Urban Exodus? Not So Fast
January 4, 2021
Are the moves out of urban centers to suburban spaces the beginning of a new structural change or merely a cyclical event caused by the pandemic?
It is much more of a cyclical change, and economic and cultural forces will continue to draw workers into cities once lockdown restrictions end, according to Ken Riggs, Vice Chair of RERC, a SitusAMC company, who was recently featured in Commercial Property Executive Viewpoint on the ongoing “urban exodus” of workers to the suburbs.
Pandemic-related restrictions have forced employees to work remotely. That may continue even after the pandemic subsides, and employees have sought more space to make it easier to work from home. While the pandemic and its implications for the economy are unprecedented, the push-and-pull forces between urban and suburban living are not. Evidence from recent history suggests urban markets will be jolted by near-term migration patterns of workers, but not permanently.
The urban-suburban dynamic in a post-pandemic world will affect all types of commercial properties. The mass distribution of an effective vaccine will resolve uncertainties, but even optimistic public health experts estimate vaccination levels will not reach a critical mass of Americans until several months into 2021.
In the meantime, certain factors indicate direction in the economy. Several metros were very expensive prior to the pandemic and will likely see an out-migration of workers. Other metros are well positioned to absorb those workers and establish a new equilibrium. Remote work options were emerging prior to the pandemic and are unlikely to cease afterwards. But office work will partially resume once it is safe to do so, except at certain technology companies that are committed to permanent work-from-home policies. The issue is not whether people will return to urban centers, but when and to what level. How people and the economy sort themselves in the coming months will be telling for the next iteration of the urban-suburban dynamic, but to expect the end of large urban areas is to ignore recent history and what drew workers there.
Click here to read the article by Ken Riggs.