With the rise of remote work, American cities face an ‘urban doom loop’ as revenue declines
Excerpt from americancityandcounty.com
Just as the Industrial Revolution fundamentally changed the purpose of city downtowns during the 1800s, today’s rapid evolution to remote work is forcing metros across the United States to reconsider business centers and adapt office spaces to emerging needs.
“We’re going through this major revolutionary change, and it will take decades to play out,” said Stijn Van Nieuwerburgh, a professor of real estate and finance at Columbia University’s Graduate School of Business during an online panel discussion Thursday titled “Special Briefing: The Future of Downtowns” hosted by The Volcker Alliance and the Penn Institute for Urban Research. “It will be a slow and painful transition.”
Over the last several years, remote work in the U.S. has exploded from about 5% of the total workforce before the pandemic to around 20% today, according to data from the Census Bureau. The impact on city revenues has been profound, given their reliance on commercial real estate taxation.
And with less people heading into offices, “public transportation commuting fell by about half, from 5% of workers in 2019 to 2.5% in 2021, the lowest percentage of workers commuting by public transportation that has ever been recorded by the ACS (American Community Survey),” reads a statement about the Census Bureau’s annual demographics report, which was published near the end of last year.
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