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> Office landlords applaud these decisions. They see the return-to-office push by new bosses as a crucial step toward reversing the slide in rent prices, occupa

> Office landlords applaud these decisions. They see the return-to-office push by new bosses as a crucial step toward reversing the slide in rent prices, occupancy levels and property values. This right here is the entire reason. They like to say things about collaboration and innovation, but commercial real estate is really the reason (and tax breaks). I wish companies would just be honest and tell people, "look we know you don't like it but it's better for our business because we need those tax breaks and real estate price support". Edit: Instead of replying to everyone, I'll add it here: the tax breaks are butts in seats tax breaks. They have already committed to long term leases or own the buildings, so they can't get out of it by "just closing the office". They can't close the office. So they need those butts in seats tax breaks and if they own the buildings, they need the prices to stay high.

Kiro 3y ago
I don't understand this. How are tax breaks better than not having the cost at all?
- jedberg 3y ago
  Because they are already in long term leases or own the buildings, so they are already committed. But now they lose their "butts in seats" tax breaks.
  - Kiro 3y ago
    So they only get tax breaks if people are actually in the building? How is this even regulated and controlled?
    - jedberg 3y ago
      Self reporting, much like all tax breaks. They tell the city "we have this percent of our employee base required to be in the office". But they can't just lie because they might get audited.
    - bamfly 3y ago
      Lots of incentives offered to businesses, especially at the city level, are contingent on providing some number of jobs in a specific place. They want you to have to give locals jobs if you need to hire, and they want those locals spending money in some particular place. They don't want to spend money helping companies with suburban/exurban workers that never come to the city, and that are seeing local headcount erode as replacements can live anywhere. > How is this even regulated and controlled? Same as... most things? There's all kinds of stuff you can lie about and be fine as long as you don't get caught. Claiming you have a full office while openly having a 100% WFH policy is probably not a great way to get away with that kind of fraud, however.
  - Spivak 3y ago
    This does seem like introducing a "office available" tax break for companies that offer wfh but have a physical office would be the best of both worlds.
    - i_am_jl 3y ago
      The municipality giving the tax breaks doesn't want people to work from home. They want people to go to the office so they buy gas and eat at restaurants and drive up office rent. But the real issue is what happens when the lease runs out. A company that's using its office as "office available" is really "remote, but with an office that we're staffing for tax breaks to offset the cost of the lease we're stuck in". The tax breaks aren't bigger than the lease, so once they're out from under the lease obligation they switch to 100% remote.
  - pavon 3y ago
    The tax breaks I have seen that are similar to this only care about where the employee is working, not whether they are in a home or office. So if that was really the motivation it would be a reason to require employees be located in a given area, not require them to come into the office a certain number of days per week. Without you citing the specific tax breaks you claim are the issue I'm very skeptical that they are the cause.
    - jedberg 3y ago
      Here is an article about it: https://www.bloomberg.com/news/features/2023-02-21/another-threat-to-work-from-home-tax-breaks https://www.bloomberg.com/news/features/2023-02-21/another-t... Google [Do companies get tax breaks for in person employees] or something like it.
  - refurb 3y ago
    If they own the real estate they get the tax break whether employees show up or not.
    - jedberg 3y ago
      No that's the point. The tax breaks are payroll tax breaks for having the employee actually come to the office. Otherwise they lose the tax break and it costs more to have the same employee.
- iLoveOncall 3y ago
  The state gives them tax breaks if they force people to go to the office because they contribute to local businesses in downtown. This is an incredibly short term decision of course, what would be a lot more beneficial would be to push for remote work and let local businesses develop all around the city in residential neighbourhoods, which would after a while lower CoL everywhere, while still having the same amount of money spent, just spent more equitably geographically speaking. But of course when your political term lasts 4 years, you don't give a single fuck about all that, you care about your next election.
renewiltord 3y ago
What are the tax breaks? At least for SF, you'll end up paying more taxes: payroll and gross receipts.
