REAL ESTATE DEVELOPMENT IN THE FACE OF RURAL MIGRATION.

• Author: Dowell, Katie
• Position: 2022 LAW JOURNAL

The recession of 2007 saw unprecedented numbers of people move to urban centers and metropolitan areas in search of employment and housing. The post-pandemic market tells a different story presenting a unique opportunity for commercial and residential real estate development.

COVID-19 transformed American society. It sent us to work from our couches, made us cancel our travel plans, and led us to avoid social interaction with all but a select few. But it also changed the employment landscape and caused a sharp shift in personal values. It taught us to embrace the availability of remote work. To value smaller communities, proximity to family, more affordable housing, and a less-congested quality of life.

In North Carolina, and other states, that value shift translated to a great domestic migration out of urban areas to rural communities at a previously unheard of pace. Rural counties in North Carolina that had sustained population decline for a decade before the pandemic (such as Warren and Nash Counties) saw a reversal of that trend in 2021. Despite decreasing birth rates and increasing mortality rates in these areas during the same period, they continue to grow as more and more people embrace small towns and the value of life they provide. With rising interest rates pricing many homebuyers out of metropolitan and suburban areas, and seemingly no end in sight for the popularity of remote work, migration to smaller towns is expected to continue. It's also created a recent but strong demand for housing and commercial development to meet the needs of these growing communities. While mainstream development has largely focused on urban areas, those commercial and residential real estate developers following this demand face a variety of unique benefits and incentives. Here are some of the benefits early adopters of the rural development movement can expect based on my experience representing commercial and residential developers following this trend.

LOWER COSTAND BETTER INVENTORY

The inflationary market of materials and rising cost of labor have led to soaring costs of construction for new developments and increased rent pressures in urban areas. These same costs aren't necessarily reflected in rural markets where the cost of living, labor, and ultimately construction are lower. In addition to the lower cost of construction, developers in these communities face a far lower cost of acquisition of existing inventory and far greater availability...