How the Pandemic Changed Real Estate & Entrepreneurship with Steve Glickman, Founder & Chief Executive Officer, Develop. Anna Mason, Managing Partner, Revolution’s Rise of the Rest Seed Fund. Garett Bjorkman, Managing Director, Portfolio Oversight, CIM Group.
Moderated by Nicholas Millikan, Managing Director, CAIS IQ, CAIS.
PRESENTED BY
SPEAKERS
Steve Glickman
Founder & Chief Executive Officer
Develop
Anna Mason
Partner, Rise of the Rest Seed Fund
Revolution
Garett Bjorkman
Managing Director, Portfolio Oversight
CIM
MODERATOR
Nicholas Millikan
Managing Director, CAIS IQ
CAIS
TIMESTAMPS
EPISODE TRANSCRIPT
Nicholas Millikan: (00:07)
... Everybody. Well, how cool is this? Right? We're all back in person. First conference for me, I don't know about my fellow panelists here, but it's good to see you guys, for sure.
Anna Mason: (00:16)
It's good to see you.
Nicholas Millikan: (00:17)
So everybody, welcome to the City Versus Suburbs: How the Pandemic Changed Real Estate and Entrepreneurship. Today, we're going to be joined by Anna Mason. She is the partner of Rise of the Rest Seed Fund at Revolution. We have Garrett Bjorkman down at the end, Managing Director of Portfolio Oversight at CIM Group. And Steve Glickman here to my left, founder and CEO of Develop.
Nicholas Millikan: (00:43)
Let's jump straight into the questioning today. Obviously the pandemic saw massive outward migration from cities, not only from suburbs, but to rural, less densely populated areas. Maybe Steve, I'll start with you. Can you briefly highlight what you saw and what areas were most impacted by the inflow-outflow of people?
Steve Glickman: (01:04)
Thanks, Nick. I'm sure I can take a piece of that. Anna and Garrett, I think, can probably give their perspective on it as well. But one of the programs I was very involved with for a long time was the Opportunity Zone program, which was based on this conceit that if people have an opportunity to move to more places than they're concentrated in now, and you gave them either an excuse or a reason not to be in the places they were, they would move. And I think one of the interesting things about COVID and the pandemic is that it's sort of proven out at least a part of that thesis. When people could take a step back and see that their cities were the downside of the lifestyle of the places they were in, they would maybe start to naturally gravitate towards places where they grew up, where the standard of living was cheaper, where they were closer to family, where they had access to more green space and housing that was more affordable.
Steve Glickman: (02:06)
And I think you've seen that, not just in the way people have moved not just to suburbs, but really to less happening cities all over the country; but also in terms of the way they've looked at their jobs and job market and what kind of life they want for themselves. And so I think what the moment we're in is so interesting because the question is, will it stick? Will people eventually go back to cities and resume that same quality of life from before the pandemic? Or will this move be permanent? Will this lead to talent permanently relocating? Will it lead to businesses starting up in those places? And some ways, everyone on this stage has made big bets that that was going to happen either through incentives or in this case, because we've radically changed the equation of what it is to live in a big concentrated city post-COVID.
Nicholas Millikan: (03:00)
Yeah. So Anna, you come from a venture capital background, more of an entrepreneurial focus. Have you seen the same types of trends here, especially around talent?
Anna Mason: (03:11)
Yeah, absolutely. And I've taken to somewhat affectionately referring to this movement that's unfolding as "the great unbundling of place". And so the way I've been thinking about this is very much so informed by the work that we do at Rise of the Rest for higher-volume, early-stage venture capital investors. And by mandate, we focus on investing in opportunities everywhere in the country, as long as those companies are not headquartered in Silicon Valley, New York City, or Boston.
Anna Mason: (03:44)
And so as the conversation has unfolded, as reality has unfolded through these last now nearly 20 months of COVID and you were looking at everyone moving out of New York, everyone moving out of San Francisco, and there was this clamor in this sense that, "Oh my goodness, so much is changing so quickly. There's this great acceleration." Obviously we think it's great for our strategy and our fund thesis, and I'll talk about this more later. I think both by anecdote and by data, we did see quite a meaningful increase in volume in terms of deal flow and investment in cities, all across the country.
