Remote Work Is Changing Our Cities

The evidence is starting to pile up and the changes bring long lasting consequences.

Author

Doug Antin
September 19, 2022

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#1 This Is How Remote Work At Large Scale Changes A City

Zoom out and think about the realities of remote work on a society-wide scale.

If around 30% of the working population does some form of remote work, then demand for corporate real estate will decline significantly. That will reduce property values within city limits and impact city tax revenues. 

On top of remote work, add in stagflation, recession pressures, and massive tech layoffs. These all cause less demand for corporate office space, reduction in property values, and loss of tax revenue.

That means many city tech hubs are on the verge of entering a doom loop.

As layoffs pile up, they lead to lower demand for office space, then lower tax revenues, and government budget cuts.  Budget cuts then cause government layoffs which reduce property values further and create a self-reinforcing feedback loop.

Don't ignore this topic because it has long-term implications for how cities will evolve moving forward.

And San Francisco provides the perfect case study.

"San Francisco is the most challenging office market today partly due to the fact they became oversupplied very quickly when the model changed to hybrid.”

"The pandemic has already eroded the city’s business and sales taxes, both of which are reliant on downtown commuters. A hit to the city’s biggest source of tax revenue—property taxes—could be even more devastating."

"a slew of office leases signed at the height of the city’s economic boom are poised to expire over the next few years, further inflating vacancies and diminishing what the office towers that draw the city’s skyline are worth"

"A report published in November by the Institute of Taxation and Economic Policy (ITEP) calculated that San Francisco could see a short-term decline in commercial property values of up to 43%, the highest projected in the study."

So just to be clear here, any city facing a large shift to remote work is going to face a tough few years ahead.

The lesson for cities is that effort must be made to convert city economies into remote work meccas. To break free of this doom loop, they must incentivize remote workers to come live and work within city limits. Cities should also work with corporate real estate owners to convert properties to residential units, public attractions, and design tax-incentivized shorter-term leasing contracts.

Or alternatively, cities should abandon remote work from a policy perspective and invest in localized manufacturing. Otherwise, the negative feedback loops will continue to spiral.

The point is that cities need to find new ways to get people into cities on a more permanent basis.

This looming crisis presents opportunities for people willing to position themselves to take advantage of the new city narrative. That narrative: remote work will force the decline and then repurposing of corporate real estate.

#2 What's With All The Noise About Quiet Quitting?

Quiet quitting is "the idea spreading virally on social media that millions of people are not going above and beyond at work and just meeting their job description." Said differently, people are doing the bare minimum to keep their job and nothing more.

What's interesting about this hot social issue is that the idea of quiet quitting shows influence is reversing from company to employee.

"Quiet quitters" make up at least 50% of the U.S. workforce". ie: The majority of people are considered disengaged from their jobs.

So why is this important to the aspiring Sovereign Individual?

Because it's being used as logic for a return to office work and that would impact lifestyle flexibility. The logic is that remote work kills culture and productivity. And maybe remote work does kill traditional forms of company culture. But the actual root causes of lost productivity and quiet quitting tell a different story.

"Disturbingly, less than four in 10 young remote or hybrid employees clearly know what is expected of them at work."

"The overall decline was especially related to clarity of expectations, opportunities to learn and grow, feeling cared about, and a connection to the organization's mission or purpose -- signaling a growing disconnect between employees and their employers."

"It's clear that quiet quitting is a symptom of poor management."

"Gallup finds the best requirement and habit to develop for successful managers is having one meaningful conversation per week with each team member -- 15-30 minutes."

The real engagement problem is bad management communication skills and remote work makes that preexisting problem worse.

For remote work to be successful, managers need to adopt more effective communication techniques. If they don't, they'll continue to struggle to retain their employees. No amount of in-person culture will fix poor communication of expectations.

The rapid increase in quiet quitting also signals that we should expect these disengaged workers to fill their free time with alternative sources of income and engagement. That means we should expect a rapid increase in quarter-time jobs around the corner.

The bottom line: if you're a quiet quitter, you could be making efficient use of your "extra time" on the company's clock.

#3 State Of Digital Nomads

This is a fun study based on data pulled from Nomadlist.com. It's by no means a definitive resource on Digital Nomadism, but it does offer some really interesting insights.

It's mostly a visual report but I'll cherry-pick a few of the data points I found most interesting below.

  • The average age of digital nomads on nomadlist was a little surprising. 33 years old.

  • The overall preferences of men and women seem to differ more than I'd have thought.

  • Overwhelming proportion of nomads are men. ~80% vs 20%

  • Job variance between men and women was considerable. Software vs Creative

  • The matchmaking data went off the rails at the end. ex: women seem to find men in relationships more attractive

This is interesting stuff but not intended to shape your worldviews. 

The takeaway here is that age isn't a barrier to a remote lifestyle. There are a growing number of locations that are becoming ideal spots for working remotely. And the type of person that pursues these remote lifestyles has a growing range of interests and preferences.

Rapid Fire

Extras

Food for thought on the role of "ambition" and leaving life's default paths. 

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