Lauren Belvin and her husband run Belvin Built, a design and construction firm based in Point Harbor, NC, a small coastal town across the bridge from the Outer Banks.
The company does everything from flood restoration after hurricanes to designing brand-new homes. Belvin pays her workers anywhere from $500 to $1,000 a day, depending on the project. But this summer, the only consistent employees they could find were two teenagers they discovered power washing their neighbor’s house.
The company’s challenge is one facing many small businesses in beach towns. From the Outer Banks to the Hamptons, a combination of factors has left ‘Help Wanted’ signs on storefront doors up and down the coast.
Insider’s Ayelet Sheffey reported that the national labor shortage could be due to a mix of four factors: unemployment benefits, COVID-19 health concerns, caring responsibilities, and low wages.
Many seasonal international workers that summer towns depend on were unable to travel to the US due to J-1 visa restrictions. Vacation destinations then face a sixth challenge: the affordable-housing crisis. All these factors are colliding during the busiest travel weekend of the year, as tourists flock to the beach to celebrate Independence Day.
“Before the pandemic it was bad,” said Tom Ruhle, director of the East Hampton Office of Housing and Community Development. “Now it’s dismal.”
Ruhle told Insider that while the Hamptons housing market has been booming, the little affordable housing that was available before the pandemic is almost entirely gone.
The New York Times reported that data collected by Douglas Elliman, a real-estate company, showed that the number of available houses in the Hamptons fell at the fastest rate in over a decade while sales and prices skyrocketed.
“It’s pushing everyone to live further and further away,” Belvin told Insider. “And then rising gas prices coupled with unemployment makes finding skilled labor right now almost impossible.”
Some year-round residents in the Outer Banks have been forced to move out of the rentals as landlords capitalize on the real-estate market.
“I had a friend who lived in Kill Devil Hills for 20 years. Her landlord gave her 30 days to move out in April because he was putting the house on the market,” Belvin told Insider. “Now she’s living in our warehouse apartment.”
Many beach-town restaurants don’t have the staff to remain open at normal hours, and often have to remain closed one to two days a week. With a tourist season only lasting three months out of the year, closing puts a dent in the revenue seasonal businesses depend on to survive through the winter.
Sandbars Raw Bar and Grill, a restaurant in Kill Devil Hills, NC, closed on Friday. Owners Mark and Michelle Shafer posted an emotional video on the company’s Facebook page, citing the labor shortage as the main reason behind the closing.
“There’s not a lot of people looking for jobs out there and it’s become extremely hard,” Mark Shafer said in the video.
Lynn Jones-Hoates, the owner of Healthy Environments Child Development Center in Kill Devil Hills, told Insider she has a waitlist of families wanting to enroll their kids in childcare so they could go to work- but she doesn’t have enough staff to fully reopen.
“The question becomes what it’s going to look like year-round out here,” Ruhle said. “Depending on the work-from-home scenario, if we get more of a year-round economy, we’re going to have more of a demand for year-round workers, and that’s going to exacerbate certain problems we have. Nobody knows what’s going to happen.”
In real estate, there are NIMBYs and YIMBYs, and Donahue Peebles III knows where he stands.
For decades, “NIMBY,” which stands for “not in my backyard,” referred to homeowners who oppose nearby development. The “YIMBY,” naturally, says yes to the same proposition. To hear Donahue Peebles III tell it, more development won’t just be good for his family’s company – he’s a real-estate development heir – but also a key to civil-rights progress in the Biden era.
“As developers, we have such an outsized effect on the world in which everyday folks live, far more than an options trader would or your Wall Street executive,” Peebles told Insider. “Everybody, every day, interfaces with real estate, multiple times a day.”
The Peebles Corporation utilizes public-private partnerships to develop properties with civic interests in mind, focused primarily on the New York, Washington DC, Miami, and Los Angeles markets. It specializes in residential, hospitality, retail, and mixed-use commercial properties.
Peebles is his father’s chief of staff, a position he has held since early last year. He said he has no interest in separating himself from his father’s legacy, saying there is “so much value” in being allowed to help build on that.
In an interview with Insider, Peebles spoke about the affordable housing crisis, how his company is trying to help curb the effects of gentrification, and what he’s expecting under a Biden presidency.
Peebles calls the affordable housing crisis ‘a failure of American society’
Peebles has been working for his father’s firm since his senior summer in high school. Born in Washington, DC, Peebles spent his childhood in South Florida and attended high school in New York before matriculating to Columbia University to study economics.
“My real-estate education happened simultaneously with my regular education,” he said. “As a little kid, you always want to go to McDonald’s and get a McFlurry or go to your friends’ house early on a Saturday before basketball practice. My father would say, ‘Sure, but I need you to learn the value of this building first.'”
