Jack Conti and Natalie Savino
Working in Tysons Corner as a mergers and acquisitions adviser for KPMG, Jack Conti had no idea how much time he was giving away.
“It would take me 45 minutes each way to and from work. That was kind of the norm,” Conti says of his commute from Arlington. “I didn’t know any better.”
Conti landed the job fresh out of college in 2018. He had few complaints. In his early 20s, he was working in a glass-sided office tower near Washington, D.C., for one of the Big Four accounting firms. All the driving and traffic congestion wasn’t something he really considered.
Then the pandemic hit, and he stopped going to the office, logging in from the house he was renting with three roommates. Without the commute, he gained an hour and a half each day and started to question why he was paying so much for rent. His girlfriend, Natalie Savino, had already moved back home to Virginia Beach. She had been working in New York City, living in a “shoebox” on the Upper West Side of Manhattan with three other women. When the pandemic shuttered pretty much all of New York in March of 2020, she quickly discovered that working from her tiny walk-up apartment wasn’t going to cut it.
“There was talk about us going back into the office,” Conti recalls of late 2020. “She was living in Virginia Beach. I was living in D.C.” Then when offices started opening back up, he remembers asking himself, “Why am I going to do this hour and-a-half commute every day?”
Today, they both live in Richmond’s Scott’s Addition neighborhood. Conti found a job as a finance and asset manager at Spy Rock Real Estate, while Savino continues to work remotely for IPG Health in New York.
“There was no work remote option before,” Savino says, adding that her employer didn’t blink when she asked to work from home — permanently. “Now my company is hiring across America. It doesn’t matter where you live.”
Richmond’s rise as a sought-after destination for young professionals and creative workers was in motion long before the pandemic began two years ago. But Conti and Savino, who moved to Richmond in February of 2021, represent a relatively new twist — a shifting labor market that isn’t driven by where jobs are physically located.
Staffing shortages and shuttered offices, along with a record number of people leaving the workforce entirely, are reordering the work-life dynamic. Meanwhile, long-held truisms in real estate and economic development — the idea that people decide where to live based on where they can find work — are becoming outdated.
It used to be that people chased jobs. Nowadays, the reverse is true, explains Anthony J. Romanello, executive director of the Henrico Economic Development Authority.
“We did a study a couple of years ago, this is pre-pandemic, about businesses that left Henrico and went to Scott’s Addition. It wasn’t a big number — you know, 10 or 12 small businesses, architectural firms, engineering, survey firms,” Romanello says. “What we were seeing was companies leaving Henrico to go to Scott’s Addition to pay higher taxes and higher rents. Why? Because of the importance of place.”
Scott’s Addition, a former industrial area of the city that’s morphed into apartments, breweries and restaurants over the past decade, offered something suburban office parks didn’t — a bustling community of young professionals.
“Place is becoming more and more important, and the pandemic accelerated that trend,” Romanello says. “Because we tested the internet. It worked worldwide. We thought that knowledge workers could work anywhere in the world. Well, now we know knowledge workers can work anywhere in the world, as long as they have Wi-Fi.”
Located at the midpoint on the East Coast between New York and Miami, Richmond’s relative affordability — especially compared to larger Northern cities — along with its vibrant dining, arts and culture scenes, are luring new residents from across the country.
In 2019, 64,000 people migrated to the Richmond region, according to U.S. census data compiled by the Greater Richmond Partnership. The largest percentage of new residents were from Northern Virginia — roughly 15%, or 9,690 people — but otherwise the relocations came from all over, including New York, New Jersey, Philadelphia, Atlanta, Los Angeles, Miami and Dallas. Another 7% emigrated from Europe, Central America, South America and Africa.
The increase in migration has fueled growth. The city of Richmond’s population has risen 11% over the last 10 years, jumping from 204,000 in 2010 to 226,000 in 2020, according to the most recent U.S. census data. Henrico grew by 9%, from 307,000 residents to 334,000 over the same period. Chesterfield, meanwhile, ballooned 15%, its population surging from 316,000 to 364,000.
While the in-migration census data for 2020 won’t be released until late spring, overall population growth during the first few months of 2020 slowed to a crawl.