Anna Mason: (04:20)
But what's so interesting when you actually peel back the layers of the onion on this data, is that the shifts in migration between cities actually hasn't... This was fascinating to me... Functionally hasn't moved that much post-COVID versus pre-COVID. I think some of the data I saw actually said that there were, according to the US Postal Service, there were about 30 million address changes registered in 2020, as things were really moving around during COVID. And there were people moving out of the Valley, there were people moving out of New York and they were going to Austin and going to Denver and going to Miami. And so there was an acceleration, but functionally, the shifts, the data that you were seeing was very similar in 2020 to what you were seeing in 2019.
Anna Mason: (05:11)
There was this great quote where someone said, the data shows that the next Austin is probably Austin. And so what's interesting about that, and I'm looking forward to talking about this more later, is, I think the biggest shift was in the intentionality and the focus that people now have on these opportunities. And this for me comes back to this idea of "the great unbundling of place". People were moving before. Some people were just moving from city to suburbs. Some people were moving to more rural areas or smaller MSA cities, but now what you have happening, I actually think this is functionally really what I would call an infrastructure opportunity and solution set, is that the package deal of a place, where you had to think about where you live and where you work and the fact that you would just expect that those would fit together, functionally is no longer the case. Now you can think about where you want to live, and separately you can think about where you want to work.
Anna Mason: (06:16)
And the intentionality that I think now is being placed around that, both in terms of technology communities all across the country, and increasingly cities all across the country where they say, "Oh, now we can really market our city with intention. We can market the value prop of our startup with intention." That's where I really think you're starting to see, some cities have functionally have been building for many years, really start to break out from the pack. So everyone in this room is going to obviously know Miami is going to be an example; they've done a great job in branding. But other unexpected places like Tampa, just across the state, or Tulsa, an unexpected place like Oklahoma, more. So we'll talk more about that as we go on.
Nicholas Millikan: (07:00)
Absolutely. Yeah. Thank you for that insight. So Garrett, you guys at CIM obviously have deep expertise, long-term expertise in this. So you saw trends very well-established pre-COVID or pre-pandemic, and were focused on secondary markets anyway and developing them to be attractive locations. Can you talk a little bit about what you've seen pre- and post- pandemic?
Garrett Bjorkman: (07:20)
Yeah, sure. So at CIM we manage approximately $30 billion of real estate infrastructure, primarily in the US, and I would say over the past five to seven years, we very intentionally were investing in a lot of the secondary cities that we really believe have been having an urban Renaissance. Austin, Phoenix, Dallas, Miami, Atlanta. We saw demographic trends in those areas, that they really had the long-term fundamentals based on employment and demographic trends, that we believe would have carried those cities forward and outperform most of the major other sub-markets within the country.
Garrett Bjorkman: (08:13)
And what we noticed from a lot of the demographic trends is, and this was pre-COVID, there was really only two areas where we saw out migration, and that was from primarily San Francisco and New York. And when we looked further into that and said, "What is really the cause of why are people making this decision?", a lot of it came down to housing affordability. So it's just an interesting thing to note, because I think as you look at what's happening in a lot of the major cities, there's still a lot to be desired to live and work in a city, right? People love the density of talent; that density of talent brings about, in certain cases, high incomes, it brings about certain amenities that come along with those types of incomes; and it affords people a certain lifestyle that you can't have outside of a city where you have that density.
Garrett Bjorkman: (09:26)
And so, of course there's been real trends with people who have moved to many of these secondary cities. But when you actually look at where people moving, when they go to the secondary cities, they're not moving to the suburbs; they're going to Austin and they want to be downtown. If you're in Phoenix, you want to be downtown or close to downtown. So those have been the trends that we saw pre-COVID, and they were really just accelerated during COVID and today, although if you are in the real estate market in New York, for example, you're starting to see rents come back very quickly. There's no more concessions. That market is very much robust. Condo sales have picked up again. So you are seeing a lot of domestic activity happening again. We haven't really seen the international capital come back, which I think is the one dynamic that once that happens, it will really bring activity back to New York. But for San Francisco, I think it's going to be a much longer trend, partially just because of the nature of the businesses that are in San Francisco. That's been our observations.
