7 ms·

Remote Work Is Killing the Hidden Trillion-Dollar Office Economy

70 points by vo2maxer 6y ago

fxtentacle 6y ago
The article surely likes to ask "but at what cost to the rest of the economy?". And I was thinking: What a wonderful benefit for our planet :) and for those people. Saving millions of people from their morning commute? Yes, please. Improved air quality due to less traffic? Yes, please. 70% less air travel? Yes, please. In addition to that, let's scrap a few parking lots and convert them into parks and then call it a day :) Maybe I'm the odd one here, but I actually like working from home and playing with my son during lunch break. And I've always resisted company business trips as much as I could.
- therockspush 6y ago
  I'm wondering whats going to happen to all these sprawled out empty campuses, the miles of diabolically ugly 2-3 story buildings in santa clara. I'd love them to become free range stock farms, with animals shitting on the carpets and in the lobby fountain. Or paintball ranges with a prebuilt post-apocalyptic office setting. When they've been used up, doze em and put in a wavetank or something.
  - schwartzworld 6y ago
    Reminds me of an old Abbot and Costello routine. They were interviewing a guest. Guest: Did you know this place used to be a livery stable? Abbott: You mean there used to be horses and jackasses in here? Guest: Yep. Ain't changed much.
- occamrazor 6y ago
  The shift to working from home may be a net positive for society and at the same time a net negative for the businesses in the “office economy”. As a society, it is probably worthwhile to support the most vulnerable people in the latter sector, with the objective of expediting the transition.
- suduudeueu 6y ago
  Public parks are like public libraries, they're mostly just homeless shelters and places to deal drugs. As a city dweller I really don't get this rosy presentation of them that acts like they're somehow gifts to the community.
  - fxtentacle 6y ago
    Obviously, you don't play golf. Scratch that. Obviously, you've never been to Singapore. I have very fond memories of walking out of the air-conditioned shopping mall above the Waterfront MRT station and then walking through Mount Faber Park, Henderson Waves, Southern Ridges Park, Kent Ridge Park, and then back into an air-conditioned shopping mall at Kent Ridge MRT. I took one of those walks almost every day, and in many cases co-workers or friends decided to join, because with the MRT system it's just so easy to quickly zip over to nature in your lunch break. It's difficult to access this objectively, but I'm 100% convinced that this was a major factor in making my time in Singapore some of the most productive months I've ever had. Also in Italy, the town squares were usually full with families and the elderly, sipping coffee and reading newspapers. But it was well understood that just by being there, they signal that they're available for you to just talk to people. Again, I felt like the strong communal spirit of having talked to 100+ neighbors in your village was fantastic, even if you only did small-talk about the newspaper. Now if you could reduce the depression rate and related issues by 10% with a new well-maintained park. That'd be a significant GDP boost, so the economic value of such parks is probably in the billions of $$$.
    - suduudeueu 6y ago
      How silly of me not to include "public golf parks", Italian town squares, and Singapore in a discussion about America. But then, there's nothing surprising about someone so privileged they can travel the globe having a loose grip on the reality being faced by most of the country.
      - nix23 6y ago
        I don't know in which shit-place you live, but the rest of the world loves parks. Homeless People in public library? Maybe ask your Government why that is.
- puranjay 6y ago
  I just keep thinking about all the money I was wasting on things I never truly enjoyed but bought because they were convenient and available. A cup of mediocre coffee, an overpriced sandwich, clothes I wasn't particularly comfortable in, an evening snack, then ordering expensive and unhealthy dinner because you're too tired to cook.
  - uzakov 6y ago
    Have you heard of FIRE(Financial Independence Retire Early? You might find it interesting
tuatoru 6y ago
The article focuses on the small businesses serving office workers downtown, and on air travel. Dry-cleaners, cafes, shoe repairers, gyms, beauticians, nail bars, copy centres, florists, newsagents, office supply stores, etc. The second order effect on real estate isn't discussed. If a lot of these businesses disappear, along with a large fraction of office workers, building owners may not be able to service their costs (finance, insurance, maintenance, etc.) I guess Wall Street will get another bail-out at that point.
- simooooo 6y ago
  They will. As people are borrowing against the current perceived value of these buildings
pankajdoharey 6y ago
Clearly the so called office Technology company WeWork was not future ready. Nor are office real estate people.
- EVdotIO 6y ago
  This is quite literally the worst case scenario for them. I've been morbidly curious what the knock-on effect of a meltdown in CMBS bonds and other securities would look like. As an aside, since employees are now responsible for their work environment, how do we factor that into pay and/or possible tax write-offs?
  - vertbhrtn 6y ago
    Remember that scene in "The Accountant" movie where the accountant says "No, the company's truck" meaning that since the truck is kinda used to carry some fluff that the family eventually sells, the truck gets a special tax status. In other words, since you use half of your house as an office, can you deduct half of your mortgage from taxes?
    - iancmceachern 6y ago
      Love that movie, love that scene in particular.
    - triceratops 6y ago
      Not half your mortgage exactly, but this has existed for a while: https://www.irs.gov/businesses/small-businesses-self-employed/home-office-deduction https://www.irs.gov/businesses/small-businesses-self-employe...
      - tonyedgecombe 6y ago
        People in the UK have to be wary of that because it can leave you liable for capital gains tax. https://www.gov.uk/tax-relief-for-employees/working-at-home https://www.gov.uk/tax-relief-for-employees/working-at-home
npiit 6y ago
Great, let those do nothing real estate developers and private equity firms run by real world Gordon Gekkos go to hell.
PeterStuer 6y ago
Even in the middle ages there would be a substantial rabble of 'service sector' entrepreneurs following the troops around to provide repairs, food and other entertainment services. Peace was the last thing these people wanted as their whole livelyhood depended on the perpetual war campaigns.
siquick 6y ago
Not sure about anyone else, but I've been enjoying supporting the cafes, restaurants, bars, and shops near my home and getting to know the people in my community, rather than spending my money in the CBD. To me, this doesn't feel like a loss of economy, just a shift away from spending at big corps to spending in smaller businesses.
- nooyurrsdey 6y ago
  while that's great, the shift isn't equal. on average I'd wager that spending has gone down overall even if it's shifted elsewhere geographically. And office real estate has taken a massive blow along with cbd restaurants and vendors
tomcam 6y ago
Crazy random thought here. It could be that a tiny tiny percentage of the people leaving are a little bit influenced by their cities being burned down by mostly peaceful protesters.
- tdeck 6y ago
  Which cities have been "burned down"?
  - tomcam 6y ago
    Portland, Milwaukee, Kenosha, Chicago, New York, and more. I exaggerated for effect but hundreds of businesses there are permanently destroyed, dozens of cops have been blinded, and emergency services to the affected areas have been sharply degraded. Black owned businesses have been disproportionately harmed. Constitutional protections are nonexistent.
JuliusPullo 6y ago
You make your connections, build your relationships and stumble upon great ideas during the breaks between the meetings, the coffee breaks, and around the water cooler. You lose all that when you work from home.

