Real estate apocalypse: Half a trillion to be wiped out?

We've delayed a day this week in delivering the newsletter, but fortunately, for a great reason! 🎉

We are media partners on an amazing event: NYC NOMAD VILLAGE POP-UP—and the press embargo was just lifted last night.

We're including info about the event in this week's edition!

Here's a preview of the remote work news we are covering this week:

🏄🏽‍♂️🇨🇷Costa Rica offers lessons for converting tourists into visa holders
🇺🇸🗽 We're Media Partners for the JUST-ANNOUNCED NYC Nomad Village Pop-up event in Brooklyn
🏢📉Real estate apocalypse: Half a trillion in value to be wiped out

🏄🏽‍♂️🇨🇷 Costa Rica offers lessons for converting tourists into visa holders

Near San José, Costa Rica

I've had some great conversations in the last few months with industry leaders in the remote work space like Mita Carriman, Tanja Polegubic, Daniel Falonipe, and more.

One thing that often comes up is what remote workers think about the various policies that nations are taking towards remote workers.

Longtime readers will know we've been reporting almost all of the new remote worker visas that have come out, and we have a comprehensive list here.

Skift reports on Costa Rica's progress.

CR's nomad visa was just recently released (early 2022). This country has a unique ability to convert primarily North Americans from tourists into temporary residents and possibly more.

Very few countries offer a similar time zone to most of Canada and the USA, with a society that is as safe and stable as Costa Rica's.

Here's the big tension regarding remote worker visa policies:

Countries generally seek long-term partnerships and stability — with businesses, in governance, and with residents and citizens.

Countries are not incentivized to prioritize people who want to be extremely transient (the classic 'digital nomad' archetype).

But digital nomads don't like the vast majority of nomad visas that have been announced.

I may not have stressed this enough in prior newsletters. The visa policies are not always popular with the more seasoned digital nomads and longtime remote workers.

For instance, read Lily Szabo's critiques here, here, and here.

I liked her model: The Remote Relocation Funnel (see below).

Rather than haphazardly labeling a "digital nomad visa" or "remote work visa" as a one-size-fits-all solution that applies to levels 1-4 of this model, countries could consider different programs catering to each of these levels (and more).

If some nations can figure out how to split out the traditional silos of:

[visitor / permanent resident / citizen],

into even more granular levels of categorization, they could really attract economic activity while still respecting and supporting local taxpayers.

This is the new Great Game. People in Europe might look at their energy bill this winter and decide that a few years of zero tax and lots of sun in a remote work-friendly country is the right thing for their family.

It doesn't have to be forever, it doesn't have to be scary, and it can accelerate rather than decelerate wealth-building and retirement planning.

It's not like emigrating from Ireland to Boston in 1850 or from Lisbon to northern Brazil in 1701.

If we can avoid a Great War, we will have countries continuing to welcome working visitors worldwide rather than restricting foreign workers and making work illegal and punishable.

It's a great reversal in how most countries view productive visitors, a group of people to be welcomed rather than prosecuted.

🇺🇸🗽 We're Media Partners for JUST-ANNOUNCED NYC Nomad Village Pop-Up event in Brooklyn

Event next week: Friday, Oct 14th to Saturday, Oct 15th at the @nycnomadvillage Pop-Up Event!

NYC Nomad Village is an experiential 2-day IRL & URL (in real life and online) pop-up event in the official lineup for NYC Tech Week—offering panels, workshops, networking & a DJ'd networking mixer—all for future-of-work, future-of-travel, and digital nomadism enthusiasts.

For readers who are not able to make it to Brooklyn (which I am sure is most of you!), there will also be a virtual panel during the 2-day event anyone from around the world can tune into.

The goal of the event is to explore ways that aspiring digital nomads from the US can approach nomadism responsibly while on the road—topics under discussion include: meeting work deadlines, personal productivity, sustainability concerns for the local environment, and support for locals and local cultures while visiting nomad destinations.

RSVP @ nycnomadvillage.org!

🏢📉 Real estate apocalypse: Almost half a trillion in value to be wiped out

There is growing evidence that commercial real estate owners, landlords, brokers, and stakeholders just don't get it.

Headlines reference vested interests in the commercial real estate industry who think "back-to-office" is a temporarily delayed phenomenon that will resurge as soon as "things settle down".

Things aren't going to 'settle back down' with respect to highly occupied (expensive) office space in major cities.

Remote work may have already wiped out $453 billion in value in commercial real estate.

If that top-line number seems excessive, try $50 billion (estimated to drop) in New York City alone.

It is hard to say how much CRE has dropped. Illiquid real estate markets (with long leases and sellers on the sidelines), unlike the stock market, can obscure the true magnitude of how much a bubble has popped until years of retrospective data become available.

Residential real estate is likely more of a concern for homeowners in the UK, Canada, Australia, the US, and other G10 locations. Interest rates will tear through the affordability of variable-rate mortgages and, eventually, fixed-rate mortgages (as they come up for renewal).

So residential will be top of mind and top of the headlines — but commercial real estate could be the real permanent, secular, economic shift downward.

People need to live in apartments or houses and will continue to need shelter for the foreseeable future — even with what is coming in terms of the bubble popping.

The return-to-2020-levels peak may not come until 2026, 2027, or later, but the ongoing residential real estate crash will bottom out and eventually trend up again.

What people don't need is millions of square footage of office space in major metropolitan areas catering to corporate organizational structures from the last century.

Downtowns are never going to be quite the same. They will have to reinvent themselves.

Luckily: young people want to start their lives around other young people (not on pastoral work-from-home farmland), artists and other bohemians may relish cheap studio space, and the seeds of new companies will occupy the hollowed-out husks of skyscrapers and industrial space.

Downtowns will continue, populated by the people who want to be there—but downtowns circa 2000-2019, with the bustle of daytime office workers who are forced to be there?

That's gone.

Remote Work News from Around the Internet

Portugal, long known for its more cumbersome D7 visa, launches its nomad visa program.

Hybrid work could cost companies their tax incentives.

Crypto winter comes for the digital nomads.

Five secrets for being a great remote manager.

Polywork: remote workers doing two jobs at once?