Howard's economy on rise

Growth wasn't as expected, but county said to be well-positioned

November 30, 2005|BY A SUN REPORTER

Howard County's economy continued to grow this year, but not as robustly as expected, and it faces several profound challenges in the future.

Nonetheless, the county remains positioned for sustained expansion barring a deep recession or drastic reduction in federal spending, neither of which is anticipated, says Richard W. Story, chief executive officer of the Economic Development Authority.

"It's a good year," he says. "It was not an outstanding year, but it was good. ... Would I like more? Absolutely."

The most significant slowdown came in the key category of job creation. Although final year-end figures will not be available for several months, Story says the number of new jobs in the county will be below projections.

"It's been more lethargic," he says. "When the year began, I predicted 5,000 jobs. I don't think we're going to come close to that. I think we'll do better than the previous year, but the curve has certainly leveled."

Last year, 2,714 jobs were created in the county -- almost twice the number in 2003 -- swelling the total to 138,485, according to the Maryland Department of Labor, Licensing and Regulation.

One factor behind the slowdown this year has been that spending by the Department of Homeland Security has not produced the number of jobs anticipated, although Story expects that to improve over the next few years.

In addition, the county will benefit from the closure and realignment of military and defense facilities, which will add 5,300 jobs at Fort Meade, although that process is expected to take at least three years.

"The impact on the defense-contractor industry is probably going to be 2-1 or 3-1," says Story. "That's another 10,000 to 15,000 people -- high-level, technology people ... all making well into the six digits."

He says that ultimately will spawn thousands more jobs as the retail and service sectors open or expand businesses to serve those people.

Not all of those jobs will be in Howard County, but Story says it is fair to assume that 40 percent, and perhaps more, will be in the county.

The year produced gains in several sectors:

Unemployment remained anemic, at 2.8 percent, the lowest in the state. The highest unemployment reached in the past dozen years was 3.9 percent, in 1993.

Business expansion was healthy, acquiring more than 3.1 million square feet of space and announcing 2,200 jobs, either created immediately or projected.

The vacancy rate in commercial office buildings fell to 10 percent, the lowest it has been in five years and far below the 24 percent rate that existed during the 2000 recession.

Construction of office buildings was brisk throughout the county. That was helped by Class A, or premium, development in Maple Lawn, Maryland, the luxury planned community in Fulton, and by the completion or start of construction of several offices in Columbia Gateway, the county's largest business park, off Route 175 and bounded on one side by Interstate 95.

Home construction was healthy, particularly in the luxury and high-end, age-restricted segments.

The average weekly wage will exceed $868 a week, or about $45,000 annually, when the final figures are in. That is expected to allow the county to leapfrog Baltimore City into second place in the state, trailing only Montgomery County.

The median household income, released yesterday by the U.S. Census Bureau, is $79,455, the highest in the state and eighth in the nation.

Although there are no trends suggesting an economic reversal for the county, there are issues that, if not addressed, could cause problems in the future.

One of the most problematic is declining land to accommodate growth. The Department of Planning and Zoning projects that at the current rate of growth the county will exhaust all developable land by 2020.

In-fill development in places such as Town Center in Columbia, Maple Lawn and Emerson and, ultimately along the U.S. 1 corridor, "is still a relief valve," Story says, "... but at some point in the near future, we run out of land for residential, retail, commercial and industrial."

The only other options are permitting higher density in areas such as Town Center, Turf Valley, Maple Lawn and Emerson, or permitting more growth in rural western Howard County. But the public and elected officials have opposed both, sometimes vehemently.

Escalating housing prices also are an issue and, like land availability, difficult to address.

"Residential has gone from `McMansions' to `starter castles,' " Story says. "The demand right now in Howard County is on the upper end ... and that demand causes the prices" to increase.

Land and housing prices are creating two problems. The first is that increasingly only the affluent can afford to live in the county. The second is that those prices, coupled with the low unemployment rate, make it harder for businesses to find workers for the lower-paying retail and service sector jobs.

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