Marghanita writes, > Subject: Re: [LINK] Remote Work Is Poised to Devastate America’s Cities > > This was felt here too during the Pandemic. > > The CBD was dead while the Inner West was a buzz with Remote workers > going out to lunch, libraries, pool, gym and parks. > > Public Transport still feeds into the CBD and there is still some value > in meeting in person but at this stage it is still intangible. > > What we don't hear is the provision of remote office space. Not everyone > has a suitable home office. Marghanita
Agree with everything you say here Marg Regarding a lack of availability of remote-office spaces, one imagines that compared with considerable pressure probable from existing CBD business property owners for some form of government assistance, there would not be much organized-group political pressure for out-of-town remote-offices? Cheers, Stephen On 5/1/23 01:44, Stephen Loosley wrote: > Remote Work Is Poised to Devastate America’s Cities > > In order to survive, cities must let developers convert office buildings into > housing. > > By Eric Levitz, senior writer for Intelligencer. > https://nymag.com/intelligencer/2022/12/remote-work-is-poised-to-devastate-americas-cities.html > > The “work from home” revolution has been very good for political columnists > who like to write shirtless in pajama pants and share too much personal > information with their readers. But the phenomenon hasn’t been so great for > America’s cities. > > The nation’s office buildings aren’t as empty as they were before COVID > vaccines became widely available in spring 2021. But they’re still far less > populated than they were in 2019. > > A recent analysis of Census Bureau data by the financial site Lending Tree > found that 29 percent of Americans were working from home in October 2022. In > New York City, financial firms reported that only 56 percent of their > employees were in the office on a typical day in September. > > Full-time remote work has grown less prevalent since the worst days of the > pandemic. But flexible work arrangements — in which employees report to the > office a couple times a week — are proving stickier. > > A recent paper from the National Bureau of Economic Research estimated that > 30 percent of all full-time workdays would be performed remotely by the end > of 2022. > > As Insider’s Emil Skandul illustrates in an excellent piece, these surveys > and projections are buttressed by mobile phone data showing that, in > virtually all major U.S. cities, foot traffic in central business districts > is down substantially from 2019. > > And collapsing office attendance rates are taking cities’ tax revenues down > with them. > > > When only 50 percent of a company’s staff leave their homes in the morning, > that firm’s desire for floorspace plummets. If storm-clouds appear on the > economic horizon — like, say, a central bank dead set on slowing the economy > to kill inflation — downsizing your office becomes the easiest way to cut > expenses. Thus, as rising rates have laid tech low, San Francisco’s signature > office towers have emptied out. In New York, meanwhile, Meta has ditched > 450,000 square feet of office space. Across the nation as a whole, only about > 47 percent of offices are occupied. > > All this translates into plummeting demand for commercial real-estate, which > translates into plummeting property values, which translates into plummeting > tax receipts. A recent study from New York University’s Stern School of > Business found that office values fell 45 percent in 2020, and are likely to > remain 39 percent below pre-pandemic levels for the foreseeable future. If > that projection proves true, it would wipe $453 billion in property values > off American cities, thereby slashing a critical source of municipal revenues. > > In New York City, property taxes are the single largest source of public > funds, supplying one-third of the city’s tax revenue. Office buildings > account for one-fifth of that sum. The declining market value of Manhattan’s > major office districts alone cost the city $5.24 billion in revenue. > > Remote work’s toll on cities does not end with its implications for property > tax revenue. Enable suburban commuters to work from their dens several days a > week, and you transfer all manner of smalltime commerce — lunch orders, > after-work drinks, etc. — from the urban core to its periphery. And lost > transactions mean lost sales taxes. U.S. cities expect their sales tax > revenues to decline by an average of 2.5 percent in 2022, according to a > survey from the National League of Cities. Last year, New York City > Comptroller Scott Stringer estimated that remote work would cost the city > $111 million in sales tax receipts annually. > > > Meanwhile, emptier office towers also mean emptier subways and buses. > Although mass transit ridership has recovered from its COVID-era lows, it’s > plateaued at roughly 70 percent of pre-pandemic levels. That poses an > existential threat to municipal transit systems, many of which were > struggling to operate on budget even before the COVID crisis. In New York, > the Metropolitan Transit Authority is poised to see a widening gap between > its revenues and operating expenses as this decade progresses. > > > The great danger for cities is that these trends could become > self-reinforcing. Falling revenues could translate into lower-quality public > services (e.g. less reliable subways, less well-maintained infrastructure, > lower performing public schools, stingier safety nets), which render cities > less attractive to high earners, who then decamp for the suburbs in greater > numbers, thereby depressing revenues further. Meanwhile, underpopulated > downtowns are less conducive to successful small businesses and more > conducive to crime. As central business districts become home to fewer > restaurants and more criminal activity, more firms will flee them, leading to > even more underpopulated office towers. > > For now, the American Rescue Plan’s copious aid to states and municipalities > are keeping cities out of this vicious cycle. But those funds will dwindle in > the coming years. In the National League of Cities recent survey, nearly > one-third of cities said that they will confront financial challenges next > year, as relief funds grow thin. > > It is possible that work from home will simply fall out of fashion as the > pandemic recedes into history. But given the myriad advantages that flexible > work arrangements have for both employees and firms, cities shouldn’t count > on it. Instead, major U.S. cities should capitalize on the one benefit of > commercial real-estate’s collapse: The newfound potential to create a