Photo: PhotoAlto/Frederic Cirou | Getty Images
As we enter the homestretch of perhaps the most turbulent year of our lifetimes, it’s hard not to ask the major questions: How did we get here? How can we fix it? And what does the future hold?
In March, virtually the entire US economy shut down as the world grappled with the Covid-19 pandemic. Companies around the country were forced to close their offices, quickly implementing work-from-home policies for non-essential workers; and many of those policies remain in effect for the foreseeable future, as organizations continue to prioritize their workers’ health and safety. The closing of offices and need for social distancing simultaneously caused a mass exodus from major US cities like New York, San Francisco and Los Angeles, with suburban markets experiencing a boom as a result. And systemic racism — highlighted in recorded acts of police brutality, violence and injustice — spurred widespread, national protests and ignited a sense of responsibility for many Americans.
So what does real estate have to do with this, you might ask? PwC and Urban Land Institute recently published a new report, “Emerging Trends in Real Estate 2021,” which highlights the ways the pandemic will change how property is bought, sold and used. Perhaps one of the most interesting takeaways from the report is “Housing as a solution — for people, for communities, and for societal repair” — and the way real estate will emerge as one of the coming decade’s forefront business opportunities.
In this article, we examine some the report’s findings, including the opportunities for housing and real estate to emerge as a solution for afflicted individuals, communities and society at large.
Real estate as a solution for individuals
When examining recent trends from an individual perspective — for buyers and sellers of single-family properties — Covid-19 has impacted everything. According to the PwC and Urban Land Institute report, “listings during the first half of 2020 declined,” with many homeowners fearful of inviting contagious disease through their doors during showings and open houses. But the second half of 2020 has seen a boom in both listings and sales, particularly in suburban areas. The report goes on to suggest that the months spent adjusting to social distancing, working from home and sheltering in place, “emerged as one of COVID-19’s wild-card forces, tripping thoughts to motivations, tripping interest to pursuit, and tripping new-home purchases into a higher gear.”
Individuals and families are shifting into planning mode. Looking ahead, they are thinking about their living space in terms of both personal and professional comfort, as well as safety. This shift in focus has undoubtedly impacted the homebuilding and construction sectors, which despite logistical challenges due to the pandemic, experienced booms in the warmer months as families and individuals continued to seek home upgrades ahead of the colder months.
Technologies like Punch List, which enables seamless, contact-free communication, progress tracking, project approval and payment via a mobile app, have made the process easier and safer for both contractors and homeowners. If anything, the pandemic has cemented the importance of “home” for many Americans, as home has become not just where we sleep and eat, but also where we work, where our children learn and where our in-laws and even adult children can stay safe. At Punch List, we’ve witnessed a continued increase in bathroom and kitchen renovation projects, as well as upgrades to indoor/outdoor space, in-law suites and home-offices. Homeowners and contractors are doing what they can to prepare for the uncertainty of this winter with home purchases and upgrades that will help keep everyone safe.
Real estate as a solution for communities
For larger developments, living communities, and multifamily enterprises, the need for social distancing has caused a massive shift in focus and outlook. Amenities like community pools, fitness centers, theaters, and game rooms were a top selling point for these developments — until recently, when the health and safety of residents became top priority. Then there is the pandemic’s economic effect on vulnerable populations, who can’t afford to contribute a large percentage of their income toward rent.
As the pandemic has decreased the popularity of community living, many developers and investors have temporarily hit pause on large development projects, both in major cities and suburban markets.
But pausing is not the answer. As an industry, real estate needs to better address the needs of working-class families and individuals with secure, affordable communities — focusing less on amenities and more on health and safety.
As the PwC and Urban Land Institute report indicates, “The pandemic’s lens could favorably alter the conversation. For instance, in light of the likely need for a New Deal–style work, training, and economic vitalization megaprogram, might housing — especially multifamily rental communities for working-class families and individuals — qualify as infrastructure?” It’s certainly a solution worth considering.
Real estate as a solution for society
As I pointed out earlier, 2020 has been trying — both due to the pandemic, and the police brutality and violence that highlighted our society’s ingrained systemic racism. It is our responsibility as a society to do better. According to the 2021 Emerging Trends survey, only 25 percent of respondents agreed with the statement, “I believe that the real estate industry understands how past policies and practices may have contributed to systemic racism.” We need to educate ourselves and take an objective look at how the real estate industry, lenders and the government share responsibility for historic redlining and segregation across the United States.
Per the report, “Many interviewees suggested that the real estate industry could be more proactive in creating and supporting neighborhoods that are racially and socioeconomically integrated, and reversing the impact of de jure segregation, as well as investing more in areas that have been overlooked and that have suffered from perpetual and deliberate disinvestment. Institutional investors are increasing commitments to ‘impact investing,’ and real estate investments that address racial inequality are a key target.”
Let’s challenge ourselves to be more proactive in addressing the wellbeing of our society — and in promoting racial equality within the real estate industry, starting with housing. We can and should be part of the solution.
Copyright 2020 Entrepreneur.com Inc., All rights reserved