Michael H. Zaransky is founder and general manager of MZ Capital Partners, an award-winning multi-family investment and development company.
The coronavirus pandemic has forced those of us in the multifamily sector to reassess the time-honored location-location-location mantra of real estate. Now that remote working is commonplace in several companies – a trend that promises to continue after the pandemic – it is now often a move-move-relocation matter.
A significant proportion of staff no longer have to consider proximity to/access to an office when choosing a place to live. They can now hang their hats wherever they want — maybe even in another state — as long as they have a viable internet connection. While major urban centers, with their vibrant nightlife, vibrant trade and cosmopolitan culture, will always appeal to some, more and more people are finding the reasonable rents and open spaces on offer in smaller towns and suburbs also appealing.
As noted in a recent report from commercial real estate firm Marcus & Millichap, “In the short term, telecommuters can take advantage of the flexibility and distance from their office. Suburban apartments will attract more of these tenants in the long run because yes, with some companies that are likely to keep staff out of the pandemic.”
A shift to smaller cities and communities
That’s reflected in the fact that the annual vacancy rate for apartments in Manhattan nearly tripled in September 2020, and the suburbs and smaller cities – Grand Rapids, Colorado Springs, Boise and Fayetteville, Ark. undergoing something of a renaissance. That continued as the pandemic continued. Austin, Charlotte, Nashville and Raleigh are among the places that have seen their multifamily markets blossom in the early months of 2021.
The National Association of Realtors found that Texas, Virginia, Colorado, Georgia, Florida and North Carolina had the most work-from-home counties, after considering factors such as Internet connectivity and the percentage of employees in office-related occupations. The NAR further specified Forsyth County, Georgia; Douglas County, Colorado; Los Alamos County, New Mexico; Collin County, Texas; and Loudon County, Virginia, were also attractive places to be.
The short-term consequences of working from home
All this is food for thought, given the number of homeworkers. An estimate early in the pandemic was that as many as half of all Americans now worked remotely. Later estimates placed that figure between 29% and 35% and contrasted it with the 2019 figure of 11.9%. What should be kept in mind, however, is that according to McKinsey, only 22% of American workers can do their jobs from home three to five days a week, and they mostly work in professions like finance, insurance and technology.
Tech giants such as Facebook, Google, Twitter, Amazon and Airbnb have indeed set the tone early in the pandemic with their work-from-home protocols, and other companies have followed suit. That prompted many workers to reconsider their housing options. A Google employee, whose wife worked for another technology company, moved from their $4,500-a-month apartment in San Francisco to a place in Kentucky. Another couple from San Francisco, already tired of city life and able to work remotely, moved seven miles further to the city of Tiburon.
Those who took advantage of the flexible work policy did so largely because they saw it as a way to achieve a better work-life balance; 78% of respondents to a Flexjobs.com survey cited that reason. Reducing stress on commuting was another; respondents also pointed to this as a factor in their movements, which is understandable.
Businesses are also reaping the benefits of the work-from-home phenomenon, as shown by a survey that found that 67% of homeworkers believe their productivity is the same as when they show up at the office, and 27% believe it is higher. Another survey, specifically for IT service teams, found that 72% of them worked remotely no less effectively than in person.
The long-term consequences of working from home
It should be clear that the trend towards remote working predates the pandemic. According to data collected by Global Workplace Analytics for the US Census Bureau, between 2005 and 2017, the number of Americans working from home increased by a whopping 159%. The pandemic has clearly accelerated this shift, which, as mentioned, is expected to continue as the public health crisis subsides. No fewer than 83% of employers have indicated that they will continue the flexible work-from-home policy after the pandemic.
Understand that there are people, like Yahoo CEO Marissa Mayer, who have resisted the trend over the years. And understand that there are some undeniable drawbacks to remote working, such as loneliness and a lack of connection with the rest of the team, which can only be partially remedied by technology like Zoom and Skype.
But make no mistake, remote working has become an everyday reality and as a result it has changed the way people have to work in the multifamily space. Not only must we continue to provide the right amenities to our residents, in terms of high-speed internet, dedicated workspaces, and revised floor plans for each unit – we also need to understand that people don’t always want to be in or near major metropolitan areas. centers. They live just fine in smaller towns and suburbs, and we need to adjust our focus accordingly.
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