I remember, in the early 1970s, wondering about the impact of widespread telecommuting on CBDs (Central Business Districts). How might the CBDs be transformed by that? What would the CBD’s roles be then?

But my first priority in 1973 was to discover whether telecommuting worked at all in the real world; never mind the chances of millions of home-based telecommuters suddenly popping into existence.

I recall drafting a paper on the optimum size of cities being around 500K-800K population. My reasoning was that this mid-size could preserve most of the key characteristics of big cities without all the nasty side effects like traffic congestion, air pollution, etc. Those key characteristics included a large enough tax base (based on property) to provide basic services including transit plus art and entertainment centers and other facilities that tend to make a place unique. The paper remained as a draft and I never got it published.

Regional/local centers

A first approximation to that was the idea of regional  centers in larger cities that might have those characteristics. Our first formal test of telecommuting in 1973-74 was structured in accordance with LA’s regional plan of that time. We posited that the employees of out test-base insurance company would live in one or more of those short-commute smaller centers and possibly avoid going to the central core at all. If the short commutes were not by car we could have long-term energy savings and pollution reduction.

Over the years I have kept in touch with some planners trying to convince them of the possible impacts on CBDs (including significant reduction in demand for office space) of massive amounts of telecommuting. The general reaction was skepticism since, according to the planners, cities had always been structured as centers with expanding series of rings for business and residential use.

From the beginning, my strategy for “inciting” telecommuting was to pick exemplars that would influence others to try it. So, hearing the reluctance of the planners, I shrugged and figured that the acceptance of telecommuting would be slow enough that individual cities might adapt to the telecommuting-induced flow of jobs from center to regional and local concentrations.

Near-instant dispersion

There was a slow but steady increase in the number of telecommuters worldwide in the 1980s through the 2010s, all according to my long range forecasts. This was mostly due to adoption by some major employers and many smaller concerns. All of these had reasonable times to prepare and adapt their organizations for the new ways of working.

Then came Covid-19. Widespread contagion or fears of it. Everybody out of the office! Our lives are at stake! Little to no time to adapt. CBDs became overnight wastelands. The office workers, the customers of many small support businesses in the CBDs, all gone. CBD office occupancy plummeted. Never to return?

This lasted two years or more. It also provided a worldwide demonstration that telecommuting works (whatever name it’s given) as well as an enforced training period for organizations to learn how to manage it. Management discovered that productivity went up, turnover rate went down, as did operating costs (except maintenance of unused office space). Telecommuters discovered that they really liked it and would fain return to the old office full time. Working away was good!

The renaissance?

But there were problems as well. Senior management, accustomed to the hierarchical rules of order, insisted that everyone return to the office full time, as BC (Before Covid). Realtors, and office property owners, and their banks saw visions of imminent bankruptcy unless everyone returned to the office.

So far, the great post-covid total return hasn’t happened. Sure, many telecommuters have discovered that part time return is good for keeping in touch and for getting organized for new projects. But full time in the office? No way. It’s still too easy to find a job where full-time office presence is not the thing. So, currently, CBD office occupancy in big cities is running somewhere between 40% and 60% and only slowly increasing, if at all. Even when there is partial return it tends to be in Tuesdays through Thursdays rather than full week occupancy.

Some of this movement by telecommuters may be switching to regional centers, both for uses of nearby office space for working meetings with colleagues and general personal uses. This may also produce shifts of service businesses to this centers. There isn’t good data on this that’s readily available.

As a counterexample, The Financial Times ran a story on 26 June titled: “HSBC exit a sign of Canary Wharf’s post-pandemic woes“. It focuses on the moves of business from a regional center of London, Canary Wharf, to The City in London’s center. This is largely a result of telecommuting producing lower demand for office space, but in the regional center rather than in the lately-bereft City. So the CBD gets partial recovery but at the expanse of the R(egional)BD.

Either way, there is a net loss of daily office occupancy in the city. That means a net loss of jobs serving those missing occupants unless the businesses providing those services disperse to wherever the telecommuters live.

As I’ve mentioned earlier, other survival options are available in CBDs but they take time and money to implement. The challenge now for CBDs is to turn that lower demand for offices into higher, and more lucrative demand for . . . what? Meanwhile, jobs and livelihoods are still in flux.