Nicholas Millikan: (10:45)
Yeah. So the one thing I'm getting from what you've all said is there's a real acceleration of trends that were established or in place beforehand through the pandemic. And we've seen that in different industries like technology and all that kind of stuff.
Nicholas Millikan: (10:55)
So Steve, turning back to you, you were instrumental in developing the Qualified Opportunity Zone program that sought to direct capital and help those areas of the country that fell behind after the uneven recovery out of the global financial crisis. Can you talk a little bit about what the program details are, just to make sure everyone's on the same page here, and discuss whether the pandemic sort of has helped accelerate interest and focus on those areas?
Steve Glickman: (11:22)
For sure. So the Opportunity Zone program really simply is a program that incentivize long-term investment, usually 10 years or longer, in communities that are considered low-income and have been selected by governors and mayors all around the country to be focal points for investment in economic activity.
Steve Glickman: (11:43)
And the program is really tied to capital gains. So it takes unrealized capital gains of which there's about $6 trillion in the economy, and the idea is to funnel some amount of that every year when those gains are realized into opportunities in these communities and into a lot of cities that have been off the radar screen. This program has been controversial, and I think it's useful to talk about the controversy, but maybe not right now, but before we finish up today. But I'd say one of the things that the program set out to do was to drive a lot of capital to create a big capital market.
Steve Glickman: (12:19)
And we have pretty good tax data now. 2019, the first real year of the program, and that tax data has shown that there was about $25 billion invested into Opportunity Zone funds around the country. One of the interesting things about that capital, and I think this surprised a lot of people, was it was invested through 2,500 funds and it was invested in 1500 communities. So there's a bit of a stereotype of Opportunity Zones that it's just going to a couple cities, and we know that's not true. We know it's pretty geographically diverse. We know it's not controlled by the largest fund managers, although a lot of them like CIM and others have funds that are active and large. And we know it's changing the mindset of not just investors, but more importantly, people who live in communities who are organizing around this idea that there's equity capital coming, and then there's follow-on capital coming because of that, whether it's philanthropic dollars or it's debt financing or it's businesses or other things. So something about that is working.
Steve Glickman: (13:22)
And I think one of the interesting things, at least, and this is my kind of core view of what's happening in the country: the current makeup, the current hardening of where people who and businesses go is a really bad outcome for the country. Not just for cities that are depressed, but for cities that are prosperous. And as Garrett pointed out, extremely expensive to live in. Normal people who with normal jobs can't live in Manhattan, they can't live in San Francisco, it costs a million dollars to buy a one bedroom condo... That's not a good outcome for people who live in those cities. Also not a good outcome for people who live in other communities where the businesses have fled to follow that capital.
Steve Glickman: (14:02)
So we need some kind of rejiggering. Whether it happens as a result of tax measures or it happens as a result of cyclical or structural changes, that's really important for the country. And that kind of driving of ensuring that there's a larger amount of places in the country that can support pretty robust, dynamic economies is a complicated question; but a lot of it is a mindset. There's no reason why places like Detroit and places like Birmingham, Alabama, and places like Philadelphia, all places that have done really well in both the Opportunity Zone program in terms of capturing capital, can't be robust, big economies. In fact, many of those places were really robust, really competitive economies in the fifties and sixties and seventies when the manufacturing revolution was towards its peak or just before the tech revolution next.
Steve Glickman: (14:56)
So a lot of this is man-made. Whether people are fleeing California because it's expensive or because the tax code there is wildly out of step with the rest of the country is a man-made problem. Whether people are looking to diversify their economy so it's not just about one sector, but it's a diverse amount of sectors and it's technologically enabled and there's access to broadband, is a choice we make. And so a lot of these are about our choices. And the question is that we wanted to make different ones as a society, as a government, and as individuals where we choose where to live and where to invest.