- jedberg 3y ago
  Many cities offer "butts in seats" tax breaks. I'm not sure about SF to be honest, but I know Seattle has them.
  - Kiro 3y ago
    Then maybe you shouldn't go around saying it's the entire reason.
  - renewiltord 3y ago
    Do you happen to recall any keywords I could Google. I'm having poor luck with "rto tax breaks" and "butts in seats tax breaks". We've got a bit of Observer Effect here where this HN thread ranks top for those searches haha
    - jedberg 3y ago
      Here is an article about it: https://www.bloomberg.com/news/features/2023-02-21/another-threat-to-work-from-home-tax-breaks https://www.bloomberg.com/news/features/2023-02-21/another-t... Google [Do companies get tax breaks for in person employees] or something like it.
      - renewiltord 3y ago
        I found it with "San Francisco tax incentives business physical space" https://sfstandard.com/business/mayor-breed-introduces-tax-breaks-to-lure-business-back-downtown/ https://sfstandard.com/business/mayor-breed-introduces-tax-b... Looks like for SF it is beating back some of the taxes I mentioned earlier. If you don't have the people in the office, of course, you don't get the tax incentive but you don't get the tax in the first place. In any case, this is actually good since we have an office here and we're all in-office and looking for a new one. That 0.45% might be good.
RankingMember 3y ago
I'm confused- wouldn't a fully-remote org just move their HQ (on paper) to Delaware and get greater tax breaks? I'm also not seeing why a company would care for the health of the commercial real estate sector. The orgs I'm familiar with that went fully remote just sublet their office leases through the end of their term.
- gkoberger 3y ago
  FWIW, most companies area already incorporated in Delaware, even if their physical location is elsewhere.
- jonny_eh 3y ago
  There are cities that offer breaks on payroll taxes. I don't know how the payroll taxes are calculated for a remote work force though, so I remain confused as well. Maybe they're calculated by the home address for each employee?
  - RankingMember 3y ago
    Payroll taxes are indeed calculated (at least in the US) by worker location, so you need to withhold according to their location.
  - cj 3y ago
    Payroll tax is always where an employee is physically working. If they're WFH, then taxes are calculated based on your home address.
    - WirelessGigabit 3y ago
      Not 100% true. https://www.vox.com/recode/22356628/working-remotely-state-taxes-pandemic https://www.vox.com/recode/22356628/working-remotely-state-t... > Taxes are, of course, more complicated than that, especially if your job happens to be based in one of seven convenience of the employer, or “convenience rule,” states — Arkansas, Connecticut, Delaware, Nebraska, New York, Pennsylvania and, since the pandemic, Massachusetts — while you’re living and working elsewhere. 7 / 50, so technically your statement is only 86% true.
golergka 3y ago
Why would company CEOs want to pay more rent?
- malermeister 3y ago
  Maybe the company owns the building and doesn't want its value to drop?
  - CapstanRoller 3y ago
    Funny how they want to retain the value of the building while externalizing all the downsides to workers and the environment at large.
    - malermeister 3y ago
      Welcome to capitalism, baby!
- jonhohle 3y ago
  They may already be in multi-year contracts. The last company I worked for was subletting space from a flash in the pan dotcom that signed a 10-year lease on the building. It’s possible the rent was the only revenue the company still had.
wahnfrieden 3y ago
Business owners collude around suppressing wages and worker benefits. Non owner managers sit and talk for hours about how to keep wages suppressed (iow market rate). What systemic reason would there be for doing something workers haven’t organized (iow created market conditions) to demand from employers?
deaddodo 3y ago
And I really don't care about their sliding rent prices and occupancy levels. People/companies who make their money through solely holding/selling space are some of the least talented and useful people. You got by for decades floating by on overinflated prices and passive income. I'm sorry your golden ticket has slipped a little, but maybe we can tear down some of your ugly grey boxes and build affordable housing to combat actual problems: inflated housing prices, lack of housing space, lack of affordable commercial space for small businesses.
- 0max 3y ago
  I'd even eat into their business and get people elected that would build state/federally funded mixed income non-market social housing
  - bnjms 3y ago
    It would go a long way to merely ban the word “luxury” in marketing.
    - pierat 3y ago
      In a way, I already have for myself. If I see: premium, luxury, professional, (etc) words that classify something to be better, I assume that they really are substandard and are using words like above to make it appear as it is the case.
      - jimmygrapes 3y ago
        Replace it with "government-issued" for a similar effect
        pierat 3y ago
