A new "untethered class" of workers could shake up US housing markets
Maybe some of these people are your employees.
The WFH experiment of the past year has given rise to a so-called “untethered class” of workers who hold remote positions and are unencumbered by homeownership or family obligations, a new report from ApartmentList suggests.
These workers are highly-educated, high-earning, and “on the precipice of settling down” at a median age of 32. They rent their homes, live alone or with a spouse who is either not working or who is working in a remote-friendly occupation, and they have no school-age children. They are also more likely to live in a state other than where they were born. ApartmentList suggests this new untethered class consists of 8.7 million workers, or 5.6% of the total American workforce.
San Francisco has the highest share of untethered workers at 13.5%, followed by San Jose and cities known for high housing prices, including Los Angeles, New York City, Seattle, and Boston.
“Given that so many untethered workers are living in the nation’s most expensive housing markets, many may choose to relocate to markets where they can afford to purchase homes and raise families more comfortably,” housing economist Chris Salviati writes in the report. “While such a trend would be unlikely to lead to the demise of superstar cities, it has significant potential to reshape the markets that the untethered class moves to.”
Nearly one in three US jobs are in occupations that can be performed remotely, ApartmentList estimates, though the number is much higher in places like San Jose and Silicon Valley, where 46% of jobs are remote-friendly.
“Many Americans who worked in offices before the pandemic are likely to continue working remotely even after it subsides,” Salviati writes. “By severing the link between job choice and housing choice, remote work could have a profound impact on where Americans choose to live.”
Of course, it remains to be seen how companies will ultimately navigate a return to physical work as the pandemic wanes. For banks, pulling off a more permanent WFH option, even for a fraction of employees, may pose significant regulatory challenges. And for other industries (like media), current research suggests WFH may be reaching a saturation point.
But for Salviati, this much is clear: “the geographic preferences of remote workers could have significant ramifications for housing markets across the country,” he writes. “If the untethered class decides that they are fed up with the high housing costs in superstar cities, they could spur a wave of migration to more affordable markets. Although superstar cities are unlikely to face a mass exodus, even a modest outflow has the potential to disrupt smaller markets. At the same time, a growing number of cities are making concerted efforts to attract remote workers, seeing an opportunity for economic development.”
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