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Pandemic-fueled suburban growth doesn’t mean we should abandon climate resiliency

People choose where to live based on a few underlying factors: proximity to where they work, preferred amenities like school quality or climate, and connections…

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2 years ago

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By Joseph Kane, Mona Tong, Jenny Schuetz

People choose where to live based on a few underlying factors: proximity to where they work, preferred amenities like school quality or climate, and connections to social networks of family and friends. But the pandemic may have fundamentally changed some of these factors—loosening the need to live within daily commuting distance of workplaces and increasing preference for larger homes to accommodate telework. According to prevailing media narratives, the pandemic has “supercharged” suburbanization rates and even hastened the death of U.S. cities.  

Homebuilders responded to this demand shift in 2020 by increasing single-family home construction in low-density areas, such as small metro area suburbs and small towns. The average size of new single-family homes also increased in 2021, following a period of decline between 2016 and 2020.  

Yet there is still widespread uncertainty around what is actually happening during the pandemic—and our post-pandemic future. One point is clear: Regions remain highly complex. And whatever short-term changes may be happening, planners and other regional leaders cannot lose sight of long-term needs: increasing the supply of smaller, moderately priced homes in compact, climate-friendly development patterns. Leaders can’t just plan for the current moment; they need to plan for a more resilient future. 

Did the pandemic boost demand for suburban living—or just continue long-term trends? 

Looking at data on county-level population changes during the first year of the pandemic shows some evidence of flight from the densest, most expensive cities and major metro areas. But this largely continues pre-pandemic trends. Between July 1, 2020 and July 1, 2021, many core urban counties (those home to the largest city within a metro area) continued to experience greater population losses than their neighboring suburban counties. 

To illustrate this, Figure 1 shows the population change across three pairs of urban and suburban counties: New York County (Manhattan) and Nassau County (suburban Long Island); Michigan’s Wayne County (home to Detroit) and suburban Oakland County; and Texas’ Dallas County and suburban Collin County. In all three cases, the core urban counties lost population more rapidly between 2020 and 2021 compared to their neighboring suburban counties. 

But more rapid population growth—or lower population decline—among suburban counties during the pandemic is not new.  

As Figure 2 shows, counties that saw higher population growth from 2010 to 2020 also saw more growth (or at least smaller population losses) from 2020 to 2021. Suburban Collin County far outpaced growth in Dallas County (and indeed, most large U.S. counties) during the 2010 to 2020 period. The obvious outlier is New York County (Manhattan), which suffered huge population losses during the first year of the pandemic, after growing during the second half of the previous decade. Not coincidentally, New York is also among the most expensive housing markets in the U.S. and has a large number of jobs that can be done remotely.  

pandemic_population

Also notable: While the pandemic may have encouraged some people to flee expensive housing markets, it does not appear to be attracting residents to low-cost urban areas that have seen long-term population decline, like Detroit. This is consistent with research showing that urban amenities such as restaurants, museums, and entertainment venues are important factors in attracting and retaining residents. 

But more likely than not, these recent trends may only represent a temporary blip, so it’s important to contextualize them as continuations of longer-term trends. Change-of-address data from the U.S. Postal Service shows that while there were some pandemic-related spikes during March, April, and December 2020 concentrated among individual and temporary moves, as of mid-2021, these trends have normalized to where they were before the pandemic. And data from Apartment List’s national rent report shows that while increases in rent prices dipped from March to December 2020, rent price growth since January 2021 has spiked 17.8%, and by April 2021, had fully rebounded in nearly all urban, suburban, and exurban markets—at least equal to pre-Covid levels, if not higher. 

These early indicators suggest that the pandemic caused massive disruptions in the short term, mostly due to its sudden nature and the inability of regional leaders to respond to such sharp changes in housing demand. Due to the inflexible nature of our land use plans—especially in cities and inner-ring suburbs—we’ve been building homes in the wrong places and in the wrong ways. As demand for bigger homes spiked, we saw planners concentrate construction in places where they can build most quickly (exurbs) without prioritizing neighborhood-serving retail, density, and proximity in neighborhood design.  

Employers, workers, researchers, and policymakers don’t yet know whether the expanded telework/hybrid office model will last, and for how many workers. This uncertainty also deters making long-term investments, such as updating land use plans and building infrastructure.  

Lessons for policymakers: Keep long-term goals in mind and increase short-term flexibility 

Whether the reaction to the pandemic is a short-term blip or longer-term pattern, it has not reduced our collective need for greater resilience—supporting our ability to live in safe, affordable, and climate-friendly communities. That means having smaller, more affordable housing, which allows workers at all income levels to live close to jobs and amenities. It also means having safer, more reliable, and more affordable transportation options. And it means striving for reduced greenhouse gas emissions and greater climate certainty and adaptation. 

