Originally posted by NREI | Jeff Cline
As the COVID-19 pandemic hit, the impacts were felt swiftly across industries, communities and markets. Social distancing practices were quickly adopted while the use of shared community spaces began to decline. People across the globe are now spending a majority of their time in their homes, oftentimes leaving office spaces vacant and multi-family living less desired. This shift has amplified one of the biggest, recent housing sensations in commercial real estate—purpose built Build-for-Rent (BFR) communities.
Prior to COVID-19, BFR communities—subdivisions encompassing detached single-family homes built from the ground up specifically for renters—had experienced an accelerated acceptance and demand as the nation faced affordable housing shortages, tracing back to the Great Recession. For the first time in U.S. history, rental household growth is outpacing home ownership over the past few years. The Urban Institute states that the growth in rental households will exceed that of homeowners by 4 million from 2010 to 2030, concluding that the nation is currently not prepared for this increase in rental homes.
While a strong demand for BFRs has existed, the pandemic emphasized the importance of a comfortable living environment that many lacked from multi-family spaces. Renters post-COVID-19 will be seeking larger, more private living spaces that offer amenities including touchless delivery services, home offices, private backyards and more, while doing away with shared spaces such as club houses and community pools. These newly-built BFR homes will likely be sustainability focused, having a significantly reduced carbon footprint, using little to no electrical power from the ‘grid’ while producing only a tenth of the carbon footprint of traditional construction.
As working from home (WFH) becomes more widely accepted and practiced during the pandemic, large companies, such as Facebook and Twitter, are already embracing workplace practices supporting remote workers who benefit from a work/life balance, little to no commute and increased productivity. This WFH shift opens opportunities for workers to relocate to more spacious, affordable suburbs where BFR subdivisions are being developed, avoiding premium rents for compact apartment living in dense markets such as New York City and San Francisco. In a recent survey by Facebook, 40 percent of employees said they are highly interested in full-time remote work and 75 percent of those employees stated they were considering moving to a different city, if working remotely.