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Will Remote Work Increase Interest in Suburban Real Estate and Small City Life?

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Will Remote Work Increase Interest in Suburban Real Estate and Small City Life?
9 min. read

Image: Kusska / Shutterstock.com

Although nearly one third of the entire U.S. workforce are able to skirt commute and solve all their daily tasks from the comfort of their home, the majority of workers cannot. But is that about to change?

The Flexible Lifestyle Is a Top Perk

98% of Workers Want to Continue Working Remotely Indefinitely

Because the pandemic has pressed the fast forward button on the work from home trend, employers and employees alike will be able to find out if working from home really works for them. And judging by the results from some recent surveys and analyses, it does.

Buffer survey of over 3,500 workers from around the world revealed that a whopping 98% of them would like to continue working remotely, while 97% would recommend remote work. Moreover, it appears remote work comes with perks for employers and companies as well. According to a Regus survey,

Business leaders have fully acknowledged the further benefits achieved by early adopters and are keen to get in on the action; not only are they fully aware that flexible working has made their business more productive (85%), but a remarkable 67% think that flexibility can improve productivity by at least a fifth.

Current Homes Are Unfit for Pandemic Demands

The Need for Bigger Homes May Increase Interest in Smaller Cities

Freelancers and remote workers usually praise the flexible schedule, lack of commute and the ability to work from any location. But, just like anything else, remote work, and especially remote work during a pandemic, has its downsides. Lockdown is adding extra strain on both parents and their children, who all need to work, attend online classes, do homework, eat and watch TV or exercise from the living room or the open kitchen.

Many families have seen their homes become their whole universe overnight. And when that home is a one-bath condo with no balcony, its prime downtown location may no longer amount to much. The pandemic has changed our perspective on what the ideal home should be like, putting much greater emphasis on space and outdoor amenities like terraces, pools, and back yards.

If workers can choose to live anywhere, many will find that the high home costs, lengthy and unpleasant commutes, and lack of recreational opportunities in big cities just don’t make sense.

So if location is moving out of the limelight and space takes its place, could home seekers who have the possibility to work from home start looking for bigger homes in smaller, more affordable areas? After all, if the pandemic is causing business hubs and dense metropolitan centers to lose leverage points, suburbs and smaller cities that offer more spacious homes might pick up the slack.

Experts Weigh In

Long-Term Bet Remains on Big City Life

To see whether this move towards less densely populated areas could become a housing trend, we talked to several experts. Their take? Short-term conditions might change a few of our housing preferences, but once the pandemic gets under control, large cities will make sense again.

…while we may be willing to give up our double-shot mocha macchiato during a pandemic, the variety of amenities and services most of us expect requires urban-level densities for economies of scale (affordability) to work.

While many “expect the normalization of remote jobs […] to accelerate migration into suburban areas and smaller cities,” big cities remain highly desirable places, places that “provide a space for people to come together, share ideas, innovate, take entrepreneurial risks, enjoy the best of cultures and the arts, and to fall in and out of love.”

Check out 3 expert opinions that provide more context and an in-depth take on the changes in housing needs and lifestyle that this pandemic might bring. The questions we asked are the following:

A solution to people’s pandemic-induced financial problems could be the normalization of remote jobs. Do you believe an increase in remote jobs could cause more people to move from large cities to smaller ones and to suburbs?

What can smaller cities and suburbs do to attract these workers?
 

Benjamin Pugsley
Assistant Professor of Economics
University of Notre Dame


“I would expect the normalization of remote jobs, to the extent it is perceived to be permanent, to accelerate migration into suburban areas and smaller cities. In addition to typically lower costs of living, those areas offer less congestion and potentially easier access to the outdoors. While these features are always desirable, the latter two may be especially desirable with the prospect of sustained social distancing. Further, some of the advantages to dense urban living, such as public transportation and easy access to a variety of retail and other services have been significantly disrupted because of the pandemic.

The risks to this growth in smaller areas would be a switch away from remote work when widespread in-person work eventually becomes feasible. Many companies, such as IBM and Yahoo, have experimented with remote work arrangements only to later revert them. One of the reasons large urban areas have been so successful is that talented people are even more productive when surrounded by other talented people. These benefits of working in close proximity are still there, they are just temporarily (far) outweighed by the risks of working in close proximity brought on by COVID-19.”
 


