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  • Writer's pictureCasey Anderson

Housing After the Pandemic: Beyond Cities vs. Suburbs

Updated: Jan 30, 2023

The stale debate over the future of cities after the pandemic hasn't done much to clarify how shifting consumer preferences will influence housing choices in the future. Instead of fundamentally changing the way people view urban and suburban living, the pandemic has accelerated trends that will force both urban and suburban areas to adapt.

The Challenge For Cities: People Want More Room (Or More Rooms)

Does paying top dollar to rent a tiny efficiency in a high-rise apartment building make sense in a world where remote work has become standard? Before COVID-19, a small apartment might have been fine for someone who spent lots of time at work or going out with friends and relatively little time at home. Real estate industry market research has shown that the pandemic has generated a desire for more separate rooms and larger floor area.

Cities can and do accommodate housing types that offer more space even as they make relatively efficient use of land. Cheaper land will continue to be an advantage for suburban jurisdictions, but rapid appreciation of rowhouses in DC neighborhoods like LeDroit Park, Capitol Hill, and Petworth - and huge townhouses in close-in suburban areas such as Strathmore in Montgomery County - show how housing can be spacious but not sprawling.

Symphony Park at Strathmore, where 3,000-square foot townhouses sell for up to $2 million

The demand for more living and working space may be harder to meet in intensively-developed areas where land values are high, and small units in existing buildings may get harder to lease. Still, the desire to add a home office or a room for exercise equipment does not necessarily translate to an insistence on living in a detached house with a yard. In fact, the absence of a yard and associated upkeep can be a feature, not a bug.

The Challenge for Suburbs: People Want Walkable, Mixed Use Neighborhoods

Some people like to live as far away from other people as possible, but most appreciate easy access to a grocery store, medical care, and other goods and services. Even die-hard suburbanites usually appreciate being able to walk or bike safely around their homes and to destinations like parks, schools, and restaurants.

Walkability is not synonymous with transit-oriented development, and a mix of uses in a compact neighborhood is possible even in areas far too sparsely developed to support frequent bus service, much less a rail line. Consider Park Potomac, which includes an office building, restaurants and retail adjacent to large townhouses.

Park Potomac adjoins a freeway interchange but features a compact and diverse mix of uses that makes walking convenient and appealing without access to transit. Market research by the National Association of Realtors shows walkability - even more than transit - is highly valued by homebuyers in every age group. Photo: Foulger-Pratt

Hybrid Work Makes The Commute Less Punishing - But There's Still A Commute

The pandemic dramatically and permanently expanded options for remote work, but there's a big difference between being able to work from anywhere every day and being given the flexibility to work from home for two, three, or even four days a week.

If your employer never expects you in the office, then you can move anywhere in the world (or anywhere you can get a high-speed Internet connection). If you have to show up even one day a week, though, your options are more limited - living in Montana while working for a firm based in Rockville might be off the table, but living in West Virginia or Pennsylvania could be attractive choices for someone who only commutes once or twice a week.

Even for someone who never has to report to their employer's place of business, the appeal of living far from a major metro area has limits. In the early phase of the pandemic, tens of thousands of New Yorkers moved to the Miami area, but many have moved back. For these people, the advantages that drew them to south Florida just can't make up for the loss of cultural, educational, and social opportunities available in the Big Apple - not to mention complaints about the quality of the food, the heat, and the right-wing politics.

The Boomerang Comes Back

Far more COVID refugees picked new homes relatively close to their old homes - and to their employers. The most popular destinations for people who left the District of Columbia early in the pandemic were close-in suburbs, as this map created by DC's Chief Financial Officer using U.S. Postal Service change-of-address data shows:

DC sees a net loss of residents to its suburbs almost every year, but the Office of the CFO's analysis showed that in 2020 three times as many people left the city for close-in zip codes in Maryland and Virginia than in 2019. The OCFO found that the 20817 zip code, which covers part of Bethesda, drew 400 DC residents during the first nine months of the pandemic, a 63 percent increase over the same period of the prior year. In any event, DC made up most of the population losses by the summer of 2021, and vacancy rates are now low in both DC and the most urban areas of its suburbs, including Montgomery County.

All of this suggests that the appeal of living on the far edge of a metro area - or beyond - where growth is widely dispersed is likely to be limited. Lots of people like wide open spaces, but they also like the convenience of living near restaurants, bars and coffee shops as well as grocers, drug stores and other kinds of convenience retail. They want gathering places where they can mingle with other people, and perhaps especially if they are teleworkers sometimes they just want a place to go to get out of the house.

The Future of the Suburbs: Complete Communities

Both urban and suburban jurisdictions should focus on how they can improve their ability to foster the qualities and characteristics that make a great place to live. For Montgomery County and other close-in DC suburbs, that means encouraging development of more "complete communities," neighborhoods that offer a mix of amenities and services within a short walk to a variety of housing - ideally but not necessarily with high-quality transit.

Suburban and rural jurisdictions don't have to give up their own distinctive features to do a better job offering these things - and cities also stand to benefit from understanding the long-term effect of the pandemic on housing preferences.

Cities and Suburbs Can Adapt To Compete

The winners will be places that offer the best mix of urban and suburban qualities. For cities, that means finding ways to deliver larger units (or at least more rooms), which may require different approaches to how buildings are designed, and for suburbs it means developing more "complete" communities that provide more of the walkable convenience associated with urban neighborhoods.

Close-in suburbs like Montgomery and Prince George's, and Fairfax Counties are well-positioned to take advantage of post-pandemic preferences for the convenience and appeal of walkable mixed use communities that also offer more space at lower prices than can be found in the urban core if they plan for development that meets these goals.

With rents - and sale prices - in urban housing markets snapping back almost as fast as they fell, it's time to recognize that neither the city nor the suburbs has a monopoly on quality of life, and both kinds of places can succeed if they address their weaknesses while continuing to play to their strengths.

What About Office Buildings?

Yes, the shrinking demand for office space has already had a huge impact on many cities, and the rise of hybrid work probably makes a shakeout inevitable. I'll return to the impact of reduced demand for office buildings in a future post. Ultimately, though, the best employers are going to want to be where their employees want to live. For this reason, delivering the kinds of housing in the kinds of neighborhoods that people find appealing remains a basic building block of local economic competitiveness and quality of life.

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