The article frames the historically high office vacancy as crushing these businesses that catered to an office crowd.
I could imagine a similar article that would frame the rise of work from home for increasing effective take home pay of employees, reducing carbon emissions and increasing available employment opportunities which is all great for workers.
Or maybe WFH is a race to the bottom in terms of wages since companies no longer have to pay a premium for local workers in a high cost area.
Or maybe WFH is helping create new businesses as they can source talent from around the country.
Or maybe fewer workers means that public transportation services are at risk of being defunded which would hurt the most vulnerable.
Or any number of other effects from a changing work environment. My point is that these kinds of articles are arbitrary and uninteresting.
> In New York, which counts on office properties to generate about 10% of its tax revenue, the comptroller warned last summer that the city could face a shortfall of more than $1bn in the coming years under a doomsday scenario.
A city serves its people, not the other way around. If a city offers too much office space, it should adjust. If it fails to do so, it'll have to learn to do more with less
I think the article hits the most important part in all this by NOT talking about WFH and instead expanding on how these buildings are highly leveraged in such a way that capital groups are disincentivized to revive the area via lower rents.
Instead ownership is passed to equity groups willing to wait out a downturn - in this case selling interests in a building for $1.
This isn't about handouts its about understanding the actual economic reasons and considering appropriate policies that may deter what has become a major societal drag in some cities. It is not a handout to pass laws that improve society at the cost of increasingly parasitic corporate interests.
Wasn't one dollar it was one dollar plus assuming an obligation of $45 million dollars for 29% of the deal. If the other 71% is valued the same the building as lost half its peak value.
> My point is that these kinds of articles are arbitrary and uninteresting.
I agree with all your other points, but I do still find it interesting to learn more about the external consequences of this shift "from the ground level" (aptly, where most of these restaurants which cater to office workers operate), so to speak.
Sure I agree it is interesting to some extent. The problem is these articles are written very emotionally as advocacy pieces and leads to stupid laws that basically amount to handouts to certain groups or regulations to prevent change in a neighborhood
I'm near this spot. All the building here that continued mostly nonstop even after the mortgage bust in 2008-09. There are so many vacant retail spaces all around midtown. Everything retail and consumption is shrinking. Even bars are closing. Another thing that hurt this small shop is Whole Foods opened up a store with a huge eating space two streets and an avenue away. Another thing that hit this guy was when Credit Suisse had some kind of crime or scandal and they totally shrunk their presence right around his shop.
Are we supposed feel obligated to return to the office just to supper lunch business? There’s no reason for knowledge workers to be mandated to be in an office X days a week.
Yes. We are all supposed to take one for the team to support businesses, especially that sacred cow, small business…
I’m not sure under what extraordinary circumstances businesses are expected to take one for the team for our and society’s benefit. Perhaps we might even find out, one day…
This is not the first time that the whims of the rich have gutted cities. Compared to the explosion of suburbia and white flight in the 50s-80s, the current situation is much less dire.
My hometown of Minneapolis lost 30% (!!) of its population between 1950 and 1980. The only major difference now is that rich people are losing money instead of making more of it.
I would love to see data on what the impact of more local restaurants, cafes and delis are seeing. As we work from home, we are spending more time in the actual places we live. This but paints one picture, and maybe the reality is that we don't need a sandwich shop on every single block.
I think to some degree cities painted themselves into this corner. Various zoning restrictions preventing the densification of residential within the city meant that they were relying on offices etc. to draw in the crowds to support the rest of the city, as the workers in those offices (and in fairness, the other businesses too) were forced to live further and further out.
Since now the apparent need to commute in has been much reduced, now is a comparatively poor time to be trying to operate a sandwich shop in the CBD as a result. But it might be a relatively good time to be operating one in the suburbs or feeder towns (inflation might deflate that a little).
