The lockdown uncovered a disturbing truth
Until the COVID-19 crisis hit us, we were collectively trapped in a narrative about living and working: Cities are the places where the opportunities are, so you need to live near or in a city to find a job. Commuting from the countryside became more and more insane. The psychological price you had to pay for living in an affordable house away from the city was having to spend 3 hours in traffic jams or being crammed in public transport during rush hours.
So we ended up collectively fighting for the scarce spaces in the big cities. To give you an idea of the consequence: the value of our apartment in Amsterdam has doubled in 5 years. Completely unsustainable.
The same thing has happened with office spaces. The more a city attracts talent and entrepreneurs, the more office space they need, the more prices were soaring. The same thing happened with retail spaces. As long as a city is growing in popularity, landlords could increase their rents to ridiculous levels (and a lot of them did), because if the current tenants couldn't pay the rent, then there were ten others desperately waiting to give it a shot.
I think this bubble is bursting.
Here's why.
Since two years it became more and more apparent that all the young people I know are leaving the city in large numbers. They loved Amsterdam, but they felt that the cost of living had reached a tipping point where they couldn't afford it anymore. With pain in their heart, they had to give up their dream.
And then came the lockdown. And suddenly people living in cities are starting to realise that the reason why they were sitting in overpriced tiny apartments and expensive office space is that they are collectively trapped into thinking that they needed to be in the office from 9 to 5.
However, within less than four weeks into the lockdown, a big hole was blown into this illusion. We all discovered that we can be productive and creative and can get to high-performance team output using a laptop, videoconferencing and collaboration software.
This changes everything.
The importance of being thrown of a cliff
I cannot stress enough how significant this forced experiment is from a behavioural point of view.
Despite all efforts in the last decade to introduce "the new way of working', in reality, we all kept each other locked in the old way. Managers felt it was more convenient to manage and control teams on an office floor. Employers invested heavily in office space, so they thought it should be used properly. Employees felt that they were better able to manage their reputation while being in the office (hence all the meetings). It was a stalemate, and the lockdown made us overcome this stalemate.
Implications for living
Why would you buy a 65m@ Appartement for € 450.000 in a big city, if you could buy a much bigger house with a garden within 30-60 minutes commuting distance? It makes so much more sense, since you can work from home for most of the week, and only show up at the office for creative sessions with your team. You and your team can carefully plan these sessions after rush hour.
I had a lunch meeting with a fellow entrepreneur yesterday. We met at about 30 minutes driving from Amsterdam, where - to my surprise - he picked me up with his boat to take me to his summer house on an island in the middle of a lake. He was running his company of 25+ staffers from his summer house and only went to the office once or twice a week. Later, when I grow up, I want to be him :)
Could it be that we will massively start to re-appreciate living in the countryside? If we can do our work from home, why wouldn't we live close to nature or close to outdoor recreation? This could be the beginning of new ways of thinking about real estate development. If the home office is the centrepiece of people's daily activity, how would you design new houses or new neighbourhoods? It would make much sense to be able to work from your garden, and to have leisure opportunities nearby: boating, fishing, biking, walking, boot-camping, playing golf,…
If I had to design a new village from scratch, I would start my design with home-working professionals as my first design principle.
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