Cause to Worry, Reason to Act

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Three years ago, we set out on a research agenda that studies the impact of the pandemic on the market for office real estate — and on cities more broadly. We documented how the pandemic had shifted the tectonic plates of how we live and work. It caused migration from urban to suburban areas and from our largest metropolitan areas to smaller cities. House prices and rents grew much faster in suburban areas and smaller cities than in urban areas of first-tier cities. That study’s sample ended at the end of 2020, but updated data show that these trends have continued to play out in the three years since then. The latest Census data indicate that New York City has lost a grand total of 550,000 residents since April 2020, despite large international immigration flows. While the exodus slowed to 78,000 in 2023, numbers consistent with the outflows just prior to the pandemic, it did not reverse. Our research indicates that the flexibility provided by being permitted to work from home was a k

The researchers who popularized the idea of the “urban doom loop” assess the state of the evidence. The other shoe is yet to drop on the office market. Our paper uses a model to calculate the value of the stock of New York City offices under various scenarios for the future evolution of work-from-home and the state of the economy. The latest version of our model predicts a 50% loss in value for the New York City office stock in the average scenario. The value destruction is even larger if current work-from-home practices were to continue for the next five years. We show that the losses are lar

Cause to Worry, Reason to Act

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