Nicholas Millikan: (15:24)
So you talk about a really interesting point there, which is the infrastructure to support this and the economies. And Garrett, I'm going to come to you eventually. But Ana, just before we do that, you look at the equitable distribution of capital when it comes to venture dollars. And you've noted that 75% of venture dollars ended up in Northern California, New York or Massachusetts. So you guys are focused on everything else. Have you seen a change in where those capital dollars are going to? And now that we have the technology infrastructure to support the reimagination of different industries in the venture space, especially?
Anna Mason: (15:56)
The short answer is yes, but since I'm up here, I will give a longer answer. So for the past probably seven, eight years, even as more capital has been distributed and allocated and invested in venture as an asset class, about a dozen years ago when there was maybe $10 to 20 billion. Oh, hi guys. When there's-
Steve Glickman: (16:21)
Everyone has to leave the club now.
Anna Mason: (16:21)
Right. When there was between $10 and 20 billion going into ventures and asset class; two years ago, you had $100 to 125 billion flowing into the class; and this past year, 2020, you had close to $160 billion flow in. So there's been tremendous growth in the asset class as a whole, which I think is incredibly exciting when you think about the opportunity and the possibility on the other side of investing in entrepreneurs.
Anna Mason: (16:51)
But what's happened is that there's been a very disproportionate allocation to that capital that has been very unevenly distributed to the tune of about 75% in California, in New York and Massachusetts. When you look at the flip side of that, and you think about the public markets and what happens on the other end of tech, it's about that same percentage, about 75 plus percent of the Fortune 500, isn't located in California, New York and Massachusetts. It's actually pretty evenly distributed all across the country, everywhere else, or in what we would think of as "the rest".
Anna Mason: (17:24)
So for us, this mandate and this investment focus, really, frankly, an arbitrage opportunity to find those next future Fortune 500 companies means you have to be looking where most people aren't necessarily looking. And so that's why for so long, we've been focused and banging the drum on the opportunity for early stage investment all across the country.
Anna Mason: (17:47)
And so what does the data tell us? What's been pretty exciting is that over the last 10 years or so, at the early stage of venture capital, what we would call seed and Series A, really company formation and starting to get out of the gate and show some progress, there's actually been a 15% decline in the percentage of investment capital that's gone to the Bay Area. And what's most exciting to us as we think about how the landscape has shifted and accelerated over the last 15 to 20 months is that half of that decline has actually come in the last year and a half.
Anna Mason: (18:25)
So you're really starting to see this acceleration and this momentum at early stage. It hasn't fully played out. You're still going to look at the headline data and you're still going to see 75% go to those three places, but there there's a trickle-down effect. And so it's happening at the early stages. And anecdotally, I think why it's happening is because the working environment and the fully-remote work environment in the veteran tech community over the last 15 to 20 months has afforded so many investors the opportunity to just have some self-reflection and to realize that you don't actually have to be quote, unquote, down the street from the companies that you're investing in, and that you can look elsewhere, you can broaden your horizons. And at the early stages, I think venture investing sits at the nexus of access and context and any value investor, any New York investor can get access to any of these places. But importantly, these last 15 to 20 months have given people the opportunity to seek out that context.
Anna Mason: (19:29)
So just to close with this quick anecdote, which has always amused me, we had a great value investor looking to lead a subsequent round of a company we're invested in. And he's like, "So, tell me more about it. I love the technology, I love the founders, but I don't know Cincinnati. What's the tech scene like there? Is there really a startup community? I'm not trying to get comfortable with the ecosystem risks." And I was like, "Well, the company's based in Columbus, not Cincinnati, but let me tell you about that and how great it is." And at the end of the day, it actually doesn't matter if it's Cincinnati or Columbus, because less than 1% of venture capital goes to Ohio. So the fact that now this investor, and he did end up leading the deal, is investing in Ohio. The anecdote, I think, matches and marries the data of the acceleration that we're seeing in early stage.
