Working at Tysons Corner as a mergers and acquisitions adviser for KPMG, Jack Conti had no idea how much time he was giving away.
“It would take me 45 minutes round trip to work. It was kind of the norm,” Conti says of his drive from Arlington. “I didn’t know any better.”
Conti landed the job fresh out of college in 2018. He had few complaints. In his early twenties, he worked in a glass-walled office tower near Washington, DC, for one of the Big Four accounting firms. All the driving and traffic jams weren’t something he really considered.
Then the pandemic hit and he stopped going to the office, logging on from the house he was renting with three roommates. Without the commute, he saved an hour and a half each day and began to wonder why he was paying so much rent. His girlfriend, Natalie Savino, had already returned to Virginia Beach. She worked in New York, living in a “shoebox” on Manhattan’s Upper West Side with three other women. When the pandemic shut down nearly all of New York City in March 2020, she quickly discovered that working from her tiny walk-up apartment wasn’t going to be enough.
“There was talk of going back to the office,” Conti recalled in late 2020. “She was living in Virginia Beach. I was living in DC.” Then, when offices started to reopen, he recalls wondering “Why am I going to travel this hour and a half every day?
Today, they both live in the Scott’s Addition neighborhood of Richmond. Conti found a job as a finance and asset manager at Spy Rock Real Estate, while Savino continues to work remotely for IPG Health in New York.
“There was no remote work option before,” Savino says, adding that her employer didn’t blink when she asked to work from home — permanently. “Now my company hires all over America. It doesn’t matter where you live.
Richmond’s rise as a sought-after destination for young professionals and creative workers was underway long before the pandemic hit two years ago. But Conti and Savino, who moved to Richmond in February 2021, represent a relatively new twist — an evolving job market that isn’t driven by the physical location of jobs.
Staffing shortages and closed offices, along with record numbers of people leaving the workforce altogether, are reshaping work-life dynamics. Meanwhile, long-held truisms in real estate and economic development — the idea that people decide where to live based on where they can find work — are becoming obsolete.
In the past, people were looking for jobs. Today, the reverse is true, says Anthony J. Romanello, executive director of the Henrico Economic Development Authority.
“We did a study a few years ago, this is before the pandemic, on companies that left Henrico and went to Scott’s Addition. It wasn’t a huge number – you know, 10 or 12 small businesses, architectural firms, engineering firms, survey firms,” Romanello says. “What we were seeing was businesses leaving Henrico to go to Scott’s Addition to pay higher taxes and rents. Why? Because of the importance of the place.
Scott’s Addition, a former industrial area of the city that has transformed into apartments, breweries and restaurants over the past decade, offered something suburban office parks lacked: a bustling community of young professionals.
“Place is becoming more and more important, and the pandemic has accelerated that trend,” Romanello says. “Because we tested the Internet. It worked all over the world. We thought knowledge workers could work anywhere in the world. Well, we now know that knowledge workers can work anywhere in the world, as long as they have Wi-Fi.”
Located midway on the East Coast between New York and Miami, Richmond’s relative affordability – especially compared to larger cities in the North – as well as its vibrant culinary, arts and cultural scenes, attract new residents from all over the world. country.
In 2019, 64,000 people migrated to the Richmond area, according to US Census data compiled by the Greater Richmond Partnership. The largest percentage of new residents came from Northern Virginia — about 15%, or 9,690 people — but otherwise relocations came from everywhere, including New York, New Jersey, Philadelphia, Atlanta, Los Angeles, Miami and Dallas. Another 7% emigrated from Europe, Central America, South America and Africa.
Increased migration fueled growth. The city of Richmond’s population has grown 11% over the past 10 years, from 204,000 in 2010 to 226,000 in 2020, according to the latest US Census data. Henrico grew by 9%, from 307,000 inhabitants to 334,000 over the same period. Chesterfield, meanwhile, jumped 15%, with its population rising from 316,000 to 364,000.
While immigration census data for 2020 will not be released until late spring, overall population growth in the first months of 2020 has slowed.
