Work from home and the office real estate apocalypse • Hacker News Board

Re: Work from home and the office real estate apocalypse

#121

Post by betwixthewires » Sun, Jun 05, 2022, 7:14 AM UTC

vincnetas wrote: post #103

betwixthewires wrote: post #98

This is just the beginning of a wider shift that will destabilize domestic economies worldwide, particularly in well developed nations, if the trend continues. It's not just urban office buildings. It starts there, then it leads to deurbanization, increased populations in less urban areas, a more flat population distribution. Why live in a city unless your job requires it? All the other perks of a city only really ap…

but as you said, these information workers nees these services provided by city, so where will they move to? and if these services are sustainable only by economics of scale, you cant expect to just move out of the city to neatby area but still use city services time to time. its similar to all discount stores probaby. you can have them only because there are a lot of poeple buing non-discount things, and you get the…

Most of the services provided by the city are provided precisely to manage the problems created by the city. You don't need complex wastewater sanitation and management if you don't have a thousand people living in one building on top of an acre of land. You don't need a subway to get around wide open spaces.

The services I was referring to though were private services. Bodegas, burrito shops, dry cleaning services, taxi cabs, all of these go out of business if office workers don't walk or drive by them en masse daily.

Re: Work from home and the office real estate apocalypse

#122

Post by achow » Sun, Jun 05, 2022, 7:17 AM UTC

asimpleusecase wrote: post #85

This has an impact not just in rents for office buildings but the entire ecosystem of support businesses that sell to workers who come into city centre to work. One example. Small organic food shop, that sold mostly to office workers and has seen a 70% drop in foot traffic. The same thing hits bars, cafes, restaurants, theatres and other venues. Those very things that make living near or in a city interesting for man…

Agree.

The place I work had diverse companies in a 'tech park' - Amazon, Google, and many others inside a gated office space, the total population of which could easily surpass 10K.

We used to have a common and very vibrant food court, even though each company used to give free cafeteria food, employees used to walk to the common food court for variety - of both people and food.

Also, since there was so much traffic of well paid, propensity to spend people, office park operation office used to arrange for paid fun stuff during lunch hours, which used to lend lot of colors to dreary office days.

During Covid the food court vanished along with all fun activities (consequently all those people who used to run those). The company cafeteria obviously closed as well and even when it has started now, they are pale shadow of earlier operations (less staff, owners of food counters working as staff).

Re: Work from home and the office real estate apocalypse

#123

Post by betwixthewires » Sun, Jun 05, 2022, 7:18 AM UTC

88840-8855 wrote: post #102

betwixthewires wrote: post #98

This is just the beginning of a wider shift that will destabilize domestic economies worldwide, particularly in well developed nations, if the trend continues. It's not just urban office buildings. It starts there, then it leads to deurbanization, increased populations in less urban areas, a more flat population distribution. Why live in a city unless your job requires it? All the other perks of a city only really ap…

I disagree. Living in a city is way better than living on the countryside. - access to a large airport to go on regular holidays easily - better health care coverage, more doctors, more specialists - cultural access - more diversity and more colorful services and products - better public transportation

I have access to a small airport that's an hour flight to a large one. The logistics of going somewhere for leisure are only marginally more difficult for me, and even easier since I don't have to navigate a small city within a city with a million people in it and traffic to get there and all that. And for the most part I have plenty of leisure around me, I don't have to fly anywhere to see wide open spaces for example.

Health care is a special exception for me since I live under an hour from a couple of big hospitals and I live in a state with a lot of hospitals all over the place. But all that really shows is that such a system can be made without heavily concentrated population centers. That perk is a result of how things are now, not how they have to be.

Cultural access... I see this mentioned alongside diversity and what not, do you mean brown people? If I were right and there were a large deurbanization trend, wouldn't it follow that the diversity would go with the diaspora, since the diversity is just people?

Public transportation is largely a solution to problems created by cities. You don't really need a public transportation system in a less densely populated area.

Re: Work from home and the office real estate apocalypse

#124

Post by danjac » Sun, Jun 05, 2022, 7:22 AM UTC

I wonder if wfm in the UK has significantly impacted newspaper readership from the drop in commuters (particularly the Metro, which is targeted at casual commuter readers) that proprietors and editors - and their flying monkeys in the government, including the Prime Minister - are writing thundering columns in their papers denouncing work from home as some kind of apocalyptic threat to the economy in general.

Re: Work from home and the office real estate apocalypse

#125

Post by betwixthewires » Sun, Jun 05, 2022, 7:24 AM UTC

mushbino wrote: post #113

betwixthewires wrote: post #99

Earlier quoted context omitted.

But how do you fill it to a good density when the cost to live there is higher and there's no need to live there to earn a living anymore?

People, culture, and amenities attract people. Maybe lowering prices would help too. Artists, galleries, restaurants, theaters are all attracted by dense areas with prices that are attractive. Cities can also step up to help with incentives instead of completely leaving it up to the free market to sort out.

But those people and culture and amenities are just other people, and when the core economic engine of the city is gone, those people leave too.

Imagine you're a Jamaican halal chicken shop owner and your core business is professional office workers walking by on the way home from work and stopping in for a bite. When that office worker is no longer there because he can make the same salary and cut his expenses in half by moving 1000 miles away, you're going to go out of business. Maybe you move 1000 miles away also so that you can afford your rent. This is how the cascade happens.