Nicholas Millikan: (20:16)
Interesting. So Garrett, over to you. There's obviously been a big change in the focus of the types of property being developed, and you guys go in and you're going to revitalize areas, and then bring in not just multi-family property, but think about the ecosystem you're building around it. Has there been a shift in focus of property types? We've all heard about the death of the brick-and-mortar store? Are you seeing that in the types of demand for property or the properties that you guys are looking to develop?
Garrett Bjorkman: (20:42)
Yeah. Yes. Right. I would say retail, the story there has been the same story for a very long time. I think one of the underlying questions that we're all circling around is, really, what is the impact of work from home. This whole city-versus-suburbs question is how does work from home actually impact commerce and how we interact with each other from a work perspective in our daily life? So office, how has office changed?
Garrett Bjorkman: (21:19)
And I think when you talk to most senior management, when you talk to leasing brokers throughout the country, there is a very strong desire in corporate America to bring people back to the office and to bring them back quickly. Now that's for a certain segment of the market. I think more, that sentiment is much stronger in people on the front office and people in industries where innovation and creativity and collaboration are really the centerpiece of what makes their job successful. But we're seeing it even in accounting and things like that; there has been studies done where productivity is substantially less in a work from home environment that work. And so you've seen the big banks...There has been major shifts to bring people back to the office.
Garrett Bjorkman: (22:19)
But I think the question is, how does the relationship in the office change? What we've seen is that companies are investing tremendous amounts of dollars into social space and redefining the way that the office interaction works. The amount of dollars that tenants are requesting for TIs to build out kitchens, they want to keep people there and make it more attractive for them to be at the office than to be at their house. So there's this massive competition taking place among employers to make their office the best, because it's a way to attract the talent, and at the same time to keep productivity high.
Garrett Bjorkman: (23:07)
But our view in long-term is that office remains a substantial asset class, and that is critically important for business to continue, in that the innovation and mentoring and all of those types of things that really make a business successful, you can't do remotely. And we've tried it.
Garrett Bjorkman: (23:31)
And so while there is this shift to secondary cities, the real question will be, is there going to be enough talent in those secondary cities? And are employers big enough to drive people to those cities? Uber recently announced they were going to move a substantial amount of employees to Dallas that recently pulled out. And that's not to say there's plenty of other tenants looking for space in Dallas; but there is a lot of political dynamics, there were people who they had moved to Dallas who just weren't happy in that environment.
Garrett Bjorkman: (24:13)
So I think that there's a lot of... We are looking at different asset classes, multi-family continues to be robust, but from an office perspective, I think that's really the biggest question. But it's about how people are going to use this space, if they're going to use it at all.
Nicholas Millikan: (24:31)
Well, I want to delve into the local level part of the conversation, and Anna, you had mentioned last week when we were chatting that cities are startups. Can you explain what you mean by that?
Anna Mason: (24:40)
Yeah. I first started thinking about cities as startups when I considered how many tech communities across the country were branding themselves. And so I would find Silicon Harbor and Silicon Holler and Silicon Slopes and Silicon Prairie. And for the work that we do, we have a parallel track where we're investing in a high volume of early stage startups, and we're also, from an economic development standpoint, engaged with these startup communities all across the country to parallel track some of the pattern matching between how the cities and communities were acting and how the startups were acting.
Anna Mason: (25:24)
And I was thinking, "Oh, all these cities who are saying..." I call it Silicon X Syndrome. It's very similar to an early stage startup that hasn't necessarily found its footing, perhaps it's product-market fit. So they say, "I'm the Uber for X" or "I'm the Facebook for Y" because it becomes a shorthand. So having the Silicon X moniker, I think, for many somewhat still-nascent startup communities across the country, it was a shorthand to say, "Hey, look at us, there's technology and innovation happening here."
Anna Mason: (25:55)
And I think part of what we're seeing now, we were absolutely seeing this for the last number of years in communities all across the country from Minneapolis to Indianapolis, Columbus and beyond, is that you started having, like startups where you have some that break out, you started to really have some communities that would break out, too. And you see this most acutely, I think, in how certain cities and communities are responding to COVID, because it's very much so rapid paced three-dimensional chess.
