With some 95% of those in office towers working from home over the past 6 weeks, the pandemic has given an opportunity to test decentralized work arrangements in real-time. Many companies, especially in the service sector, have been pleasantly surprised and are now envisioning cost-saving work-from-home arrangements for well beyond COVID-19. See: BMO says 80% of employees may switch to blended home-office work.
I have long argued that a debt-heavy, aged, climate-challenged, slower-growth world must be focused on improving efficiency, wasting less–time, money, resources, pollution–to have more–savings, quality of life, sustainability and productivity.
If workers are spending less time travelling to and from work and meetings, they too tend to spend less–transportation, parking, restaurants, clothing, even child care–and have more time for essentials like exercise, preparing food and maintaining family and home. Spending less allows us to pay down debt and build up savings faster, and most people are very much in need of both.
This won’t be a win for everyone of course. The past decade of credit abuse helped to fuel a massive overbuild in commercial space and proximate housing. Less demand in concentrated centers should lead to lower rents and property prices, but even that may not be enough to sop up all the superfluous supply in some places.
In a highly levered world, this is set up to be a tough transition for present owners, investors and lenders. Rethinking and repurposing space will be part of the solutions needed.
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