Urbanexus Update - Issue #106
Urbanexus Update - Issue #106
This weekly selection of real estate and community development articles is distributed by H. Pike Oliver. Inclusion of articles does not imply endorsement. Some links lead to items that are behind a paywall.
The economy and employment
14.7% unemployed in the USA, 20.5 million jobs lost
Employers shed a record number of jobs in April, as the unemployment rate climbed to the highest since the Great Depression.
Washington State’s hardest-hit jobs
About 14,800 initial unemployment claims by bartenders were filed from March 8 through April 25. That just about matches the number of people estimated to work as bartenders in Washington in the second quarter of 2020. (The number of claims is actually higher by 16 than the number of people employed in field, which may sound like a mistake. But the total employment numbers are estimates and therefore not exact). There are seven of the 100 most common occupations in which more than half of those employed have filed for unemployment. Dental assistants rank just behind bartenders, with about 94% of people employed in that field filing an initial unemployment claim. Others near the top of the list include hairstylists, waiters and waitresses, and massage therapists. Some construction-related fields are also near the top, as well as aircraft assemblers.
Covid impact is predictable so far despite complaints
Office
Nationwide to make work-from-home permanent
The strategy includes a hybrid operating model that will shift employees at most locations to a permanent remote work environment. The Columbus, Ohio-based insurer said that it will keep four main brick-and-mortar offices in place and that it will also keep some other, smaller brick-and-mortar offices open.
The pandemic may eliminate the open office
As businesses contemplate the return of workers to their desks, many are considering large and small changes to the modern workplace culture and trappings. Some companies have begun mentioning a return to one of history’s more derided office-design concepts: the cubicle. There is talk also of the cubicle’s see-through cousin, known as the sneeze guard.
Retail
Neiman Marcus files for bankruptcy
The high-end retailer is not liquidating, and expects to emerge from restructuring later this year. Neiman Marcus became the first major department store group to file for bankruptcy protection during the coronavirus pandemic. It’s a stunning fall that follows the collapse of Barneys New York late last year and comes as shadows gather over chains like Lord & Taylor and J.C. Penney.
Nationwide keeping some workers at home
At the outset of the coronavirus pandemic, Nationwide sent a majority of its office workers home. Now it plans to make that move permanent for some of them. "I think this is the future," CEO Kirt Walkersaid. "We are learning as we go, but I can see us being 50% work-from-home some day."
J.Crew Group Inc., which operates the J.Crew and Madewell fashion retail brands, has filed for Chapter 11 bankruptcy protection. The company hopes to restructure its debt while aiming to eventually reopen its stores in the aftermath of the COVID-19 pandemic. Chinos Holdings Inc., the parent company of J.Crew, filed the voluntary petitions for protection on Monday in the U.S. Bankruptcy Court of the Eastern District of Virginia. The New York City-based retailer said its lenders and stakeholders agreed to convert $1.6 billion of debt into equity. Typically in a debt-to-equity conversion, lenders receive ownership of a company in exchange for cancelling existing debt. With this conversion, creditors will now own about 82 percent of the company, per The Wall Street Journal.
Nordstrom permanently closing 16 full-line stores
The Seattle-based company also said Wednesday it will make changes to how its remaining stores function when they do open in a “market-by-market” approach.
Residential
Home prices in the USA rising, for now
The economy is shrinking, businesses are closing and jobs are disappearing. But in the housing market, prices keep chugging higher. Home prices plunged during the last recession after a housing crash caused millions of families to lose their homes. Home values could start to erode again, especially when mortgage forbearances end, some economists warn.
But that hasn’t been the case so far. The median home price rose 8% year-over-year to $280,600 in March, according to the National Association of Realtors (NAR). While buyer demand has softened and sales fell 8.5% that month from the prior month, the supply of homes on the market is contracting even faster, recent preliminary data shows. Bur homes typically go under contract a month or two before the contract closes, so the March NAR data largely reflects purchase decisions made in February or January.b
Regional and metropolitan dynamics
Dispersion in US metros accelerates
New data from the U.S. Census Bureau indicates that within the major metropolitan areas, domestic migration away from the core counties was 2.23 million from 2010 to 2019. In contrast, the suburban and exurban counties gained 1.94 million. The suburban and exurban counties attracted 4.2 million more moving residents than the core counties (Figure 1). The rate has been accelerating. In the first two years of the decade, the suburbs and exurbs had about a 175,000 domestic migration advantage over the core counties. In the last three years, the suburban advantage has widened to over 600,000 (Figure 2).
Community development
Google affiliate abandons Toronto smart city project
Google’s affiliate Sidewalk Labs has abruptly abandoned its vision to transform Toronto’s waterfront into one of the world’s first “smart cities”. In a statement released on Thursday, Sidewalk Labs’ CEO, Dan Doctoroff, said that sustained unpredictabilities stemming from the coronavirus pandemic meant that the project was no longer feasible. “As unprecedented economic uncertainty has set in around the world and in the Toronto real estate market, it has become too difficult to make the 12-acre project financially viable without sacrificing core parts of the plan we had developed,” he wrote.
Leadership
Creating viable business models
In a series of three articles, Adam Sgrenci looks at a systemic approach to the pandemic’s two most important lessons - the need to come up with more resilient business models and the need for collaboration between for-profit and nonprofit sectors.
Construction
Sheathing walls in seismic and high wind zones
Whether designing for resistance to hurricanes, tornadoes, or earthquakes, one of the most basic structural elements that helps resist the forces a building sees during such events is the shear wall. Oriented strand board (OSB) is often used to accomplish this.