Anna Mason: (26:31)
And to this point, it was interesting, Garrett, how you're thinking about this talent question. Is there actually talent in these communities? If you go back to this framework that a city is like a startup, and we talked a little bit about brand and moving away from, "Hey, Silicon X" to now, "We're going to brand and define ourselves in a very specific and unique way that ties to, really, the core DNA of our city and why we're different, not why we're a copycat of Silicon Valley."
Anna Mason: (27:03)
But then I think there's this really exciting moment for what I think of as community infrastructure, and why it's not just going to be... I hope and I think for many cities, this fleeting moment of people moving, everybody ran to Miami, but eh, now the weather's nice, they're going to come back to New York. I think you see cities, and frankly, I would absolutely count Miami among them, who are investing infrastructure. They've done the branding thing; frankly I think they've taken a really fascinating page out of a startup playbook to say, "We're not a B2B business anymore in terms of how we acquire customers." Every city, every mayor should be thinking about their citizens as customers. And I think you're starting to see that that's a big change that's accelerated because of COVID. But now that you can say, "Oh, we can directly acquire our consumers, so to speak, because people can live anywhere, they can work anywhere, let's go after the people, themselves, the employees, themselves, instead of the companies from an economic development play."
Anna Mason: (27:59)
And now infrastructure is really going to be critical. Everything from affordable housing, you don't want to price local people out of the existing market. You want the rising tide of a startup community to really lift all boats, including those who've been doing the hard work and investing for many years. So that's what I mean when I say cities are like startups; I think it's just a framework to think about development infrastructure and functional growth, because every city is going after what every startup is going after. They want to make more money, they want to be better than the competition, and they want to have lasting success.
Nicholas Millikan: (28:33)
So let's talk about the citizens themselves, Stephen. This is near and dear to your heart, specifically. What impact has the shift had on the intercity issues such as inequality, homelessness, no regular jobs for regular people? Can you talk a little bit about the impact there?
Anna Mason: (28:49)
Well, first let's just say the intercity question of why people live or want to be in San Francisco or New York compared to Detroit or elsewhere, are different. Although there are some overlap between the intracity issues where frankly, if you look at inequality, the biggest inequality, the most shocking figures are actually neighborhoods within cities, where you have a five-year for example, life expectancy gap between the lowest-income neighborhoods that could be right next door to higher-income neighborhoods.
Anna Mason: (29:18)
And what's most shocking about the intercity question is that it's really solvable. And everybody knows what the solution is. The intercity question is complex. It involves attracting talent and businesses and tax codes and industry and infrastructure. It requires a lot, and it's almost easy to throw up your hands and say, "There's nothing we can do about it. It just sort of is what it is," which is also not true, but closer to being true than the intracity question. Which if you heard one theme, I think, from everything we've talked about, boils down to housing. If you want housing to be cheaper, there's one answer that I think everyone knows. What do you do? You build more housing. Period. The answer is really easy. It's supply and demand. Housing will be really expensive if there's not a lot of it; it will be much cheaper if there's more of it. And that means building housing, not just in poor communities, but building housing in wealthier communities.
Anna Mason: (30:09)
I consider myself a political progressive, I think. Hard to tell these days, distance from my time in a Democratic administration. But the cities that we're talking about that have the biggest inequality are, I think, self-described politically progressive. And it's the problem that drivers are just as much in the wealthy part of those cities, if not more so, than the poorer parts of those cities. You need to build housing everywhere. We have a huge housing crisis in the country. It's not because there's not money there for investment. The biggest asset class growth in the real estate space is by far multifamily. That is what's been burning all the way through COVID and the pandemic; it's the vast majority, if not almost all, of the investment, that's going into Opportunity Zones, which are this $25 billion subset of distressed community investing.
