There are so many “Deja-vu all over again” reasons why the rich must not inherit the earth disproportionately nor usuriously rent it to others. The annual January World Economic Forum (“WEF”) known as Davos, serves as latest reminder of what happens when public greenwashing competes with private jet carbon emissions to carpet bomb the physical planet and metaverse with “do-as-we-say-not-as-we-do-ism” leadership sans personal example.
Some of the most visible show-boaters in attendance discard human capital assets like commoditized chum. Starting with Salesforce co-chief executive, Marc Benioff, a Davos denizen whose company announced 8,000 lay-offs, the lived “tech-topia” has disgorged over 200,000 knowledge workers so far starting with 12,000 at Alphabet-Google, 10,000 at Microsoft, 11,000 at Meta, Spotify at “six percent of its workforce”, 18,000 at Amazon, and continues to depress-impress. Worse, these are already “yesterday news” numbers with most lay-off numbers under reported.
According to Stanford Business School Professor, Jeffrey Pfeffer, “stress layoffs” impose a “devastating toll on behavioral and physical health and increases mortality and morbidity substantially… Layoffs literally kill people.” Adding insult to injury, Citigroup is the latest in a growing line of vertical culture companies such as Starbucks, Disney, Goldman Sachs, Google & Salesforce – again, JP Morgan, and Twitter (as part of its new, globally shared, Muskian-inspired ethos) ordering workers back to office towers, compounds, cathedrals and clusters by digital edict.1
Citi focuses on returning “low-performing remote workers” as a form of regressive lifestyle punishment administered by corporatist plantation owners. Empirically proven unsuccessful since the global pandemic economy formally reared its lethal multiple-mutating heads in Q1 2020, hundreds of thousands of recent Tech layoffs reveal these workers are not going back to self-contained vertical office structures and office parks, except sporadically at best. Great Resignation outpatients, whether voluntary or involuntary, prefer more integrated, versatile, multi-purpose and diverse work-life arrangements revolving around personal choice and individual freedom.
It doesn’t take an advanced degree in urban planning, human resources or rocket science to predict what happens when corner office, c-suite and boardroom command & control gravity meets rising factory floor, mail room, and office cubicle aspirational lifestyle helium. This is when “RTO” (return to office) fantasy segues into “OBE” (overcome by events) departing boots on the ground. Fortune reports “workers hate being in the office so much, many would rather get a root canal.”
Layoffs do not save money and often become more expensive than retraining when rehiring happens. Those involuntarily freed from legacy office building commute-contracts and place-constrained relationships increasingly opt not to return, choosing to burrow in their neighborhoods, mission halls, cultural icons, and home offices, locales with higher happiness connectivity indices.
Undergirding Great Resignation causation reality, this year’s Davos plutocrat-illuminati predict that the “dawn of new U.S. Industrial policy”, earning European Union reciprocity and in competition with China, will seed, breed and need more local societal cohesion and social compact adhesion than pre-pandemic practices. Morningstar and ImpactAlpha affirm that 2023 will be the year of developing better global benchmarks and metrics for Social & Human Capital Assets to include hybrid work formulas.
Transforming today’s office diaspora into locally repurposed supply chain manufacturing sites connected to affordable commercially adjacent housing especially in downtown centers can revitalize ghosted cities. Why can’t empty, under-utilized, downtown commercial office towers and adjacent suburban office parks be converted into community owned, affordable & sustainable housing in collaboration with local governments and relevant commercial real estate owners in ways where everyone wins?2 What can’t capital refocus first on community-building that then segues into community wealth-building?3
Axios notes “the persistence of remote work” in cities such as San Francisco and New York with both deriving a considerable part of municipal revenue, “somewhere in the neighborhood of 20% – from taxes tied to the value of office buildings. San Francisco officials have estimated that the hollowed-out office sector could cut city tax revenues by as much as $200 million annually in coming years”.4
Growing hybrid-remote work culture combined with massive tech layoffs means that “the layoffs might be less a problem for tech workers — who can often easily find new, even remote jobs — than for the landlords who once rented their employers’ spaces.”5 Axios summarizes a paper published June 23, 2023, by the National Bureau of Economic Research, “TIME SAVINGS WHEN WORKING FROM HOME”, in mutualist terms where lost city finance receipts from commercial real estate matchup against remote workers saving “around the world an average of 72 minutes in commute time every day in 2021 and 2022”.6 The key data points show that, “the benefits of remote work flow both to employees and employers”.7
Emerging office-housing tandems of stubbornly higher office vacancy rates coupled to disruptive and punitive affordable housing shortages everywhere already produce office-to-housing conversions.8 This stream can become a river feeding a supply and demand ocean with the help of algorithmically caring and enlightened public policy and commercial real estate collaboration. Occupancy rates show that vertical office towers structurally imposing power through wealth culture downwards may never achieve full occupancy again unless and until they are repurposed as affordable, available, sustainable housing. As an example of what’s possible, “In the past decade, Houston has moved more than 25,000 homeless people directly into apartments and houses”.
