Part of the Disruptors Series
Jan. 1, 2021
In late August 2020, Pinterest paid nearly $90 million to terminate the lease on a half-million-square-foot space it was planning to expand into in San Francisco. A few weeks later, Twitter announced it was looking to sublease 100,000 square feet of its San Francisco office space. The situation was similar in Seattle, where nine out of 10 office desks sat empty as summer turned to fall.
By October of that year, office space available for sublease in New York City had risen 50 percent since the start of the pandemic, leading local real estate firms to fret over the future viability of the market. Manhattan's 400 million square feet of office space provides 10 percent of the city's tax revenue, making the viability of the municipal budget a question mark as well.
Then there are the nearby restaurants and shops that cater to office workers, and families whose livelihoods depend on them. Not to mention the already underfunded transportation systems predicated on rush-hour usage.
Leases for commercial office spaces typically run for five years or more, so with a COVID-19 vaccine likely around the corner, many hoped things would be back to business-as-usual by the end of 2021. But the exodus is not just about the pandemic.
The COVID-19 crisis has merely accelerated a transformation of work life that has been decades in the making. The near-total digitalization of many office activities, coupled with the advent of 5G networks, have made fully remote work seem like a feasible option for many employers, and there' s now an excuse — or permission, if you will — to finally make the leap.
"The technological capacity is available, but it's as if we've been stuck in a 20th-century habit of doing things," says Thomas Fisher, director of the Minnesota Design Center at the University of Minnesota. "The pandemic is showing us that we don't need to work that way anymore. It's going to fundamentally change the urban landscape as we accelerate into the digital economy."
Pandemic or not, Facebook says it expects half of its employees to work remotely by the end of the decade. A survey of Microsoft employees found that seven in 10 desire to continue working from home after the pandemic ends.
In a nationwide survey of employers, 94 percent reported that working from home had not decreased productivity; 27 percent said productivity had improved, 73 percent envisioned at least one in four employees working remotely indefinitely, and nearly half of those expected 50 percent of their employees to keep working from home even when it's safe to return to the office.
What might this exodus mean for the future of cities? Fisher has been vigorously debating that with his planning colleagues and is currently working on a book that will explore the possibilities of this new world in detail. He's also leading a series of workshops on the topic at the Minnesota Design Center — remotely, of course.
In his crystal ball, he sees office work dividing into two buckets: head-down activities (work done alone) and head-up activities (collaboration). Offices of the future will be geared to accommodate the latter, while the former will mostly be accomplished remotely. He predicts office footprints will shrink, and the resulting shift in land-use and transportation patterns will create new opportunities to solve age-old urban problems.
Central business districts often lack housing, for instance, so it's possible that some of the empty office spaces will be renovated for residential use. That will require massive investments by building owners, which may only be possible with government incentives, as well as zoning changes — a long-term endeavor, in other words. But Fisher sees a short-term opportunity as well, which he's been encouraging municipal officials in the Twin Cities to consider. "We expect a rise in homelessness as eviction moratoriums end, so we're going to have this paradox of a lot of empty heated space and a lot of people who are freezing outside. Why don't we figure out a solution?"
Cities may see shrinking demand for physical office space and college campus space, and will need infrastructure upgrades to accommodate increased online traffic.
Fisher says the impacts of workplace digitalization will be paralleled and reinforced by the digitalization of entertainment, education, and shopping. The online purchase and delivery of basic goods will become more fully entrenched, with brick-and-mortar stores devoted mostly to so-called experiential retail. Combined, these pandemic-catalyzed trends will result in a lot of obsolete asphalt. So even if it takes a few more decades for autonomous cars to take over roadways, the ideas for repurposing parking areas that have circulated in recent years may be implemented sooner rather than later.
"A lot of parking requirements are based on the Christmas rush, but that may be an increasingly online phenomenon, in which case we probably have way, way more parking than we ever need," says Fisher, citing alternative land uses for the excess asphalt, from affordable housing to urban forests.
The more time people spend at home, he believes, the more they will advocate for a range of activities within walking distance, whether green space or entertainment options. The mixing of uses will start organically. "Corner coffee shops may morph into micro-coworking spaces with good coffee," he suggests. Fisher sees the need to rethink the very concept of zoning that has underlaid urban planning for the past century.
"What does land use mean anymore when people are living, working, shopping, learning, and producing things out of their homes? What is a residential district anymore, as opposed to an industrial district or a commercial district or an office district?" he asks. "We've allocated land into these zones that may not match how people are actually living and working in the future. We're going to need a more flexible and inclusive system that will allow people to adapt — that's the opportunity."
Or temporary shift to remote work?
Of course, no one can foretell how these changes will play out (Fisher is the first to acknowledge that his theories are more thought experiment than fact). But history has shown that pandemics inevitably bring about significant changes in land use and social fabric.
In the Middle Ages, the bubonic plague upended the feudal system as labor became scarce — half the workforce perished in much of Europe, after all — giving the remaining serfs newfound leverage over their lords and sparking a movement toward city-based commerce that eventually blossomed into the Industrial Age. The cholera epidemics of the 19th century accelerated the development of indoor plumbing and citywide sewer systems. The 1918 flu pandemic encouraged suburbanization, as people realized that social distancing was easier with a private vehicle and a single-family home with a big yard.
