Joel Kotkin at The New Atlantis: Simply put, downtowns matter less and less. In Austin and elsewhere, we are witnessing an epochal shift away from the highly concentrated urban center first described by Jean Gottmann in 1983 as the “transactional city.” Gottman spoke of a future dominated by massive high-rise office buildings filled with professionals who commuted largely from the periphery. Yet in reality, jobs have been dispersing throughout metro areas since the 1950s. Bumsoo Lee and Peter Gordon showed that downtowns for cities with the largest populations had dropped to 7 percent of metropolitan employment by 2000, while 78 percent of jobs were located in dispersed areas. Office occupancy and construction of new space have both seen a net decline since the turn of the century. The same goes for businesses, as investment in corporate real estate moves away from dense urban areas.
Remote work, rising before the pandemic but greatly expanded since, allows professionals to work ever further away from their place of employment. According to a 2023 paper at Stanford, work-from-home constituted about 7 percent of workdays before the pandemic and over 60 percent at its peak. The number has since dropped to below 30 percent, but that is still four times the pre-pandemic share.
This trend is particularly critical for high-tech jobs, a key driver in the Austin area. A 2020 study from the University of Chicago suggests that one-third of all jobs could be done remotely and up to half of the jobs generated by Silicon Valley.
Futurists have long argued about how remote work would shape urban geographies. Some predicted a spur to concentration in big cities and high-rises, but others recognized that the ease of telecommunications would allow unprecedented levels of dispersion. Many managers will continue to resist this trend, and surveys of workers suggest that many of them wish a more flexible approach to office occupancy.
This shift favors suburban and exurban areas, particularly those with high concentrations of knowledge workers. Work from home, whether full-time or in a hybrid model, according to a Conference Board survey, also addresses issues especially important to millennials, like work–life balance. The new paradigm also favors suburban and exurban buildings that can accommodate both full-time and hybrid workers, perhaps one reason why they are now outperforming many of their downtown counterparts.
More here.
