Work from home and empty offices leading to ‘doom loop’ for NYC: study

[Kamaji]

Work from home and empty offices leading to ‘doom loop’ for NYC: study
By Philip Pilkington   
June 8, 2023

Empty office buildings have set New York on an “urban doom loop” that will destroy the quality of life in the city and drive residents out.

That is the conclusion of a team of economists from NYU Stern Business School, Columbia Business School and the National Bureau of Economic Research.

Many employees who worked from home during the pandemic haven’t returned — at least not full time. In 2020, office occupancy fell from nearly 90% to 10%. But it’s only bounced back to 48.4% in New York.

In response, fewer companies are renewing their leases, which lowers the value of office buildings.

The number of newly signed lease, meanwhile, fell from 285.4 million feet per year before the pandemic to only 62.4 million feet per year in the same period after.

The researchers developed a valuation model that tells us how much these properties will be worth in six years’ time — a level of destruction that would make the Four Horsemen blush.

Already between December 2019 and December 2022, the economists show, lease revenue fell 18.5% in inflation-adjusted terms.

Lower values means less tax revenue. In the case of New York, the paper predicts a 6.5% drop by 2029. To plug the hole, cities will raise taxes and fees in other ways — making the city less attractive to live in, which means even less revenue.

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Source:  https://nypost.com/2023/06/08/work-from-home-and-empty-offices-leading-to-doom-loop-for-nyc/

[Kamaji]

Well, at least Adams would have more room to house his beloved illegal aliens.

[Fishrrman]

Before the pandemic, the commuter train parking lots near here used to be quite heavily used.

Then covid happened, the offices closed, and the parking lots went empty -- sometimes only three or four cars in the daytime.

There are more cars now than that, but last time I went by, I'll bet there were less than 20...

[Free Vulcan]

Gotta laugh, woke liberals wanted to work from home and I guess stick it to the Man. Now that people have, even moved out and away from the metropolis, they cry about the 15 minute cities being being avoided and depopulated.

Liberals always want it both ways.

[DB]

San Francisco has a very similar issue.

There's no indication so far that it is reversable. Once out of that hell hole they discover they have a much higher standard of living elsewhere.

[Kamaji]

Before the pandemic, the commuter train parking lots near here used to be quite heavily used.

Then covid happened, the offices closed, and the parking lots went empty -- sometimes only three or four cars in the daytime.

There are more cars now than that, but last time I went by, I'll bet there were less than 20...

I've been riding the same train for the last 8 years, and I can say that ridership still hasn't recovered to pre-2020 levels.

[PeteS in CA]

San Francisco has a very similar issue.

There's no indication so far that it is reversable. Once out of that hell hole they discover they have a much higher standard of living elsewhere.

While SF is experiencing much reduced office use, and consequent reduction of restaurant and store traffic (which are also reduced for other reasons), traffic volume in my commute on north-bound SR17 and I-880 (the same freeway, but the number changes when it crosses I-280) is back to or slightly greater than pre-Covid levels.

[DB]

While SF is experiencing much reduced office use, and consequent reduction of restaurant and store traffic (which are also reduced for other reasons), traffic volume in my commute on north-bound SR17 and I-880 (the same freeway, but the number changes when it crosses I-280) is back to or slightly greater than pre-Covid levels.

That's well south of San Francisco.

[roamer_1]

I would say all those non-essential businesses might have been more essential than proposed.

How many of those closed offices are businesses that have folded up, or drastically reduced overall footprint?

[DB]

I would say all those non-essential businesses might have been more essential than proposed.

How many of those closed offices are businesses that have folded up, or drastically reduced overall footprint?

I don't know, but I can tell you large numbers of well paid employees in the tech sector moved out of San Francisco into other parts of California while keeping their jobs, at least initially.

[corbe]

   I remember taking one of these home in the mid 70's when I worked for Shell Oil as a programmer.  I always strived for working at home.  Since the Home Office nixed the idea, I switched to Midnight Shift instead, the best compromise. I could still smoke anything and drink on 1st Watch.

[DB]

   I remember taking one of these home in the mid 70's when I worked for Shell Oil as a programmer.  I always strived for working at home.  Since the Home Office nixed the idea, I switched to Midnight Shift instead, the best compromise. I could still smoke anything and drink on 1st Watch.

That looks like it has some serious screen burn...

[PeteS in CA]

That's well south of San Francisco.

