Building industry CEO solves problem with the problem's cause

In a Saturday "His Voice," John Beckman, chief executive officer of the Building Industry Association of the Delta, suggested that revitalizing San Joaquin County's stagnant economy is as easy as slashing fees and red tape imposed on developers.

"In the short term," he says, "the quickest way to get our local economy moving again is to spur new construction."

Beckman then talks briefly of a "San Joaquin Stimulus Plan" that consists solely of allowances to the construction industry, which for so long fueled the Central Valley's boom, as the solution.

Alert readers will note, however, that earlier in the very same column Beckman details why this is a Bad Idea That Will Not Work.

Why? Consider one main cause of our economic doldrums, which Beckman himself alludes to.

Home prices have fallen substantially from their previous highs, leading to reduced tax revenue. The dropping prices are essentially because of unsustainable price inflation and bad loans in the housing market a few years ago. The fallout from that situation is that we now have more sellers than buyers and a surplus of houses and commercial real estate on the market, which is depressing prices. In short, too much supply and not enough demand.

Still following? Good.

In this climate, Beckman insists that more construction — leading to more homes and commercial real estate on the market — will inflate property values.

Read that again. *Ahem.* Right.

New construction will not boost anything — prices, tax revenue, your general well-being — unless there is demand for it. And as of now, there is none.

It seems what this association really wants is a gift from local governments in the form of reduced and deferred fees. However, all such "temporary" measures, as Beckman calls them, are likely to do is rob cities and counties of what scant fees they might collect in the tightest financial climate since the Great Depression.

In a geographical area where development has often not paid for itself, it seems a dubious time to trust a building association to find a remedy to economic ills. Especially when the proposed solution is the same as the existing problem.

UPDATE: Beckman's idea that the jobs produced by construction will lead to an increase in work for construction-related folks — and therefore lead to more spending and tax revenue — seems to make sense at face value. But those are relatively small gains in exchange for continuing a problem of too much real estate and people who can't afford to buy it (and, therefore, cities that are missing revenue they were once accustomed to).

Just remember that construction is a one-time boost to the economy. The only way it can sustain a community is if that construction and expansion goes on unabated forever. Not exactly a sensible or stable foundation, if you ask me.