University of Michigan MADS 593 Milestone Project
by Arun Suresh, Nick Wheatley and James Conner
Problem Statement While remote work has been a feature of corporate workplaces for decades, it has not been exceptionally common. The COVID-19 pandemic dramatically changed the face of remote work in the United States within a few short months, due to prohibitions placed on gathering in public spaces.
As companies and the workforce adapted to remote work as a primary mechanism of employment between 2020 and 2022, many well paid professionals were no longer tied to short commutes to the office (Coate 2021).
This led to an exodus from the high home value city centers to the more reasonably
Info on analysis purpose priced suburbs exurbs, which has had a side effect of increasing exurb median home values due to surging market demand (Markarian 2021).
Motivation The purpose of this report is to analyze the effect on affordability caused by this migration from city center to exurb counties between 2020 and 2022. We will demonstrate this effect using an Affordability Index, comprised of income, home values, and utility costs per county in the United States. This index will then be used to create a national analysis, as well as a regional analysis for two large city centers.
The value of this analysis is in identifying the trend that remote work and the resulting metro center exodus has had on exurb communities and city cores, from the perspective of a potential home buyer. Using the data, notebooks, indexes and methods of analysis we have comprised in this project, readers can analyze any county of interest for their own needs.
Regional Concentration
The two regions that have been selected for our analysis are the San Francisco Bay area, and the New York City metropolitan area. These two metropolitan areas are classic examples of high cost city centers with a high concentration of professionals, and exhibit the “donut effect” (Ramani & Bloom 2021).
Coate, Patrick. “Remote Work before, during, and after the Pandemic Quarterly Economics Briefing–Q4 2020.” Remote Work Before, During, and After the Pandemic, National Council on Compensation Insurance, 25 Jan. 2021, https://www.ncci.com/SecureDocuments/QEB/QEB_Q4_2020_RemoteWork.html
Markarian, Kevin. “Council Post: The Effects of Remote Work on Real Estate across the U.S.” Forbes, Forbes Magazine, 23 Apr. 2021, https://www.forbes.com/sites/forbesrealestatecouncil/2021/04/23/the-effects-of-remote-work-on-real-estate-across-the-us/
Ramani, Arjun, and Nicholas Bloom. “The Donut Effect: How Covid-19 Shapes Real Estate.” Stanford Institute for Economic Policy Research, Stanford University, Jan. 2021, https://siepr.stanford.edu/publications/policy-brief/donut-effect-how-covid-19-shapes-real-estate