Regional leaders shouldn’t overreact to short-term headlines about a supposed suburban “gold rush.” They need to take a step back and recognize the uncertainty and complexity surrounding them—including the need to better analyze and assess their region’s evolving concerns. Pursuing this type of approach is tough, because the signals are conflicting in different parts of the country and the long-run impacts of the pandemic aren’t yet known. 

In light of these unknowns, post-pandemic planning should focus on baking in more flexibility and best practices into our land use plans to prepare us for both potential future spikes in housing demand and the general long-term trend of increasing suburban and exurban population growth. This means embedding suburban retrofits and urbanization into suburban planning, which includes more multifamily housing near transit, mixed-use town centers, and investing in suburban public transit to job centers to promote equitable, higher-density, transit-oriented development. The Mosaic District in Fairfax County, Va. is an example: a 10-year suburban retrofit project that replaced single-use commercial areas with higher-density, mixed-use, transit-oriented centers.  

Ultimately, even if pandemic-related trends continue, incorporating more flexibility and best practices into our land use planning is a must for planners and other regional leaders to navigate our post-pandemic future.  

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Key shipping company files for Chapter 11 bankruptcy

The Illinois-based general freight trucking company filed for Chapter 11 bankruptcy to reorganize.

Published

4 hours ago

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March 14, 2024

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The U.S. trucking industry has had a difficult beginning of the year for 2024 with several logistics companies filing for bankruptcy to seek either a Chapter 7 liquidation or Chapter 11 reorganization.

The Covid-19 pandemic caused a lot of supply chain issues for logistics companies and also created a shortage of truck drivers as many left the business for other occupations. Shipping companies, in the meantime, have had extreme difficulty recruiting new drivers for thousands of unfilled jobs.

Related: Tesla rival’s filing reveals Chapter 11 bankruptcy is possible

Freight forwarder company Boateng Logistics joined a growing list of shipping companies that permanently shuttered their businesses as the firm on Feb. 22 filed for Chapter 7 bankruptcy with plans to liquidate.

The Carlsbad, Calif., logistics company filed its petition in the U.S. Bankruptcy Court for the Southern District of California listing assets up to $50,000 and and $1 million to $10 million in liabilities. Court papers said it owed millions of dollars in liabilities to trucking, logistics and factoring companies. The company filed bankruptcy before any creditors could take legal action.

Lawsuits force companies to liquidate in bankruptcy

Lawsuits, however, can force companies to file bankruptcy, which was the case for J.J. & Sons Logistics of Clint, Texas, which on Jan. 22 filed for Chapter 7 liquidation in the U.S. Bankruptcy Court for the Western District of Texas. The company filed bankruptcy four days before the scheduled start of a trial for a wrongful death lawsuit filed by the family of a former company truck driver who had died from drowning in 2016.

California-based logistics company Wise Choice Trans Corp. shut down operations and filed for Chapter 7 liquidation on Jan. 4 in the U.S. Bankruptcy Court for the Northern District of California, listing $1 million to $10 million in assets and liabilities.

The Hayward, Calif., third-party logistics company, founded in 2009, provided final mile, less-than-truckload and full truckload services, as well as warehouse and fulfillment services in the San Francisco Bay Area.

The Chapter 7 filing also implemented an automatic stay against all legal proceedings, as the company listed its involvement in four legal actions that were ongoing or concluded. Court papers reportedly did not list amounts for damages.

In some cases, debtors don't have to take a drastic action, such as a liquidation, and can instead file a Chapter 11 reorganization.

Truck shipping products.

Shutterstock

Nationwide Cargo seeks to reorganize its business

Nationwide Cargo Inc., a general freight trucking company that also hauls fresh produce and meat, filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Northern District of Illinois with plans to reorganize its business.

The East Dundee, Ill., shipping company listed $1 million to $10 million in assets and $10 million to $50 million in liabilities in its petition and said funds will not be available to pay unsecured creditors. The company operates with 183 trucks and 171 drivers, FreightWaves reported.

Nationwide Cargo's three largest secured creditors in the petition were Equify Financial LLC (owed about $3.5 million,) Commercial Credit Group (owed about $1.8 million) and Continental Bank NA (owed about $676,000.)

The shipping company reported gross revenue of about $34 million in 2022 and about $40 million in 2023.  From Jan. 1 until its petition date, the company generated $9.3 million in gross revenue.

