Working From Home Will Change Cities

Just three years ago, the New York Times had this headline Why Big Cities Thrive, and Smaller Ones Are Being Left Behind” — trumpeting the victory of big cities over their smaller competitors, not to mention the suburbs and rural areas. At the top of that heap, of course, was New York City.

Now the headlines are different:

· Coronavirus Escape: To the Suburbs, May 8, 2020

· The Richest Neighborhoods Emptied Out Most as Coronavirus Hit New York City, May 15, 2020, finding that “Roughly 5 percent of residents — or about 420,000 people — left the city between March 1 and May 1. In the city’s very wealthiest blocks, in neighborhoods like the Upper East Side, the West Village, SoHo and Brooklyn Heights, residential population decreased by 40 percent or more, while the rest of the city saw comparably modest changes.”

· The Pandemic Sent Young New Yorkers Packing. Will They Return?, June 19, 2020

A week ago, the always perceptive Claire Cain Miller added another perspective in an Upshot article that was headlined with the question “Is the Five-Day Office Week Over?” Her answer, in the sub-title, was that the “pandemic has shown employees and employers alike that there’s value in working from home — at least, some of the time.”

This chart summarizes a part of what she wrote about:

As Miller’s story makes quite clear, it is important to realize that some of what has happened during the COVID pandemic will continue after we have finally overcome it and people are free to resume activities anywhere.

Some of the current refugees from cities will likely move back to the cities and many city residents remained there, of course.

But the point is that many of these old, returning and new urban residents will have different patterns of work and that will require cities to change.

While the focus of this was mostly on remote office work, some observers note that cities still have lots of workers who do not work in offices. While clearly there are numerous jobs that require the laying of hands on something or someone, there are also blue-collar jobs that do not strictly require a physical presence.

I have seen factories that can be remotely controlled, even before the pandemic. Now this option is getting even more attention. One of the technology trade magazines, recently (7/3/2020) had a storied with this headline — “Remote factories: The next frontier of remote work.” In another example, GE has been offering technology solutions to enable the employees of utility companies to remotely control facilities — see “Remote Control: Utilities and Manufacturers Turn to Automation Software To Operate From Home During Outbreak”.

So perhaps the first blush of victory of big cities, like the British occupation of New York City during the American Revolution or the invasion of France in World War II, did not indicate how the war would end. Perhaps the war has not ended because, in an internet age where many people can work from home, home does not have to be in big cities, after all, or if it is in a big city it does not have to be in a gleaming office tower.

These trends and the potential of the internet and technology to disrupt traditional urban patters, of course, have been clear for more than ten years. But few mayors and other urban leaders paid attention. After all they were in a recent period in which they could just ride the wave of what seemed to be ever increasing density and growth in cities — especially propelled by young people seeking office jobs in their cities. This was a wonderful dream, combining the urban heft of the industrial age with cleaner occupations.

Now the possibility of a different world is hitting them in the face. It is not merely a switch from factory to office employment, but a change from industrial era work patterns too. Among other things that change means that people do not all have to show up in the same place at the same time. This change requires city leaders to start thinking about all the various ways that they need to adjust their traditional thinking.

Here are just three of the ways that cities will be impacted by an increasing percentage of work being done at home:

· Property taxes in most cities usually have higher rates on commercial property than on residential property. Indeed, commercial real estate has been the goose that has laid the golden eggs for those cities which have had flourishing downtowns. But if the amount of square footage in commercial property decreases, the value of those properties and hence the taxes will go down. On the other hand, most elected officials are loath to raise taxes on residential real estate, even if those residences are now generating income through commercial activities — a job at home most of the week.

· Traffic and transit patterns used to be quite predictable. There was rush hour in the morning and afternoon when everyone was trying to get the same densely packed core. With fewer people coming to the office every day that will change. Even those who meet in downtown may not be going there now for the 9:00 AM start of the work day, but for a lunch meeting. Then there is the matter of increasing and relatively small deliveries to homes, rather than large deliveries to stores in the central business district. This too turns upside down the traditional patterns.

· Excitement and enticement have, of course, been traditional advantages of cities. Downtown is where the action is. Even that is changing. Although it is still fun to go to Broadway, for example, I suspect that most people had a better view of the actors in the Disney Plus presentation of Hamilton than did those who paid a lot more money to sit somewhere many rows back even in the orchestra section of the theater. At some point, people will balance this out. So, cities are going to have be a lot more creative and find new ways, new magic to bring people to their core.

Cities have evolved before. In the 18th century, American cities thrived on the traffic going through their ports. While the ports still played a role, in later centuries, cities grew dramatically and thrived on their factories and industrial might. Then they replaced factories with offices.

A transition to an as yet unclear future version of cities can be done and will be done successfully by those city leaders who don’t deny what is happening, but instead respond with a new vision — or at least new experimentation that they can learn from.

© 2020 Norman Jacknis, All Rights Reserved

Senior Fellow, Intelligent Community Forum; Columbia University Faculty. Former Director, Cisco IBSG Public Sector & CIO Westchester County, NY