How Urban Exoduses are Impacting the Multi-Family Market
- Is the urban exodus really happening?
- Areas that are seeing the greatest growth due to the city exodus
- What the urban exodus means for multi-family development, including:
- Why multi-family developers are moving to suburbia
- Why apartment developers are also moving to strategic city outskirts
- How including green amenities can positively impact multi-family housing
Since the onset of the coronavirus pandemic, Americans all over the nation have fled urban areas en masse. With many multi-family housing properties located in urban regions, multi-family developers are wondering about how these city exoduses will impact the future of their business — and their bottom line.
While it’s no secret that mass migration away from cities has taken the multi-family market by surprise, the industry as a whole has experienced a boom in recent years. This is due in large part to developers’ ability to adapt to their tenants’ changing needs by understanding where and how they wish to live.
Is the Urban Exodus Really Happening?
Despite slowing down to some degree in recent months, urban exoduses dramatically increased during the earliest months of the COVID-19 pandemic. Many believed that more densely populated areas were at higher risk for exposure and infection; however, this turned out not to be the case, according to the Johns Hopkins Bloomberg School of Public Health. In fact, a 2020 study by one of the school’s researchers found that cities experienced fewer COVID deaths, potentially due to their higher level of development and higher-quality health care systems.
But cities lost their allure for different reasons during the pandemic as well: Business shutdowns made easy access to restaurants, entertainment, and cultural institutions a thing of the past as urban areas saw the strictest stay-at-home orders. Being forced to stay at home in smaller quarters only accelerated residents’ desire to seek more space to call their own. With the community amenities stripped away, many city dwellers could no longer justify the higher cost of rent in areas like New York, Chicago, or Philadelphia, fleeing these areas for more affordable regions of the country.
In fact, affordability is why many Americans would have made the decision to leave large cities within the next five years regardless of the global health crisis. According to research by William H. Frey, senior fellow of the Brookings Institution, large cities saw slower growth and population losses throughout the last half of the previous decade. Increasingly, families have become attracted to the affordability that small-scale cityscapes and suburbia provide.
Where Is Everyone Going?
What Does the Urban Exodus Mean for Multi-Family Development?
1. Moving to Suburbia
As more people choose to live in suburban areas, it’s a wise decision for multi-family developers to seek out properties in these regions in order to remain relevant and profitable. Suburban properties aren’t just more affordable for the people living in them: Developers also benefit from the lower real estate value and high rate of return on their investment.
2. Strategic City Outskirts
With businesses slowly returning to pre-pandemic normalcy, some tenants that temporarily fled the city scene are seeking a low-key return to urban living. Increasingly, residents are seeking housing in specific “not-city” areas, such as Atlanta’s Buckhead or Charlotte’s dynamic South End neighborhood. Properties located in these areas still offer all the proximity of city amenities while providing more affordable housing solutions.
3. Including Green Amenities
One of the biggest attractions to suburban living is the increased amount of outdoor space. Outdoor activities like gardening, biking, and walking have surged in popularity with many tenants seeking multi-family communities that are able to offer such amenities on-site. Finding opportunities to include green amenities — such as community gardens, bike trails, and walking trails — is a great way to attract residents for the long-term.
As Americans seek a change of scenery to their living environments, that doesn’t mean multi-family developers have to suffer. Instead, they’ll simply need to strategize to meet residents where they want to live, and provide the types of amenities and affordable housing they’ve come to expect.