Three economists speaking at National University agreed Tuesday that the Republican victory in the midterm elections could benefit San Diego through an end to blunt cuts in military spending.
“It will be a good development because of a united Congress. They can probably pass some legislation,” said Kelly Cunningham, economist and senior fellow at National University.
Cunningham predicted that with a Republican majority Congress could end the automatic spending cuts, or sequestration, that have been “a pretty blunt instrument” disrupting military budgets. San Diego would benefit, he said, because it receives the most military spending of any metropolitan area.
Alan Nevin, an economist at the Xpera Group, predicted the military would close smaller bases and concentrate spending on large centers like San Diego. “I see the next few years really going to be quite good for us,” he said.
Alan Jin, a professor of economics at the University of San Diego, said President Obama’s veto power means there could still be gridlock, but predicted “a little bit of compromise” with benefits for San Diego’s military-based economy.
The event at National University’s new Sanford Education Center was sponsored by the San Diego Chapter of the Institute of Management Accountants.
Turning to local politics, the economists were asked about Republican Chris Cate’s victory, which ended Democrats’ veto-proof majority on the San Diego City Council. The three saw that as having limited impact. They noted that members of the council already have a strong working relationship.
“They work relatively well now compared to many cities,” said Jin.
Nevin said a bigger issue is the impact of community planning groups on development projects. “We have a City Council that is somewhat hogtied in making progress in city planning,” he said.
Both Cunningham and Nevin said San Diego was facing a housing shortage because construction of new homes hasn’t caught up since the beginning of the recession in 2008.
“We have a severe problem in terms of our housing, and our governments locally don’t seem to have much enthusiasm for increasing the density or having more development,” Nevin said.
He said housing starts were as high as 9,000 a year before the recession, but this year will not exceed 2,500.
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