One hundred days of solitude*, our post Corona world
14 Apr 2020
The consequences of this pandemic are yet to be understood, that is going to take time. But the human cost is being counted daily, deaths on the scale we are witnessing are something this generation has not had to consider or deal with before. The economic impact will be immediate and terminal for some businesses and a fight for survival for others. A few will inevitably prosper.
What does it mean for the architectural profession? The year started with real optimism, there was a long-term view to investment and development that certainly bode well for those of us working in central London.
I would expect that the real impact of this crisis will be felt towards the end of this year or the beginning of next. Setting aside whether we have another version of this virus next winter, it is very rare for the property and construction industry to stop overnight.
Let’s examine one or two of the predicted outcomes that may influence our profession:
Homeworking and the office
The necessarily rapid switch to on-line meeting and conferencing platforms will, no doubt, change the way we will be working in the future.
There are plenty of journalists extolling the virtues of home-working and proclaiming the end of the office, it’s how a lot of them operate anyway. The lessons we have learned from recent weeks have demonstrated that it is an alternative, it will add flexibility to our employment contracts, and it will help new parents get working again. But these changes were on the cards anyway.
Another few weeks of social distancing and everyone will want to be back in the office, having a pint after work in the local pub, assuming it has survived. The office will survive, in the future it will be a social hub as much as anything, but will the pent up demand in the market still be there? Rents may well drop which will impact the office refurbishment and development market.
More of a worry is the impact it will have on the co-working world. WeWork looks extremely shaky, and the business model of flexible short licenses means that many businesses will have walked away from their co-working spaces never to return.
Some are predicting a shift away from cities, if pandemics are the new norm is it better to be located outside overcrowded and densely populated cities?
Planning and investment
This crisis is going to cost everyone and at some point the debt will need to be repaid. We currently have record low interest rates which discourage saving, inflation is a now a risk and unemployment has risen and will take time to fall.
Against this backdrop, central government will need to stimulate the economy. A relaxation of stamp duty and business rates may help the residential market and the retail sector, but the biggest obstacle to property investment is an over-complex over-empowered planning system. In order to get the economy going the government needs to reign in the planners so that developers can build.
This is not the 1950’s where post-war development ran amok. We still need to control quality and ensure sustainable development, but if planners were made to delegate more decisions, and not get involved in complex viability assessments, that would be a good start.
The national response to the pandemic has been fascinating. There was no pan European strategy, it was each for his own, national borders were closed, further exposing the fundamental inequality at the heart of the European project.
Looking ahead, we will travel less, this would be great for the environment but not so good for those poorer countries that rely on tourism. We can certainly cut out flights in the UK and reduce those to Europe. Do we really need MIPIM for example, does the BCO conference need to be in Toronto next year?
We will, and should, reconsider our relationships with China, perhaps look into bringing back manufacturing and reducing trade until their human rights and animal welfare policies are changed. Let’s not forget that this global catastrophe started in the wild animal markets of China, I have seen some of them and they are sickening. This is not a tradition, it is a modern phenomenon that started in the 90’s and is worth $72bn dollars to the Chinese state, a taste for exotic meat came with economic success.
But London is still a global city, in the short to medium term that will not change, it will still be seen as an attractive place to invest and I am sure overseas capital will still find its way to our shores
This government was preparing to borrow hugely to invest in infrastructure projects, will they be able to do that in the wake of this crisis? Indeed, we may see effective nationalisation of parts of the UK economy, this will further add to the burden of state debt. The need to create work and homes will be even greater in the next few years, but how will it be funded?
These are but a few of the many issues and questions that we are facing. Architects are used to the ups and downs of the market economy, the best we can hope for is that this is another bump in the road that throws us off course but doesn’t derail us.
* with apologies to Gabriel García Márquez