70 points by vo2maxer 6y ago

The article surely likes to ask "but at what cost to the rest of the economy?". And I was thinking: What a wonderful benefit for our planet :) and for those people. Saving millions of people from their morning commute? Yes, please. Improved air quality due to less traffic? Yes, please. 70% less air travel? Yes, please. In addition to that, let's scrap a few parking lots and convert them into parks and then call it a day :) Maybe I'm the odd one here, but I actually like working from home and playing with my son during lunch break. And I've always resisted company business trips as much as I could.

therockspush 6y ago
I'm wondering whats going to happen to all these sprawled out empty campuses, the miles of diabolically ugly 2-3 story buildings in santa clara. I'd love them to become free range stock farms, with animals shitting on the carpets and in the lobby fountain. Or paintball ranges with a prebuilt post-apocalyptic office setting. When they've been used up, doze em and put in a wavetank or something.
- schwartzworld 6y ago
  Reminds me of an old Abbot and Costello routine. They were interviewing a guest. Guest: Did you know this place used to be a livery stable? Abbott: You mean there used to be horses and jackasses in here? Guest: Yep. Ain't changed much.
occamrazor 6y ago
The shift to working from home may be a net positive for society and at the same time a net negative for the businesses in the “office economy”. As a society, it is probably worthwhile to support the most vulnerable people in the latter sector, with the objective of expediting the transition.
suduudeueu 6y ago
Public parks are like public libraries, they're mostly just homeless shelters and places to deal drugs. As a city dweller I really don't get this rosy presentation of them that acts like they're somehow gifts to the community.
- fxtentacle 6y ago
  Obviously, you don't play golf. Scratch that. Obviously, you've never been to Singapore. I have very fond memories of walking out of the air-conditioned shopping mall above the Waterfront MRT station and then walking through Mount Faber Park, Henderson Waves, Southern Ridges Park, Kent Ridge Park, and then back into an air-conditioned shopping mall at Kent Ridge MRT. I took one of those walks almost every day, and in many cases co-workers or friends decided to join, because with the MRT system it's just so easy to quickly zip over to nature in your lunch break. It's difficult to access this objectively, but I'm 100% convinced that this was a major factor in making my time in Singapore some of the most productive months I've ever had. Also in Italy, the town squares were usually full with families and the elderly, sipping coffee and reading newspapers. But it was well understood that just by being there, they signal that they're available for you to just talk to people. Again, I felt like the strong communal spirit of having talked to 100+ neighbors in your village was fantastic, even if you only did small-talk about the newspaper. Now if you could reduce the depression rate and related issues by 10% with a new well-maintained park. That'd be a significant GDP boost, so the economic value of such parks is probably in the billions of $$$.
  - suduudeueu 6y ago
    How silly of me not to include "public golf parks", Italian town squares, and Singapore in a discussion about America. But then, there's nothing surprising about someone so privileged they can travel the globe having a loose grip on the reality being faced by most of the country.
    - nix23 6y ago
      I don't know in which shit-place you live, but the rest of the world loves parks. Homeless People in public library? Maybe ask your Government why that is.
puranjay 6y ago
I just keep thinking about all the money I was wasting on things I never truly enjoyed but bought because they were convenient and available. A cup of mediocre coffee, an overpriced sandwich, clothes I wasn't particularly comfortable in, an evening snack, then ordering expensive and unhealthy dinner because you're too tired to cook.
- uzakov 6y ago
  Have you heard of FIRE(Financial Independence Retire Early? You might find it interesting

