Telework Will Change Our Cities, and (Maybe) Our Politics
A typical Zoom meeting. Photo by Office of Ruben Gallego, United States Congress [Public domain] via Wikimedia Commons
With the end of the Covid-19 pandemic in sight, how might our adaptions to work and life in this time influence our future? As an urban economist, this is near to my heart. How will increased teleworking, particularly among white collar workers, might our cities? Here are my top 3 changes to watch for.
1) More workers are thinking of moving
The US labor force is about 160 million working adults. Our best estimate is that about 3 million workers were teleworking full time prior to the pandemic. According CNBC, post pandemic, about 10% “are planning to relocate to a new U.S. City or region.” This change is not isolated to just the big companies like Amazon or Facebook. Over half of smaller firms are planning for more remote workers. Those most affected by increased teleworking are the 64 million white collars workers according to the numbers from the BLS.
Put simply, well over one third of the white-collar workforce may work from home in a few years, compared to less than one in ten today. Such a move would have enormous implications for cities. Bigger cities would likely see the biggest changes. Newly remote workers relocate away from the high-cost urban cores of cities. This is already seen in survey data from United Van Lines, a moving company.
2) Pollution might get worse, not better
My friend Will Larson finds that increased telework may not reduce pollution. Local government must change zoning and land use regulation if it wants to reduce the negative impacts that telework may bring.
3) More workers will live further from their jobs, increasing sprawl
Urban economist Jed Kolko believes that the post 2008 housing market was about workers living closer to work. Post pandemic, Kolko expects there will be a permanent increase in telework and thus a reversal of this pattern. More and more, people will live further from their office. Policymakers will have to grapple with the effects of increased teleworking. Mass transit options may see financial strain. Urban economists also expect that sprawl will increase. Recent work by Delventhal and Parkhomenko finds that workers will move further away. This should make intuitive sense.
If we live close to our job, which is most likely downtown for these types of workers facing increased telework options, we pay higher housing costs in exchange for lower commuting time. Further, workers will move from large coastal cities to smaller interior cities, which would reinforce the current political realignment of suburbs ongoing. Nothing in politics is ever permanent, and the unpacking of Democratic voters in urban areas to suburban or exurban polities presents opportunities and risks to both major parties.
I’ve had a theory for a while that high urban housing costs are driving the growth of the far left, as young people with a poor understanding of economics blame capitalism for the economic hardships that are actually caused by restrictive zoning regulations. If housing prices come down significantly, maybe anti-capitalist conspiracy theories will lose a bit of their verisimilitude.Report
And how exactly do you divorce zoning regulations for capitalism?Report
If a regulation benefits monied interests it is capitalism. If it benefits anyone or anything else, from consumers to the commons, it is Chavez-ism.Report
I’d be puzzled how anyone would lump zoning regulations in with capitalism? It is, by definition, state regulation to short circuit market pricing signals and restrict land use by fiat which is pretty much inherently non-capitalist.Report
There’s been a smearing of “stuff corporations like” with “Capitalism”.
And so going against something that a corporation would like is seen as anti-Capitalist (and therefore Socialist/Communist).Report
I suppose? As far as I’m aware most of corporate America hasn’t really weighed in on housing policy have they? Perhaps it’s because I don’t live on the east or west coasts where housing policy is especially idiotic but I am not familiar with corporate America saying or advocating on housing policy at all.Report
Housing Policy? Or Zoning Policy?Report
Either, frankly. Here in Minneapolis I haven’t heard of corporate involvement in that field at all. On the other hand Minneapolis is the home of actual genuine up-zoning regulation so it would make sense that I wouldn’t.Report
It seems like a plausible theory- especially since the bootlegger/baptist coalition that pushes and defends zoning regulations needs to use anti-capitalist mantras to appeal to the “baptist” side of that alliance.Report
Ya know, I agree with this theory halfway. I’ve lived in places where there was a housing crisis due to too many people and too little housing, and there was an old guard who said “Yeah, but if you build higher than two stories, the *character* of our city will be destroyed!” So, yep, restrictive zoning regulations fuel this problem.
The problem is plenty of us have *also* lived in places where that was the problem ten years ago and the developers said “Of course you have a housing crisis! Let us build high and dense and in abundance and you won’t have one, you dummies!” Which, ya know, isn’t *wrong*. And then the city rezoned and removed the decades-old restrictions that prevented that building- and, in many cases, bent over backwards to encourage building.
