CHICAGO, Aug. 4, 2020 /PRNewswire-PRWeb/ -- Reduced
migration amid COVID-19 behavioral changes continues to impact real
estate and the world's economies as people face unprecedented
challenges to mobility, according to a report from The Counselors
of Real Estate.
"The flow of people between and within countries has always been
a critical driver of real estate and the economy as demand
increases where population flows," said Michel Couillard, CRE, 2020 chair of The
Counselors of Real Estate. "For those areas receiving migrants, the
demand for housing, goods, services, and infrastructure expands,
increasing both immigrant and non-immigrant jobs and economic
growth. Countries and states that lose population can suffer
economic decline and crippling near and longer-term pension and
budget problems."
From flows of approximately 270 million in 2019, immigration has
essentially ground to a halt, initially driven by nationalistic
policies in the U.S. and countries throughout the world and more
recently by the pandemic. Universities and companies reliant on
foreign-born workers have been hard hit, even prior to COVID-19, as
visa difficulties for incoming students and workers have
intensified in recent years. The report states that if U.S.
policies discouraging legal immigrants and students from working in
the U.S. continue or intensify, slower growth will occur in
communities that have been reliant on such demand.
COVID-19 is creating particular challenges in states with
historically high inbound migration such as Florida, Nevada, Colorado, Tennessee, and Arizona, all of which typically rank in the
top ten of states with the highest percentage of GDP in high-risk
industries. Many workers will need to relocate to find employment,
and states will need to plan for potentially more dramatic changes
in their economies.
Rural areas in the U.S. may see an accelerated decline in
population and economic growth due to the dearth of medical
facilities and the large older population, significant negatives in
a post COVID-19 world. Agricultural concerns due to lack of
seasonal low-wage workers could also cause economic problems.
Further decline could be offset by significant investment and
innovations in telemedicine, remote working, remote entertainment,
and the desire for a lower density living environment, according to
the report, the Top Ten Issues Affecting Real Estate.
Dense urban areas may face particular challenges. A recent
Harris Poll showed that nearly 40% of urbanites are considering
fleeing the city as concerns about the virus and economic effects
of the pandemic linger. Despite popular belief, suburban areas have
continued to attract more people than urban centers, a historic
trend lasting for many decades. However, in recent years, urban
areas have successfully captured more affluent and younger people
attracted to job access, public transit, entertainment,
restaurants, and other advantages. If the value of urban living
declines and access is rendered less important due to the
aforementioned remote innovations, less dense and more affordable
suburbs could grow even more rapidly. Potential expansion of
suburban and "spoke" employment facilities to reduce mass transit
reliance will also be a key factor in determining how far this
dynamic progresses.
The Counselors' report states that the world's approximate 70
million displaced people are particularly stressed as the cessation
of migration leaves many with no place to go. The U.S., which has
resettled an average of 80,000 to 150,000 refugees from 1980 to
2017, had already dropped to less than 10,000 by the end of 2019,
prior to the COVID-19 crisis. The virus has also stopped many
humanitarian flights and much international cooperation, and
created the economic and safety conditions in hard hit areas that
increase the likelihood of more people becoming refugees.
Migration, urbanization, and global connections are central
components of growing the world's economies. The flexibility of
people to move to better jobs or available jobs has driven
productivity and the real estate markets. Nationalism and now
COVID-19 have reset the playing field for now, limiting migration,
slamming the economy, and limiting international cooperation. Real
estate implications will be determined by how long behavioral
changes brought on by the virus last, the quality of innovations
that emerge in healthcare, living, and working, and the caliber of
world leadership.
SOURCE The Counselors of Real Estate