Charleston’s Geography Impacts Economic Growth

Charleston’s Geography Impacts Economic Growth

Charleston Regional Development Alliance, recently hosted a luncheon with geopolitical analyst Peter Zeihan, to discuss the unique challenges that the Lowcountry faces due to its location.  He called Charleston a “pocket city” because of its limitations geographically along the oceans and swamps that surround the city.  In an interview with the Post & Courier, Mr. Zeihan pointed out that Charleston has thrived very well economically during the last ten years despite these limitations, in attracting companies such as Boeing, Volvo and Mercedes-Benz, which have invested billions of dollars in the metro area. Mr. Zeihan noted that “there aren’t a lot of cities out there where this happens because of a plan….I  have no doubt that Charleston will continue to thrive.” He added that Charleston is “evolving for the right reasons and in the right direction.”

Mr. Zeihan, who heads up a consulting firm in Austin, Texas, thinks that the United States in general is posed to do well globally as the world becomes more chaotic, and the country turns more inward.  He believes it may lead more foreign firms to invest in manufacturing plants in the United States, and to attract more skilled labor to the country. The United States is a big attraction for foreign investment because of ”the combination of land, labor and capital,” said Mr. Zeihan.

He cited concerns involving the rate of growth in Charleston and the number of people moving here from places with higher wages.  When questioned about its impact on the cost of living in Charleston, Mr. Zeihan said that “higher paid people—whether they are local or not—drive up the cost of everything because they can bid on the rare pieces of land that are available, and that prices everybody else out—new or not, young or old, black or white….Economics are, as a rule, brutally blind, but politics are not.”

Mr. Zeihan said that other geographically limited cities, such as Vancouver, have not fared well in dealing with an influx of foreign investment to their city. Seventy percent of apartments in downtown Vancouver have been left vacant but are owned by foreigners he stated. Charleston does not have that problem he added. “People are living here. It’s just a question of the politics.  And because the new people and the old people can both vote, it’s a balance issue.”

Charleston has avoided some of the pitfalls that other cities around the country have faced.  The area was “jolted into action” when the military left, and “made a lot of very good calls very early.” He added “there are very few military towns that have done that successfully without something else huge going on….so honestly, you guys really do stand out.”

Source: Post & Courier, “Peter Zeihan,” by Thad Moore, November 7, 2016

Caldwell Commercial keeps abreast of the latest global and local economic trends to best serve our clients. Contact us today at caldwellcommercial.com to learn more about our commercial real estate properties and services.