Suburbia’s Comeback Part II: Virtual Communities & Remote Employee Incentivization
I wrote in April about the potential migration from dense urban centers to suburbia. It’s fascinating to see how much has changed in 3 months. Anecdotally, I’ve had several very close friends move out of Manhattan — their dominant reason driven by the need for more space for kids and for working at home. Several other close friends have moved or are actively looking to move from SF into surrounding Bay Area communities. Data from a recent Harris Poll survey indicates that many urbanites share the same sentiment, as 39% of urbanties have considered relocating since the onset of the COVID-19 crisis.
The most logical place to move is into a surrounding suburb as there are countless benefits ranging from jobs, education, and community. In New York City, data from this Bloomberg article indicates that higher end home buying in the suburbs surrounding Manhattan has soared.
- In May, contracts to buy New Jersey homes priced at more than $2.5 million soared 69% from a year earlier…The increase came entirely from counties just beyond the city.
- “When you go from a $3 million apartment to a $3 million home, you triple or quadruple your space…You really don’t care if the mayor shuts down the beaches, or the mayor shuts down the parks, because you’ve got all that in your backyard.”
In the Bay Area, regions like Santa Cruz and Sonoma, outside of the typical commute range, are the only ones that are seeing home sales on par with last year.
As previously indicated, I don’t think at all that there will be a massive exodus. Many people love living in large cities (as I certainly did) and the notion of fully remote work will only work for a subset of companies. But even small shifts in broader demographics can have large downstream effects. Many existing technology trends will experience tremendous acceleration. Seeing this shift in action, I’ve been thinking about two vectors — virtual community building, and incentivizing a remote workforce.
Virtual Community Building
One of the biggest hurdles in leaving a city is leaving a dense community filled with a mix of friends, family, co-workers, schools, service providers, etc. When moving to another big city, there likely are some folks that you know that can help kickstart your community building — meeting new friends, finding a pediatrician, or getting recommendations for schools. But if you’re starting afresh in the suburbs while working from home, you might have to start from scratch.
Considering that in-person community building won’t be a viable option in the near future, newly established suburbanites will need to rely on virtual tools and networks to build new communities and maintain old ones.
I’m excited to see how technology helps create virtual communities for passion filled verticals like sports and religion that previously heavily relied on in-person gatherings and events. What will be the alternative to watching sporting events at packed stadiums or sports bars? How will folks whose primary community was a religious center cope as they move to a new town with all religious centers closed?
Education and instruction are also important communities that are typically completely disrupted following a big move. But due to the absence or restriction of in-person classes, the existing trend of virtual classes may transition from niche early adopter popularity to mainstream, as virtual classes serve as a medium to build a new community and also maintain previously established communities for new suburbanites. Peloton is a clear winner here with companies like Masterclass and Skillshare also on the verge of becoming household names.
Incentivizing a Remote Workforce
A demographic shift towards suburbs is predicated on the notion that work will be at least partially remote for the foreseeable future. With employees working from home, surrounded by family, away from the competitive environment of cities, and most importantly away from desks with colleagues and bosses peering over their shoulder, how will companies incentivize employees to perform? Having spent a few years in a massive company without very attractive incentives to go above and beyond, I believe in many cases the 80/20 rule exists for office employees — you get to 80% of the result with 20% of the effort. To get to 100% and beyond is where the vast majority of effort is required, and for some, the incentives may not be there to put in that effort. So how will companies ensure that employees aren’t stopping at 20% and spending the rest of the day with family or on personal hobbies or on second jobs? I believe HR strategies and incentive systems will have to change and software tools will help to enable these shifts.
As the world continues to adapt under these unprecedented conditions, technology will continue to play a vital role in enabling the world to continue functioning with some semblance of normalcy. A demographic shift out of dense urban areas will inevitably cause countless ripple effects, but technology may help to ease the disruption for those migrating to different parts of the country.