Remote Work Is Killing US Cities?

Remote work is hurting US cities because it is affecting the amount of tax revenue they receive from office spaces which in turn limits the capital they can pour into vital municipal services.

By Kristi Eckert | Published

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The rise of remote work has worked out exceedingly well for a great number of people. Individuals who still work remotely are gleaning benefits like increased time with family and the complete absence of commuting costs. However, for US cities, the rise of remote work isn’t working out well at all and is, in fact, tearing into the very fabric of how they function. 

To put it simply, big cities rely on office workers far more than the average person may realize. New York City, for instance, relies on the taxes it takes from behemoth corporate offices to pay for its municipal services. However, New York is still struggling to fill vacant offices. 

And the problem isn’t getting better. Big corporate behemoths, not able to fill up their massive pre-pandemic spaces, are opting to downsize to smaller venues. Or worse yet, pack up and leave altogether. As an example, New York Magazine highlighted the Meta let go of a whopping 450,000 square feet of its New York City office space. 

Furthermore, because there is too much supply and not enough demand in terms of available office space, it’s driving prices for these spaces lower. Lower prices mean that even if the spaces are filled, the owner will be paying lower taxes on them. Further driving down tax revenue for integral municipal services. 

To illustrate just how empty some cities are, data collected by Insider shows the decline in cellphone usage in major Us cities’ business districts. The data compares present usage to usage from 2019. According to the statistics, cities like Atlanta, Chicago, Portland, and San Francisco have less than half the usage numbers now than they did in 2019. 

Moreover, in New York City, about 30% of employees are still engaging in remote work in some capacity, per a report from the National Bureau of Economic Research. The bottom line is that this is bad news for cities on a fundamental level. Lack of tax profits from corporate venues is stifling the amount of available capital for integral municipal services, increasingly threatening vital city functions like adequately running transportation and quality public school systems. 

It’s scary to examine the evidence of how remote work is negatively impacting the US’s most prosperous cities. However, examining the reality also gives rise to multiple questions: Is there a fix? Is remote work a temporary thing that will die off in time? And if not, will once vibrant cities fall to ruin? 

The answers to these questions are still a bit hazy. According to New York Magazine, some individuals are absolutely convinced that remote work is simply a societal fad that will eventually dissipate entirely (or almost entirely). Whether that is plausible or not, only time will reveal. 

The only potentially viable solution that is circulating presently is to turn vacant office spaces into residences. But this “solution” does not come without a laundry list of caveats. A big one is that many buildings are not properly zoned for residential occupants. 

And as far as the last question goes: will the cities fall to ruin? That’s a little extreme. But if office spaces do not recover adequately before funding from the American Rescue Plan runs out, then there will most certainly be a visible decline, and this will be especially evident in the municipal sectors. 

Overall, remote work is great for a lot of reasons. But unfortunately, those reasons largely do not apply to major cities. The major takeaway here is that something has to give, or an alternative solution has to be found sooner rather than later.