        I take it that with this snark, that you're a libertarian type... I like government. It provides a framework we all know about, can interact with, and know that everyone's being treated to the same standard. And where you have better governments, it works well. Sure, there's complaints about all implementations, but I prefer a stronger "typed" system. I can plan for it. I can use it. And best of all, I can rely on it. At least in the USA, the problem is that government is underfunded, blamed for bad service, and underfunded some more. And crazy stupid ideas like "social security is the biblical revelations mark of the beast" is some of the reasons why where we are. In my state, the bureau of motor vehicles was identified as "terrible". Investigation was made, and found that it had to do with not enough workers, not enough "open time", and bad communication to customers (us drivers). My state then increased workers at all branches, increased hours on some days to accommodate a wider array of schedules, and now our BMV is superb. So no, I whole-heartedly reject that "government-issued" is in the same class. I refuse to play in faux libertarian narratives.
gkoberger 3y ago
I guess I don't understand this argument. It's significantly cheaper to have a remote employee, especially if you pay location-based salaries. In addition to lower salaries, you save a ton on office space, janitorial services, food and coffee, workmans comp, office managers, furniture, etc. I think it's more likely that some people really like to work from home, and other people really like the office. And that's okay! People have different preferences and circumstances. The only issue is that it's one of those things where both sides can't really have their way at the same time, because it defeats the purpose of an office if you're the only one there. Of the 22,000 people who work at Farmers, 2,000 have reacted negatively. (Yes, I assume it's higher b/c some people don't want to publicly disagree with their employer.) Overall, I think everyone simply has a preference, but it's become an escalated debate. I think eventually we'll see half of companies being remote and half being in the office, and everyone will get to make their own decision for what works best with their goals and lifestyles. (All that being said, in this situation, telling people they can work remotely and then changing it is pretty crappy.)
- jedberg 3y ago
  It's cheaper to have a remote employee for sure, unless you've already bought an office tower or committed to a 15 year office lease. Then it's more expensive because you have to support them at home but still maintain the building and pay the taxes on the building.
  - gkoberger 3y ago
    Even with a lease, it's still more expensive to have them in the office. Or, to put it another way, if it's just about money – it's still cheaper to shut down the offices and pay to have them sit vacant since that's a sunk cost. I think most people who run companies are sociopaths who don't care about their employees. That being said, I think this is a situation where there's no hidden agenda... I think it's fine to disagree with their decision, but ultimately they genuinely believe it's better for the bottom line to have people in the same place.
    - 3y ago
tabtab 3y ago
Re: "tax breaks are butts in seats tax breaks" It kind of reminds me of schools who are afraid of kicking out disruptive students because they are funded based on student count. It's usually better for disruptive students to go to special schools, but the butt-based-funding mucks that up.
rfwhyte 3y ago
The problem is they'd actually have to say "Look we know you don't like it, but it's better for me personally as I have substantial personal investments in commercial real estate." Because it's not even ultimately about corporate profits (outside of real estate companies that is) as real estate holdings these days are largely a cost centre for most companies, and most companies were selling their RE holdings long before remote work was ever a thing and leasing back their offices from the companies they sold them to. This is ultimately about the personal wealth and power of the elite class, who's wealth is heavily concentrated in real estate. Nobody goes back to the office the companies financials look broadly the same, but the owners / shareholder's personal portfolios look a lot, lot worse.
ryandrake 3y ago
I've always wondered about this explanation. Commercial Real Estate is a big industry but it's not that big. How can this relatively small tail wag the dog (the enormous US economy)? Real estate may be a cost for companies, but is it really that big, for so many companies, such that they are all operating pretty much in lock-step around WFH vs. Return To Office?
- SketchySeaBeast 3y ago
  Well, the total market for Commercial Real Estate in the United States is about $20 Trillion. That's pretty big.
  - refurb 3y ago
    That’s value of all assets, not just annual GDP of commercial real estate. It’s less than 10% of all US assets ($270T).
    - SketchySeaBeast 3y ago
