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Speaker 1: From Bloomberg News and I Heart Radio. It's the Big Take.

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Speaker 1: I'm West Cassova. Today more people are working from home,

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Speaker 1: and that has some cities very nervous. We've talked a

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Speaker 1: few times on this podcast about the tug of war

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Speaker 1: between companies and employees over flexible work arrangements. People whose

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Speaker 1: jobs don't require them to be there in person want

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Speaker 1: to work from home at least part of the time,

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Speaker 1: and a lot of companies are letting them. That's left

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Speaker 1: cities with this pressing problem. Fewer people downtown means a

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Speaker 1: lot less money being spent there every day. There's less

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Speaker 1: demand for all the buildings and buses, shops, restaurants and

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Speaker 1: services that downtowns are built around and can't survive without companies. Politicians,

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Speaker 1: urban planners are now taking a hard look at how

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Speaker 1: their cities can change to adapt to a new reality.

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Speaker 1: Reporters Emma Court and Donna Borak have written a big

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Speaker 1: story about what all this looks like for New York

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Speaker 1: and other cities too, and they're here with me now

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Speaker 1: from New York. Donna, let me start with you, and

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Speaker 1: you began reporting this story. What is it that you

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Speaker 1: wanted to find out? When we began this reporting project, like,

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Speaker 1: we wanted to be able to answer the question of

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Speaker 1: what was the economic impact of remote work in Manhattan right?

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Speaker 1: And we wanted to be able to show in more tangible,

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Speaker 1: concrete ways, how the daily rhythm of life had changed

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Speaker 1: across the city. We know that wridership is down. We

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Speaker 1: know that people are not badging into the office nearly

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Speaker 1: as often as pre pandemic. You go downtown, it's not

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Speaker 1: nearly as vibrant, you know, as it once was. But

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Speaker 1: what does it really feel like on a Monday in

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Speaker 1: Manhattan versus a Thursday, And like, does it really matter?

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Speaker 1: You do see this sort of clumping around Tuesday, Wednesday,

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Speaker 1: Thursday in New York City, you know, people are in

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Speaker 1: the office, and we've seen that. You know, we use

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Speaker 1: a ton of data for the story, So we saw

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Speaker 1: this trend pretty black and white in a variety of ways.

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Speaker 1: We saw it in black card data, so for people

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Speaker 1: who are expensing business rights to work, we saw them

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Speaker 1: sort of coming in in force on Tuesday, Wednesday, Thursday.

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Speaker 1: We saw it in subway data, we saw it an

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Speaker 1: office badge data, we see it in foot traffic data.

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Speaker 1: And so I think, you know, we feel really confident

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Speaker 1: after looking at all this data and really crunching the

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Speaker 1: numbers to be able to say, this is a big

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Speaker 1: trend that's happening. You know, people are all wringing their

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Speaker 1: hands about hybrid work, but the reality of it is,

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Speaker 1: at least in New York and in many parts of

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Speaker 1: the country, people are back in offices, but it's extremely uneven,

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Speaker 1: especially at the start and the end of the week.

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Speaker 1: And you know, we have to think about what that

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Speaker 1: means for cities, for their economy, means for offices for workers.

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Speaker 1: That does have economic effects, and you know, cities are

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Speaker 1: only beginning to sort of grapple with what that means

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Speaker 1: for them. Sure. I mean, we're even seeing this at

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Speaker 1: like Sweet Green and Chopped, the popular lunch places where

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Speaker 1: you get a salad or something exactly right. Even just

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Speaker 1: standing in line, you're overhearing people talk about, well, what's

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Speaker 1: your three day, like when are you coming in? Are

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Speaker 1: you coming in on Tuesdays? Is Monday your anchor day?

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Speaker 1: And so we did a little bit of an experiment

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Speaker 1: to find out just how long it would take right

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Speaker 1: to get a Sweet Green salad on a Monday versus

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Speaker 1: a peak day of like Wednesday, or Thursday. I and

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Speaker 1: one of our interns at the time, Christian, went to

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Speaker 1: one specific Sweet Green over the course of a week

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Speaker 1: and came up with this like very scientific methodology, which

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Speaker 1: is like, you know, get online by a certain time,

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Speaker 1: like I think it was twelve ten pm, and then

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Speaker 1: see how long it takes to get from this, you know,

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Speaker 1: getting in line to picking up your salad. And so

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Speaker 1: on a Monday, it was about nine minutes and twenty seconds.