And the newly-liberated developers cried “Free at last! Free at last!” and build luxury condos as high and far as the eye can see. And, why not?! If they can sell them, why wouldn’t they? But, it didn’t solve the housing crisis.
I mean, it seems to me that large-scale problems tend to be really multicausal, so there needs to be more than one magic bullet. I don’t think it’s anti-capitalist to say that Problem X is actually caused by: A, B. C, D, and E. That’s usually the case.Report
Sure, I mean building your way out of a housing crisis is slow and developers will build the high-end housing first (because that’s the most profitable housing they can build). Whereas with housing building restrictions they just build the high-end housing only (along with whatever minimum amount of other housing they have to build to build the stuff they want).
I don’t know what the deal is with your specific market. It’s Hamilton Ontario isn’t it? Looking at their zoning project websites it looks like they loosened the zoning but didn’t exactly say “build anything anywhere”. Then again, I’m far from a zoning expert and I wouldn’t dream of asserting you’re wrong and it certainly bears noting that your housing issues are knock on effects being caused by even worse NIMBY douchebaggery going on in Toronto to the east of you.
Now, under Covid, we got a chance to test the “it’s what you build, not how much you build” theory that anti-density advocates push and it fell flat on its face. When demand plunged in both California and in New York due to Covid the restrictionism theory says that the prices should have been only minimally affected since the makeup of the constructed housing units didn’t change. Big nope on that one- housing prices and rental rates stalled and plunged despite the amount of luxury housing being built staying the same.
Personally, I’m no libertarian- I’m all for the other options (short of the imbecilic rent control schemes; keep it simple-just spend twenty bucks on some gasoline and burn the city down if your goal is to destroy your community) for addressing housing issues so long as they’re used to get the core medicine down which is to build a lot of housing as densely as it can be sold.Report
I’m not trying to prove or disprove a thesis and I’m not talking about Hamilton because here too it’s a seriously multicausal problem. But, yeah, the zoning restrictions were much worse here before they rezoned, they’re a great deal more liberal now, there is a *tremendous* amount of high end building going on, and the housing crisis has gotten far worse. If I was a right libertarian, I would say “Ah ha! But there’s not NO regulation!” So, fair enough, I guess.
But, like I said, I think multicausal problems need multiple solutions. The silver bullet argument is, if they can build anything, everywhere, they’ll build their way out of the housing crisis? In what, fifteen years from now?
I just don’t see where, in the ideal world where I, Mr. Deveolper, can build whatever I want, wherever I want, and I have a plot of land and the choice to build: A. luxury condos that pre-sale for, say $700,000 a piece; or B. low-income apartments that rent for $700 a month, and now there is large demand for both markets in a specific place due to telecommuting, I would have any incentive whatsoever not to build more luxury condos. I mean, it’s not my problem that young people who work as temps or in call centers or whatever can’t find an affordable apartment, is it?
The problem really comes for cities that want to grow based on replacing their former industrial core with a service economy. At some point, all those highly-paid telecommunters aren’t going to make their own tapas.Report
A luxury condo in 1991 is likely to not be a luxury condo in the current year.
The best time to build a luxury condo is 30 years ago. The second best time is now.Report
Sometimes, I hear people say things like “If you want to live in a high-rise, move to Manhattan.” People seem to have a hard time thinking that there is a lot of stuff you can do between two stories and a 20 foot tower.
There is a small c-conservatism that a lot of people seem to have that amounts to “i don’t like change.” People want their towns/cities frozen in amber as they remember them. Yes, yuppie condos are going to get built first. Housing is frustrating because it is a combination of a lot of people willing to make the perfect the enemy of the good or wanting a unicorn and a pony. Rich NIMBYs are frustrating but even more frustrating are NIMBYs lower down on the socio-economic scale who don’t realize that they are shooting themselves in the foot and can’t quite bring themselves to openly say “I want place X to be my bohemian paradise forever and hate these icky yucky yuppie condos.”
No one ever said that prices will go down overnight but what happens in cities where demand outstrips supply is that landlords would prefer to rent to professionals over people with more moderate incomes. I spent 11 years in a rent-stablized one bedroom in a building that was build around 1940. In a saner housing market, I would have been able to find a condo to purchase sooner and my old apartment would have gone to someone with moderate means.Report
Sometimes you hear people say those things, but they’re not what I’m arguing, they’re not my opinion, and they’re nearly the opposite of what I’ve said here whenever this topic comes up.