      Personally, I think 7.5% of all US assets is a HUGE amount of money and power.
      - refurb 3y ago
        US residential real estate is worth $43T, so about double. Does that mean home owners have lots of money and power?
mattcantstop 3y ago
I can see how a CEO would look at a long term lease and regret the financial commitment and then see in person as more compelling to not have as much regret. That seems plausible, but foolish, because of the sunk cost fallacy. I can't see how commercial real estate companies losing money would compel most businesses to take this approach. I can see how JP Morgan would promote this, hoping it would help other companies make the same decision, and therefore avoid a commercial real estate (and related loans for JP Morgan) collapse. But the average company has no potential tax breaks, has the potential to save money by getting rid of their office space, and doesn't care about the financial outcomes of large real estate investors or lenders. I think they believe returning to the office is good. I would agree with them that some things are hard to replicate in a remote environment. It's hard to brainstorm a new project in a Zoom call. But I think many prefer an in person work setup because they are bad managers. Bad managers are not good at setting a vision for a company or building in organic, helpful checkpoints for progress and accountability. They don't actually state what anyone at the company should be doing. Expectations are often unclear. These bad managers have very little way of knowing if their employees are working. So they go the lazy route and use presence and the appearance of busyness, in the office, as a poor stand in for good management. There are benefits of being in-person. But whenever I see a decree for in person work, I think it's usually just poor leadership. I would say the best dynamic for most, not all, companies is a remote work environment where people can get together as needed. Well before the pandemic I worked at GitHub. At GitHub we worked remotely but we got together often to have a hack house where we worked together solving a problem that needed brainstorming or deep thinking. I saw my fellow employees often. It was the best of both worlds. A remote first company with opportunities to get together as needed is the gold standard. A fully in person is too extreme. A fully remote company without the chance to get together is also a poor experience and is very isolating. Both too far on either side of the spectrum.
- RestlessMind 3y ago
  > a remote work environment where people can get together as needed. +1 to that in theory though in practice, it is hard to pull off if everyone is geographically scattered. Key constraint boils down to everyone's ability to attend in person - you always miss around 10-15% of attendees. And then there is not enough ROI on all the expenses you have incurred for that offsite (air, hotel, cabs etc). If people are in the same geographical area, then probably it is not a problem.
bleah1000 3y ago
I see this all of the time, but without any evidence. Even your edit says they get a "butts in seat" tax break. But how much is that? I can very easily see the savings of remote employees being way higher than this tax break. You might need to spend a bit more on IT and maybe on equipment. Then again you save on cleaning (not needed as often), garbage, electricity and anything else related to maintenance. Maybe it's slightly more expensive, or slightly less expensive. I've never seen anyone break the numbers down before making this claim. It feels like an appeal to emotion, those bad companies only care about money. Even if that's true, this argument doesn't prove it's true in this case. And this all assumes long term leases or you own the building. It's possible to pay to get out of leases some time, and you can sell the building if you think it's going to cost millions to keep owning it. Also, we are seeing lots of smaller businesses also requiring people to come back to the office. If they are getting some huge tax break for a 100 person company, how much is that? I'm happy if I'm wrong, and this is some huge tax break that saves companies millions of dollars, but I think it's fair to ask for evidence that this really saves the money people claim it saves. I think there are other dumb reasons people are being called back, it just doesn't feel like this is one of the reasons.
- jedberg 3y ago
  Here is an article about it where someone had a similar skepticism as yourself: https://www.bloomberg.com/news/features/2023-02-21/another-threat-to-work-from-home-tax-breaks https://www.bloomberg.com/news/features/2023-02-21/another-t... Also, I didn't say tax breaks was the only reason. I also said commercial real estate prices. Even companies that don't own buildings need commercial real estate to stay up, either because their owners own some elsewhere, or because other business products are priced based on commercial real estate (one common example is corporate insurance treasuries often hold a lot of corporate real estate).

