What Cities Can Learn From Suburbs

L to R: Nancy Sarnoff, Joe Gose and Jonathan Brinsden

The move to the suburbs was happening before the pandemic and it may not be permanent, experts say. But that doesn’t make downtown urban property owners any less nervous these days.

The suburbs are luring Millennials—and their employers—with reduced density, lower occupancy and housing costs, better schools, and historically low interest rates. And, with work from home potentially a permanent part of the corporate culture, even more urbanites are thinking about becoming suburbanites.

Speaking at the National Association of Real Estate Editors conference this week, Jonathan Brinsden, ULI Americas chairman and chairman of Houston-based Midway, acknowledged that cities certainly have their challenges to work through—including improving livability and infrastructure issues while contending with increasingly constrained budgets. But he cautioned the industry not to think in absolutes: suburbs or cities.

“After 911, people said ‘no one will ever office in office towers again’ and, well, people are officing in office towers, and so I think we have to be measured about our thought process and nothing’s ever really kind of black and white,” said Brinsden.

Despite the slight changes in migration we are witnessing, Brinsden said, major cities still have huge demand drivers like entertainment, finance, technology and higher education, and they will always attract talented people.

There are, however, a few less capital-intensive things cities can do to improve livability, some of which started during COVID. These include opening up sidewalks or parking lots for outdoor dining and adding more bike lanes or “parklets.” 

Cities can also follow the model of taking existing assets and leveraging them, like Houston did with its bayous, Los Angeles did with its waterways and San Antonio did with its river assets. “These are things that existed that just needed enhancement,” said Brinsden.

The Workplace

Brindsen offered his observations while fielding questions from Houston Chronicle reporter Nancy Sarnoff and freelance writer Joe Gose during a panel titled “Reinventing Cities in the Post-COVID Environment.” The journalists also wanted to know about how the workplace will change due to the pandemic.

“There is a consensus beginning to form around the idea that, again, it is not this big pendulum swinging and suddenly everyone is going to work from home and no one is going to be in the office,” Brinsden said. “A lot of the talk really revolves around office as a place and not just space and, so if everyone is working from home, I think more companies are feeling that that’s a real detriment to culture and collaboration and mentorship.”

While COVID may not eliminate the office, it is making employers and property owners think about how inviting and convenient the physical office is. And on that front, the urban office can take some lessons from the suburban office.

Companies that want to use their offices to retain and attract talent, Brinsden said, will need to provide amenities and green space vs. a stand-alone office building. But all companies will need to make a compelling case for people to return to the office. Therefore, he foresees some companies opting for a distributed office approach within a city so they can reduce commuting time for some staff members. He also thinks all employees will work from home part of the work and work in the office part of the week. He expects co-working to come back strong and play an important role for existing and new companies

Growth Cities

When asked which cities were well positioned during and after COVID, Brinsden said COVID is accelerating growth in cities that were already benefiting from in-migration of companies in the health care, technology and education fields. Many of those cities are “business-friendly” Sunbelt cities, including Denver, Salt Lake City, Charlotte, and Raleigh Durham, Austin, Houston and Dallas.

But major companies, like Apple and HP, he noted, are also opting for less dense, “surban” environments—suburbs with amenities and walkability—around the growth cities. Brinsden, however, sees the desire for less dense quarters as a cost-related concern rather an issue linked to the pandemic.