The Real Deal's Erin Hudson and Sasha Jones examined one of the central questions facing New York City – and national – real estate in this thoughtful article.
A few central questions are driving the uncertainty in real estate and, more broadly, all markets right now. When will we have an effective and safe vaccine for the coronavirus. And when will "normal" life (and, for our readers, normal real estate pro formas) safely resume?
The pandemic has underscored the inter-dependence of various segments of the economy.
Schools are not just tied in to property values for certain neighborhoods, but have become factors in whether families are returning to cities in the fall. It seems that politics and perceived economic necessity, more than public health and science, is driving the push to re-open schools.
Schools seem to be a perfect (imperfect?) storm for many of the factors driving the spread of the coronavirus. These are densely-occupied, indoor spaces with little or no ventilation. The most recent research suggests that children are particularly effective carriers of the virus. The virus has a roughly two-week asymptomatic incubation period. Given the logistics (and expenses) for families to move from the city to a medium-term temporary residence or vacation home, there is serious concern that schools will be forced to suspend classes within two weeks of the start of the school year.
In some districts where the fall semester has already begun, there have been valid concerns about students not wearing masks. One Georgia teen, Hannah Watters, posted a video of the crowded hallways in her school – making social distancing impossible – and the lack of masks worn by students. The North Paulding school suspended her – not, they emphasized (after likely consulting with their attorneys), for calling out the school's lack of caution, but instead because she violated the school's social media policy. After the video and the news of her suspension went viral, the school (again, after likely consulting with their attorneys) reversed the suspension.
(In normal times, a young woman who has the courage and integrity to call out bad behavior ought to be praised for taking a stand, not suspended. It is an unfortunate but not unexpected sign of the dysfunction in that school that she was suspended rather than praised.)
Real estate is synergistic, and most components of a functional city reinforce each other. We're seeing the effects when schools are taken out, even temporarily, from the urban equation.
UPDATE: Earlier today, North Paulding High School announced several coronavirus cases among faculty and students, and is moving ("temporarily") to online classes.
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