Theaters and museums and all those aren't why cities have a lot of people, those exist in cities because that's where the people are. when people become more spread out, those things will follow suit.

Re: Work from home and the office real estate apocalypse

#126

Post by cortesoft » Sun, Jun 05, 2022, 7:29 AM UTC

puszczyk wrote: post #119

cortesoft wrote: post #8

Earlier quoted context omitted.

Whether value was 'destroyed' or not depends on how you look at it. $500 billion dollars worth of assets were lost by the owners of the real estate; that value is gone, and it didn't go to someone else. It just vanished. The value didn't disappear because it transferred to someone else, it went away because the asset itself become less desirable and valuable to other people. You can imagine it being like if a farmer…

I don’t know if like the spoiled grain analogy. If my stock portfolio was worth $1000 yesterday and is only $800 we don’t say the $200 was destroyed. I have the same number of stock. It may go down further, but it can also go up to say $1100 tomorrow. Is this a new being value created, or only capricious market pricing things differently? Until I sell, there is no real gain or loss. And for the farmer, if the grain g…

We do say $200 of value was destroyed when your stock portfolio goes down $200, though. If you think about it, it is the same thing… that real estate value is owned by some business that has shareholders (either public or private)… the $500 billion in value that was destroyed came from the shareholders of the real estate companies. It is the same thing.

Re: Work from home and the office real estate apocalypse

#127

Post by betwixthewires » Sun, Jun 05, 2022, 7:29 AM UTC

WastingMyTime89 wrote: post #120

betwixthewires wrote: post #111

Earlier quoted context omitted.

I do live outside of a city, and I do it for the lack of traffic, less crime, lower cost of living, being surrounded by the natural outdoors, and less stressful culture. But you missed my point. All those perks of living in a city are great, if you need to be there to earn what you earn. without that, the high cost of living simply isn't justified. Even if people want to be there, they'll make financial and economic…

> But you missed my point. All those perks of living in a city are great, if you need to be there to earn what you earn. without that, the high cost of living simply isn't justified. I am not missing anything. I just deeply disagree. City life is enjoyable in and of itself. I don’t live there because I have to for my work. I live there because I find it inherently better than living somewhere else. If I was living in…

That's a part of it too, moving to smaller cities, but that's still a massive economic reshuffling.

I think you're grossly overestimating the number of people that live in cities for reasons other than economic opportunity. That is the entire value proposition of a city, that was the driver that led to urbanization in most countries as they developed. You might be willing to pay 3x as much in rent for the same pay because you like the local chicken place, but I doubt most of your neighbors would make the same choice as you when given the opportunity to reduce cost without reducing income. And when those people leave, all those perks of city life go with them.

Re: Work from home and the office real estate apocalypse

#128

Post by [deleted] » Sun, Jun 05, 2022, 7:30 AM UTC

superfrank wrote: post #12

I'm curious to see how this plays out in the long term since data they're using is from 2020. In late 2020 I remember reading tons of articles about how people were fleeing the city causing apartment rental prices to plummet. Now, two years later, most of my friends who rent are paying as much as, if not more than they were paying pre-covid and the apartment buildings I can see into look as full as they ever were (an…

[deleted]

Re: Work from home and the office real estate apocalypse

#129

Post by Tade0 » Sun, Jun 05, 2022, 7:31 AM UTC

cookiengineer wrote: post #95

spiderfarmer wrote: post #76

Earlier quoted context omitted.

You’re so disconnected from reality. Ask yourself how many people are unable to work remotely. If you can’t think of enough examples to justify roads, go outside more.

Are factories now built downtown or am I missing something? Do you think that cities of the future rely on cars or on more efficiently scaleable means of transportation - like trains, subways and trams? > Ask yourself how many people are unable to work remotely. Please elaborate. Personally, I don't think there's any elected mayor on the planet that has "moving more factories inside the city" on their agenda. Note th…

> Are factories now built downtown or am I missing something?

Plenty of other roles that can't be performed remotely, e.g. plumbers, hairdressers/beauticians, dentists, shoe/clothing store workers, therapists, teachers (technically possible, just not desirable in the last two cases).

But that's not even the limiting factor for public transport: the landscape of extracurricular activities for children shifted.

Parents of children too young to cross the whole city on their own have a total of 3-4 locations to visit daily. Doing that via public transport quickly becomes tedious.

Re: Work from home and the office real estate apocalypse

#130

Post by cortesoft » Sun, Jun 05, 2022, 7:33 AM UTC

ramraj07 wrote: post #28

cortesoft wrote: post #8

Earlier quoted context omitted.

Whether value was 'destroyed' or not depends on how you look at it. $500 billion dollars worth of assets were lost by the owners of the real estate; that value is gone, and it didn't go to someone else. It just vanished. The value didn't disappear because it transferred to someone else, it went away because the asset itself become less desirable and valuable to other people. You can imagine it being like if a farmer…

So good riddance? Do you really think someone who was able to buy real estate in Manhattan needs a handout? Also the money didn’t disappear, it went to people smarter or luckier than them who used to own the place before. Money doesn’t disappear.

I wasn’t making a judgement about whether the loss was worth it or not… it might create more value in the long run. Sometimes a short term loss is worth it.