Anna Mason: (30:59)
Investors want to invest in multifamily because they know there is a consistent demand for it. People who live in cities don't want to build it. There's a theme around gentrification, which is mostly not true. Almost all research around gentrification shows that the people that gentrification most helps are younger people, children, in communities that have access to better schools, both in terms of primary schooling, better access to college education, less crime in their communities. It's what every parent wants for their kids in every community and every country. And the only way you get there is by investing and building more, creating more housing, more housing options across the spread. Same thing in wealthy communities: you have to build multi-family in wealthy communities. It can't just be single- family. Otherwise, there's not enough housing for people. People are priced out of the market, people have to leave, only wealthy people can live there and it perpetuates inequality.
Anna Mason: (31:49)
So we have the answer; we just have to want to enable it in our own communities. That's where it starts. It's not something some politician, some unnamed NGO or philanthropy has to solve. We can solve it if we want to fix this problem. So I'm very much in the spirit, what my theme here, if nothing else, is agency. We have agency to fix this very sticky problem in our own communities by just building more housing.
Nicholas Millikan: (32:14)
Yep. Okay. Excellent, then. So, Garrett, at the local level, you guys work specifically... And I know we're running up on time here, but yeah, can you talk a little bit about how you work with local governments and organizations to develop out property?
Garrett Bjorkman: (32:28)
Yeah, sure. So I would say one very successful effort that we've had has been in the city of Atlanta with a project that used to be known as The Gulch, but we acquired over years about 55 acres in downtown Atlanta and worked very closely with the city and the state to get different tax incentives that would effectively not just allow us to be incentivized to develop in that area, but also other developers to be incentivized to develop in that area.
Garrett Bjorkman: (33:07)
And it's been a part of Atlanta that people have been trying to activate for 20-plus years with no success. But we really built a coalition and thought about, "How do we master plan this whole city in a way to provide for a very active, vibrant lifestyle while at the same time addressing many of the issues that Steve just brought up?" So getting incentives that allow us to develop affordable, making sure that we have enough housing and the right types of housing. But working with the state and local governments to get those incentives were absolutely critical in order to make that happen.
Nicholas Millikan: (33:59)
Excellent. And we're just on one minute left here, so I want each of you to put a very fine point on what you've talked about already today. Steve, I'll start with you. So have we seen the Great Talent Redistribution as a result of the pandemic?
Steve Glickman: (34:13)
No, we haven't. We haven't seen the Great Redistribution, but we have this moment now where people, I think, can make a different decision, being separated from life and business-as-usual pre-pandemic. And that's, what do they want? What is their power to convince their companies not to go back to the office, to enable them to work for home, to live in more places to be near their family, to be near green spaces? I think this is going to be a very telling moment for American society, but I don't think we've seen it yet.
Nicholas Millikan: (34:40)
Okay. Anna?
Anna Mason: (34:42)
From a tech and entrepreneurship perspective, I think the fundamental change that COVID has induced is less about talent redistribution, though I think I would say yes, and that's incredibly exciting. But I actually think it's more about the boost and the shot in the arm that entrepreneurship has gotten overall.
Anna Mason: (34:59)
And I think the final point I would leave everyone with is that in 2020 we saw a historic high in the country of new business creation, of new business starts, up about 15% from what we've been seeing over the last couple of years and very different than what we saw in the Great Recession. So as we sit here and we look 10 years from now, where do we think we're going to be? I think the spirit of innovation and entrepreneurship, that is perhaps more alive and well now than it was in the past decade, is really going to be what pays dividends. And hopefully we see that more evenly distributed all across the country.
Nicholas Millikan: (35:36)
Brilliant. Garrett, take us home.
Garrett Bjorkman: (35:37)
So not to steal a word from our Fed chairman, but it appears that the talent shift is maybe transitory in the short term. Over the long-term, unless cities really invest in their local economies and safety and transportation and housing, there's going to be a lot more change.
Nicholas Millikan: (35:57)
Brilliant. Well, on behalf of everyone who joined, Steve Anna, Garrett. Thanks for taking time out today.
Steve Glickman: (36:02)
Thank you.
Anna Mason: (36:02)
Thank you.