Kiro 3y ago

I don't understand this. How are tax breaks better than not having the cost at all?

jedberg 3y ago
Because they are already in long term leases or own the buildings, so they are already committed. But now they lose their "butts in seats" tax breaks.
- Kiro 3y ago
  So they only get tax breaks if people are actually in the building? How is this even regulated and controlled?
  - jedberg 3y ago
    Self reporting, much like all tax breaks. They tell the city "we have this percent of our employee base required to be in the office". But they can't just lie because they might get audited.
  - bamfly 3y ago
    Lots of incentives offered to businesses, especially at the city level, are contingent on providing some number of jobs in a specific place. They want you to have to give locals jobs if you need to hire, and they want those locals spending money in some particular place. They don't want to spend money helping companies with suburban/exurban workers that never come to the city, and that are seeing local headcount erode as replacements can live anywhere. > How is this even regulated and controlled? Same as... most things? There's all kinds of stuff you can lie about and be fine as long as you don't get caught. Claiming you have a full office while openly having a 100% WFH policy is probably not a great way to get away with that kind of fraud, however.
- Spivak 3y ago
  This does seem like introducing a "office available" tax break for companies that offer wfh but have a physical office would be the best of both worlds.
  - i_am_jl 3y ago
    The municipality giving the tax breaks doesn't want people to work from home. They want people to go to the office so they buy gas and eat at restaurants and drive up office rent. But the real issue is what happens when the lease runs out. A company that's using its office as "office available" is really "remote, but with an office that we're staffing for tax breaks to offset the cost of the lease we're stuck in". The tax breaks aren't bigger than the lease, so once they're out from under the lease obligation they switch to 100% remote.
- pavon 3y ago
  The tax breaks I have seen that are similar to this only care about where the employee is working, not whether they are in a home or office. So if that was really the motivation it would be a reason to require employees be located in a given area, not require them to come into the office a certain number of days per week. Without you citing the specific tax breaks you claim are the issue I'm very skeptical that they are the cause.
  - jedberg 3y ago
    Here is an article about it: https://www.bloomberg.com/news/features/2023-02-21/another-threat-to-work-from-home-tax-breaks https://www.bloomberg.com/news/features/2023-02-21/another-t... Google [Do companies get tax breaks for in person employees] or something like it.
- refurb 3y ago
  If they own the real estate they get the tax break whether employees show up or not.
  - jedberg 3y ago
    No that's the point. The tax breaks are payroll tax breaks for having the employee actually come to the office. Otherwise they lose the tax break and it costs more to have the same employee.
iLoveOncall 3y ago
The state gives them tax breaks if they force people to go to the office because they contribute to local businesses in downtown. This is an incredibly short term decision of course, what would be a lot more beneficial would be to push for remote work and let local businesses develop all around the city in residential neighbourhoods, which would after a while lower CoL everywhere, while still having the same amount of money spent, just spent more equitably geographically speaking. But of course when your political term lasts 4 years, you don't give a single fuck about all that, you care about your next election.

renewiltord 3y ago

What are the tax breaks? At least for SF, you'll end up paying more taxes: payroll and gross receipts.