So, again, I want growth. I want density. I am cool with change and actually want it to happen faster. And I see no reason why they shouldn’t or wouldn’t be building yuppie condos, since there’s a demand for them. Gosh, I even like change in my own backyard.
I mean, surely, there’s some other low-income creative type who actually holds those opinions that you could go argue with, yes? Or even start your own thread to vent about them.Report
I’m considering this right now. Why should I work in the same state if I can telework from a lower cost state, say, Florida or Arizona, where the housing and cost of living and taxes are massively less than Virginia, MD, DC? They key, is that my pay doesn’t drop. As long as I can get paid “Mid Atlantic pay” and live in Arizona, I’d be a fool not to. I think you’re going to see a lot of urban flight of white collar workers leaving NYC and Cali in droves.Report
It seems like a plausible theory- especially since the bootlegger/baptist coalition that pushes and defends zoning regulations needs to use anti-capitalist mantras to appeal to the “baptist” side of that alliance.Report
I had a similar comment that I think got eaten. However it goes beyond zoning. Proximity to work is only one driver of housing costs. You also have to account for things like schools and quality of life issues. It’s going to take some pretty selfless local leadership to untangle all of this though I think there is a real opportunity for a better post covid world if we have the guts to try for it.Report
It may be only one drive but it’s a significant one. Personally I really despair watching how it’s going on the coasts. I’m wondering if the only way it’s going to be fixed is by letting it get so bad that it gets pushed up to state level regulation. California, with their incestous feedback loop of Prop 13 and their strict zoning regulations, looks especially vulnerable.Report
Housing is probably one of the toughest decisions out here even for people with the money to have some flexibility. For a good school district you’re picking between hyper inflated real estate prices for something (and that something might be a collapsing shack) with ‘proximity’ to the jobs and something more reasonable that has you spending 1-2 hours commuting each way. I put ‘proximity’ in quotes because even 3 or 4 miles can take an eternity in pre-covid gridlock. Your other options are be a DINK/rich single person or live somewhere with bad schools and serious crime and poverty problems.
The ‘haves’ in our current situation are entrenched and have a serious interest in preventing any change that would hurt their investment in the right zip code. The ‘have nots’ tend to have enough conflicting interests that I’m not sure they could build a coalition even at the state level. The only way I see it changing is a critical mass of people in a county or municipality on the wrong side of the equation getting enough votes for the haves to agree to redistricting and rezoning plans that are implemented over a slow enough period of time that no one loses their shirt on a 400k house they bought for 800k.Report
I’m relatively doubtful that tele-commuting is going to become that common despite Covid-19. There are still going to be al to of professions that require a real office. Finance, law, and medicine are the big three in this. Lawyers will need places to meet with clients, and I’m pretty sure most don’t want their clients to know where they live, and store files. They will also want close proximity to court High finance is another area where working from home doesn’t quite carry the mystique of the profession. Medicine won’t work through tele-commuting for obvious reasons.
There are plenty of businesses that could work through tele-commuting but a lot of people are going to decide that they can of like separating their work and personal lives more than working from home would allow. So I think there will be relatively big shift back to office work even if not a total one.Report
I share your scepticism, though for slightly different reasons. As research into the causes of innovation develops, it appears that one of the things that drives innovation is people meeting each other, often spontaneously. I don’t think this is a function of cities that teleworking can supplant.Report
A lot of this assumes that telework is here to stay and I think the trillion dollar question is whether telework is here to stay. My fiance works in tech. Her company (and many tech companies) announced work from home weeks before any state considered shelter-in-place and when COVID was still a novel story about a virus on cruise ships instead of a virus that caused 400,000 American deaths (probably more). On the other hand, I am not in tech. I am in law. We went work from home just before the state announced it as official policy and I know lots of lawyers who really, really hate the new world of work from home, zoom depositions, zoom mediation, zoom court appearances, etc. They are chomping on the bit to get everything back in person.
