What’s going on:
The shift to remote work led to a dramatic decrease in the number of people commuting to major cities for work. San Francisco, a city that has felt the extreme impacts of remote work, saw a drop of nearly 210,000 people during a typical workday in 2021 compared to 2019, according to The Mercury News. Prior to the pandemic, the average population in San Francisco during the weekday work hours was over 1.1 million. Likewise, Manhattan’s daytime population dropped 24% between July 2019 and July 2021, according to Propmondo.
Why it matters:
With more people working remotely, the need for physical office spaces has decreased in many large metro areas within the U.S. This trend has impacted the commercial real estate industry.
Additionally, businesses in these metro areas that rely on the influx of weekday office workers, such as restaurants and shops, have felt the economic impacts as well. However, there are signs of recovery, with more workers gradually returning to the office. Several large companies in San Francisco, New York, and other areas that have been impacted the hardest are now adopting hybrid work policies. This has contributed to a slight recovery in downtown markets within the commercial real estate industry.
How it’ll impact the future:
While some companies are calling employees back to the office, the trend toward remote work seems very likely to continue, at least in the form of hybrid work. This trend could lead to changes in where people choose to live and work. If remote work persists, workers may opt to live in less expensive areas, away from major downtown areas. This could lead to an increase in the populations of these areas, as seen in Alameda and Contra Costa counties, which added tens of thousands to their workday populations between 2019 and 2021.
