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With Eric Papenfuse’s defeat of incumbent Mayor Linda Thompson in last week's primary, many are wondering what the future holds for the embattled midstate city. I thought I would spill some ink here ruminating about the impact of changes in leadership on a municipality’s real estate market.
It’s a long-held belief in real estate that if a government is pro-growth, pro-business, it naturally follows that property values rise as buyers feel encouraged about their town’s future prospects. Generally I think this is true at the local level. Certainly I would agree that the reverse is true; just think of Detroit.
Also, I make note that the degree to which leaders in government (assuming there are any) set the public tone for growth can develop a powerful positive vibe; things like holding grand openings, patronizing local establishments, talking up the neighborhoods and communities within their purview. When bad news comes, this positive press legacy will be keenly felt and appreciated.
In the case of Harrisburg, I fear that all the bad news over the last few years has made a serious dent in the confidence of real estate owners, investors and professionals. From what I’ve observed, the current Harrisburg administration apparently did little to lay a positive groundwork of community pride of ownership or small-business excitement. People just had to “grin and bear it” the last few years, hoping their property values would rebound some day. Now, people in the city are clearly ready for a new narrative.
So, if Mr. Papenfuse wins in the fall election, I believe he has an opportunity to show early leadership in the area of celebrating and encouraging business investment and home ownership in Harrisburg, and thus take public steps to reclaim a positive narrative even with the continuing financial woes (that’s a whole ‘nother post aside from real estate). You can be sure that those who own, invest in or make a career around real estate will thank him if he makes this a priority.