I am an urbanist at heart, but my day job is as an Economic Development Director for a suburban community. With that in mind I want to make the case for co-working space being located in suburban areas.
According to a report by the Pew Research Center, roughly 55% of Americans live in suburban areas compared to 31% in urban, and 14% in rural areas.
Additionally, American Community Survey (ACS, 2017 5-year estimate) data shows, that approximately 38% of the population commutes at least 30 minutes to work and 17% commute at least 45 minutes. Long commutes and congested roadways mean higher personal transportation costs (such as gas and vehicle maintenance), loss of leisure/family time opportunities from having to spend additional time on the road, greater amounts of vehicle pollution, and higher public service costs to maintain roads.
Meanwhile, recent urbanization trends have brought more and more businesses to the urban cores of cities. From the employee perspective, business re-locations lead many employees to have longer commutes and the higher costs/lost opportunities that go along with that. On the employer side, researchers in England have found that adding 20 minutes of commuting time per day produces the same negative effect on employee satisfaction as cutting their pay by 19%.
While the housing boom in downtown areas may make headlines and lead one to think that most Americans are ready to move to urban cores, suburban home sales and growth patterns tell a different story. For example, a report by Brookings showed suburban growth rates exceeded city growth rates in 2015-2016 and 2016-2017.
With many areas at full employment, the economic condition where virtually everyone in an area who can be employed is employed, and there being more jobs openings then there are unemployed, businesses must find ways to keep their employees happy or else they may seek other opportunities.
From the business perspective, utilizing suburban co-working space as a proxy satellite office offers the ability to keep those workers happy by offering them an alternative workplace within their communities with minimal real estate costs. Technology has enabled more and more businesses to allow their employees to work remotely. This means that workers can stay in their communities and be close to their kid’s schools, parks, and the amenities that they sought out when deciding to live in that area, thus fueling employee satisfaction and happiness.
From the employee perspective, co-working space offers the ability of suburban residents to still go to an office type setting, if they choose, while still remaining close to home. Furthermore, co-working spaces can support the growing entrepreneurial community and facilitate an office environment for independent contractors who, according to a report from the Department of Labor, currently represent about 10% of the total workforce.
For real estate investors, locating a co-working space in suburban area would provide a workforce solution for those employees that want to live near their home and avoid those long commutes into the city. Also, there are many benefits that suburbs offer. This includes free parking, close proximity to highways (should consumers of their co-working space need to travel for a meeting or host a guest), ample nearby dining, entertainment and lodging options, other community amenities such as fitness centers, parks, schools, etc., and lower or no local income taxes.