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Speaker 1: There's a little longer. On a Tuesday, nine minutes and

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Speaker 1: almost forty seconds. Wednesday, whopping, thirteen plus minutes. Thursday actually

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Speaker 1: a lot shorter, about six minutes, and on Friday it

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Speaker 1: was just four minutes. And I think, you know, this

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Speaker 1: kind of speaks to like, if you are, you know,

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Speaker 1: so bold as to go into the office on a Friday,

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Speaker 1: you will see there are no lines for lunch, your

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Speaker 1: subway car is not going to be busy, and you

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Speaker 1: you know, kind of reap the benefits of that. But

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Speaker 1: the businesses around you and the other kind of systems

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Speaker 1: reliant on commuters certainly don't. Some of this kind of

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Speaker 1: gets out. I think what the heart of this story

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Speaker 1: is really, which is, you know, there's been a lot

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Speaker 1: of handwringing about what does it all mean? Right, people

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Speaker 1: are not in offices the way they used to be.

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Speaker 1: Why does this matter? A couple of I think insights

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Speaker 1: that we bring to the table that hasn't been sort

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Speaker 1: of sharply looked at before. Is one this difference by

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Speaker 1: day of week, which I think everyone is observing if

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Speaker 1: they're in the office in a big city. And then

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Speaker 1: to sort of like what is the cost of that?

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Speaker 1: And we were able to come up with a number

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Speaker 1: to sort of figure out how much this is costing

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Speaker 1: New York City or specifically Manhattan in terms of you know,

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Speaker 1: sales to businesses like Sweet Green that sort of weekday

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Speaker 1: warriors favor, right, and uh, you know, to transit systems

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Speaker 1: because there's like misfares for instance, and all these other

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Speaker 1: you know, knock on effects of me working from home

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Speaker 1: on a Friday. It doesn't seem so bad, but in

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Speaker 1: mass an aggregate that really adds up. Our reporting and

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Speaker 1: analysis show that worker spending has reduced by at least

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Speaker 1: twelve point four billion dollars a year in Manhattan alone

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Speaker 1: due to remote work. Down in your story, you write

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Speaker 1: that to get that number, you asked for help from

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Speaker 1: a professor. His name is Jose Maria Barrero and he

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Speaker 1: is at Mexico's Instituto Technological Autonomo and he's also part

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Speaker 1: of Stanford University's Work from Home research groups. So how

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Speaker 1: does he sculate this in Barrero and his colleagues had

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Speaker 1: asked in their survey as part of their work from

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Speaker 1: home research, what workers had estimated they were spending on

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Speaker 1: a weekly basis on meals, shopping, and entertainment near the

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Speaker 1: workplace a year prior. So this research really was closest

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Speaker 1: to to get a sense of what were people spending

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Speaker 1: pre pandemic. Using that number, he was able to show

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Speaker 1: how much less workers were spending. By adjusting for a

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Speaker 1: thirty percent reduction in return to office that ends up

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Speaker 1: translating to about four thousands, six hundred and sixty one

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Speaker 1: dollars per person per year in Manhattan. They calculated similar

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Speaker 1: analysis and other major cities, including San Francisco, which was

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Speaker 1: just over three thousand dollars a year per worker that

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Speaker 1: was being lost due to remote work, and in a

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Speaker 1: city like Chicago just a little over. So we came

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Speaker 1: up with this number for New York. But it's cool

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Speaker 1: about you know what jose has done and his colleagues

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Speaker 1: at w FH Research Group is that they also came

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Speaker 1: up with all these estimates for how much in person

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Speaker 1: work has been reduced in all these other cities in

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Speaker 1: the United States, and they came up with spending calculations,

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Speaker 1: you know, similarly per person per week reductions and spending

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Speaker 1: for all these different places. So it's really interested to

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Speaker 1: see this list because at the top of it is

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Speaker 1: actually it's not New York, it's Washington, d C. Interestingly,

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Speaker 1: with a thirty seven percent reduction in person days. And

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Speaker 1: that's probably because you have all these federal workers who