Related: Veteran fund manager picks favorite stocks for 2024

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Key shipping company files Chapter 11 bankruptcy

The Illinois-based general freight trucking company filed for Chapter 11 bankruptcy to reorganize.

Published

5 hours ago

on

March 14, 2024

By

The U.S. trucking industry has had a difficult beginning of the year for 2024 with several logistics companies filing for bankruptcy to seek either a Chapter 7 liquidation or Chapter 11 reorganization.

The Covid-19 pandemic caused a lot of supply chain issues for logistics companies and also created a shortage of truck drivers as many left the business for other occupations. Shipping companies, in the meantime, have had extreme difficulty recruiting new drivers for thousands of unfilled jobs.

Related: Tesla rival’s filing reveals Chapter 11 bankruptcy is possible

Freight forwarder company Boateng Logistics joined a growing list of shipping companies that permanently shuttered their businesses as the firm on Feb. 22 filed for Chapter 7 bankruptcy with plans to liquidate.

The Carlsbad, Calif., logistics company filed its petition in the U.S. Bankruptcy Court for the Southern District of California listing assets up to $50,000 and and $1 million to $10 million in liabilities. Court papers said it owed millions of dollars in liabilities to trucking, logistics and factoring companies. The company filed bankruptcy before any creditors could take legal action.

Lawsuits force companies to liquidate in bankruptcy

Lawsuits, however, can force companies to file bankruptcy, which was the case for J.J. & Sons Logistics of Clint, Texas, which on Jan. 22 filed for Chapter 7 liquidation in the U.S. Bankruptcy Court for the Western District of Texas. The company filed bankruptcy four days before the scheduled start of a trial for a wrongful death lawsuit filed by the family of a former company truck driver who had died from drowning in 2016.

California-based logistics company Wise Choice Trans Corp. shut down operations and filed for Chapter 7 liquidation on Jan. 4 in the U.S. Bankruptcy Court for the Northern District of California, listing $1 million to $10 million in assets and liabilities.

The Hayward, Calif., third-party logistics company, founded in 2009, provided final mile, less-than-truckload and full truckload services, as well as warehouse and fulfillment services in the San Francisco Bay Area.

The Chapter 7 filing also implemented an automatic stay against all legal proceedings, as the company listed its involvement in four legal actions that were ongoing or concluded. Court papers reportedly did not list amounts for damages.

In some cases, debtors don't have to take a drastic action, such as a liquidation, and can instead file a Chapter 11 reorganization.

Truck shipping products.

Shutterstock

Nationwide Cargo seeks to reorganize its business

Nationwide Cargo Inc., a general freight trucking company that also hauls fresh produce and meat, filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Northern District of Illinois with plans to reorganize its business.

The East Dundee, Ill., shipping company listed $1 million to $10 million in assets and $10 million to $50 million in liabilities in its petition and said funds will not be available to pay unsecured creditors. The company operates with 183 trucks and 171 drivers, FreightWaves reported.

Nationwide Cargo's three largest secured creditors in the petition were Equify Financial LLC (owed about $3.5 million,) Commercial Credit Group (owed about $1.8 million) and Continental Bank NA (owed about $676,000.)

The shipping company reported gross revenue of about $34 million in 2022 and about $40 million in 2023.  From Jan. 1 until its petition date, the company generated $9.3 million in gross revenue.

Related: Veteran fund manager picks favorite stocks for 2024

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Tight inventory and frustrated buyers challenge agents in Virginia

With inventory a little more than half of what it was pre-pandemic, agents are struggling to find homes for clients in Virginia.

Published

7 hours ago

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March 14, 2024

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No matter where you are in the state, real estate agents in Virginia are facing low inventory conditions that are creating frustrating scenarios for their buyers.

“I think people are getting used to the interest rates where they are now, but there is just a huge lack of inventory,” said Chelsea Newcomb, a RE/MAX Realty Specialists agent based in Charlottesville. “I have buyers that are looking, but to find a house that you love enough to pay a high price for — and to be at over a 6.5% interest rate — it’s just a little bit harder to find something.”

Newcomb said that interest rates and higher prices, which have risen by more than $100,000 since March 2020, according to data from Altos Research, have caused her clients to be pickier when selecting a home.

“When rates and prices were lower, people were more willing to compromise,” Newcomb said.

Out in Wise, Virginia, near the westernmost tip of the state, RE/MAX Cavaliers agent Brett Tiller and his clients are also struggling to find suitable properties.

“The thing that really stands out, especially compared to two years ago, is the lack of quality listings,” Tiller said. “The slightly more upscale single-family listings for move-up buyers with children looking for their forever home just aren’t coming on the market right now, and demand is still very high.”

