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Vaccine Passports: What Investors Need to Know

Apr 19, 2021 by Maurie Backman
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Now that coronavirus vaccines are, thankfully, becoming more widely available, it opens up an interesting question: Will those vaccines become mandatory on the road to getting back to normal life?

So far, a number of colleges are requiring students to get vaccinated before they can attend in-person classes or live in student housing. And some employers are starting to impose a similar mandate, requiring workers to get a vaccine before they're allowed to return to the office.

Meanwhile, tech companies are hard at work on vaccine apps, or digital health passes that make it easy for users to show proof that they've been vaccinated. That proof may become a requirement to do more than just show up to work or attend in-person college classes -- it may soon be needed to enter a store, dine at a restaurant, stay at a hotel, or board a plane.

But are vaccine passports even legal? And if they become the norm, how might that impact real estate investors?

A way to get back to normal

Many health experts are touting vaccines as our ticket to a return to normalcy -- or the closest thing to it possible. At the federal level, there are no plans to make vaccines or vaccine passports mandatory. And while some states have embraced the idea, others have blatantly opposed it.

But are vaccine passports even legal? In some cases, they might be.

Take schools, for example. Currently, most public school districts require proof of vaccination for students to enroll, and many private colleges and universities have a similar system in place. It's therefore not a stretch to think that private businesses will seek to implement similar requirements, just as they're allowed to tell customers these days to mask up or not enter.

In fact, many businesses may opt to require proof of coronavirus vaccination on the basis that protecting consumers trumps the risk of alienating those who don't want the vaccine. Restaurants, for example, may have an easier time welcoming in diners at full capacity if entry is limited to those who are vaccinated. Hotels may choose to adopt a similar policy -- especially resort-style hotels with shared amenities like dining areas, pools, and kids clubs. And there's a very strong likelihood that getting vaccinated will become a prerequisite to boarding a cruise ship.

All of this could be a mixed bag for real estate investors. While vaccine passports could be the ticket to opening up businesses and boosting revenue, a recent NPR/Marist poll found that 25% of Americans said they'd refuse a coronavirus vaccine outright if offered one. So limiting access strictly to the vaccinated could automatically mean losing business from a quarter of the population. That's a blow some industries can't afford, and if closures ensue, real estate investors get hurt.

Of course, in certain contexts, vaccine passports do work to investors' benefit. Take office buildings, for example. Companies eager to bring staff back to the office can mandate proof of vaccination, and once they have enough of it, they can move forward with new leases. That, in turn, benefits office REITs, or real estate investment trusts, which have been sluggish for the past year thanks to the remote work trend.

An evolving process

Right now, vaccine availability is still somewhat limited, so it could be some time before every adult who wants a vaccine can actually get one. As such, it's unlikely that vaccine passports will become an instant requirement.

There's also the gray area of what happens with families whose children aren't old enough to get a vaccine. Say restaurants want to start mandating proof of vaccination for indoor dining. Right now, that would cut off any family with a child under the age of 16.

All told, there's still a lot to iron out with vaccine passports. But real estate investors should keep tabs on how things progress, as vaccine requirements could impact their bottom line -- for better and for worse.

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