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Speaker 1: have lenient work from home policies. And in fact, the

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Speaker 1: mayor of Washington, d C, Neuraler Browser, has been kind

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Speaker 1: of begging the Biden administration to require federal employees to

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Speaker 1: get back to work so that they can make up

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Speaker 1: the loss money exactly. And in fact, in New York,

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Speaker 1: Mayor Eric Adams has been a huge proponent of in

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Speaker 1: person work. He's you know, has federal employees in the office,

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Speaker 1: you know, depending on their jobs obviously like you know,

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Speaker 1: during the week, um, and it's been a big issue

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Speaker 1: because people don't really want to be in fun days

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Speaker 1: a week the way they were used to before. So, yeah,

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Speaker 1: do you see at the top of the list, followed

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Speaker 1: by Atlanta, number two, Number three is Phoenix, Number four

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Speaker 1: is l A, New York City coming in at number five,

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Speaker 1: but it's very similar to l A with a thirty

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Speaker 1: three reduction in person days. Then San Francisco, Boston, Miami, Chicago, Dallas, Philly, Houston,

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Speaker 1: And so we're seeing this happening all over the country

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Speaker 1: where cities are taken big hits because people aren't coming

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Speaker 1: downtown as much. Yeah, and we're seeing it all over

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Speaker 1: the world in fact, but you know, their data was

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Speaker 1: pretty u S specific. So we also have the spending reductions.

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Speaker 1: And even though New York is only sort of number

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Speaker 1: five in terms of reduction in person days, it's number

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Speaker 1: one in terms of spending because New York is expensive.

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Speaker 1: So New York is at the top of the list

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Speaker 1: with a reduction of four thousands, six hundred and sixty

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Speaker 1: one dollar per person per year. L A is four thousand,

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Speaker 1: two hundred d C is closer to about four thousand.

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Speaker 1: Atlanta is three thousand, nine hundred and so on. But

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Speaker 1: we thought it was a really interesting kind of window

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Speaker 1: into sort of how cities are getting impacted by this trend,

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Speaker 1: and you know how big a hit they're taking. There

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Speaker 1: is a so what to all of this, Right, they

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Speaker 1: have ripple effects of causing a decline and consumption of

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Speaker 1: food and beverages, right, transit rides impacting small business owners,

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Speaker 1: lowering sales tax revenue, transit operating revenue, which we're clearly

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Speaker 1: seeing in New York with the m T a shortfall,

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Speaker 1: and those drop offs have been especially acute as our

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Speaker 1: reporting is showed on Mondays and Fridays, right when employees

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Speaker 1: have shown the strongest preference to work from home. And

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Speaker 1: so cities really have to figure this out. The importance

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Speaker 1: of these revenue sources varies from city to city in

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Speaker 1: some cases for cities and regions, the US is there

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Speaker 1: so urgent and are just requiring immediate fiscal help in

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Speaker 1: the very near term. And even if you look at

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Speaker 1: New York City, Eric Adams ruled out his hundred and

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Speaker 1: three billion dollar budget and is already projecting tax revenue

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Speaker 1: shortfalls in the out years, like, yes, we can balance

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Speaker 1: this year, but there's going to be a lagging effect

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Speaker 1: to the impact of all of this. So all that

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Speaker 1: money has to go somewhere. It's not that people aren't

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Speaker 1: spending at all anymore, they're just spending closer to home

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Speaker 1: when they work from home. And so we are seeing,

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Speaker 1: you know, MasterCard has this really cool kind of data

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Speaker 1: and it measures in store and online retail sales across

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Speaker 1: all forms of payment. So this is literally New York

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Speaker 1: City spending data that they have, which is such a

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Speaker 1: cool data source we found. And what we saw in

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Speaker 1: their data is that you know, Manhattan growth in like

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Speaker 1: in certain months like September, versus that retail sales was growing,

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Speaker 1: you know, a little bit, but not a lot. And

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Speaker 1: then you saw in the outer boroughs higher levels of

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Speaker 1: growth relative versus in Manhattan, and I think that tells us,

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Speaker 1: you know, we don't know obviously exactly what's going on,

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Speaker 1: but we were looking at week days and so we

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Speaker 1: believe what's happening is that, you know, work from home

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Speaker 1: is providing an economic benefit in these other parts of

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Speaker 1: the city. Emma and Donna Lease stay with me, will

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Speaker 1: continue talking after the break. Donna, Emma, you've painted this

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Speaker 1: very vivid picture of how cities are being affected by

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Speaker 1: workers not coming into the office as much on certain days.

