New York: Remote work and expensive rent empty the city – 04/19/2023 – Lúcia Guimarães

Remember the Big Apple, the “city that never sleeps”? Well, this metropolis discovered the privilege of waking up later and skipping the subway to work. The Covid pandemic, which has revealed the viability of remote work far and wide, has proved especially decisive for a city whose economy has an unhealthy reliance on real estate tax collection.

The number of empty offices in New York broke a record in the first quarter of 2023, and the average face-to-face occupancy hovers around 50%. Optimism with the relaxation of pandemic restrictions, in 2022, soon took the cold shower of the explosion in the price of residential rents —the average is US$ 4,495, or R$ 22,800— and the increase in interest rates on financing the own home. There’s no rosy backdrop painted by the real estate lobby —a friend of Mayor Eric Adams– capable of putting lipstick on this pig.

Adams believed he could reverse a global trend and declared imperiously, shortly after taking office, in January 2022, that New York could not be managed from home: “You can’t stay in your pajamas all day!”, he complained. New Yorkers voted for pajamas, and today the city hall cannot fill 25,000 vacancies in the municipal civil service – some secretariats have a deficit of 20% of the workforce.

Adams admits a retreat in the demand for full-time face-to-face work in the face of competition from the private sector, which is increasingly forced to accommodate remote work to attract talent.

Historically, pandemics have resulted in advantages for surviving workers. The decline of feudalism in the Middle Ages was hastened by the disappearance of nearly half of Europe’s workforce with the bubonic plague. Pandemics also foment social uprisings, as seen in the demonstrations that took place in the wake of the death of George Floyd, in the middle of the 2020 lockdown. Last year, the pace of union membership in the US increased by 57%.

The favorable labor market and the shortage of employees in sectors such as health and education facilitated bargaining power – the power to work in your pajamas for a week or two. “Friday at the office is dead forever,” said an executive at Vornado, the company with the second-largest portfolio of commercial properties in New York. “And Monday isn’t going well.”

The plan to tackle the housing shortage by converting commercial buildings into residences and encouraging mixed use of neighborhoods, as is the case in Rio de Janeiro, faces cost and legal complications in New York. The state government, not the city, regulates building codes.

The signs of a revolution in the culture of work were clear within months of the pandemic. It is estimated that New York has lost up to 300,000 of its 8.7 million inhabitants due to Covid, but the population has grown again. The densest American metropolis, and also the one with the highest cost of living, wasted a chance to plan its reinvention.

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