New distribution of living in Philly?

Question

Hey BP Philly!

Just wanted to throw this out there and see if it sticks. Let me first say that I personally believe that, despite COVID scares and new working from home guidelines, the city will still remain a popular place to live. Not only are there a lot of areas where families have lived for generations (outside of center city in the neighborhoods) but I personally believe that, despite working from home, people still want to be in the area.

With that being said, I can see a large shift from people living in the downtown area (Rittenhouse, Logans square, even fishtown) to some of the more up and coming areas (brewerytown, fairmount, etc). Maybe not soon, but I could realistically even see areas like cobbs creek and haddington becoming relatively gentrified and nicer areas for young adults post college.

So my question today is, how do you think corona will affect the surrounding areas? Will things stay the same, will it force a quicker level of development, or something else entirely?

I hope everyone is staying safe out there, and I look forward to your answers!

Brett

Alex Uman · Answer

Does anyone in this thread work from home? I find in real estate, we tend to work either on the road or from traditional offices despite the lockdown/work from home trend. I currently work from an office but have worked from home in the past. Additionally my SO currently works from home.

Most everyone enjoys working from home intermittently or when the circumstances dictate it but most do not want to work from home indefinitely. News of pushing back the return to offices has been met with mostly negative emotions by many that I know. Even the most introverted people are social creatures and miss the interaction with coworkers they once had pre-COVID. I enjoyed my first few weeks working from home and appreciated the opportunity to do so while finishing my undergrad. Overtime I found myself enjoying my ability to get out of the house more and more, and even a short ten minute commute to school or an office helps to break up the monotony of sitting at home working all day.

While the outlook may look bleak for returning to offices right now, I feel that the all the hype surrounding the mass exodus from cities is rather overblown. Take that as you will, I am young and work and interact with other young people who do not have any plans to leave cities anytime soon. I think this sentiment is a symptom of COVID, which like the virus will come to pass in the long run. The suburbs will rightfully grow in this next year or two but I do not think everyone plans on leaving the city just yet!

Daniel Quinn · Answer

I think the work from home shift is going to be very real and the biggest variable in the outcome. Could be a hiccup or something much more prominent. I already know a few large employers in CC that have informed their employees that the shift to remote work is indefinite and they are reviewing their leases and weighing relocating.

My guess is the current situation has expedited the late 20s/early 30s crowds plans to move outside for more space or better schools. I think the bigger issue is that the post grad crowd that the city has recently relied on gets progressively smaller after each cycle.

I don't really see the fringe neighborhoods having a big comeback. In fact, most of the neighborhoods that were selling relatively high relying on future gentrification might take a beating. The service industry are usually the early anchors for those type of neighborhoods and with those more or less out of the equation for the next six months the appeal of those neighborhoods drop close to zero. The established areas will likely be fine but everything in between will probably lose favorability to the suburbs where people will value more space (and perhaps timeliness of trash pickup).

I hate to say it but from my viewpoint (which is admittedly much less informed than other users on this site) the outlook is grim for the future. The local leadership specifically doesn't inspire much confidence that they can weather this storm.

Kenneth C. · Answer

I agree completely with the assessment of everyone. I currently work downtown at a large company and I don't foresee working more than two days in the office once things go back to "normal". I recently bought a newly constructed home in a gentrifying area of Kensington/Richmond with the intent of beefing up my home office for the long haul. A lot of white collar jobs and old school industries (e.g. Law, Finance, etc.) that were adversed to the idea of working remotely have been forced to see the benefits of such a work environment. Could there be a mass exodus from cities? Maybe. Is it likely? Probably not.

Those traditionally conservative industries are now open to having employees not being tethered to a particular region. This makes real estate in cities like Philly more attractive to New Yorkers who are paying an exorbitant amount for an apartments. Just my two cents. What are your thoughts?

John Fish · Answer

@Sunil Kurian I agree with all of this but this is short term thinking. People are creatures of habit, once this all dies down employees will no longer be comfortable with everyone working remotely as any employer is always fearful of actual productivity at home.￼ as far as businesses/restaurants will probably see the same impact that we did in 2008/09 on that front. Businesses/restaurants will close even further into next year but once a vaccine is available things will start to turn around I will slowly get back to normal where are those businesses will reopen or new ones will take its place. Should be a 2-3yr ride. So if your property is in a solid neighborhood you should be fine or affected slightly as compared to French neighborhoods which will basically be put on pause for that time.￼￼￼

Sunil Kurian · Answer

Just my opinion, but I think Daniel is right on in his assessment. The service industry and hospitality jobs are just getting clobbered by the shutdown and many of those businesses simply won't have the means to survive into next year.  When they are gone, the jobs will go with them. On top of that, many of the major "white collar" employers whose commuting patterns would normally contribute to foot traffic, currently have their employees working remotely (Think IBC, Comcast, Thomas Jefferson) . At some point in the near future I'm sure they will be reassessing whether those jobs ever need to be back at a corporate hub at all. (Why incur the real estate expenses if the job can be performed elsewhere without the operating expense?) If that were to happen, it would mean a further drop in demand downtown for housing specifically from white collar workers who would no longer be tethered to their "mother ship". Hate to say it but I think we are going to be in for tough times ahead in the immediate future for local downtown markets...

this article is from a few weeks ago but, if anything, the situation is growing more dire since then.https://www.inquirer.com/economy/philly-green-phase-restaurants-reopening-stores-philadelphia-20200624.html

Mark Slider · Answer

I think a lot will depend on how widespread working from home becomes and what effect on the surrounding areas it will have if the commercial district of the city doesn’t bounce back.  I spoke with a store manager last week down on Chestnut St., Center City and he was of the opinion that a lot of the stores in the area would not be coming back.  I don’t know how informed his opinion was tho.

Mayer M. · Answer

@Brett Stander

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New distribution of living in Philly?

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