Telework and evolving urban structure

In my last blog I wrote about possible impacts of the coronavirus and teleworking on cities, particularly downtowns. Specifically, I wrote about patterns of evolution of the urban structure; what will we do with all those downtown office buildings when they are mostly empty? Recently Matthew Haag in The New York Times wrote about some possibilities in his article Manhattan Faces a Reckoning if Working From Home Becomes the Norm. Here are some thoughts about how this may work.

Office buildings

Those magnificent, tall structures in the downtown areas of many cities have one primary purpose: housing office workers during office hours. Suppose that, after a few months, businesses find that most of that expensive space is unoccupied — and the lease will run out shortly? Are they likely to retain the space in order to satisfy their edifice complexes, or will they reduce that cost to fit the new teleworking regime? My guess is that many businesses will opt to reduce their space. The rate of reduction will depend largely on the remaining length of the leases.

This creates a major dilemma for the owners of the newly less-occupied buildings. After all, they probably have substantial mortgages to pay off. Do they rush to find new tenants? Do they reduce rents or provide similar incentives in hopes that they can keep the existing tenants? Do they ask their local governments for tax breaks to reflect their newly devaluing property? Do they refurbish the buildings to include apartments to attract people who want to live and work in the same general location? Or all of the above?

I don’t know what the mix of those options will be. Certainly some property owners will stick it out in hopes that the old days will soon return. But many will be seriously examining those alternatives if they haven’t already started.

Local businesses

Those big buildings don’t exist in a vacuum. There are clusters of supporting businesses around and in them. Restaurants, cafes, bars, tailors, grocers, shops of all sorts dependent on the swarms of office workers in the buildings adjacent to them. Drop-off services do not replace in-person visits. What happens to those businesses if their customers mostly or entirely disappear because they’re working from their homes or if the COVID-19 lockdown becomes chronic? Well, if the owners of the big buildings decide to make them multiuse, some mix of offices and residences, then some of the supporting businesses will survive. If they can make it through the transition period. Others will not survive unless they’ve moved to more promising sites.

Homes

Then there are the teleworkers themselves. Many, if not most, of them became instant teleworkers in the past few months. They were forced to establish some sort of office in their homes, often by pushing some other use of space aside. Even with that disruption, apparently most home-based teleworkers want to keep on doing it, if not every day, after the COVID-19 lockdowns are lifted and the kids are back in school. But, if their teleworking becomes semi-permanent, the needs of the rest of the workers’ families may urge some redesign of the home spaces to make everything run more smoothly, with office space and living space more clearly defined. Expect a surge in building material sales and discussions with landlords about redevelopment projects.

People still need social contact. The question is whether they will get it mostly from their local friends and neighbors in the future? Or will they still lust for that downtown excitement? And how often?

Cities

A substantial part of the income of cities, at least in the United States, comes from property taxes. The near future can be a worrying time for cities with lots of office buildings. Like Manhattan, Chicago’s Loop and several regional centers of Los Angeles, such centers constitute major sources of income for their cities. One of the possible impacts of large-scale teleworking will be reductions in property values in some areas, such as downtowns, and in increases in some residential areas with good broadband service. As the office workforce spreads out to be more evenly distributed around the landscape, what will this do to properly tax revenues? Or, more specifically, how will cities recoup any losses for the new urban designs?

In 1970 the dominant urban plan for Los Angeles was to have a series of regional centers, with roadways radiating out from them. Each relatively self-sufficient, with workers living around the center in which they worked. It didn’t happen the way it was planned. It seemed that those who lived near one regional center tended to work in another center on the other side of downtown. Maybe we’ll think it out again. With telecommuting much of that cross-town traffic can be over the internet rather than the freeways. Here’s a map from our 1974 report and 1976 book (and its 2015 reprint).

Residential distribution of employees of a company used as a case study in The Telecommunications-Transportation Tradeoff.

Internet

I was worried at first that the internet would collapse under the the lockdown loads. Sudden increases in videoconferencing, much more bandwidth-intensive than texting, would bring the internet to its electronic knees. But, so far, it hasn’t happened. Of course there are plenty of snowy conversations, dropped channels and the like but the internet has held up fairly well. It made me feel good to be a part of its birth process back in the day.

The lower risk of COVID-19 infection in rural areas may increase their attractiveness, provided that broadband internet coverage can be extended to them. Yet rural internet is a chicken and egg proposition. Telecommunications services suppliers don’t want to go there unless there are enough clients. Potential clients may not want to move to rural cares unless there are the needed telecommunications services.

Environment and climate change

My primary motivation in the 1970s for beginning research on what became known as telecommuting was the enormous waste that commuting produced. Waste of time. Waste of energy. Waste by pollution. All because we felt the need to GO to work in order to go to work.

Now that we’ve had an unlooked-for test of massive teleworking we have also seen massive reductions in energy use and air pollution. At least for a few months. We’ve shown that teleworking works for millions of people, many of whom want to keep on doing it. To the extent that we can keep on avoiding the use of fossil fuels, as we are doing today, we can seriously think about achieving the goal of avoiding the more dismal impacts of climate change.

Next

We do live in interesting times. I’m still an optimist so I believe that we will sort these problems and opportunities out eventually, if not very soon. After all, as Mike Berners-Lee states in the title of his latest book: There Is No Planet B. We have to make the best of it.

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