jedberg 3y ago
Many cities offer "butts in seats" tax breaks. I'm not sure about SF to be honest, but I know Seattle has them.
- Kiro 3y ago
  Then maybe you shouldn't go around saying it's the entire reason.
- renewiltord 3y ago
  Do you happen to recall any keywords I could Google. I'm having poor luck with "rto tax breaks" and "butts in seats tax breaks". We've got a bit of Observer Effect here where this HN thread ranks top for those searches haha
  - jedberg 3y ago
    Here is an article about it: https://www.bloomberg.com/news/features/2023-02-21/another-threat-to-work-from-home-tax-breaks https://www.bloomberg.com/news/features/2023-02-21/another-t... Google [Do companies get tax breaks for in person employees] or something like it.
    - renewiltord 3y ago
      I found it with "San Francisco tax incentives business physical space" https://sfstandard.com/business/mayor-breed-introduces-tax-breaks-to-lure-business-back-downtown/ https://sfstandard.com/business/mayor-breed-introduces-tax-b... Looks like for SF it is beating back some of the taxes I mentioned earlier. If you don't have the people in the office, of course, you don't get the tax incentive but you don't get the tax in the first place. In any case, this is actually good since we have an office here and we're all in-office and looking for a new one. That 0.45% might be good.

RankingMember 3y ago

I'm confused- wouldn't a fully-remote org just move their HQ (on paper) to Delaware and get greater tax breaks? I'm also not seeing why a company would care for the health of the commercial real estate sector. The orgs I'm familiar with that went fully remote just sublet their office leases through the end of their term.

gkoberger 3y ago
FWIW, most companies area already incorporated in Delaware, even if their physical location is elsewhere.
jonny_eh 3y ago
There are cities that offer breaks on payroll taxes. I don't know how the payroll taxes are calculated for a remote work force though, so I remain confused as well. Maybe they're calculated by the home address for each employee?
- RankingMember 3y ago
  Payroll taxes are indeed calculated (at least in the US) by worker location, so you need to withhold according to their location.
- cj 3y ago
  Payroll tax is always where an employee is physically working. If they're WFH, then taxes are calculated based on your home address.
  - WirelessGigabit 3y ago
    Not 100% true. https://www.vox.com/recode/22356628/working-remotely-state-taxes-pandemic https://www.vox.com/recode/22356628/working-remotely-state-t... > Taxes are, of course, more complicated than that, especially if your job happens to be based in one of seven convenience of the employer, or “convenience rule,” states — Arkansas, Connecticut, Delaware, Nebraska, New York, Pennsylvania and, since the pandemic, Massachusetts — while you’re living and working elsewhere. 7 / 50, so technically your statement is only 86% true.

golergka 3y ago

Why would company CEOs want to pay more rent?

malermeister 3y ago
Maybe the company owns the building and doesn't want its value to drop?
- CapstanRoller 3y ago
  Funny how they want to retain the value of the building while externalizing all the downsides to workers and the environment at large.
  - malermeister 3y ago
    Welcome to capitalism, baby!
jonhohle 3y ago
They may already be in multi-year contracts. The last company I worked for was subletting space from a flash in the pan dotcom that signed a 10-year lease on the building. It’s possible the rent was the only revenue the company still had.

wahnfrieden 3y ago

Business owners collude around suppressing wages and worker benefits. Non owner managers sit and talk for hours about how to keep wages suppressed (iow market rate). What systemic reason would there be for doing something workers haven’t organized (iow created market conditions) to demand from employers?

deaddodo 3y ago

And I really don't care about their sliding rent prices and occupancy levels. People/companies who make their money through solely holding/selling space are some of the least talented and useful people. You got by for decades floating by on overinflated prices and passive income. I'm sorry your golden ticket has slipped a little, but maybe we can tear down some of your ugly grey boxes and build affordable housing to combat actual problems: inflated housing prices, lack of housing space, lack of affordable commercial space for small businesses.