Local U.S. innovators such as Coop Cincy’s Renting Partnerships9 indicate turnaround formulas pointing the way forward to nationwide conversion of commercial real estate into affordable sustainable housing. In other scenarios, part of each office-to-home conversion would feature a competitive home office with benefits tied to metrics-based work resulting from each participating, converted home office (e.g., lower loan rates, tax breaks, end of year commissions out of profits) linked to neighborhood conference centers for in-person meetings on demand.
Similar to mutualist cooperative housing projects on a grand scale responding to last century’s Great Depression, cooperativizing commercial to home and home-based business conversions by communities and by sector business leaders could include shared services coops and microgrids lowering shared utility costs and other written-off business expenses. Those not only most in need to reside adjacent to employment can serve as the most qualified and willing to light up a city’s unplugged neighborhoods after dark beyond the intermittency of daylight commerce especially when benefitting from a caring and fulfilling municipal ethos.
This approach outlines an achievable, combined stakeholder business and housing recovery portal where reimagined and repurposed “rights” can undo legacy redlined and socioeconomic inequity “wrongs”. If given half a public policy chance, vacant office buildings transformed into inclusive, affordable, sustaining, pandemic-preventative housing tightly links to and supports rapidly evolving hybrid work futures for shared prosperity neighborhoods, townships, counties, states and countries. Accelerating in this direction could impact the global Happiness Index10 where the United States currently does not rank in the top ten. Why couldn’t the aspiring indivisible, E Pluribus Unum nation enjoy civic happiness as a respite from so much recent civil unrest?11 A transcending, transforming culture living and working in dignity displacing fear while onboarding hope becomes a replicable and viral virtuous cycle.
Footnotes:
1 Layoffs by Email Show What Employers Really Think of Their Workers
2 1worker1vote position paper on transforming empty commercial office space, Q3 – 2020
3 “‘You can’t do impact on a passive basis’: Q&A with municipal bond investor Eric Glass,” by Andrea Riquier on ImpactAlpha
4 Axios – 1 big thing: SF, NYC and WFH
5 Ibid.
6 Axios – 3. 72 minutes a day
7 Ibid. (more information below)
8 DC/NYC (more information below)
9 CO-OP CINCY & Renting Partnerships / Rental Equity
10 Happiest Countries in the World & The World Happiness Report 2023
11 Yale University’s most popular class is now free for teenagers—why it could make you happier
Additional information on resource 6:
● “40% of workers used the time saved to work on either a primary or secondary job.
● 34% used the time for leisure activities, including exercise or watching TV, and 11% went to caregiving, for children or others.
● The value of the commute time saved is even greater than the numbers suggest, write the paper’s authors, for three reasons:
○ Remote work saves money. (No more spending on gas or trains or buses.)
○ Workers also spend less time grooming and getting ready for work when they’re remote.
○ Working from home gives people more autonomy over their time during the day.”
Additional information on resource 7:
● The Washington Post: As offices stay empty, downtown D.C. looks for post-pandemic identity – how to convert under-utilized, adjacent community of interest commercial office space into community owned, affordable/sustainable housing in collaboration with local governments
● New York Times: The Housing Shortage Isn’t Just a Coastal Crisis Anymore – An increasingly national problem has consequences for the quality of American family life, the economy and the future of housing politics.
● WTOP News: High-profile Dupont Circle buildings heading for residential conversion