“It can be said that from mid-2019 to mid-2020, the population of the Greater Richmond area increased by approximately 9,500 people. It was the lowest [12-month] total since 2011,” says Michael Cobb, senior market analyst at CoStar Group, a real estate data and research company. “In April-May-June, you really had a lot of people in confinement, not really on the move. You probably saw more people moving in the second half of 2020.”
In other words, the pandemic initially dampened the region’s growth, but that was only temporary. Although new figures are not yet available, recent trends in the residential housing market suggest that the population of the Greater Richmond area is poised for another boom.
In the Richmond area in 2020, 21,845 single-family homes, condos and townhouses were sold, more than at any other time this century, says Laura Lafayette, general manager of the Richmond Association of Realtors and Central Virginia Regional. Multiple Listing Service. In 2021, the numbers jumped again, rising to 23,463 home sales through the end of December.
“Demand exceeds supply,” says Lafayette. “When you look to 2022, there’s no indication that demand is going to drop significantly.”
There is also a rapid growth in the apartment market. By early January, there were 5,400 apartments under construction in the metro area, “just hovering around historic highs,” Cobb says. The overall vacancy rate — 4.5% in mid-January — is a 20-year low, according to CoStar. And new apartment projects are renting out quickly. Those that have opened since the beginning of 2020 have a collective vacancy rate of 3%.
It’s no surprise that the City of Richmond leads the region by far when it comes to new apartment developments. In the past two years, 3,250 new apartments have opened in the city, compared to 1,700 in Chesterfield and 700 in Henrico, Cobb says. And many more are on the way.
“We expect to see around 4,000 units open in 2022, which would be an all-time high,” he says. “We are seeing developers continue to flock to Richmond for a number of reasons. You have an incredibly healthy market. …You also have a business-friendly environment in Richmond that also benefits from an affordable cost of living.
Over the next few years, population growth and changes in how and where people work could fundamentally alter the region’s development. Traditional commuting patterns are likely to change as fewer people commute daily to sprawling suburban office parks or the downtown business district. New office developments will likely be smaller, interspersed with residential housing and retail.
“Place is becoming more and more important.” —Anthony J. Romanello, Henrico Economic Development Authority
Places like Innsbrook in Henrico, which years ago siphoned off downtown businesses to become the metro area’s largest suburban office park, are already being redeveloped with thousands of new apartments. Romanello says many companies are consolidating their existing offices and reassessing the space they’ll need when the COVID-19 pandemic finally subsides.
“What these workplaces look like when people come back… in five years it could be very different,” he says. “I think there’s a good chance we’ll see offices focus more on gatherings of people than individual workspaces. Even if the virus disappears completely, it is only the way we work and the way we interact as humans that changes.
It’s a change for the better, says Garrett Hart, director of the Chesterfield County Economic Development Authority.
“We’ve seen a strong housing market, as strong as it’s ever been in the county, and we’re seeing the strongest multifamily market we’ve ever seen in the county,” he says. “And that’s good news for us, because it’s all about attracting talent. We seek to attract young tech workers and retain experienced workers by providing them with more housing options as they grow. If we can attract talent, companies will follow talent.
The changing nature of work should bode very well for the city. Richmond’s attractiveness is easy to understand, says Andrew Basham, co-founder of Spy Rock Real Estate (the company Conti joined last year), a development and investment firm that has built or acquired more than 3,200 apartments since its creation in 2008.
“I don’t think anyone is moving here for anything,” he says. “You move here because you want to live in the city. There is very little traffic here. There is a great food scene. There is a big entertainment scene.
For Conti, whom Basham hijacked from KPMG a year ago, the decision to move to Richmond was an easy one.
“You’re not stuck in rush hour traffic. You can get anywhere in about 10 minutes,” says Conti, adding that his 45-minute morning commute is now more like 60 seconds. His apartment at Scott’s Addition is half a mile from his office, a short drive or walk to breweries and restaurants. “I can go to the gym after work now, and weekday social life is much better.”