How has real estate been impacted by the great expansion of work-from-home opportunities?

Q :How has real estate been impacted by the great expansion of work-from-home opportunities?

A :The work-from-home trend (WFH) is largely a byproduct of the pandemic economy. Offices emptied out in 2020 when a new and deadly virus spread throughout the country. Organizations moved quickly to remote work in an effort to reduce inflection levels, hospitalizations and fatalities. While not particularly common, office employees sometimes worked remotely before the pandemic. The Census Bureau estimates that “between 2019 and 2021, the number of people primarily working from home tripled from 5.7 percent (roughly 9 million people) to 17.9 percent (27.6 million people).” Where we are today is not especially clear. As the pandemic fades, employers often prefer to have workers return to established office hubs. Some major companies have asked workers to be at the office at least three, four and even five days a week. Alternatively, Yelp found that when its re-opened offices on a voluntary basis less than 2% of its workspace was actually used. The company has now largely gone to remote working arrangements for all employees. “Forcing people back to the office,” said Jeremy Stoppelman, Yelp Co-founder and CEO, “even in a hybrid model, is the wrong approach. It requires employees to live near an office, potentially driving up their housing costs, and to endure unpaid time spent commuting. It also means hiring is artificially constrained by geography, translating to a smaller and less diverse pool of talent.” What about the WFH impact on real estate? There are several. First, working from home is plausible for many employees without major additional costs. Most office equipment uses standard Internet and electrical connections and does not take up gobs of space. However, many office employees will want separate and quiet work areas to maximize productivity. This increases demand for larger homes vwith extra bedrooms and other spaces that can be turned into offices. Second, for those with “flexible” or “hybrid” work schedules, the need to remain near formal office settings continues because of the need to go into offices several days a week. Third, there are new housing options for those who can work remotely on a full-time basis. Such newly-liberated remote employees really can work 1,000 miles from the office – and more. Fourth, large numbers of office workers will likely come back to office centers. As this happens, downtown office cores will see renewed commercial activity for restaurants and retailers. Some older office space will likely be converted to residential use, increasing 24-hour activity. Fifth, now-distant locations will be “nearer” in the sense that with less office usage there will also be fewer commuters. Commuting as a result will be quicker. Sixth, the trend toward fully remote and hybrid work will raise new management issues. How will productivity be measured? At what point is computer oversight intrusive and a privacy issue? Will remote workers be paid less on the basis of local living costs if they move to areas with lower costs? For more details, speak with managers, co-workers and union stewards. Look for job ads that feature remote opportunities if that’s what you want.