 

Nina Martin
Associate Professor of Geography
University of North Carolina at Chapel Hill


“In the short and medium terms, the pandemic has some potential to accelerate the movement of people out of large cities and into small cities and suburbs. Most people move to large cities because of the rich and varied employment opportunities they can find there. During the pandemic, many folks are finding that their jobs can be done almost as well remotely as in person. This “natural” experiment has forced people to work from home and demonstrated to previously skeptical employers that the remote office can function well. Employers themselves could cut down on real estate costs by encouraging remote work.

If workers can choose to live anywhere, many will find that the high home costs, lengthy and unpleasant commutes, and lack of recreational opportunities in big cities just don’t make sense. Many small cities have a lot to offer these workers in these realms of life. Also, many small cities and suburbs have undergone a cosmopolitan-type renaissance in recent years, with excellent restaurants opening, new entertainment venues, more walkable environments, and a diversity of housing options from loft-style apartments to co-housing. In other words, they feel more “urban” than they did in the past.

But, I never count out big cities! In the long term, they will continue to be the drivers of economic growth. There is a reason why big cities thrive and people move there generation after generation. Cities provide a space for people to come together, share ideas, innovate, take entrepreneurial risks, enjoy the best of cultures and the arts, and to fall in and out of love. They are exciting places to be. Once the pandemic is in the past, people will still want to meet face-to-face and large cities are the logical place.

Smaller cities and suburbs have many advantages over large cities that can be marketed to remote workers. Most obviously, housing affordability and access to recreation and open space will be major draws. Remote workers will all be looking for a few things that smaller places can work on bolstering to attract them: 1. Excellent internet connectivity, 2. Air and rail access to large cities, and 3. Co-working spaces for those who wish to still have contact with “real” people during the day.”
 


 

Terry L. Clower
Northern Virginia Chair and Professor of Public Policy
Schar School of Policy & Government
George Mason University


“The rapid adjustment to remote telework in the face of the Covid-19 pandemic this past spring is a testament to our adaptability – when we want to be adaptable. However, Zoom calls remain a poor substitute for the casual face-to-face interactions that are critical drivers of innovation and the spread of information within and across firms. Prior to the pandemic, several large employers had reversed course on expanding telework. Still, well-managed strategies that blend office time and remote work can enhance productivity, reduce costs related to fixed office assignments and help address traffic congestion in major urban areas by effectively reducing the number of commuting trips. Yet, a blended work site arrangement means the vast majority of workers won’t be able to live in a beach hut or mountain cabin and keep their city-based jobs. Besides, while we may be willing to give up our double-shot mocha macchiato during a pandemic, the variety of amenities and services most of us expect requires urban-level densities for economies of scale (affordability) to work.

Economic development in the 21st Century is all about talent attraction and retention. The population shift from smaller cities and rural areas to urban areas has been going on since the beginning of the industrial revolution. The greatest predictor of the magnitude of urban population growth is the size of the city. As stated by the comedian Gallagher “nothing draws a crowd like a lot of people.” The market dynamics for suburban markets are substantially different versus smaller, more remote cities. Suburbs, with comparatively affordable housing prices, will benefit the most from the wider adoption of telework. An hour-long commute two days per week is tolerable, and suburbs often have a critical mass of amenities and high-quality services for entertaining kids and their parents.

The challenge of smaller cities will not likely be made any easier by the current pandemic. While smaller cities do not have the population density that increases exposure risk, they also often have a deficit of important services like medical facilities and healthcare specialists. Would a young family want to move to a community with limited healthcare resources during a pandemic? Probably not. There is no magic bullet for stopping out-migration from small, disconnected towns and cities. Many of these communities have tried to lure back former residents, particularly young adults with families. (Come home to a lifestyle like the one you had as a child!) Quite a few have even offered cash bounties or near-free housing to skilled workers for moving in.

However, the success of these strategies has been modest, at best. Some communities have had some success by focusing their talent attraction efforts on outdoor recreation. (You can leave the office and be paddling on a river in 30 minutes or less.) The next strategic wave is working to develop lifestyle characteristics in small cities and towns such as new mobility and town centers that mimic the amenities and vibe of dense urban neighborhoods. Can a small town be cool? Maybe so. Ask me again in about five years.

Of course, if we are still dealing with the spread of the novel Coronavirus two or three years from now, we may be all fleeing for the hills.”

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