the city is $318,000, as compared to $220,000 just eight years ago.

The median cost of an apartment in the city, including studios and one-, two- and three-bedroom units, is $1,226, with utilities, Cramer indicated.

According to Bill Ray at the N.H. Workforce Housing Council, a family or individual would have to take home approximately $49,000 a year to comfortably afford that rent. That equates to gross pay of about $60,000 a year.

Neither the national financial issues nor the local housing costs have deterred growth in the city, however.

From July 2007 through May 2008, the city issued eight new industrial permits with construction values totaling $30 million and 22 new residential dwelling unit permits with construction values totaling $8 million, Cramer said. In addition, permits for renovations are up 26 percent over the same period last year.

"Portsmouth is land poor right now," the economic development program manager said, "so renovations are where it's at right now in Portsmouth."

The effects of the subprime lending and adjustable rate mortgage crisis that has so greatly impacted areas such as northern California and Las Vegas are virtually unknown here in Portsmouth, Cramer said.

"We've had five foreclosures through May of this year," she said.

While portraying the optimism of any good economic development manager, Cramer recognizes the issues the country faces and the possible effects of those issues on the local economy sometime in the future.

"We're not immune to what's going on in the rest of the country," she said.

 

Thank you,

Tom Bonenfant | Associate Broker
NH & ME

Search the entire MLS at: www.tombonenfant.com

"I turn your home dreams into reality!"