Houston could be “the most momentous city in America” ​​as it is rapidly diversifying and raising questions that CRE needs to answer

With large numbers of older, white baby boomers retiring from the labor force, those who follow them are both more racially diverse and eager to approach the office in new ways. The face of the average American worker is changing rapidly, fastest in Houston, with a major impact on a commercial real estate industry already grappling with the upheaval caused by the coronavirus pandemic.

Bisnow / Lane Gillespie

Founding Director of the Children’s Institute for Urban Research Stephen Klineberg

State and local closings last year resulted in postponements that questioned how developers will go about creating and managing new office developments. At the Bisnows construction and development event in Houston on November 3, panelists warned employers and commercial real estate professionals to consider when planning office projects, determining hiring strategies, and planning for the future in a city that has had racist demographics for years Even a rapidly changing workforce should consider the rest of the country.

According to the latest U.S. census data, in 2020 the greater Houston area was made up of approximately 35% whites, 17% blacks, 8% Asians, and 38% Latinos.

Urban experts agreed that in the midst of the paradigm shift in hybrid and home offices triggered by coronaviruses, the real estate industry must also adapt in order to meet the needs and interests of its employees.

“We’re at the forefront of what’s happening across America. What happens here is important. This is where the American future is being worked out, ”says Stephen Klineberg, founding director of the Children’s Institute for Urban Research at Rice University.

“How we manage this transition will be of tremendous importance, not just to the future of Houston, but also to the future of America,” he added. “That makes this city perhaps the most interesting and momentous city in America.”

Bisnow / Lane Gillespie

Brandi McDonald Sikes from Limestone Commercial Real Estate, Patrick Ezzell from Urban Partnerships Community Development, Stephen Klineberg from the Kinder Institute for Urban Research, Ryan LeVasseur from Rice Management Co. and Michael Scheurirch from Arch-Con Corp.

Michael Scheurich, CEO of Houston-based construction company Arch-Con, said the workplace independence of the younger, less invested generations meant a disinterest in working for a company for just 30 years and receiving a pension. To attract and retain a workforce, companies need to keep pace with changing job expectations, that is, change.

The panelists said that the commercial real estate industry in particular should look inward. Currently, the industry strongly distorts white and male, disproportionately compared to the general demographics. A 2020 survey by the Commercial Real Estate Women Network found that women made up only a third of the commercial real estate workforce and that pay, especially among women of color, lagged behind men. Bisnow’s ongoing analysis shows that commercial real estate executives remain predominantly male and white, and the Urban Land Institute reported earlier this year that senior CRE executives of black people have been stuck at around 2% for years.

That has to change in order for progress to be made.

“The diversity of this city is its strength. But we’re talking about getting stronger. If you look in this room, we don’t represent that diversity. We just don’t do it, ”said Ryan Levasseur, Managing Director of Direct Real Estate at Rice Management Co ..

“We can be a lot better. There is a lot of latent talent in this city that we can capitalize on, and we can advance this economy by taking advantage of and nurturing those talents. But that takes a lot of work. “

A report from the Future Forum 2021 suggests that there is currently a discrepancy between how employers and employees view the office, with more than 80% of these employees saying they prefer a flexible or hybrid work environment. The same study conducted by Slack to examine the future of work found that only 3% of black professionals want to return to the office full-time when the nation is out of the coronavirus pandemic.

However, not all people of color, or even workers in general, benefit from working from home. Although Houston homes tend to sprawl more than other cities faced with the hurdle of small apartment sizes, many workers struggle to maintain a productive home office.

“If you work at home … the environment you are in may not be the same for everyone.” Scheurich called. “Someone might have a great home office, someone else could work with the dogs and children at the kitchen table and what do you have?”

That means companies should create a better office experience than employees could find at home. And for People of Color, you should remember that working from home is associated with less microaggression and other inequalities than in an office.

Bisnow / Lane Gillespie

Jones | Carter’s Erin Williford, Craig Maske from Harris County Flood Control District, Jacques Gilbert from PEA Group, Carol Ellinger Haddock from Houston Public Works and David Hightower from Midway

According to the Future Forum report, there is a discrepancy between employers ‘and employees’ views of return to office. While employers believe they are making the shift transparent, they often make decisions without the involvement of employees, especially the colored ones, and employee satisfaction levels mismatch.

“The office is not dead – but the headquarters are now virtual,” the report says. “Executives should consider converting physical office space into environments that intentionally encourage collaboration and connection between colleagues in the same location and at remote locations, while leaving some space for solitary, focused work.”

This is especially important in the Texas suburbs, which are bringing national prosecution to the growing population of colored people. Nationwide, about 50% of total population growth in the past decade was driven by the Latino population, and almost all of the state’s population growth was driven by colored Texans, either through migration or natural increases.

So many colored people have moved to the Houston area, Klineberg says, that the non-white populations of Houston and Harris Counties would continue to form the majority even if migration stopped.

“After the 1982 oil spill, Harris County’s Anglo population stopped growing. All the growth … was the influx of African Americans, Latinos, and Asians, ”said Klineberg. “This Birassian city in the south, which has been dominated and controlled by white men all its life, has become the most ethnically diverse city in the country.”