Vacant Big City Offices are Here to Stay
Fresh Setback for Big Cities
The low level of employees back at their workplaces is intensifying pain for cities geared toward office life reports the Wall Street Journal, noting a New Setback for Big Cities.
The recent surge in Covid-19 cases across the country has led to an uptick in Americans resuming work at home after some momentum had been building for returning to the workplace, property analysts said. Floor after floor of empty office space is a source of great frustration for landlords and companies, which have invested millions of dollars in adapting building plans and developing new health protocols to make employees comfortable with a shared location.
The low level of employees at their desks is intensifying the pain for cities geared toward office life. Cities’ populations are falling as people working from home move to the suburbs or other less dense locations where they can find more living space for less money.
Apartment rents in downtown San Francisco have fallen 20% since their peak in March, according to CoStar Group Inc., as residents leave. Metro public-transportation systems in cities such as New York, San Francisco, Boston and Washington, D.C., have lost billions of dollars in revenue from months of employees favoring remote work.
About three-quarters of the 25 employees at OhmniLabs Inc., a San Jose, Calif., robotics company, returned to work this fall. But as infection rates increased, OhmniLabs reversed its policy for all but those directly involved in manufacturing the robots.
“Going forward we’re going to continue to encourage people to work remotely,” said Thuc Vu, chief executive. “Let’s just accept it as the new normal.”
I used to work downtown Chicago at Harris Bank, now the the Bank of Montreal.
The "fast" train from Crystal Lake to Chicago was 1:20 each way. Tack on 20 minutes each way to and from the train station.
That is three hours and 20 minutes lost every day commuting. Does that make much sense?
The cost of living downtown was prohibitive. And parking was a disaster.
Twenty years ago you could easily rack up $30 a day parking if you drove in.
It's now up to $50 for downtown, but "only" $34 if you are willing to walk a mile or so.
If you work at a restaurant you cannot commute. Then again, restaurant traffic is down 75% or more and so are the jobs.
What About a Vaccine?
A vaccine will help stop the spread of Covid, but the office cat is out of the bag.
I have not seen any reports of lost productivity from working remotely.
Sure, some will take advantage. But others are happy to work 9 hours instead of 8 and still come out way ahead after factoring in commute time and costs, lunches, etc.
Ultimately, if you get the job done as expected, what difference does it make what hours you work or where you work them?
And that is what businesses are deciding, with obvious implications.