Indiana is embroiled right now in a bitter controversy, which as of the date of this writing appears to have been resolved - for now. Put simply, the controversy is over the right of individuals to “contract” with businesses to work, without being compelled to contribute to or take part in union membership as a condition of employment.
Indiana Governor Mitch Daniels signed the state’s right-to-work bill this week after it passed through the state’s House of Representatives, making Indiana the first state in a decade to become a right-to-work state. Neighboring Illinois State Governor Pat Quinn doesn’t like the new law, and despite the claims by many pundits that it will, Quinn doesn’t believe Indiana’s new law will impact his state.
According to the Huffington Post, Illinois Governor Pat Quinn announced to the media that “most Illinois businesses are happy with union labor, and that prohibiting unions from requiring representation fees is a bad policy.”
When asked about the possibility of businesses leaving the state for Indiana, the Post quoted Quinn as saying “That ain’t gonna happen, I’ll tell you that. I think that’s a bad bill and I’m very sorry that Mitch Daniels is gonna sign the ‘right to work for less’ bill. That’s a bad bill for the incomes of hard-working people."
Quinn also said that when Wisconsin governor Scott Walker took collective bargaining rights away from public union employees, that he “should be ashamed of himself.” Well, as a citizen of the Badger State, I have to say unequivocally that Quinn is dead wrong about the impact on his state. We have had a good influx of businesses in this state who fled Quinn’s tax scourging, improving our employment situation, albeit unfortunately at the cost of many of Illinois citizens’ livelihoods.
What is to be seen is the impact that this new law will have on real estate in Indiana. There are a myriad of experts on both side of this “right to work” fence, both claiming that it will negatively (or positively) impact the economy, however values in real estate are not driven by one single topic, but rather a multitude.
Looking at real estate currently in Indiana, the average price per square foot grew by 19.4% compared to the same time last year. The median home sales price, compared to the same time last year has fallen by 0.2% with an 89.3% decrease in home sales.
Home sales have dropped from this time last year; the median sales price for Indianapolis is $82,331, reflecting a decline of 3.7% when compared to the 3rd quarter of 2011, and sales prices have depreciated over the last 5 years by 25.2%.
The real impact of this new law will be felt by not only Indiana businesses, but Indiana citizens as well. But “all work and no play makes Jack a dull boy” so despite which side of the aisle they find themselves in on the right to work issue, sports fans in Indiana and across the globe will have something to cheer about as they watch the upcoming Superbowl XLVI this Sunday as the New England Patriots and New York Giants battle it out in Indianapolis’ Lucas Oil Stadium.
Optimists will tell you that the new law recently enacted by Governor Daniels will spur life in the real estate market as more jobs become available, drawing more individuals to the area who obviously will need housing - improving both the residential and commercial real estate markets and spurring a renewal in the area. Pessimists will predict gloom and doom with more businesses closing up shop, people leaving the area and/or falling into desperate situations. As it is with so many things, time will see who was right.