With the vaccination rates increase and businesses start to reopen, cities across the country are cautiously moving forward with economic recovery plans to coax workers back into offices and revive real estate markets pummeled by the pandemic.
Some midsize cities such as Austin, Texas; Boise, Idaho and Portland, Oregon may be set up to rebound faster than others because they have developed strong relationships with their local economic development groups. These partnerships have established comeback plans that incorporate a number of common goals, like access to affordable loans, relief for small businesses and a focus on downtown areas.The partnerships are also encouraging investments in infrastructure as lures for new business activity. Last Wednesday, President Biden announced a $2 trillion infrastructure plan to modernize the nation’s bridges, roads, public transportation, railways, ports and airports. Demand is high for industrial sites in Tucson. More than 80 percent of requests about real estate in the city are geared toward industrial facilities, according to Sun Corridor, the regional economic development agency that sponsored the recovery plan. And 65 percent of the inquiries deal with space for new factories.
“Recovery plans create an agenda for rebuilding the metropolitan area,” said Richard Florida, professor at the University of Toronto, who helped prepare a plan for northwest Arkansas. Other cities are struggling to recover after pandemic restrictions emptied their central business districts. The question is how much these downtowns will bounce back when the pandemic ends. Experts disagree about what comes next. Several economic trends, like growth in hiring and the acceptance of remote work, are colliding, said Richard Barkham, global chief economist at CBRE, the commercial real estate firm. After a 3.5 percent decline in economic activity in 2020, the U.S. economy is expected to grow 6.5 percent in 2021, he said, which bodes well for construction. But CBRE also projects that office employees will spend 36 percent of their time working remotely, up from 16 percent before the pandemic.