Remote work is not just affecting how people do their jobs—it is also starting to affect how communities live outside of working hours.
- As more companies opt to allow remote work for at least part of the week, city business districts are starting to look more desolate.
- However, the business that corporate workers once brought to big cities is not going away—it has just moved with them to residential areas.
- While downtown locations and commercial real estate are suffering from the lack of customers, local gyms, restaurants, and neighborhood cafes are booming.
Why it’s news
American cities have not gone away—they have just relocated. While bustling downtown city centers are quieter than before the pandemic, neighborhoods across the U.S. are coming to life with an influx of customers. The focus of urban activity has shifted from business districts to residential areas, though many of these residents remain in cities like New York or Chicago.
According to the University of Toronto city-planning specialist Richard Florida, this is a return to what cities were initially. “We’re now back to what cities really are—they’re not containers for working. They’re places for people to live and connect with others,” Florida says.
As it became more obvious that remote work would remain, some analysts predicted that cities would disappear altogether as residents moved out to the suburbs in search of more space and a lower cost of living. However, many residents have remained—they have just shifted their habits.
While some residents left big cities searching for more space, many have remained. The city population decline has slowed or reversed in many cases, The Wall Street Journal reports.
Remote work has brought numerous benefits to residential zones. People working from their homes are more likely to frequent local shops, restaurants, gyms, and bars, boosting the area’s economy.
According to data from Placer.ai, foot traffic in downtown Los Angeles is 30.7% below pre-pandemic levels. However, in residential areas near Los Angeles, like South Glendale and Highland Park, foot traffic is higher than before the pandemic, The Wall Street Journal reports.
Additionally, food-delivery data demonstrated the shift in where employees are doing their work. In 2019, almost 95% of all New York City corporate lunch orders were sent to the city’s business district. This year, that number has dropped to 85%.
However, this decline in activity in the business districts does not mean that residents are leaving the cities. Renal data shows that there is still a strong demand for places to live in the city. Rental prices are up due to the high demand for these locations.
Though cities like New York and Chicago still have residents interested in living there, downtown areas face challenges with the customer shift. Shops and restaurants have less foot traffic than before the pandemic. Meanwhile, commercial real estate faces challenges due to fewer interested renters.
While residential areas are enjoying a boost in their local economies, it is unlikely to be enough to offset the decline in tax revenue from the emptying of business districts.