Statewide, Virginia had a 90-day average of 8,068 active single-family listings as of March 8, 2024, down from 14,471 single-family listings in early March 2020 at the onset of the COVID-19 pandemic, according to Altos Research. That represents a decrease of 44%.

Virginia-Inventory-Line-Chart-Virginia-90-day-Single-Family

In Newcomb’s base metro area of Charlottesville, there were an average of only 277 active single-family listings during the same recent 90-day period, compared to 892 at the onset of the pandemic. In Wise County, there were only 56 listings.

Due to the demand from move-up buyers in Tiller’s area, the average days on market for homes with a median price of roughly $190,000 was just 17 days as of early March 2024.

“For the right home, which is rare to find right now, we are still seeing multiple offers,” Tiller said. “The demand is the same right now as it was during the heart of the pandemic.”

According to Tiller, the tight inventory has caused homebuyers to spend up to six months searching for their new property, roughly double the time it took prior to the pandemic.

For Matt Salway in the Virginia Beach metro area, the tight inventory conditions are creating a rather hot market.

“Depending on where you are in the area, your listing could have 15 offers in two days,” the agent for Iron Valley Real Estate Hampton Roads | Virginia Beach said. “It has been crazy competition for most of Virginia Beach, and Norfolk is pretty hot too, especially for anything under $400,000.”

According to Altos Research, the Virginia Beach-Norfolk-Newport News housing market had a seven-day average Market Action Index score of 52.44 as of March 14, making it the seventh hottest housing market in the country. Altos considers any Market Action Index score above 30 to be indicative of a seller’s market.

Virginia-Beach-Metro-Area-Market-Action-Index-Line-Chart-Virginia-Beach-Norfolk-Newport-News-VA-NC-90-day-Single-Family

Further up the coastline on the vacation destination of Chincoteague Island, Long & Foster agent Meghan O. Clarkson is also seeing a decent amount of competition despite higher prices and interest rates.

“People are taking their time to actually come see things now instead of buying site unseen, and occasionally we see some seller concessions, but the traffic and the demand is still there; you might just work a little longer with people because we don’t have anything for sale,” Clarkson said.

“I’m busy and constantly have appointments, but the underlying frenzy from the height of the pandemic has gone away, but I think it is because we have just gotten used to it.”

While much of the demand that Clarkson’s market faces is for vacation homes and from retirees looking for a scenic spot to retire, a large portion of the demand in Salway’s market comes from military personnel and civilians working under government contracts.

“We have over a dozen military bases here, plus a bunch of shipyards, so the closer you get to all of those bases, the easier it is to sell a home and the faster the sale happens,” Salway said.

Due to this, Salway said that existing-home inventory typically does not come on the market unless an employment contract ends or the owner is reassigned to a different base, which is currently contributing to the tight inventory situation in his market.

Things are a bit different for Tiller and Newcomb, who are seeing a decent number of buyers from other, more expensive parts of the state.

“One of the crazy things about Louisa and Goochland, which are kind of like suburbs on the western side of Richmond, is that they are growing like crazy,” Newcomb said. “A lot of people are coming in from Northern Virginia because they can work remotely now.”

With a Market Action Index score of 50, it is easy to see why people are leaving the Washington-Arlington-Alexandria market for the Charlottesville market, which has an index score of 41.

In addition, the 90-day average median list price in Charlottesville is $585,000 compared to $729,900 in the D.C. area, which Newcomb said is also luring many Virginia homebuyers to move further south.

Median-Price-D.C.-vs.-Charlottesville-Line-Chart-90-day-Single-Family

“They are very accustomed to higher prices, so they are super impressed with the prices we offer here in the central Virginia area,” Newcomb said.

For local buyers, Newcomb said this means they are frequently being outbid or outpriced.

“A couple who is local to the area and has been here their whole life, they are just now starting to get their mind wrapped around the fact that you can’t get a house for $200,000 anymore,” Newcomb said.

As the year heads closer to spring, triggering the start of the prime homebuying season, agents in Virginia feel optimistic about the market.

“We are seeing seasonal trends like we did up through 2019,” Clarkson said. “The market kind of soft launched around President’s Day and it is still building, but I expect it to pick right back up and be in full swing by Easter like it always used to.”

But while they are confident in demand, questions still remain about whether there will be enough inventory to support even more homebuyers entering the market.

“I have a lot of buyers starting to come off the sidelines, but in my office, I also have a lot of people who are going to list their house in the next two to three weeks now that the weather is starting to break,” Newcomb said. “I think we are going to have a good spring and summer.”

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