Why remote work is the opportunity of the century for cities

The real problem with cities is too much office space and not enough housing. Remote work is the solution, not the problem.

Remote work is harming cities, according to a growing consensus. But that consensus is wrong.

As a future-of-work editorialist, part of my job is to listen to and consider the many complaints that attend large-scale changes in how we work and live. I’ve noticed that two of the biggest complaints about the impact of remote work on cities appear to be mutually exclusive. These complaints are:

  1. Remote work is bad because it enables digital nomads to pour into cities and overuse scarce housing resources — reducing supply, increasing demand, and thereby raising prices, which prices locals out of their communities.
  1. Remote work is bad because it enables workers to move out of cities and live wherever they want (or stop commuting from the suburbs). This leaves office space empty and turns downtown areas into ghost towns, harming local businesses and greatly reducing the tax revenues that fund the city services that make cities livable.

The first complaint says remote work brings too many people to cities; the second says remote work drives too many people away.

So which is it? Too many people or not enough?

What’s really happening is that human culture is changing faster than cities are.

Remote work is increasing demand for homes and decreasing demand for offices. This mismatch results in too many people in the residential parts of cities and not enough in the business areas.

When cities become “unstable”

A few years ago, I attended a tech product rollout event of some kind in New York City with drinks and finger foods. I don’t remember the product, but I’ll never forget the space. It was on the ground floor of an old building, a strange windowless rectangular prism.

“This used to be a stable for horses,” I was informed. A place once known for horsesh*t is now used for public relations. (Insert your own joke here.)

In 1900, the city had 4,500 stables to support its 75,000 horses. But by 1908, the number of automobiles in the city surpassed the number of horses.

Imagine the crisis. Cars suddenly made those stables obsolete and (along with the city’s famous bridges and trains) enabled workers to move to Long Island and commute to work. Suddenly, the city was filled with empty apartments and useless stables. As a result, tens of thousands of people working in the horse transport business lost their jobs.

The moral of the story is the value of hindsight. What seemed like a crisis at the time was merely the temporary instability of rapid change that was always inevitable and inescapable.

Today’s remote work “crisis” should be seen in the same light. 

The real crisis is the status quo

The horses are long gone in favor of the automobile. Today, most American cities are built around cars. Every day in cities of all sizes across America, there’s a morning traffic jam on the roads leading into the cities and another traffic jam at night in the other direction.

All that pollution and car accidents and the misery of commuting for millions exists in the service of ferrying human bodies into cities where employees work in dehumanizing offices or spaces they hate.

On evenings, weekends, and holidays, all those commuters spend their time and money outside the city. As a result, city merchants miss out on all that business, and the city misses out on all that tax revenue.

Why are we working so hard to preserve this miserable status quo? 

The solution is right in front of us, 30 stories high

Over the coming decades, cities will evolve to support the remote work revolution. The buildings will learn.

In the short term, the crisis is as real as the solution is obvious: Since the remote work revolution started, around half of all office space is now unused — so as quickly as possible, we need to convert at least half our existing urban office space into housing.

By increasing the housing supply, cities will become more affordable. And now-empty space can be used and therefore taxed to make cities more livable and desirable (as an alternative to the “urban doom loop” in which resident flight-caused lost tax revenue reduces city services, further degrading cities and causing more people to leave).

And local businesses will thrive with all those new residents replacing empty buildings on nights and weekends.

More housing means more Airbnb rentals without pricing out locals. Airbnb guests not only enable home-owning residents to a side hustle but also drive business to city merchants, especially bars and restaurants. In addition, cities collect direct and secondary tax revenues from all those extra visitors.

Work-from-home remote workers don’t flee cities because cities are inherently unlivable. They do so because cities don’t have the tax revenue to make them livable through police, sanitation, and public amenities.

Cities can revitalize by changing requirements for housing.

Office spaces usually have only one wall full of windows.

By changing the code to allow apartments to have one wall of windows and eliminating other restrictions (such as requirements that apartments must have a balcony or back courtyard), office spaces can be converted into homes, with the main expense for building owners being the installation of much more plumbing.

Cities can further encourage this transformation by using future tax revenues to build schools, parks, and community spaces in current business districts.

The most efficient and beneficial scenario for cities is to maximize the number of remote workers who live in cities. Doing so greatly reduces commuting and lost tax revenue from empty office buildings. And you greatly increase tax revenue, which can be applied to the project of making cities far more livable for everybody.

The first step is to understand and fully accept that remote work is now and the future. Businesses will never again fully occupy all that existing office space.

So instead of seeing remote work as the problem, realize that it’s the opportunity of the century for revitalizing cities.

Copyright © 2023 IDG Communications, Inc.

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