0max 3y ago
I'd even eat into their business and get people elected that would build state/federally funded mixed income non-market social housing
- bnjms 3y ago
  It would go a long way to merely ban the word “luxury” in marketing.
  - pierat 3y ago
    In a way, I already have for myself. If I see: premium, luxury, professional, (etc) words that classify something to be better, I assume that they really are substandard and are using words like above to make it appear as it is the case.
    - jimmygrapes 3y ago
      Replace it with "government-issued" for a similar effect
      - pierat 3y ago
        I take it that with this snark, that you're a libertarian type... I like government. It provides a framework we all know about, can interact with, and know that everyone's being treated to the same standard. And where you have better governments, it works well. Sure, there's complaints about all implementations, but I prefer a stronger "typed" system. I can plan for it. I can use it. And best of all, I can rely on it. At least in the USA, the problem is that government is underfunded, blamed for bad service, and underfunded some more. And crazy stupid ideas like "social security is the biblical revelations mark of the beast" is some of the reasons why where we are. In my state, the bureau of motor vehicles was identified as "terrible". Investigation was made, and found that it had to do with not enough workers, not enough "open time", and bad communication to customers (us drivers). My state then increased workers at all branches, increased hours on some days to accommodate a wider array of schedules, and now our BMV is superb. So no, I whole-heartedly reject that "government-issued" is in the same class. I refuse to play in faux libertarian narratives.

gkoberger 3y ago

I guess I don't understand this argument. It's significantly cheaper to have a remote employee, especially if you pay location-based salaries. In addition to lower salaries, you save a ton on office space, janitorial services, food and coffee, workmans comp, office managers, furniture, etc. I think it's more likely that some people really like to work from home, and other people really like the office. And that's okay! People have different preferences and circumstances. The only issue is that it's one of those things where both sides can't really have their way at the same time, because it defeats the purpose of an office if you're the only one there. Of the 22,000 people who work at Farmers, 2,000 have reacted negatively. (Yes, I assume it's higher b/c some people don't want to publicly disagree with their employer.) Overall, I think everyone simply has a preference, but it's become an escalated debate. I think eventually we'll see half of companies being remote and half being in the office, and everyone will get to make their own decision for what works best with their goals and lifestyles. (All that being said, in this situation, telling people they can work remotely and then changing it is pretty crappy.)

jedberg 3y ago
It's cheaper to have a remote employee for sure, unless you've already bought an office tower or committed to a 15 year office lease. Then it's more expensive because you have to support them at home but still maintain the building and pay the taxes on the building.
- gkoberger 3y ago
  Even with a lease, it's still more expensive to have them in the office. Or, to put it another way, if it's just about money – it's still cheaper to shut down the offices and pay to have them sit vacant since that's a sunk cost. I think most people who run companies are sociopaths who don't care about their employees. That being said, I think this is a situation where there's no hidden agenda... I think it's fine to disagree with their decision, but ultimately they genuinely believe it's better for the bottom line to have people in the same place.
  - 3y ago

tabtab 3y ago

Re: "tax breaks are butts in seats tax breaks" It kind of reminds me of schools who are afraid of kicking out disruptive students because they are funded based on student count. It's usually better for disruptive students to go to special schools, but the butt-based-funding mucks that up.

rfwhyte 3y ago

The problem is they'd actually have to say "Look we know you don't like it, but it's better for me personally as I have substantial personal investments in commercial real estate." Because it's not even ultimately about corporate profits (outside of real estate companies that is) as real estate holdings these days are largely a cost centre for most companies, and most companies were selling their RE holdings long before remote work was ever a thing and leasing back their offices from the companies they sold them to. This is ultimately about the personal wealth and power of the elite class, who's wealth is heavily concentrated in real estate. Nobody goes back to the office the companies financials look broadly the same, but the owners / shareholder's personal portfolios look a lot, lot worse.

ryandrake 3y ago

I've always wondered about this explanation. Commercial Real Estate is a big industry but it's not that big. How can this relatively small tail wag the dog (the enormous US economy)? Real estate may be a cost for companies, but is it really that big, for so many companies, such that they are all operating pretty much in lock-step around WFH vs. Return To Office?

