How Remote Work’s “Zoom Town” Boom Will Change Cities’ Office Markets — Not Kill Them

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The American metropolis isn’t dead; but thanks to dispersed office workers, it’s being entirely redefined.

Before 2020, remote work was growing, but only one in 10 U.S. workers — or fewer — worked remotely full-time. The latest polls say now, that figure is more like one in four — including most workers at enterprise companies like Salesforce and Nationwide — with yet even more working remotely at least part of the time. The shift to remote work isn’t new, but it is moving at hyperspeed. While some heads of real estate and office brokers are dashing to keep up, others are launching innovative solutions and new workspace strategies that marry remote work culture and team work needs.

This shift is also changing our concept of The City itself: In the decade before the pandemic, urban centers like San Francisco, Boston, San Jose, San Diego and Seattle were growing fast, and New York, Los Angeles and D.C. were increasingly expensive — but, workers needed to be there. Now, as remote and hybrid work models disperse workers, and technology bridges teams in lieu of physical spaces, a new segment of the real estate market is booming: Economists are calling them “Zoom towns” — per NPR’s Planet Money, “markets that are booming as remote work takes off.”

According to urban studies theorist Richard Florida and Upwork Chief Economist Adam Ozimek in a recent WSJ op-ed, after the pandemic, the demand for space in office districts is projected to decline by as much as 30%. Some of this decline is happening before our eyes. An estimated 15% of workers have returned to New York City office, while in San Francisco, that rate is even lower. In Downtown L.A., after two decades and $34 billion dollars of dedicated development, the past year brought the closure of more than 100 bars, cafés, restaurants and shops in this one district alone.

And the workers who would’ve inhabited those spaces? Economists say many are headed to Zoom towns.

“Many Americans — especially 30-somethings who remain employed — are ditching their tiny rental apartments in hip districts of expensive cities and moving to buy houses in more affordable cities or the burbs,” Planet Money reports, with the most price competition on the outskirts of metropolitan areas. 

In Bozeman, MT, population 50,000, white-collar workers fleeing pandemic-ravaged cities have driven up home prices by 18%. In the Hamptons, the same phenomenon has jolted the market upwards by 25%. The same can be seen in New York’s Catskills and Hudson Valley; the Hamptons; the Massachusetts North Shore; Boise, ID; Truckee, CA; and towns throughout Sonoma County — places where quality of life is high, the price of square footage is often lower than the city neighborhoods people are moving from, and beaming into work on Slack and Zoom can be book-ended by ski outings or beach strolls — instead of a 45-minute ride on the L train.

The rise of remote work changes what a
metropolitan region is — expanding it in all
directions to encompass not only the suburbs,
but smaller ‘Zoom towns’ a couple hours away.

Buoyed by low interest rates and other pre-existing trends, this exodus from congested urban apartment living — in easy commuting distance from downtown — has spiked the housing market overall. In fact, it was up by nearly a quarter year-over-year as of September 2020 and has continued to climb. According to the Wall Street Journal, as of this week residential home prices have seen an 11.2% year-over-year increase — a 15-year high

But this doesn’t mean cities are dead, Daryl Fairweather, the chief economist of Redfin told Planet Money. While city dwellers who no longer need to commute daily are moving farther from their centers, into single-family homes often on the outskirts or in the suburbs where they have more elbow room, people aren’t abandoning cities entirely. 

First, at least according to data from the United States Postal Service, people who left cities haven’t gone far: Of the more than 12-and-a-half million “change of address” requests processed by the USPS in 2020, around 5% moved out of to a different county. And second, urban theorists might argue it’s time to rethink the metropolis as a concept.

“Remote work severs the age-old connection between where people live and where they work,” write Florida and Ozimek. “For most of history, people literally worked where they lived, on farms and in ground-floor workshops, or at most a short walk away. With the advent of subways, commuter trains and the automobile, the distance between home and the workplace expanded. In fact, the definition of a metropolitan region … is based on its labor market and commuting shed. The rise of remote work changes that equation—not in all sectors of the economy but in more than ever before.”

With the advent of remote teams technology, the physical distance between home and our traditional idea of the workplace is expanding yet again. And at the same time, the distance between home and office are conflating — the two are becoming one. House, neighborhood — these are now “the workplace,” too. Remote work is changing entire metropolitan regions — expanding them in all directions to encompass not only the suburbs, but these smaller communities towns a couple hours away. And before long, they will need workplace amenities. 

“Smaller cities, suburbs and rural areas must also up their games in other ways,” Florida and Ozimek write. “Apartment buildings and condominiums can add workspaces and conference rooms for remote workers to book as needed. Under-occupied suburban malls, abandoned space in office parks and lagging rural town centers can be retrofitted as remote-work hubs.”

Indeed, post-pandemic, people won’t stay in their houses forever, even if they now finally have space for a home office. “Zoom towns,” suburbs and other growing, city-outskirts communities will soon need more shared workspaces where teams can congregate and collaborate, too. Remote work may have drained downtowns of densely packed, full-time office tenants, but it isn’t killing cities — it is just redistributing their inhabitants — and stretching their boundaries.

Read On

For more on Zoom towns and remote work, check out these stories:

Wall Street Journal, How Remote Work Is Reshaping America’s Urban Geography: Smaller cities and communities are turning into ‘Zoom towns’ and competing with coastal hubs as workers move to find more space and lower costs.

NPR Planet Money, Zoom Towns And The New Housing Market For The 2 Americas: One America is living in a housing boom. The other needs support from the government or family for an affordable place to live.

Bloomberg CityLab, The Zoom Town Boom in Bozeman, Montana: Remote workers spur an affordable housing crunch in Montana.

The New York Times, Remote Work Is Here to Stay. Manhattan May Never Be the Same: New York City, long buoyed by the flow of commuters into its towering office buildings, faces a cataclysmic challenge, even when the pandemic ends.