Central business districts (CBDs) are not going extinct. They are just being reshaped by shifting work schemes brought about by the changing times.
“The ability to work remotely will not drive most people away from cities and offices, but it will enable many to live and work in new ways and places…” economic historian Dror Poleg posits in commentary in the New York Times.
Poleg said that since 2018 net migration to New York, Los Angeles and San Francisco was negative, while the US economy grew at a healthy 2.9 percent. Creative magnets like London and Paris were experiencing similar declines.
This has been a trend long before the pandemic. A few years back, startup companies have begun setting up remote hubs, a move that allows them to tap into talent anywhere. Offices started to have a new meaning. Employees do not need to be confined in one location to do their jobs.
Poleg says the “creative class,” a term he uses for professionals who function is to create new ideas, new technology or creative content, has the ability to work from anywhere they want.
Even before the work from home (WFH) setup was widely adopted by many companies, Leesman, a firm that measures employee experiences, analyzed how the workplace affects employee productivity, pride and enjoyment. Polling 719,000 respondents in 4,771 workplaces worldwide, the survey revealed that nearly 40 per cent of employees felt their workplace did not enable them to work productively.
Then the pandemic forced many employees to reassess their preferences. Multiple surveys have found that many are happy to continue to work remotely and would move, if given the chance.
Poleg predicts that the total demand for offices will diminish to a moderate degree. The bigger changes will be in how total demand is reshuffled and what office providers will have to do to remain competitive. Most office activity will not move to homes or to the cloud. Instead, it is likely to be redistributed within and between cities, with a variety of new employment areas.