The Round-Up Volume 9: Equity, Recession, and the Horizon
As difficult as recent times have been, we are seeing incredible glimmers of hope, compassion, citizenship, and progress.
June 19, 2020
Annnndddd another week for the history books...
The Supreme Court issued several rulings including a decisive vote to protect LGBTQ people from workplace discrimination, and a split decision to uphold the DACA program that protects immigrant DREAMers.
Global protests continued this week, while public officials announced plans to address police reform at the federal, state, and local levels.
The COVID-19 pandemic situation continues to develop, as hopeful signs of viable treatments have emerged.
As we round out the first half of the year, many people are wondering what the future holds. Welcome to The Round-up, and Happy Juneteenth!
The economic downturn and social unrest are exposing deep cracks in the nation’s housing system. Both housing categories—renting and homeownership—are failing Americans, and especially younger generations.
The average Millennial is spending more than 30% of their net income on rent, with lifetime rent payments expected to surpass $200,000. Meanwhile, homeownership is becoming less attainable due to high rates of student debt, restrictive credit requirements, and wages that haven’t kept pace with inflation or property values. Add in an underlying system of discriminatory housing policies and lending practices and it’s objectively clear housing as a whole is broken, and has been for quite some time.
The market is screaming for a new category of housing, one that can incorporate the best aspects of both renting and homeownership, without any of their limitations or complexities. Rentership delivers on the flexibility, access to amenities, and prime location provided by renting, and the financial upside and deeper connection to a community you gain with homeownership. There aren’t just two types of people in the world––renters and homeowners––any longer.
Recession Bears its Head
The National Bureau of Economic Research officially declared we are in a recession, citing an unprecedented decline in employment and production across the economy as a whole. While this marks the end of a 128 month economic expansion, the longest cycle since 1854, NBER believes there is a possibility of a more brief contraction than previous recessions.
The worst of the layoffs appear to be behind us, but it’ll be a long slog back to the pre-pandemic unemployment rate. The American economy could face years of high unemployment due to fallout from the coronavirus. Even as states reopen, Federal Reserve Chairman Jerome Powell expects there could be millions of workers whose jobs won’t return beyond 2022. Even in the short-term, the Fed believes unemployment will hover around 9.3% through year-end.
Pandemics and Property
Fallout from the coronavirus is reshaping the commercial and residential real estate landscape. People are leaving densely packed cities and the popular mixed-use development concept has been called into question amid a decrease in confidence of its viability given the new realities of a post-COVID-19 world. We tend to believe these new short-term trends will not be lasting, but that remains to be seen.
In the residential space, decreasing demand during shelter-in-place exacerbated an already constricted housing supply, propping up home prices. April saw the largest decrease in existing home sales since 2010––a 17% year of year decline. What this translated to was a median home price increase of 7.4% in April across the board, according to the National Association of Realtors.
It remains to be seen how the lasting effects of the pandemic will play out in the economy. Check out some of the initial data from the National Association of Realtors by clicking below.
It’s a big week for LGBTQ equality. In a landmark decision, the U.S. Supreme Court ruled businesses cannot fire employees based on sexual orientation or gender identity.
As noteworthy as the decision is, there’s more to be done in the name of equality. For example, more than half of U.S. states still do not have protections for discrimination in housing and public accommodations based on sexual orientation and gender identity.
Featured Property of the Week
Neil & Tappan
Built in the 1890s, and completely renovated in 2006 are 9 beautiful townhomes at the corner of Neil Ave and Tappan Street, in the heart of Victorian Village.
Hardwood floors, stainless steel appliances, granite counter tops, 1.5 baths, and gorgeous woodwork, these apartments are move-in ready.
If you're looking for location, character, and charm, look no further.
As difficult as recent times have been, we are seeing incredible glimmers of hope, compassion, citizenship, and progress. It’s easy to focus on the frustrating rhetoric and actions of the worst. However, as we’ve seen, the best of us can rise to the occasion and lead when called upon. We could look at 2020 as a year full of chaos. Or we could recognize that 2020 is a year where we started to course correct. We’ve taken incredible steps toward achieving meaningful civil rights, justice, equality, and economic stability. Granted, there is much work to be done before we achieve a better society that serves everyone.
Tools like systemic racism, unjust laws, the war on drugs, economic barriers, and restrictive housing policies are what created this environment of institutional inequity and a growing wealth gap. These are the causes of civic unrest and economic instability. We need more than a recovery.
Recovering our economy isn’t the answer, we need to rebuild it.
Better isn’t the answer, we have to be different.
Quote of the Week
"Whenever there is in any country uncultivated lands and unemployed poor, it is clear that the laws of property have been so far extended as to violate natural right." Thomas Jefferson, 1785