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Speaker 1: So the big question now is what are cities actually

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Speaker 1: doing about it? Businesses affected mass transit. You have lots

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Speaker 1: of office buildings that are standing empty or underused part

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Speaker 1: of the week. How is this affected cities and like

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Speaker 1: sort of why is it so important to cities? Cities

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Speaker 1: really care about this because for one thing, they use,

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Speaker 1: you know, tax revenue from consumer spending to fund the city.

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Speaker 1: They also care about it because another big form of

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Speaker 1: revenue for cities is income taxes. And if I don't

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Speaker 1: have to live in New York City because I only

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Speaker 1: have to be in the office one time a week,

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Speaker 1: and I can, you know, take the hit of a

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Speaker 1: two hour commute from some other state, maybe I'm going

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Speaker 1: to move away. Uh. And in a city that's as

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Speaker 1: expensive and difficult to live in as New York and

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Speaker 1: many cities are expensive and difficult to live in, that

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Speaker 1: is a big existential risk. What is the point of

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Speaker 1: living in New York City if you don't really have

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Speaker 1: to live there and you're paying a big price? Yeah, So,

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Speaker 1: I think for city officials, the big shift to work

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Speaker 1: from home has really increased the sensitivity of the local

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Speaker 1: tax base. So people residents in New York are going

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Speaker 1: to be a lot more attuned to the quality of

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Speaker 1: local governance, the quality of local public goods that are

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Speaker 1: being provided to the people that live and work here.

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Speaker 1: So the stakes are really high. So if you have

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Speaker 1: a city that gets it right, either by virtue of

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Speaker 1: a great functioning political system or is just endowed with

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Speaker 1: the kinds of amenities that people value, like here in Manhattan,

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Speaker 1: those cities might be like well positioned to benefit from

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Speaker 1: work from home. But for the cities that don't get

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Speaker 1: it right, like due to a number of factors, whether

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Speaker 1: they're economic or political reasons, some researchers worry that they

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Speaker 1: may face a potential doom loop right as downward spiral

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Speaker 1: where residents leave and inward commuters diminished. I think are

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Speaker 1: reporting has shown that really the economic benefit of having

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Speaker 1: these inward commuters into the city is incredibly important. And

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Speaker 1: so there's this monumental task that policymakers are now faced with,

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Speaker 1: and they're trying to work out how to best make

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Speaker 1: this transition happen, which they anticipate are going to take

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Speaker 1: years to achieve, and what does it look like? What changes?

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Speaker 1: Because there's a thing happening now in a lot of

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Speaker 1: cities where politicians answer to it is to try to

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Speaker 1: force people to get to come back to work five

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Speaker 1: days a week, because that's what the system is set

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Speaker 1: up for. But it doesn't seem realistic. A lot of

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Speaker 1: workers they're saying, well, why should I have to pay

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Speaker 1: to sustain the system that no longer works for me?

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Speaker 1: So change will have to come. What does it actually

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Speaker 1: look like? City officials right now are really trying to

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Speaker 1: wrap their arms around possible solutions. Office conversions is one

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Speaker 1: of them. You know, as Emma mentioned, this is a

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Speaker 1: very difficult undertaking. There's ten million square footage that Mayor

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Speaker 1: Adams thinks is like something that could be repurposed to

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Speaker 1: get people back into downtown so that they're not just

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Speaker 1: there to go to the office, but they're living and

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Speaker 1: going out to restaurants and helping support small businesses. How To,

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Speaker 1: it's going to be really tough, and we don't really

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Speaker 1: want to overdo the office conversions because you still need

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Speaker 1: office buildings to be there as an like an economic

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Speaker 1: engine of growth for the city. The one thing that

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Speaker 1: I also want to add on to this, like with

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Speaker 1: the rise of office vacancies. Right so, because we have

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Speaker 1: this like stark contrast from the old ebb of daytime

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Speaker 1: population surges in the middle of the day, you know,

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Speaker 1: you end up having these declining office rents that reduce