To Peebles, housing affordability is one of the most pressing issues facing the US right now. “There’s no reason that somebody gainfully employed should have to be housing insecure, or struggle with finding an apartment they can comfortably afford on their full-time salary,” he said. “That’s a failure of American society.”
Part of the problem, he said, is that developers are being restricted in terms of when and where they can build new housing. He cited historic preservation in the West Village, for example, which prevents developers from knocking down existing brownstones to create more housing.
These restrictions exist “even though they were constructed to satisfy the housing needs of a New York that’s about one stitch the size of New York City is today,” he said. “Instead of treating the symptoms, we need to begin to treat the underlying cause of the disease, which in my mind is a consequence of artificial supply constraints.”
Andrew Berman, executive director of the Greenwich Village Society for Historic Preservation, told Insider that, for the most part, the organization was all for more affordable units in landmarked areas.”That can be achieved through adaptive reuse and new construction,” Berman told Insider.
But there is often a catch: “What is often proposed however is large new entirely or predominantly luxury developments which do little or nothing to address affordability issues and actually often make the situation worse, not better,” he continued.
Meanwhile, Simeon Bankoff, executive director of NYC’s Historic Districts Council, an organization that advocates for the city’s historic and cultural neighborhoods, noted that as a developer, Peebles has a vested interest in more laxity on development. “If people who are in the business of doing real estate development didn’t have to deal with regulations, they wouldn’t.”
Bankoff said the number of landmark properties in New York City overall is very small, the city has one of the most complex building ecosystems and construction ecosystems in America, and finally, it has a “limited amount of land. If someone wants to come in and build a high-density, residential development in a low-density zone, it’s difficult.” Doing that has nothing to do with landmark designation, Bankoff added.
Peebles Corporation is raising money for a fund to help minority entrepreneurs
Peebles, along with the corporation, has also been working to assist minority and women entrepreneurs as it seeks to help close the racial wealth gap and curb gentrification.
He called the racial wealth gap a social failure of capitalism. Talent, he said, is thought to be distributed equally, but without opportunities, underrepresented and underutilized business owners, entrepreneurs, and firms will still struggle to grow.
“It seems as though people who have a fair amount of economic privilege already are those who have been encouraged to become entrepreneurs and become owners,” Peebles said, adding that consumers and society will benefit more if more people with talent are provided with opportunities.
A development project isn’t like an options trade, he said, and there are so many different economic tributaries that flow from it – from the developer making money to the bank getting the land and the equity partner getting deployed capital.
The goal is to find a way to democratize access to capital and involve local businesses and long-term residents of particular neighborhoods in that neighborhood’s economic growth, he said, rather than a third party coming in from outside, attracting all the capital and renovation work. Right now, he said, the Peebles Corporation is raising an emerging developers fund that will help provide capital to women and other developers of color who seek to develop in the communities in which they live.
And this, Peebles said, will hopefully guard, in some ways, against more gentrification.
“I like to say the struggle of the 19th century was emancipation,” Peebles said. “The struggle of the 20th century was enfranchisement. And the struggle with the 21st is without a doubt, economics. If we can help bridge the racial wealth gap by whatever means, I think we’re doing our society a service.”
Corporations need to give employees better safety nets, Peebles says
Peebles expressed optimism about the future of affordable housing with Joe Biden in the White House and congress under unified Democratic control.
He praised the section of the $900 billion in COVID-19 relief and $1.4 trillion stimulus package passed in December that assisted renters and made 4% the permanent minimum rate for low-income housing tax credit bonds. Peebles predicts this will help create a boom in affordable housing.
He’s also expecting a revision of a few tax policies that could have large-scale economic consequences, such as the 1031 exchange. He also hopes to see a revision in the structure of opportunity zones – designated geographic areas that have been identified as low-income subdivisions.
Opportunity zones, he said, are like “government-funded gentrification” and they need to be structured so they can help create jobs and economic opportunities within the communities they target, rather than creating economic hubs that are pushing out existing communities. “You want a rising tide that lifts all boats,” he said. “Not a new dock.”
The situation might be different for individual citizens, however, and Peebles said the pandemic has the potential to spark conversations around entrepreneurship as a whole. Many people realized that the job security and safety nets they had are not as secure as they once thought.
If corporations, he said, could find ways to provide a more robust social safety net for people, it could boost innovation as it would give more people freedom to fail, which “would encourage more entrepreneurial risk-taking, which in turn would hopefully help bridge the racial wealth gap.”
He called real estate “such a challenging, creative industry,” but said he wouldn’t rather be doing anything else. “The problems we solve are at times both very immediate and practical, but also indelibly complex. It’s one of the best intellectual and social challenges.”