The good news is that unlike 2001 and 2009–venture capital funding did not come to a screeching halt. Instead, venture capital funding is just down 10 to 20% off its peak. The world is awash in liquidity. Technology is the future. Some companies will fail; others will be acquired; and new disrupters will appear.
Quantgene, a tenant at our Santa Monica Digital Bungalow Property, typically offers AI-powered blood test systems to consumers and healthcare providers to provide early detection for up to eight types of cancer. But as the COVID-19 pandemic has persisted, Quantgenei has pivoted its focus to helping individuals identify if they have coronavirus. Quantgene launched 12-hour coronavirus testing last week and, since then, has already signed about 10 companies up to test their employees daily, weekly, as often as necessary, to stop another viral outbreak before it starts.
We are now forced to learn how to use technology, and we will be more productive. To do many tasks and forms of work–we do not have to be physically present at a particular location. Workers and consumers will be able to do more things and do them faster through video conferencing and digitization. Former Google CEO Eric Schmidt on Face the Nation explains: “One way to think about this is that this one month, two months period has brought forth 10 years of forward change. So all of a sudden, the Internet is no longer optional. It’s fundamental to doing business, to operate, to live our lives, all sorts of much higher expectations as a result…” For example, students are learning how to learn through Zoom classes versus attending classes. More students can have access to great universities or professor in less time and for less cost.
Housing Costs: Workers will now be able to live in different cities and far out suburbs and still work for companies based in super cities. Eric Schmidt said recently on Face the Nation: . “we’ve had this situation where people move to super cities in these incredibly concentrated ways. That will change in the next few years. You don’t need to be in the super city in order to participate in the ex- excitement of these super cities.” This counter-trend will drive down rents and housing prices in super-cities or otherwise retard their rate of increase. Agglomerations economies requiring physical presence will be diminished.
Congestion: Workers will have more flexible hours or work schedules. On some days–workers will work from home. Some workers will work from home most of the time or in remote locations or other cities and not drive into work. More people will shop on line and not need to travel to the store. More doctor appointments will be done remotely. “80 percent of the visits to doctors are right now in tele-health. People have been wanting this to happen for years. Now using remote monitoring, we can actually measure everybody and do it remotely. And then only if you have to, you go in to see the doctor”– says Eric Schmidt. Thus, there will be less cars on the road.
Productivity: we have been forced to use technology to become more efficient and do more things digitally from signing documents to using digital project management tools. Instead of spending two days attending an out of town meeting–a person can spend 2 hours in a video conference. We will be able to do more work more effectively in less time as a result of this digital transformation.
The City Council voted to freeze rents for 12 months and to prohibit eviction until after the Mayor’s emergency order is terminated. However, the Mayor can open up almost all activity without technically terminating the order. There is a proposal to limit rents to 60% of the CPI and a State referendum to eliminate vacancy decontrol. There are a group of political activists who are using the pandemic to deprive owners of all benefits of their ownership. Property owners must start to become engaged and united as a wave of tenant legislation sweeps the State. If you cannot raise rents on any units (even vacant units) but need to pay rising expenses–WHO REALLY OWNS YOUR PROPERTY. Contact the California Apartment Association to become engaged in saving your property. Contact CAA
The television show Fear of the Walking Dead has some tips for how society should behave in an apocalypse when there are no governments to enforce contracts and life becomes a free for all. In this case, the character Morgan sets up boxes filled with goods throughout the roads with a sign that reads: ” TAKE WHAT YOU NEED. LEAVE WHAT YOU DON’T. SEE YOU ON UP THE ROAD.”
Rent control by market forces.
In light of the coronavirus pandemic, many cities are experiencing lockdowns, business closures, and other economic consequences. Many small businesses are especially affected by these economic difficulties because of the current coronavirus pandemic. However, government and private organizations have acknowledged these difficulties and created disaster assistance programs for small businesses.
We have compiled a list of small business assistance programs in hopes that they will be a resource to small businesses during this trying time.
The Small Business Administration’s Economic Injury Disaster Loan Program will provide targeted, low-interest loans to small businesses and non-profits that have been severely impacted by the Coronavirus (COVID-19) outbreak. Businesses can apply online here. Applicants may also call SBA’s Customer Service Center at (800) 659-2955 or email email@example.com for more information on SBA disaster assistance.
The Jewish Free Loan Association is also providing interest free loans to small businesses up to $36,000. Apply here.
Facebook Inc. has recently pledged $100 million in ad credits and cash grants for small businesses that have been impacted by the economic damage caused by the Coronavirus (COVID-19) outbreak. More information can be found here.