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Speaker 1: the value of commercial buildings and ultimately end up negatively

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Speaker 1: impacting property revenue, which is such an important part of

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Speaker 1: the city's livelihood. So some of the researchers at Colombia

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Speaker 1: n YU have modeled this drop in office market value,

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Speaker 1: which their estimating could cost like five billion dollars in

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Speaker 1: annual loss tax revenue, or really five percent of the

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Speaker 1: city's budget. That is a significant chunk. Having that five

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Speaker 1: percent of the city's budget be eaten a way because

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Speaker 1: of office building depreciation. Market value depreciation, I mean, really

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Speaker 1: eats into the coffers of the city. But there's a

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Speaker 1: big hole that will be left to be filled, right

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Speaker 1: that you need that additional tax revenue to fund schools,

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Speaker 1: to fund the rats are so that like the streets

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Speaker 1: are clean, you know, pick up trash, policing, all of

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Speaker 1: these things that are also at the crux of you

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Speaker 1: know what Eric Adams has to wrestle with in order

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Speaker 1: to even create a feeling of economic recovery, right that

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Speaker 1: the city is back, that they don't have these ongoing

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Speaker 1: issues for every different piece of the puzzle, there's perhaps

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Speaker 1: a different solution. One thing we've heard from Sweet Green

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Speaker 1: is in these stores that have been really hard hit

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Speaker 1: from this, they're actually trying to renegotiate their agreements with

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Speaker 1: landlords so they can instead of paying sort of fixed

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Speaker 1: rent every month, maybe they can do it as a

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Speaker 1: percentage of sales. For instance. Um, you know, with the

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Speaker 1: m t A, with these big kind of budget gaps

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Speaker 1: that they're facing down, you know, they've said, unless we

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Speaker 1: get some more money from you know, the city and state,

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Speaker 1: we're going to need to cut service. And in fact,

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Speaker 1: they are already cutting service on Mondays and Fridays. They're

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Speaker 1: planning to on several lines that you know, largely connect

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Speaker 1: Manhattan and other borrows. You know, there's a lot of

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Speaker 1: emphasis by city leaders trying to inch your way back

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Speaker 1: to what things look like in and I think something

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Speaker 1: we found really fascinating from this reporting is might there

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Speaker 1: be another path forward, for instance, by leaning into more

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Speaker 1: of that outer borrow silver lining that we're seeing. And

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Speaker 1: so I think what's really interesting about kind of putting

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Speaker 1: some numbers on these problems that hopefully helps city officials,

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Speaker 1: business leaders, everyone else find a way to take a

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Speaker 1: path forward and create a better way for the city

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Speaker 1: to recover. Emma Court, Donna Bora, thanks so much for

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Speaker 1: coming on the show today. Thank you so much, Wess,

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Speaker 1: it's been a pleasure. When we come back, we'll talk

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Speaker 1: about ways cities can reinvent themselves. So what are some

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Speaker 1: of the things cities can do to meet all these

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Speaker 1: changing needs and not go broke? Tracy Hadn't Low thinks

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Speaker 1: about these questions for a living. She's a fellow at

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Speaker 1: the Brookings Institution and her research focuses on commercial real

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Speaker 1: estate and how cities can become better places to work

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Speaker 1: and live. And she joins me from Baltimore. Tracy, if

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Speaker 1: employees won't come back five days a week, and it

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Speaker 1: seems like in a lot of businesses where physical presence

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Speaker 1: isn't required, that seems to be the new way of

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Speaker 1: doing things. How are cities going to have to adapt?

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Speaker 1: We have a lot of office buildings which will no

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Speaker 1: longer be needed. You have a lot of businesses that

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Speaker 1: can't make as much money. So I guess what we're

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Speaker 1: looking at down the road or cities changing as they

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Speaker 1: always do. What sort of changes do you see? So

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Speaker 1: a trend that was going on before the pandemic that

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Speaker 1: has certainly been accelerated is that employers are consuming fewer

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Speaker 1: square feet of office space per worker. That's been declining

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Speaker 1: in the top ten U S office markets for over

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Speaker 1: a decade, and it's going to hit new low is

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Speaker 1: now and it's going to hit more markets. This is

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Speaker 1: going to be everywhere in the US, not just in

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Speaker 1: the biggest office markets. So the question there is how

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Speaker 1: low is it going to get? Because if your employees

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Speaker 1: are in the office three days a week, you still

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Speaker 1: need an office. The question is like how much obsolete

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Speaker 1: office space is there? And that depends on how much

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Speaker 1: employers can reduce their footprints. Relatively few employers are taking

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Speaker 1: those footprints to zero and going fully remote. So the

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Speaker 1: question is what does the in person component of a

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Speaker 1: hybrid workplace look like, how much space does it take?