ton of > new housing in already constructed, centrally located buildings. > > America’s most successful cities have long failed to expand their stocks of > housing in line with demand. The result has been a perennial crisis of > affordability that constrains urban growth, transfers vast sums of money from > workers to landlords, and displaces longtime residents. Restrictive zoning > codes — and community opposition to new construction that threatens to bring > more noise, traffic, and competition for parking spots — have helped entrench > this sorry state of affairs. > > But vacated office towers typically reside in districts already zoned for > both residential and commercial activities. And since the buildings are > already built, they tend to attract less community opposition. Their > centrality, meanwhile, makes them potentially attractive residences for > urbanites who wish to walk to work, and/or have virtually every good or > service one could ever want within a hop, skip, and a jump. > > Alas, converting office buildings into housing is easier said than done. > Commercial buildings tend to have far fewer bathrooms and kitchens than > residential ones require. Which means that any conversion demands > reconstructing a tower’s plumbing and electrical systems. Expenses add up > quickly, especially at a time of elevated construction costs. > > Meanwhile, many office buildings do not meet all of the standards that > municipal zoning codes require of residential buildings. Offices tend to have > much more interior space between windows, leaving much of their floor plans > without external light. Additionally, in New York City, residential buildings > are generally required to have 30-foot rear yards, in order to ensure a > modicum of light and air. Commercial buildings often have smaller rear yards, > while also running afoul of the parking minimums that many cities impose on > residential towers. > > Faced with the high costs and regulatory headaches of attempting a > conversion, many real-estate developers have resigned themselves to lower > revenues from their commercial properties, while nursing hopes that remote > work will prove to be a mere fad. > > If conversions don’t pencil out for private developers, however, they promise > profound benefits for cities as a whole. Turning thinly populated office > towers into apartment buildings would ease cities’ housing shortages, while > boosting both downtown commerce and property values and, therefore, tax > revenues. > > Thus, city and state policymakers would be wise to help lower both the > funding and regulatory hurdles to mass office-to-residential conversions. > > Cities have often sought to promote development by giving tax credits and > abatements to new projects. Yet one of the main objectives of promoting > office-to-residential conversions is to increase property tax receipts. So, > trying to spur such developments by doling out property tax breaks seems less > than ideal. > > Instead, cities should help finance new projects with revolving funds that > secure the public sector a cut of the ultimate proceeds. Montgomery County’s > Housing Production Fund in Maryland offers one model for this form of > public-private development. In simple terms, the county’s fund encourages > private investment in housing by providing partial funding for new projects, > thereby reducing the financial risk that developers must assume when pursuing > new construction. In exchange, developers agree to place income restrictions > on 30 percent of the units in a given building, and to share a portion of > their ultimate profits with the government. Through this mechanism, > Montgomery County has managed to catalyze the construction of new affordable > housing, at a negligible net-cost to the public sector. > > While providing capital for office-to-residential conversions, cities should > also exempt such projects from their most burdensome zoning requirements. > Residential towers in central business districts replete with transit options > should not have to comply with parking minimums. And they probably don’t all > need 30-feet yards either. Relaxing such standards will necessarily mean that > some new housing developments will offer residences with unusually poor light > and limited windows. But they will also offer renters and buyers the myriad > amenities of a city center and benefits of new construction. Having > poorly-lit new housing is not ideal. But having an acute shortage of > affordable housing — and a superabundance of downtown office space — is even > worse. New York, Los Angeles, and myriad other cities have offered regulatory > exemptions to conversion projects in the past, and have rarely regretted > trading stringent standards for more housing units. > > Indeed, the benefits of office-to-residential conversions are so significant, > cities should consider exempting them even from the requirement that all > legal bedrooms have windows. > > Given the massive core-to-window depths of contemporary office buildings, > converting many such towers to residences will require tolerating some deeply > weird floor plans. The real estate developer Bobby Fijan recently tweeted > this example of how a typical modern office could be refashioned into a > spacious yet bizarre home: > > Not everyone is going to want to live in a 2,500 square-foot apartment with a > massive common area and 4 windowless bedrooms. But as Matt Yglesias argues, > some people probably would. Personally, I’m a very light sleeper who is > routinely awakened by city noise and morning light. So the idea of having a > bedroom insulated from both by solid walls has some appeal. If cities are > faced with a choice between letting office towers sit vacant, or letting > photophobic bargain hunters live in windowless bedrooms, they should opt for > the latter. > > The liberation of America’s white-collar homebodies need not come at cities’ > expense. The remote work revolution could devastate municipalities’ downtowns > and finances, or it could help resolve their housing crises. If they can > summon the requisite policy imagination and flexibility, city officials can > make “work from home” work for everyone. > _______________________________________________ > Link mailing list > [email protected] > https://mailman.anu.edu.au/mailman/listinfo/link -- Marghanita da Cruz Telephone: 0414-869202 Email: [email protected] Website: http://ramin.com.au _______________________________________________ Link mailing list [email protected] https://mailman.anu.edu.au/mailman/listinfo/link _______________________________________________ Link mailing list [email protected] https://mailman.anu.edu.au/mailman/listinfo/link