SketchySeaBeast 3y ago
Well, the total market for Commercial Real Estate in the United States is about $20 Trillion. That's pretty big.
- refurb 3y ago
  That’s value of all assets, not just annual GDP of commercial real estate. It’s less than 10% of all US assets ($270T).
  - SketchySeaBeast 3y ago
    Personally, I think 7.5% of all US assets is a HUGE amount of money and power.
    - refurb 3y ago
      US residential real estate is worth $43T, so about double. Does that mean home owners have lots of money and power?

mattcantstop 3y ago

I can see how a CEO would look at a long term lease and regret the financial commitment and then see in person as more compelling to not have as much regret. That seems plausible, but foolish, because of the sunk cost fallacy. I can't see how commercial real estate companies losing money would compel most businesses to take this approach. I can see how JP Morgan would promote this, hoping it would help other companies make the same decision, and therefore avoid a commercial real estate (and related loans for JP Morgan) collapse. But the average company has no potential tax breaks, has the potential to save money by getting rid of their office space, and doesn't care about the financial outcomes of large real estate investors or lenders. I think they believe returning to the office is good. I would agree with them that some things are hard to replicate in a remote environment. It's hard to brainstorm a new project in a Zoom call. But I think many prefer an in person work setup because they are bad managers. Bad managers are not good at setting a vision for a company or building in organic, helpful checkpoints for progress and accountability. They don't actually state what anyone at the company should be doing. Expectations are often unclear. These bad managers have very little way of knowing if their employees are working. So they go the lazy route and use presence and the appearance of busyness, in the office, as a poor stand in for good management. There are benefits of being in-person. But whenever I see a decree for in person work, I think it's usually just poor leadership. I would say the best dynamic for most, not all, companies is a remote work environment where people can get together as needed. Well before the pandemic I worked at GitHub. At GitHub we worked remotely but we got together often to have a hack house where we worked together solving a problem that needed brainstorming or deep thinking. I saw my fellow employees often. It was the best of both worlds. A remote first company with opportunities to get together as needed is the gold standard. A fully in person is too extreme. A fully remote company without the chance to get together is also a poor experience and is very isolating. Both too far on either side of the spectrum.

RestlessMind 3y ago
> a remote work environment where people can get together as needed. +1 to that in theory though in practice, it is hard to pull off if everyone is geographically scattered. Key constraint boils down to everyone's ability to attend in person - you always miss around 10-15% of attendees. And then there is not enough ROI on all the expenses you have incurred for that offsite (air, hotel, cabs etc). If people are in the same geographical area, then probably it is not a problem.

bleah1000 3y ago

I see this all of the time, but without any evidence. Even your edit says they get a "butts in seat" tax break. But how much is that? I can very easily see the savings of remote employees being way higher than this tax break. You might need to spend a bit more on IT and maybe on equipment. Then again you save on cleaning (not needed as often), garbage, electricity and anything else related to maintenance. Maybe it's slightly more expensive, or slightly less expensive. I've never seen anyone break the numbers down before making this claim. It feels like an appeal to emotion, those bad companies only care about money. Even if that's true, this argument doesn't prove it's true in this case. And this all assumes long term leases or you own the building. It's possible to pay to get out of leases some time, and you can sell the building if you think it's going to cost millions to keep owning it. Also, we are seeing lots of smaller businesses also requiring people to come back to the office. If they are getting some huge tax break for a 100 person company, how much is that? I'm happy if I'm wrong, and this is some huge tax break that saves companies millions of dollars, but I think it's fair to ask for evidence that this really saves the money people claim it saves. I think there are other dumb reasons people are being called back, it just doesn't feel like this is one of the reasons.

jedberg 3y ago
Here is an article about it where someone had a similar skepticism as yourself: https://www.bloomberg.com/news/features/2023-02-21/another-threat-to-work-from-home-tax-breaks https://www.bloomberg.com/news/features/2023-02-21/another-t... Also, I didn't say tax breaks was the only reason. I also said commercial real estate prices. Even companies that don't own buildings need commercial real estate to stay up, either because their owners own some elsewhere, or because other business products are priced based on commercial real estate (one common example is corporate insurance treasuries often hold a lot of corporate real estate).