Spend any amount of time in New York and you’ll feel it. Manhattan and Brooklyn are teeming with activity. It’s electrifying to be there after being relatively confined for years.
The question posed by the San Francisco Chronicle this week is why San Francisco isn’t recovering in the same way.
As reporter Roland Li writes, “There has always been a disconnect — New York has 10 times the population of San Francisco — but coastal tourism and economic hubs have diverged strikingly as they recover from the pandemic.”
Consider, Li writes, that construction of large commercial real estate projects in Manhattan has been completed during the pandemic — and while much of this new office space is almost fully leased — over in San Francisco, projects have stalled and existing buildings are struggling to find tenants because of the work-from-home policy.
One way to fill these buildings is to convert them into apartments. Wall Street, Li observes, has been doing just that for decades. But while there’s clear demand for housing in New York, and rents are already soaring to record highs, in San Francisco it’s not so clear that enough people would — for now — rent converted office space even if it were available.
Indeed, new telecommuting policies are clearly having a major impact on where people live, and many Bay Area workers who might be fleeing the area’s high prices have done so. (California — led by San Francisco and followed by Los Angeles — lost more than 352,000 residents between April 2020 and January 2022, according to California Treasury Department statistics.)
It might be time to consider whether these fully distributed plans still make sense. In his post, Li partially draws a line between the “staggering crowds” on the streets of New York and April last year, when then-Mayor Bill de Blasio announced that city employees would soon be returning to the office, a move quickly followed by private ones Company.
Called back by employers, New Yorkers who had left during the pandemic suddenly found themselves looking for new housing, if only to spend just two or three days in the office.
The gambit seems to continue to work. The Partnership for New York City, which says it surveyed more than 160 employers over a two-week period between late April and early May, found that 38% of its Manhattan workers are back in the office on an average weekday, while 28% % are completely remote. Meanwhile, the average attendance is expected to increase to 49% over the next month.
This does not mean that the employees are full-time again. They may never be, considering even the most vocal critics of remote work have been forced to soften their stance, including JPMorgan Chase CEO Jamie Dimon. As Bloomberg reported in May, Dimon told shareholders in an April letter that working from home “will become more permanent in American business,” and estimated that about 40% of its 270,000 employees would work on a hybrid model. Shortly after, a senior engineer at the bank told some teams that, based on internal feedback, they could spend two days in the office instead of three if they wanted.
Those two to three days a week could save New York, and it might be time more San Francisco employers, reluctant to make demands of their own employees, consider doing the same.
Small businesses in San Francisco are increasingly desperate for the economic activity that would bring office workers back; While civic duty may not be a priority for local tech companies, there’s still a strong argument that hybrid environments allow employees better work-life balance, more camaraderie with their peers, and even career advancement.
Many blame San Francisco’s inability to recover on a lack of affordable housing, and there’s no question that the city is self-sabotaging on that front. In San Francisco, “instead of clear rules where a developer knows I can build this, everything is negotiable and every project is ad hoc,” Jenny Schuetz, a housing economist at the Brookings Institution, told The Atlantic in May.
But abandoning plans to return to the office forever will not solve the problem. Meanwhile, two and a half years after the pandemic sent everyone home, and amid a slowing US economy that’s making it harder to change jobs (and newly relaxed CDC-COVID guidelines), it might be time for more outfits to embrace the Ask employees to come into the office two to three times a week and see what’s happening from there.
It is not the responsibility of employers to “fix” San Francisco. At the same time, if they wait too long, they may not have much left to go back to.