I've lived in Silicon Valley since the Carter MalAdministration, so I'm aware of the distance. SF is 50-55 miles from my home. The people choosing to WFH instead of driving or riding BART (or Muni) in to their offices work in tech. Most of the people I see in my Silicon Valley commute also work in tech (myself among them), Silicon Valley long being the home of tech on this side of the US. So my point is that, while these SF workers and the Silicon Valley commuters I see work in similar companies in the tech industry, their/our WFH vs. work-in-office choices are very different.

NYC and SF workers may be making their WFH choice because those cities have added out-of-control crime to the horrible commutes those workers had tolerated for years or decades. As for their companies, people whose work is on computers and phones can work from anywhere with reliable phone and Internet service. The problem came/comes/will come when workers claim time but don't actually do work (e.g. Yahoo!'s 2012 or 2013 experience/realization, https://news.yahoo.com/why-marissa-mayer-decision-pull-yahoo-employees-back-205102366.html ). Or more energetic employees might finagle to have two simultaneous "full-time" WFH jobs & salaries.

[sneakypete]

I can't imagine anyone who is NOT self-employed wanting to work from home. It would be like having  a job that requires you to work every waking hour with no overtime,and no place to go after work to "unwind".

If you are going to do that,you might as well be self-employed and get the added profit from proving your own home,electric bill,water bill,etc,etc,etc to your OWN bank account.

Yeah,you still never get a day off,but at least you are the one making the profits.

[Kamaji]

I've lived in Silicon Valley since the Carter MalAdministration, so I'm aware of the distance. SF is 50-55 miles from my home. The people choosing to WFH instead of driving or riding BART (or Muni) in to their offices work in tech. Most of the people I see in my Silicon Valley commute also work in tech (myself among them), Silicon Valley long being the home of tech on this side of the US. So my point is that, while these SF workers and the Silicon Valley commuters I see work in similar companies in the tech industry, their/our WFH vs. work-in-office choices are very different.

NYC and SF workers may be making their WFH choice because those cities have added out-of-control crime to the horrible commutes those workers had tolerated for years or decades. As for their companies, people whose work is on computers and phones can work from anywhere with reliable phone and Internet service. The problem came/comes/will come when workers claim time but don't actually do work (e.g. Yahoo!'s 2012 or 2013 experience/realization, https://news.yahoo.com/why-marissa-mayer-decision-pull-yahoo-employees-back-205102366.html ). Or more energetic employees might finagle to have two simultaneous "full-time" WFH jobs & salaries.

In terms of monitoring WFH employees, there is plenty of software out there that allows monitoring of substantive performance.  Some of it is downright Orwellian.

[DB]

I've lived in Silicon Valley since the Carter MalAdministration, so I'm aware of the distance. SF is 50-55 miles from my home. The people choosing to WFH instead of driving or riding BART (or Muni) in to their offices work in tech. Most of the people I see in my Silicon Valley commute also work in tech (myself among them), Silicon Valley long being the home of tech on this side of the US. So my point is that, while these SF workers and the Silicon Valley commuters I see work in similar companies in the tech industry, their/our WFH vs. work-in-office choices are very different.

NYC and SF workers may be making their WFH choice because those cities have added out-of-control crime to the horrible commutes those workers had tolerated for years or decades. As for their companies, people whose work is on computers and phones can work from anywhere with reliable phone and Internet service. The problem came/comes/will come when workers claim time but don't actually do work (e.g. Yahoo!'s 2012 or 2013 experience/realization, https://news.yahoo.com/why-marissa-mayer-decision-pull-yahoo-employees-back-205102366.html ). Or more energetic employees might finagle to have two simultaneous "full-time" WFH jobs & salaries.

I lived in Sunnyvale for 6 years in the mid eighties. I worked for a large communications equipment company as an engineer way back then and did most of that at home the last few years of it before I started my own company.

San Francisco has lots of empty office space right now due to tech sector employees not wanting to live there and being able to do their jobs remotely. The rest of the bay area is not San Francisco was my point...

[PeteS in CA]

In terms of monitoring WFH employees, there is plenty of software out there that allows monitoring of substantive performance.  Some of it is downright Orwellian.

True, and some of it - alluding to a monitor several family members endure - pretty stupid:

SW: You have been away from your computer for more than 15 minutes.

Person: I was working in the supplies store room.