tuatoru 6y ago

The article focuses on the small businesses serving office workers downtown, and on air travel. Dry-cleaners, cafes, shoe repairers, gyms, beauticians, nail bars, copy centres, florists, newsagents, office supply stores, etc. The second order effect on real estate isn't discussed. If a lot of these businesses disappear, along with a large fraction of office workers, building owners may not be able to service their costs (finance, insurance, maintenance, etc.) I guess Wall Street will get another bail-out at that point.

simooooo 6y ago
They will. As people are borrowing against the current perceived value of these buildings

pankajdoharey 6y ago

Clearly the so called office Technology company WeWork was not future ready. Nor are office real estate people.

EVdotIO 6y ago
This is quite literally the worst case scenario for them. I've been morbidly curious what the knock-on effect of a meltdown in CMBS bonds and other securities would look like. As an aside, since employees are now responsible for their work environment, how do we factor that into pay and/or possible tax write-offs?
- vertbhrtn 6y ago
  Remember that scene in "The Accountant" movie where the accountant says "No, the company's truck" meaning that since the truck is kinda used to carry some fluff that the family eventually sells, the truck gets a special tax status. In other words, since you use half of your house as an office, can you deduct half of your mortgage from taxes?
  - iancmceachern 6y ago
    Love that movie, love that scene in particular.
  - triceratops 6y ago
    Not half your mortgage exactly, but this has existed for a while: https://www.irs.gov/businesses/small-businesses-self-employed/home-office-deduction https://www.irs.gov/businesses/small-businesses-self-employe...
    - tonyedgecombe 6y ago
      People in the UK have to be wary of that because it can leave you liable for capital gains tax. https://www.gov.uk/tax-relief-for-employees/working-at-home https://www.gov.uk/tax-relief-for-employees/working-at-home

npiit 6y ago

Great, let those do nothing real estate developers and private equity firms run by real world Gordon Gekkos go to hell.

PeterStuer 6y ago

Even in the middle ages there would be a substantial rabble of 'service sector' entrepreneurs following the troops around to provide repairs, food and other entertainment services. Peace was the last thing these people wanted as their whole livelyhood depended on the perpetual war campaigns.

siquick 6y ago

Not sure about anyone else, but I've been enjoying supporting the cafes, restaurants, bars, and shops near my home and getting to know the people in my community, rather than spending my money in the CBD. To me, this doesn't feel like a loss of economy, just a shift away from spending at big corps to spending in smaller businesses.

nooyurrsdey 6y ago
while that's great, the shift isn't equal. on average I'd wager that spending has gone down overall even if it's shifted elsewhere geographically. And office real estate has taken a massive blow along with cbd restaurants and vendors

tomcam 6y ago

Crazy random thought here. It could be that a tiny tiny percentage of the people leaving are a little bit influenced by their cities being burned down by mostly peaceful protesters.

tdeck 6y ago
Which cities have been "burned down"?
- tomcam 6y ago
  Portland, Milwaukee, Kenosha, Chicago, New York, and more. I exaggerated for effect but hundreds of businesses there are permanently destroyed, dozens of cops have been blinded, and emergency services to the affected areas have been sharply degraded. Black owned businesses have been disproportionately harmed. Constitutional protections are nonexistent.

JuliusPullo 6y ago

You make your connections, build your relationships and stumble upon great ideas during the breaks between the meetings, the coffee breaks, and around the water cooler. You lose all that when you work from home.