The COVID-19 pandemic has drastically changed normal life for most Americans. In California, one long-lasting effect may be on the housing market.
Since March, the median San Francisco rent has dropped by 25 percent. Rent and home prices are dropping in other high cost-of-living cities, too, including Los Angeles and San Diego.
Meanwhile, housing costs in smaller cities and in Californian suburbs are rising. People are more motivated than ever to leave densely-populated areas, so there’s a new level of competition in the suburban housing market.
It’s not clear yet whether this is a temporary phenomenon that will end alongside the pandemic. However, many experts believe this shift in housing demand is here to stay.
The rapid rise of telecommuting is mainly responsible for the change. While the pandemic caused countless challenges, it did reveal the benefits of telecommuting as many businesses were forced to adopt a work-from-home model.
Most businesses have found that telecommuting did not affect workers’ productivity.
Offices are cutting costs on space and utilities, and employees are saving time and money by eliminating their daily commute.
Working from home even has environmental benefits when done on such a large scale. One study found that carbon dioxide emissions dropped by 25 percent in the Bay Area after the stay-at-home order took effect in March.
Telecommuting may become the norm after the pandemic. Its effects may be most observable in California because the tech industry is usually flexible with remote work.
With employees not being tethered to their office, they have much more freedom in where they live. Many are choosing to move to quieter and less expensive areas.
Some people wonder if Californians will want to stay in big cities when restaurants and other attractions reopen.
However, affordability may outweigh this desire for millennials who are trying to buy a home for the first time.
This shift could negatively affect lower-income individuals in suburban areas who cannot telecommute and don’t have as much flexibility.
As higher-income workers move to these neighborhoods for more space, they could drive up the rent prices and force the current residents out.
Remote work most likely won’t end the California housing crisis or make it worse. Instead, it may simply change its location.
There will be less competition and decreased housing costs in cities like Los Angeles and San Francisco, but Californians should expect costs to rise in smaller cities and suburbs.
