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Good evening everyone:

There has been a good amount of speculation about the extent to which “the future of work” will inevitably mean the decline of cities. People moving to the Hamptons or Traverse City, working from their home study, telecommuting rather than braving the drive . . . . all sapping the energy of downtown vitality.

Richard Florida – he of The Rise of the Creative Class and The New Urban Crisis, who is now on the faculty of the University of Toronto’s School of Cities – recently penned a piece for Bloomberg Cities that suggests the reality may be more nuanced than that. His thesis is that urban cores have always been, and will increasingly be, spaces in which to live and socialize, not just work. The piece is long, so I thought I might provide a Readers Digest version – Florida is always worth paying attention to.

He notes that four signals of changing patterns are all too real.

First, the convergence of COVID-precipitated work-related vectors are, in fact, posing a serious challenge to office occupancies – in the nation’s ten largest cities, the occupancy of downtown offices is less than 50 percent of pre-pandemic levels.

Second, hybrid and remote work will, indeed, take a long-term toll. Florida cites a project by Stanford professor Nicholas Bloom that 20% of workdays will be done remotely, up from 20% pre-COVIC, and that as much a 50% of “knowledge and professional workers who occupy downtown offices” will work remotely part of the time.

Third, work that requires focused, non-interpersonal attention can often be accomplished more efficiently when not interrupted by the ebb and flow of an office environment; coupled with the elimination of travel time, this can contribute to higher productivity.

And fourth, COVID has reversed the trend of suburban communities and smaller cities losing workers to the center city – indeed, suburban work locations, Florida writes, “have generally seen a greater return to work than central business district office locations [particularly] in mixed-use suburbs . . . that are home to large concentrations of professional and knowledge workers.”

But, some of the countervailing considerations paint a less dire picture for central business districts.

First, COVID accelerated a set of changes in downtowns that were already underway. Iconic downtowns are far more than offices, as we have witnessed so powerfully with the return of street vitality in Detroit through shops, restaurants, public squares and waterfronts, athletic activities, musical venues, theaters, residences, schools and countless other activities.

Second, young people continue to be attracted to central cities and the neighborhoods that lie on their shoulder, even as the very real challenge persists of retaining those residents as they form families and make school decisions.

Third, many downtown residents are themselves reverse commuters and hybrid workers – living downtown and working outside it. These people still want to be downtown even if they aren’t working there and/or are spending less time in offices. Florida notes: “In cities across the US, demand for downtown housing is significantly out-performing housing in other urban neighborhoods, according to a detailed study by Moody’s Analytics.”

Fourth, older downtown office buildings and hotels present an opportunity to convert outdated structures into affordable housing and mixed-use development.

Fifth, downtowns continue to be powerful magnets of personal and business-to-business connection. Florida observes:

Even where offices remain relatively empty, downtown neighborhoods are abuzz with all manner of social activity. Restaurant reservations are at 98% of their pre-Covid levels; attendance at arts, theater, and cultural venues has similarly rebounded; and basketball and hockey arenas are full. These social and connective functions are precisely what people value most in their downtowns.

And sixth, work that requires the kind of innovation, collaboration, and creativity generated by face-to-face interactions is what “knowledge” workers most want from an office.

In sum, Florida concludes, central cities will be places in which office life, rather than dominating the environment, become just one dimension of a diversified, balanced set of experiences.

If we could only solve the shrinking tax-base problem – actually, Aaron is working on that.

Rip

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