I don’t think anyone really knows how many companies/bosses are going to see work from home as boon (decreased operational costs! no need to rent office space!) or a bane (For all I know, my underlings are slacking off because I can’t see/control them).Report
I think the safe bet is that we’ll see telework recede as Covid recedes but that it won’t decline to anywhere close to the level telework was at pre-Covid. Covid shattered the norms/traditions/inertia that was holding telework back and forced companies to try it out. For a lot of companies that had good experiences with telework there’s no reason to not either continue doing it or allow it as an option. Those companies who’ve had a bad experience with telework will no doubt discontinue it as soon as it is practical to do so.Report
Perhaps but I am also never surprised by the power of people stuck in their ways and used to doing things the old way to force their way back into things.Report
I’ve seen two predictions about how increased tele-commuting and the potential big population shift that will come from it. Brandon made the prediction from the Right, that a de-concentration of people would move more people politically to the Right because nearly all liberal-left politics comes from living in dense urban environments and once you move people to places with a lower cost of living, their politics will shift to the right.
The argument from the Left is that the current growth in liberal-left politics is because most people desire moral autonomy and increased education/changes in how people work. Therefore moving a lot of liberal people from the coasts into the interior will make those areas more liberal because of a big influx in Democratic voters. I tend to believe that this view is more accurate but neither is entirely accurate.
I agree that increased tele-commuting is going to lead to more sprawl and pollution because people will be living where land is a lot cheaper, so they can spread out more. There needs to be changes in zoning, to encourage interior cities to develop in a more urban pattern and to discourage driving.Report
So let’s say that you have a job that will FINALLY let you work from home 11 months out of the year and you only have to fly for a week of in-person once a quarter. Where are you likely to live?
Youngerish people will probably want to move someplace hoppin’. Maybe find someone to make out with.
Okay, you’ve found someone to make out with and you hop less. Where are you likely to live? Suburbia. “I want good schools”, you may find yourself saying. “It’s not racist! I just want my kids to have the best opportunities!”
How are the people who move likely to vote?
Well, I imagine that, at first, they’ll vote the way that their Reddit community would have them vote. That’s the community they interact with, after all. That could work to get new people moving into this or that red suburb and turn it purple.
The only question then becomes how do they *KEEP* voting after a while? Do they become members of the new community? I don’t mean “church”, does anybody even go to church anymore? I mean, like, maybe school or something? Making friends? How do grownups make friends?
Maybe they’ll end up at church after all. Just Christmas and Easter.
The question is whether they become a member of their new community or whether they use their house as a staging area for the internet, where they *REALLY* live.
But maybe that has attendant costs too… why do I need to pay extra taxes for (big city far away)? So they can spend more money on cops that will murder black people? I’m going to vote “no” on the tax increase. Oooh, taxes for local libraries? I support those.
I don’t think we have to consider whether someone would be willing to telecommute from someplace even smaller where the fancy dinner place is a Chili’s, right? Even if you can get a house there for cash. There’s nothing else to do.Report
The thing about telecommuting that often gets missed is that it takes the offshoring model to the white collar professions.
If the pool of people with my skills is limited to Los Angeles, that’s one thing; If the pool of labor is expanded to the United States, or the English-speaking world, then my ability to negotiate compensation is limited to the lowest bidder.
As ever, capital has the upper hand on labor.Report
We’ve been told that post-COVID, we are all going to hybrid schedules, where folks only go in 2-3 days a week, and work from home otherwise.
Here’s my prediction: Companies will scale back on pricey office space in urban cores, but you’ll start seeing suburban and maybe even rural co-working space expand. There is a building near where we live (like, a mile or two away) that is all small office space. The building has a huge internet connection, and it rents out individual offices (think 15’x15′ or larger). You can get it furnished, or bring in your own. My wife and I are thinking about getting a space like that so we have a place that gets us out of the house. I wouldn’t be surprised to see companies paying for such spaces for employees, especially if they have 2 or 3 employees near such an office that can share the space. That’s less space needed at the downtown office, plus you get a satellite office in the suburbs, so customers don’t have to come downtown for little things.Report
Oh, jeez. We’ve got a thousand little strip malls around here that are maybe 50% occupied.
How hard would it be to harden one of these and make it appropriate for businesses that need to protect business secrets (instead of inventory)?Report
Pre covid, I know many people who, not wanting to drive to the new consolidated office space, elected to work at the server farm for half the drive to the considered office space. Less nice but half the commute timeReport