“We can say that from mid-2019 to mid-2020, the Richmond metro area’s population grew by about 9,500 individuals. That was the lowest [12-month] total since 2011,” says Michael Cobb, a senior market analyst with CoStar Group, a real estate data and research company. “In April-May-June, you really had a lot of people in lockdown, not really moving. You likely saw more people move in the second half of 2020.”
In other words, the pandemic initially stunted the region’s growth, but it was only temporary. While the new numbers aren’t available yet, recent trends in the residential housing market suggest metro Richmond’s population is set for another explosion.
In the Richmond region in 2020, 21,845 single-family homes, condos and townhomes were sold, more than at any other point this century, says Laura Lafayette, chief executive of the Richmond Association of Realtors and the Central Virginia Regional Multiple Listing Service. In 2021, the numbers jumped again — increasing to 23,463 home sales through the end of December.
“Demand is outpacing supply,” Lafayette says. “When you look out at the horizon of 2022, there’s nothing to suggest the demand is going to abate substantially.”
Anthony Romanello, executive director of the Henrico EDA, says remote work has forced companies everywhere to rethink the size, and purpose, of office buildings.
There’s also rapid growth in the apartment market. As of early January, there were 5,400 apartment units under construction across the metro area, “hovering right around all-time highs,” Cobb says. The overall vacancy rate — 4.5% in mid-January — represents a 20-year low, according to CoStar. And the newest apartment projects are leasing quickly. Those that have opened since early 2020 have a collective vacancy rate of 3%.
Not surprisingly, the city of Richmond is leading the region in new apartment projects by a wide margin. In the last two years, 3,250 new apartment units have opened in the city, compared to 1,700 in Chesterfield and 700 in Henrico, Cobb says. And a lot more are on the way.
“We’re expecting to see about 4,000 units opening their doors in 2022, which would be an all-time high,” he says. “We see developers continue to flock to Richmond for a number of reasons. You have an incredibly healthy market. … You also have a pro-business-friendly environment in Richmond that also boasts an affordable cost of living.”
Over the next few years, the rising population and the evolving nature of how and where people work could fundamentally alter how the region develops. Traditional commuting patterns will likely change, as fewer people drive daily to sprawling suburban office parks or the downtown business district. New office developments will likely be smaller, intermixed with residential housing and retail shopping.
“Place is becoming more and more important.” —Anthony J. Romanello, Henrico Economic Development Authority
Places such as Innsbrook in Henrico, which years ago siphoned off downtown businesses to become the metro region’s largest suburban office park, are already being redeveloped with thousands of new apartments. Romanello says many companies are consolidating their existing offices and reevaluating how much space they’ll need when the COVID-19 pandemic finally abates.
“What those workplaces look like when people come back … five years from now could be very different,” he says. “I do think there’s a strong possibility that we’re going to see offices be more about people gathering than individual workspaces. Even if the virus completely goes away, just the way we work and the way we interact as humans is changing.”
It’s a change for the better, says Garrett Hart, director of the Chesterfield County Economic Development Authority.
“We’ve seen a strong housing market, as strong as it’s ever been in the county, and we’re seeing the strongest multifamily market we’ve ever seen in the county,” he says. “And that’s all good news to us because it’s all about talent attraction. We’re looking to attract the young tech worker and keep the experienced worker by providing them with more options for housing as they mature. If we can attract the talent, the companies will follow the talent.”
The shifting nature of work should bode particularly well for the city. Richmond’s attractiveness is easy to figure out, says Andrew Basham, co-founder of Spy Rock Real Estate (the company Conti joined last year), a development and investment firm that has built or acquired more than 3,200 apartments since its founding in 2008.
“I don’t think anybody’s moving here for any one thing,” he says. “You’re moving here because you want to live in the city. There’s very little traffic here. There’s a great food scene. There’s a great entertainment scene.”
For Conti, whom Basham lured away from KPMG a year ago, the decision to move to Richmond was an easy one.
“You’re not stuck in rush-hour traffic. You can get anywhere in like 10 minutes,” Conti says, adding that his 45-minute morning commute is now more like 60 seconds. His apartment in Scott’s Addition is a half-mile from his office, a short drive or walk to breweries and restaurants. “I can go to the gym after work now, and the social life on a weekday is definitely better.”
