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    number of people who can afford ever more expensive homes and communities. The reality is that WFH is not preferred or ideal for all employees, and it raises important cultural and social equity issues. Younger employees may prefer working in an office for a better learning environment and business and social connection opportunities. Also, younger and lower-income employees are less likely to have adequate space or the high-speed connectivity needed to work from home.
“Emerging Trends” states that an affordable housing crisis is likely
to explode without government intervention. The COVID-19 pandemic has swelled the number of unemployed low-income workers, many of whom will struggle to pay rent until those jobs are restored. Federal and local eviction moratoria have delayed a spike in evictions and additional homelessness until 2021. The year 2020 may have marked a tipping point in national support for greater racial equality. How this translates into long-term change in the real estate sector remains to be seen. The National League of Cities estimates that Fiscal Year 2021 general revenues
— including sales, income and property taxes — will be 13 percent less than Fiscal 2020, which does not bode well for school funding, which is crucial for economic competitiveness and social equity.
The migration from cities to suburbs is a trend that was
already underway before the pandemic accelerated it. Sans
virus, demographics was the key driver as the population in family formation years (ages 30-49) was already targeted to reach 8.4 million between 2020 and 2030. As the pandemic worsened, city dwellers young and old were leaving the dense central business districts with their high-rises, elevators and dependency on mass transit to less
congested, typically auto-dependent areas with larger dwelling units, including living with parents, and more public open space.
Cities have started to adapt to COVID-19 restrictions with creative solutions such as street dining
and more public space designated for nonvehicular use. Building on decades of recognition of the value of parks and green space, and the need for lower-cost housing and quality schools, further innovation is both likely and necessary to provide these and other amenities that are often more widely
available in suburbs. Center-city neighborhoods and close-in suburbs have blossomed into attractive places to live and raise families. Markets to watch include 18-hour cities like Austin and Nashville, which rank high on several factors, such as private-sector investment, public transportation, crime rate, racial equity and affordability. Even the older, established northern
New Jersey and New York City metro area “ascending suburbs” are gaining favor from businesses and residents from the boroughs of New York City.
With so much of the workforce operating remotely, proptech, or property technology, has never
been more critical for managing properties; business continuity; customer engagement and sales, such as property tours; and monitoring costs and efficiencies. Proptech’s value in data analytics for investment decisions, optimal asset allocation and cybersecurity is well-documented. And don’t forget that all this data, which is integral to our connected lives, resides in data centers. New Jersey government officials would be wise to attract more of these facilities, since their role and value will only increase over time.
As reported in “Emerging Trends,” proptech will take the lead in managing indoor safety and in informing users and customers about ongoing safety procedures and status. Health safety in buildings is likely to become a must- have and a critical differentiator
in the wake of COVID-19. Making substantive health safety changes may be the first challenge, requiring upfront capital investments and ongoing operating costs. Convincing companies, workers, customers and guests that office buildings, retail stores, restaurants and other public- use facilities are safe is another
challenge — a tall order, but one the real estate industry must solve.
The increased focus on health safety will lead to new services
and technologies that provide cleaner buildings and indoor air, sensors and touchless entry (via
an app that opens doors). More fresh air in buildings may be healthier but could conflict with environmental sustainability goals as outlined in the DEP’s “80x50 Report”, particularly the goal of less energy consumption. The costs of improving health safety are estimated to be 1 to 2 percent of total development budget.
Speaking of workforce wellness, New Jersey has a new free
and secure mobile app that anonymously alerts users if they have been in close contact with someone who has tested positive
for COVID-19. The app also provides up-to-date information on New Jersey reopenings, key COVID-19 metrics and a user-friendly symptom tracking tool. COVID Alert NJ uses Bluetooth proximity technology. The app will never record any identifying data. All users will remain anonymous. Learn more and/ or download the app here.
REALESTATENJTM 25 To close: “Disruption is occurring
faster than ever. The world is moving from physical to digital, wasteful to sustainable, delayed
to instantaneous, manual to automated. The pace and disruption force companies to rethink how they do business to prepare
them for the future, and provide fertile ground for opportunity and innovation,” according to “The Future of Logistics, American Journal of Transportation, Special October 2020 Report.” We don’t have a moment to waste — roll up your sleeves, reboot and refresh.
NAIOP New Jersey will take a deeper dive on many of these topics (and more) at our Dec. 8 Webinar “Back to the Future of Office.” Details and registration at www. NAIOPNJ.org.
MICHAEL MCGUINNESS is CEO of NAIOP New Jersey and has led the commercial real estate development association since 1997. NAIOP represents developers, owners, asset managers and investors
of commercial, industrial and mixed-use properties, with 830 members in New Jersey and over 19,000 members throughout North America. RE
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