Virtual Work Will Make Cities Larger

The current pandemic has been a crash course in remote work and led to discussions about the decline of cities as people are allowed to work from anywhere. Despite the speed to which we have all learned to work remotely, I don’t believe that remote work is sustainable for economies, companies, or people. Ignoring academic reasons given for the existence for cities, I believe that there are very basic reasons for going into a company’s office.[1] Reasons that people go into a company’s office, even during a pandemic, include connecting personally with their team, taking a break from their children, and simply enjoying a change of scenery.

Instead of permanent remote work, I believe that work will simply become more flexible. People will be able to work from the company’s office a few days a week and from their home office a few days a week. People will be able to shift their hours to work when they want, so long as they get their job done. My personal observation is that a large share of people with the privilege to choose would go into the company’s office two days per week and their home office three days per week.

If we only work in a company office two days a week, I see this resulting in two major changes. First, businesses will reduce how much office-space they rent and ask employees to alternate the use of shared space. Second, people will move farther out of the city to the very edges of metro areas in search of bigger houses and more space. They will not be bothered by the fact that their commute is perhaps substantially longer given that they only have to make the trek a couple days a week. The wealthy will opt for a pied-a-terre in the city and spend a few nights a week downtown before returning to the far-flung edges of the metro.

If workers can commute from farther away, the result will be larger metro areas. Metro areas will grow larger in both geographic size and population as more people are allowed to have flexible work schedules.

We will still have Zipf distributed cities (that has been and will continue to be the case; see more here), but the metro areas of super-star cities will grow larger. New York, DC, Seattle, and Boston will become more populous, not less. It will take a few years of restructuring infrastructure and public health systems, of course, but people in cities are incredibly adaptable. As folks adjust their habits and learn from the current pandemic, cities will grow larger.

[1] Economic benefits of living in cities, agglomeration economies, are suggested to result from knowledge sharing, shared labor pools, specialized suppliers, greater competition, etc.

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