The popularity of Wall Street, the attractiveness of Times Square and poor language of surveyors elicits comment from John Gummer
I have spent this week at the United Nations in New York. It was as light relief from the environmental deliberations that I dined one evening with friends from the US property industry – and they can’t believe their good fortune. The longest period of economic expansion since the 1950s shows no sign of slowing down. The supply of commercial real estate far from equals demand and so rents are rising against a background of low interest rates and low inflation.
Older hands are quick to warn that things could easily change. Still, there is a remarkable spirit of confidence around and it owes much of its strength to a new factor in the market. In the 1970s, the average American’s most important capital asset was his home. Now it’s his portfolio. The tone of the stock market is set by literally millions of individual investors, who know that share prices fall as well as rise. Refusing to be panicked when the market falls, their steadiness has meant that it rallies after a few weeks. Of course, there could easily be a sudden collapse. But, at least for the moment, wider share ownership is seen as a powerful stabilising factor.
The change in the US has been much more dramatic than that in the UK. Here, privatisation has given share-holding a boost, but for the most part the domination of the institutions has strengthened. What a transformation would occur if we were able to involve millions of our own citizens in the direct investment of their money. This democratisation of the capitalist system would have very far-reaching effects.
Continuing low interest rates will make the purchase of shares attractive for those who once relied exclusively on putting their money into building societies. In turn, that widening of share ownership may give us more stability. And that stability will be good news for property, which often plays the part of the canary in the mineshaft when things go up and down in the economic cycle.
Sleaze-free profits
This week I revisited Times Square and walked along 42nd Street. It was 30 years ago that I first walked this route, and wrote about it as a grim and sordid place. Today, it is a thriving and attractive centre. The Ford Foundation has renovated the theatre opposite and given a new home to modern art productions. New office complexes are rising, with quality retail outlets for Calvin Klein and Gap. Disney has brought the New Amsterdam Theatre back to its historic grandeur and is coining profits with the stage version of The Lion King. No wonder the street is now labelled New 42nd Street.
Can you imagine the British government specifically funding English Partnerships to set up a development company in Soho and King’s Cross? Imagine, too, that, together with Westminster and Camden councils, it gave generous national and local tax concessions to developers to transform these areas into centres of quality entertainment and commercial enterprise. Just think of the sleazy joints being closed by competition and regeneration rather than regulation. All that would seem mere fantasy in London, but it is reality in New York.
In the area’s Information Centre, visitors are introduced to this transformation. It is being achieved largely by the private sector, but that investment was made possible only by the encouragement that the government provided. That leads me to suggest a daring publicity coup. I know how dangerous it would be for John Prescott to be photographed wandering among clip joints and sex shops. Yet I wish he would see for himself what needs to be done in Soho and King’s Cross and then look at New 42nd Street. I think that by creating New Soho and New King’s Cross he would have done something that would outlast New Labour.
The Queen’s English
Why is it that people in property seem so determined to avoid speaking English? Passing the London headquarters of that distinguished company Healey & Baker, I spotted the subtitle “Member of Cushman & Wakefield” in the window. Surely a company is either a subsidiary of another company or an equal partner, in this case, I think, the latter.
It is always puzzling when residential agents insist that a property “has the benefit of a bathroom”. What property, having a bathroom, does not benefit by it? Are we to nod sagely at the special deal being offered, and how it beats a home with the bathroom cemented up? What’s wrong with “has a bathroom”? The punters can discover the benefits for themselves.