Rogier van den Berg, director of urban development at the World Resources Institute's Ross Center for Sustainable Cities, agrees that the pandemic will reinforce and accelerate existing trends of digitalization, but he's not confident we'll see the massive shift to remote working — and all the related changes in land use — some urbanists predict. People may be loving their work-from-home freedom in the short term, but he questions whether it is sustainable in the long term. The technology may be there, but is the human species really cut out for a life in bedroom slippers?
Some pundits have gone so far as to suggest that the normalization of remote work will lead to the decline of large cities, as urbanites become untethered to their old offices and flee to less populous (read: less expensive) locales. A Politico article titled "The Death of the City" (tagline: "teleworking, not the coronavirus, is making urban living obsolete") claims, for example, that "For the first time since the earliest cities emerged in the Fertile Crescent some 6,000 years ago, concentrated urban centers no longer have a monopoly on the economic and cultural connections that make civilizations tick forward."
For van den Berg, that's a bit extreme. As an architecture student in the 1990s, he recalls Photoshopping corporate executives into beach scenes with palm trees. At the dawn of the internet, "we thought everyone would soon be working remotely," he says. But the renderings never fully meshed with reality. "No matter what sort of freedoms technology provides, you can't beat the advantages of being face-to-face, that quick spinning around of ideas that makes city life so attractive." His point is that the densely built downtowns of metropolises, and the office workplaces that typically comprise them, provide a sort of human alchemy so valuable to society that decentralization will never overcome the inertia of agglomeration.
"Work is not only about efficiency; it's a social thing," says van den Berg. Not just for the high-paid creatives who we associate with open-office culture, but for the back-office bookkeepers and support staff. "There's a buzz in the mainstream media that cities are dead, but I totally believe in the power of cities — they've overcome so many complex issues in the past and have always found ways to reinvent themselves."
Rather than a revolution, he sees more of a subtle pendulum shift. Plans for giant new corporate campuses, à la Amazon's HQ2, may be paused for the foreseeable future. Corporate real estate managers may be more likely to invest in suburban areas and second- and third-tier cities where the return-on-investment threshold is lower. There may be a balancing out of the trend toward city center development, with renewal of the dispersed office parks that dominated corporate life prior to the '90s. But van den Berg doesn't see any of that killing the buzz of the big city.
He ran a planning and consulting company in Rotterdam at the time and studied the conversion of office space to residential uses, which became fairly common in some European cities during the Great Recession. "It did those cities a lot of good," he says, but it didn't cause a drastic shift in the urban fabric. In fact, he admits that the vast majority of grand ideas that his firm proposed post-recession never came to pass — largely, he says, because "people tend to be very entrenched in the path of least resistance. I don't want to be too old-and-wise here, but I've seen these cycles before. The pandemic is an important moment in time, but it's not going to redefine the city as we know it."
Or maybe it will, and we just have no idea how yet.
Flexible and equitable planning
Technology is changing the nature of workplaces, but Oliver Schaper, a design director at Gensler focused on how technology is changing urban environments, thinks it's also important to look at how the planning and design process is changing as a result of advancements in technology; this too has an impact on the built environment.
"Just as increased digitalization is changing the way we live, work, and move around, it is changing the way that planners and architects conceive of the built environment. In these parallel streams, one influences the other in a very complex way," Schaper says.
For instance, building information modeling, or BIM, can make it easier to design buildings that are able to adapt to changes in use.
Gensler recently worked on a parking garage project in Cincinnati that was deliberately designed to transition to office space or residential in the future, a notion that would have been unthinkable in low-tech times. BIM provides a complete "digital twin" of a building, says Schaper, which is not only used in the design and construction phases, but throughout a structure's operational life. Energy consumption, environmental metrics, and patterns of human activity in the space can all be tracked and analyzed to improve efficiency and promote desired outcomes — such as social distancing.
He says that in the not-too-distant future, entire neighborhoods and cities will also be planned — and tweaked — using digital twins, representing a point-of-no-return that must be approached with an eye toward equity.
"Increased digitization carries the promise of being able to make more informed decisions. But it also creates a dilemma. We increasingly have access to real-time data from sensors spread throughout buildings and cities — the question is, who owns the data? Who controls it? Who can work with it? These are things we need to be actively thinking about."
Questions of equity, whether in the deployment of smart- city technology or remote working and learning access, hang over our digital future like a haze. It's important to keep in mind, for instance, that the shift to digitalization of office jobs impacts everyone, not just businesses and white-collar workers. Any potential benefits of working and learning from home are nonexistent for the estimated 19 to 38 million Americans who lack access to a high-quality internet connection or whose jobs cannot be done remotely. If digitalization of work life does bring significant change to cities, it will be important to ensure that the benefits are shared and the downsides mitigated. Internet infrastructure, housing and transit options, and location and availability of services will remain crucial for everyone, but especially people who must commute to work and access services like health care and healthy food options in person.
Our digital future is one we can scarcely imagine today. How can we plan for what we cannot see? Like Fisher, Schaper questions whether traditional planning strategies are sufficient and suggests a scenario planning approach, in which "the options increase the farther you go into the future," as opposed to "the classic approach where you think about a series of alternatives and then pick one plan to implement."
He doesn't know what's coming, but he's certain about one thing: "Flexibility is going to be paramount in the future."
Updated January 10, 2022.