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Speaker 1: And then of the remaining space, how much is now

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Speaker 1: obsolete because it doesn't match these new demands for what

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Speaker 1: offices have to be like and how much of it

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Speaker 1: can be adapted. From a city planning perspective, when you

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Speaker 1: know planning commissions and mayors and city councils start looking

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Speaker 1: down the road at their cities. What sort of things

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Speaker 1: are you hearing about the way they want downtowns to change,

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Speaker 1: not just office buildings, but restaurants and shops that depended

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Speaker 1: on that nine to five revenue that is now no

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Speaker 1: longer as big as it used to be. There's a

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Speaker 1: few obvious things that cities are already doing and baking

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Speaker 1: into their strategies that makes sense. So the first is

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Speaker 1: incentivizing the conversion of office into housing. So saying like, okay,

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Speaker 1: you can strengthen demand for local retail, for example, by

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Speaker 1: making sure that downtown is a place where people are

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Speaker 1: not just between nine and five, but also five and

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Speaker 1: nine and uh. And you can also do that by

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Speaker 1: increasing the quality of the other amenities that are in

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Speaker 1: a downtown neighborhood, like waterfronts, other high quality open spaces,

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Speaker 1: places just for people to spend time, um, whether they're

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Speaker 1: working or doing something else. Right, Since uh majority of

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Speaker 1: travel is non work travel, and a majority of the

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Speaker 1: time in our lives is not spent at work, it

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Speaker 1: makes sense that if you just want more people, then

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Speaker 1: you need more nonwork amenities and activities and experiences and things.

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Speaker 1: How hard will it be for cities to begin to

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Speaker 1: adapt to this new reality. So was what is holding

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Speaker 1: up downtowns from adapting is that of the built environment

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Speaker 1: is controlled by the private sector individuals or companies who

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Speaker 1: make their own decisions about their own assets. What cities

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Speaker 1: can control is what's happening in the public right of way,

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Speaker 1: and there are huge untapped opportunities in most cities to

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Speaker 1: rethink that, not just in terms of high quality open spaces,

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Speaker 1: but traffic safety, and to think about supporting retail, for example,

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Speaker 1: by reallocating space from car storage and to retail. Like

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Speaker 1: there's there's plenty of opportunities there that cities can take.

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Speaker 1: But what about this that the built environment that's controlled

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Speaker 1: by the private sector. Figuring out how to incentivize the

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Speaker 1: owners of these assets that are located at the heart

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Speaker 1: of our cities. That is the big question right now

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Speaker 1: of how to motivate these players to think differently about

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Speaker 1: how they use their assets and put them to work.

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Speaker 1: If we make adapting buildings really hard to do, people

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Speaker 1: just won't do it and they'll just walk away, like

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Speaker 1: there's always another option. What's going to happen with some

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Speaker 1: of these office buildings is like there is going to

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Speaker 1: be a wave of foreclosures, people are just going to

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Speaker 1: give the keys back to the bank, and you know

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Speaker 1: who's really going to do nothing with it? Banks? Are

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Speaker 1: there tax incentives or there other things that cities are

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Speaker 1: already starting to offer to make those switchovers. Yeah, very

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Speaker 1: few office buildings are a hundred percent vacant. Even if

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Speaker 1: they're half empty, that means they're also have full So

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Speaker 1: when you're talking about an office building, you're talking about

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Speaker 1: an income producing asset that has current tenants in it.

