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Deurbanization Rising: Covid-19, Remote Work And Electric Aviation Will Reshape Living Patterns

Between 2006 and 2019, remote work expanded 170% to the point where about 8% of people with jobs worked remotely. By August 2020, the Covid-19 pandemic helped drive that figure to 20%, according to the Federal Reserve Bank of Dallas. Global Workforce Analytics believes percentage of telecommuters will hit 25% to 30% by the end of 2021.

According to some surveys, 99% of employees who work remotely want to continue doing so at least to some extent. It is not surprising given the large cost savings for individuals and the perceived improvement in flexibility of working hours. Businesses themselves have a huge opportunity to save on real estate costs and 94% of employers believe the productivity of their workers has been stable or has increased working from home.

San Francisco and other dense urban centers have seen rents decline rapidly under this pressure while rents and housing prices in the suburbs have risen. The pandemic and the ease of videoconferencing applications like Zoom, BlueJeans and Microsoft MSFT -3.4% Teams helped to accelerate this trend, but electric aviation will lead to profound changes in the urban landscape in ways that few expect.

The continued growth of remote work and the availability of faster, lower-cost long-distance transit opens up the possibilities for longer-distance commutes with limited amounts of weekly travel time and cheaper housing. The remote workers, desperate to escape videoconferences in their laundry rooms, will want the space. Work could change materially with workplaces looking more like meeting hubs for people that gather from a larger region than a traditional office. These sorts of changes could make work relationships and social relationships more regional further driving aviation demand. As the flywheel starts to spin, people will start to spread out. Developers will build new style offices meant to permit in-person meetings close to tertiary airports making longer distance commutes easier.

College-educated workers, who work from home at almost double the national rate, will lead the way. You can already see evidence of this trend at the top end of the income scale even prior to the introduction of cheaper forms of air travel. As high income commuters move further from the urban core, they will pull service jobs with them. The movement will reduce congestion in urban areas, further reducing proximity benefits and creating property utilization issues in the urban core (much like the car did in the 1970s). These trends will put pressure on urban property values and rents and support suburban property values and rents. This trend is already evident during these first months of the pandemic when rents in thirty core cities have declined by 5% while suburban rents have increased by 0.5%. Read more via Forbes

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