Remote Work Could Spark Housing Boom in Suburbs, Smaller Cities
A much needed economic boost could come from the unlikeliest of sources – a housing boom. As both employees and companies are realising the efficacy of working from home, it is likely to become the norm even beyond the lockdown. More and more companies are making it a permanent feature for a significant part of the workforce to work remotely full time. Indian IT giant TCS has already committed to a 25/25 model which involves only 25% of its workforce working out of its offices by 2025. Of course, silicon valley which is used to remote working for almost two decades is not going to be left behind.
“Facebook has joined companies including Twitter and Square in saying it will begin allowing select employees to work remotely full time, expecting 50% of its workforce to be remote within five to 10 years. Chief Executive Mark Zuckerberg said about 75% of his employees expressed some interest in moving to a different city if they could work remotely.
Myriad large corporations are considering permanent shifts in workers’ location. Columbus, Ohio-based insurance company Nationwide has announced a permanent transition to a hybrid work model for many employees. Even investment banks with big Midtown Manhattan offices such as Barclays have signaled long-term changes to location strategy.”
This article brings out the second order effects of this development. Employees no longer need to live close to their workplace, one of the prime reasons for congestion in cities. Instead, employees can work from the suburbs or even remote towns. The US is already witnessing a surge in home buying interest:
“Redfin said this month overall buyer demand on its platform has already surpassed prepandemic levels, while Zillow says traffic to its listings is currently up 40% year over year…
.. Zillow Chief Executive Rich Barton has coined the coming changes in where and how workers live their lives “the great reshuffling.” Redfin’s lead economist Taylor Marr says his company is registering stronger demand in terms of homes under contract in places like Seattle and Austin, Texas, where there has been spillover from bigger cities. These are tech hubs where a lot of remote work was already happening and they have been more insulated in terms of layoffs, he said.
Zillow’s chief economist, Svenja Gudell, says she doesn’t expect residents to cut the cord entirely from their cities, but that they may opt for an “extension cord” into the suburbs where they can get more space, more outdoor areas and, of course, a home office.”
Indian cities could do with some decongestion. The Indian economy could surely do with a housing boom given the industry’s contribution to jobs and the investment cycle.