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Jonathan Price – CRE & Flex Expert
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New Yorkers are expected to cut their time in the office by almost half, as well as spend less money in the city according to a new survey.
Nicholas Bloom, an economics professor at Stanford University, expects that the average New York City office worker will reduce their time in the office by 49% and reduce their annual spending by $6,730.
This highlights an impending downside that the adoption of hybrid and remote work may have on the city’s economy.
During the “Future of New York City” conference at the Federal Reserve Bank, Bloom added that working remotely may cost New York around 5% to 10% of its population in the city, which may lead real estate values to drop.
“People used to live in cities because they had to come into the office five days a week,” said Bloom. “If they don’t have to, and they want a backyard, they move out to the suburbs. We see that across cities, and call it the doughnut effect.”
New York follows San Francisco in the reduced time spent in the office, but it ranks first in decreased spending.
Data from Kastle Systems shows that office occupancy in New York sits at 36%, which is below the 40% ten-city average.
While business leaders and politicians, including New York City Mayor Eric Adams, have been pushing for employees to return to the office, workers are expressing their desire for permanent flexibility. Without it, some have threatened to quit, which would only further tighten the labor market.
However, Bloom insists that the pivot to hybrid work will not “kill the office” and that productivity will see an increase as a result.
“Employers value working from home — they really like it, as it’s a huge hiring and retention policy,” said Bloom. “Why wouldn’t you do something that makes them more productive and happier?”