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Speaker 1: First off, the motivation is low for the owner to

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Speaker 1: do anything with it because it is generating income, maybe

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Speaker 1: not as much as it used to, but if you

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Speaker 1: wanted to do anything else with it, that would come

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Speaker 1: with costs. So that's a disincentive to do anything different

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Speaker 1: with it, especially when you do have some revenue. So

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Speaker 1: in terms of incentivizing it, that means that the carrying

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Speaker 1: cost of the vacant space has to increase, and the

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Speaker 1: trick is increasing that carrying cost in a way that

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Speaker 1: doesn't further disincentivize the owner from actually doing anything with

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Speaker 1: it and investing in the property. Doing something different with

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Speaker 1: the property attractive. For example, Pittsburgh and Harrisburg in Pennsylvania,

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Speaker 1: both have a land value tax system in which they

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Speaker 1: separately acts the land under a building and the building itself.

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Speaker 1: So even if an office building is dwindling in value

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Speaker 1: as it becomes more and more vacant, the land and

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Speaker 1: the location remain valuable, and that increases the carrying cost

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Speaker 1: of the asset because you can't escape the land tax.

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Speaker 1: I was speaking to a couple of my colleagues earlier

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Speaker 1: about how all of this is playing out in New

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Speaker 1: York City, which of course is you know, sort of

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Speaker 1: the center of attention a lot of the time whenever

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Speaker 1: it comes to real estate, and in New York and

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Speaker 1: other big cities, one of the huge complaints is no

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Speaker 1: one can afford to live there, and so it's hard

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Speaker 1: to live where you work. Do you see this as

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Speaker 1: being an opportunity to change cities into places where people

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Speaker 1: can actually afford to live and work. So I don't

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Speaker 1: think that converting offices into housing is going to make

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Speaker 1: a meaningful down in the housing crisis, because we were

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Speaker 1: talking about a pretty small number of units relative of

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Speaker 1: to the need that is out there. What it can

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Speaker 1: do is revitalized downtowns as places by bringing more people

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Speaker 1: into them, and everyone should have that chance, not just

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Speaker 1: the people with the most money. So in terms of

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Speaker 1: policies and incentives that cities can offer in order to

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Speaker 1: encourage the highest and best use of these locations, I

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Speaker 1: think there's a strong argument to be made that incentivizing

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Speaker 1: the production of housing, including affordable housing, and including housing

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Speaker 1: for particular communities of concern that are concentrated downtown, like

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Speaker 1: people experiencing homelessness, there's a clear case to take these

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Speaker 1: underused real estate assets and serve a greater public good.

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Speaker 1: So I think that we will see more policies incentivizing

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Speaker 1: the production of housing and affordable housing in downtowns. And

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Speaker 1: I think that there's a role for the federal government

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Speaker 1: here too. Just like the federal government offers tax credits

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Speaker 1: for the preservation of historic buildings, why not offer a

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Speaker 1: tax credit for the recycling of buildings into affordable housing.

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Speaker 1: As someone who looks at especially commercial real estate and

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Speaker 1: how that's changing all the time, look down the road

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Speaker 1: for us in I don't know, three years, five years,

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Speaker 1: in cities like Baltimore and New York Chicago, what looks

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Speaker 1: much different than it looks right now. I Mean, my

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Speaker 1: greatest fear is that nothing looks different, and that cities

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Speaker 1: enter generation of decline because of the lack of dynamism

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Speaker 1: in the real estate sector that prevents the built environment

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Speaker 1: from adapting in a timely way. That is my greatest fear.

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Speaker 1: My greatest hope is that we see uh boom in population.

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Speaker 1: We see all kinds of new housing downtown, that we

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Speaker 1: see right of ways reimagined from being enormous channels for

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Speaker 1: commuters into um live work play spaces for people, and

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Speaker 1: that we see office buildings incorporating some of the comforts

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Speaker 1: of home with all of the important things that we

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Speaker 1: need for work, like spaces to collaborate and incredible connectivity.

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Speaker 1: Tracy had Low, Thanks so much for talking with me today.

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Speaker 1: Thanks Wes. You can read more from Emma Court and

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Speaker 1: Donna Borak at Bloomberg dot com. Thank you for listening

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Speaker 1: to us here at The Big Take. It's a daily

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Speaker 1: hear from you. Email us questions or comments to Big

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Speaker 1: Take at Bloomberg dot net. The supervising producer of The

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Speaker 1: Big Take is Vicky Bergoline Huh. Our senior producer is

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Speaker 1: We'll be back tomorrow with another Big Tig