Back in around 2017, I remember looking at the local council's development plan for the city I worked in until 2021 - they had planned for office development for 100,000 more workers, and accommodation for 20,000 more people. Where were the net 80,000 extra people going to live? The residential property situation in the city was already popularly described as a crisis, and unsurprisingly, it only continued to get worse until 2020, with the only thing that's been slowing it since then is people leaving the city to work remotely.
I’m likely eating more sandwiches for lunch since starting working from home.
I can’t see any reason why I’d go out to buy one for $10 instead of making one for $2-3 at home at any frequency anywhere near as often as I bought lunch when working from the office. That sandwich shop needs me to buy $10 sandwiches and I’m not going to walk past my fridge to go do that very often.
I often wonder if this scenario is more common that not... if you look across decades, it's not clear to me that thriving downtowns in large cities is actually the norm. For example, I think about how many cities I was in as a traveling consultant between approx 2006-2015 with plenty of available (and likely overpriced...) class A space and empty suburban office parks that were there as a tax scheme. I moved to small town American in 2010 because it was clear that remote work would take off eventually... even if Covid hadn't come along, wouldn't there have jus been a more gradual decline of these downtown office spaces as more companies figured out they didn't need the overhead?
Readit News
I could imagine a similar article that would frame the rise of work from home for increasing effective take home pay of employees, reducing carbon emissions and increasing available employment opportunities which is all great for workers.
Or maybe WFH is a race to the bottom in terms of wages since companies no longer have to pay a premium for local workers in a high cost area.
Or maybe WFH is helping create new businesses as they can source talent from around the country.
Or maybe fewer workers means that public transportation services are at risk of being defunded which would hurt the most vulnerable.
Or any number of other effects from a changing work environment. My point is that these kinds of articles are arbitrary and uninteresting.
> In New York, which counts on office properties to generate about 10% of its tax revenue, the comptroller warned last summer that the city could face a shortfall of more than $1bn in the coming years under a doomsday scenario.
A city serves its people, not the other way around. If a city offers too much office space, it should adjust. If it fails to do so, it'll have to learn to do more with less
Instead ownership is passed to equity groups willing to wait out a downturn - in this case selling interests in a building for $1.
This isn't about handouts its about understanding the actual economic reasons and considering appropriate policies that may deter what has become a major societal drag in some cities. It is not a handout to pass laws that improve society at the cost of increasingly parasitic corporate interests.
I agree with all your other points, but I do still find it interesting to learn more about the external consequences of this shift "from the ground level" (aptly, where most of these restaurants which cater to office workers operate), so to speak.
Credit Suisse had a crisis of confidence and collapsed.
https://www.reuters.com/business/finance/credit-suisse-how-d...
https://www.ips-journal.eu/topics/economy-and-ecology/the-fa...
https://www.economicsobservatory.com/why-did-credit-suisse-f...
https://cepr.org/voxeu/columns/global-lessons-demise-credit-...
I’m not sure under what extraordinary circumstances businesses are expected to take one for the team for our and society’s benefit. Perhaps we might even find out, one day…
My hometown of Minneapolis lost 30% (!!) of its population between 1950 and 1980. The only major difference now is that rich people are losing money instead of making more of it.
Since now the apparent need to commute in has been much reduced, now is a comparatively poor time to be trying to operate a sandwich shop in the CBD as a result. But it might be a relatively good time to be operating one in the suburbs or feeder towns (inflation might deflate that a little).
Back in around 2017, I remember looking at the local council's development plan for the city I worked in until 2021 - they had planned for office development for 100,000 more workers, and accommodation for 20,000 more people. Where were the net 80,000 extra people going to live? The residential property situation in the city was already popularly described as a crisis, and unsurprisingly, it only continued to get worse until 2020, with the only thing that's been slowing it since then is people leaving the city to work remotely.
I can’t see any reason why I’d go out to buy one for $10 instead of making one for $2-3 at home at any frequency anywhere near as often as I bought lunch when working from the office. That sandwich shop needs me to buy $10 sandwiches and I’m not going to walk past my fridge to go do that very often.