CAMBRIDGE — The head of the regional Federal Reserve Bank that includes Maryland visited business and community leaders on Wednesday, Sept. 23, in Cambridge.
Tom Barkin, the president and chief executive officer of the Richmond Fed, is responsible for the bank’s monetary policy, bank supervision and regulation, and payment services, as well as oversight of the Federal Reserve System’s information technology organization.
Barkin held meetings in Cambridge with business owners and representatives, developers, and workforce and economic development directors.
Barkin travels widely through small towns and rural areas in the Fifth District (West Virginia earlier this month and Somerset County this week), in order to “get boots on the ground to learn the story, history, dynamics, and to find out the initiatives already in place.”
He said a major longstanding difficulty for small towns is when rural jobs and people move to the cities, but the massive changes to the economy and the status quo caused by the COVID-19 pandemic and shutdown have created an opportunity for small businesses. Residents of more heavily populated areas have been “awakened to the risks” and been more exposed to the downsides of city dwelling, while the response to the crisis created new ways for people to live and work.
Barkin said that while small towns can benefit in a shift of population and economic activity, the shift is “not going to help every situation,” and there will be big competition for full or part time residents that are moving from cities.
“I do think COVID is the moment for small towns,” said Barkin, as he explained that individuals and businesses are looking for a story. Towns need to “get their story out there, get everyone telling the same story.”
“Some scrappiness is required,” cautioned Barkin, who said that communities have to have an educational system that must be desirable to individuals, and that provides an adequate workforce for employers.
“Workforce and jobs are two levers that must be moved at the same time,” said Barkin of the combined need to have jobs for workers and workers for jobs. Barkin said the Cambridge area has potential, including the waterfront area that Cambridge Waterfront Development Inc. is working on.
Barkin said the Richmond Fed is able to help communities with economic, community development and business growth by using strong research abilities to find out what makes a community work and by connecting those areas with that information. Often, Barkin said, “small towns struggle with access to expertise,” and benefit from that outside information, and from support that comes from connections with other areas elsewhere that are facing similar challenges.
Additionally, the Richmond Fed has an upcoming conference on investing in small towns, a forthcoming publication of research about expanding rural broadband, and connecting prospective entrepreneurs with a broader set of lenders to increase the chances of getting the necessary loan.
When asked about the local housing situation, Barkin said that while the nation is “in a slightly difference place on home ownership,” more lower cost housing is needed. He said while older generations saw it as the single best path to wealth, the housing crisis of 2008 showed that home ownership at any cost is a dangerous goal. The creation of what Barkin called “workforce housing” works economically in cities that have affordable land and construction costs.
Construction is “coming out of the depths,” with strong residential new construction and steady commercial rehab work, according to Barkin.
“No one is starting office buildings,” which Barkin said is a reflection of the trend created by the COVID situation, the situation that presents such an opportunity for a smaller town or city with the right circumstances. He said that as construction potentially slows down, it could help to make that factor more affordable for workforce housing.
The Richmond Fed’s mission is to strengthen the economy and communities within the Fifth District, which includes the Carolinas, Maryland, Virginia, most of West Virginia and Washington, D.C. The Federal Reserve System is comprised of 12 regional Reserve Banks across the country, including the Richmond Fed, and the national Board of Governors in Washington, D.C.
Barkin joined the Richmond Fed in January 2018.
CWDI board member Jeff Powell said, “It was really encouraging.”
Powell said an examination of Barkin’s recent work and his comments and questions at the meeting show, “He really gets it.”
Bay Country Communications representative Brian Roche said the meeting with Barkin and his staff showed, “They’re trying to understand what’s going on in the local economy.”
“They mostly listened and asked good questions,” said Roche. “I appreciated the opportunity to talk about what’s going on locally.”