Speaker 1: From Bloomberg News and I Heart Radio. It's the Big Take.
Speaker 1: I'm West Cassova. Today more people are working from home,
Speaker 1: and that has some cities very nervous. We've talked a
Speaker 1: few times on this podcast about the tug of war
Speaker 1: between companies and employees over flexible work arrangements. People whose
Speaker 1: jobs don't require them to be there in person want
Speaker 1: to work from home at least part of the time,
Speaker 1: and a lot of companies are letting them. That's left
Speaker 1: cities with this pressing problem. Fewer people downtown means a
Speaker 1: lot less money being spent there every day. There's less
Speaker 1: demand for all the buildings and buses, shops, restaurants and
Speaker 1: services that downtowns are built around and can't survive without companies. Politicians,
Speaker 1: urban planners are now taking a hard look at how
Speaker 1: their cities can change to adapt to a new reality.
Speaker 1: Reporters Emma Court and Donna Borak have written a big
Speaker 1: story about what all this looks like for New York
Speaker 1: and other cities too, and they're here with me now
Speaker 1: from New York. Donna, let me start with you, and
Speaker 1: you began reporting this story. What is it that you
Speaker 1: wanted to find out? When we began this reporting project, like,
Speaker 1: we wanted to be able to answer the question of
Speaker 1: what was the economic impact of remote work in Manhattan right?
Speaker 1: And we wanted to be able to show in more tangible,
Speaker 1: concrete ways, how the daily rhythm of life had changed
Speaker 1: across the city. We know that wridership is down. We
Speaker 1: know that people are not badging into the office nearly
Speaker 1: as often as pre pandemic. You go downtown, it's not
Speaker 1: nearly as vibrant, you know, as it once was. But
Speaker 1: what does it really feel like on a Monday in
Speaker 1: Manhattan versus a Thursday, And like, does it really matter?
Speaker 1: You do see this sort of clumping around Tuesday, Wednesday,
Speaker 1: Thursday in New York City, you know, people are in
Speaker 1: the office, and we've seen that. You know, we use
Speaker 1: a ton of data for the story, So we saw
Speaker 1: this trend pretty black and white in a variety of ways.
Speaker 1: We saw it in black card data, so for people
Speaker 1: who are expensing business rights to work, we saw them
Speaker 1: sort of coming in in force on Tuesday, Wednesday, Thursday.
Speaker 1: We saw it in subway data, we saw it an
Speaker 1: office badge data, we see it in foot traffic data.
Speaker 1: And so I think, you know, we feel really confident
Speaker 1: after looking at all this data and really crunching the
Speaker 1: numbers to be able to say, this is a big
Speaker 1: trend that's happening. You know, people are all wringing their
Speaker 1: hands about hybrid work, but the reality of it is,
Speaker 1: at least in New York and in many parts of
Speaker 1: the country, people are back in offices, but it's extremely uneven,
Speaker 1: especially at the start and the end of the week.
Speaker 1: And you know, we have to think about what that
Speaker 1: means for cities, for their economy, means for offices for workers.
Speaker 1: That does have economic effects, and you know, cities are
Speaker 1: only beginning to sort of grapple with what that means
Speaker 1: for them. Sure. I mean, we're even seeing this at
Speaker 1: like Sweet Green and Chopped, the popular lunch places where
Speaker 1: you get a salad or something exactly right. Even just
Speaker 1: standing in line, you're overhearing people talk about, well, what's
Speaker 1: your three day, like when are you coming in? Are
Speaker 1: you coming in on Tuesdays? Is Monday your anchor day?
Speaker 1: And so we did a little bit of an experiment
Speaker 1: to find out just how long it would take right
Speaker 1: to get a Sweet Green salad on a Monday versus
Speaker 1: a peak day of like Wednesday, or Thursday. I and
Speaker 1: one of our interns at the time, Christian, went to
Speaker 1: one specific Sweet Green over the course of a week
Speaker 1: and came up with this like very scientific methodology, which
Speaker 1: is like, you know, get online by a certain time,
Speaker 1: like I think it was twelve ten pm, and then
Speaker 1: see how long it takes to get from this, you know,
Speaker 1: getting in line to picking up your salad. And so
Speaker 1: on a Monday, it was about nine minutes and twenty seconds.
Speaker 1: There's a little longer. On a Tuesday, nine minutes and
Speaker 1: almost forty seconds. Wednesday, whopping, thirteen plus minutes. Thursday actually
Speaker 1: a lot shorter, about six minutes, and on Friday it
Speaker 1: was just four minutes. And I think, you know, this
Speaker 1: kind of speaks to like, if you are, you know,
Speaker 1: so bold as to go into the office on a Friday,
Speaker 1: you will see there are no lines for lunch, your
Speaker 1: subway car is not going to be busy, and you
Speaker 1: you know, kind of reap the benefits of that. But
Speaker 1: the businesses around you and the other kind of systems
Speaker 1: reliant on commuters certainly don't. Some of this kind of
Speaker 1: gets out. I think what the heart of this story
Speaker 1: is really, which is, you know, there's been a lot
Speaker 1: of handwringing about what does it all mean? Right, people
Speaker 1: are not in offices the way they used to be.
Speaker 1: Why does this matter? A couple of I think insights
Speaker 1: that we bring to the table that hasn't been sort
Speaker 1: of sharply looked at before. Is one this difference by
Speaker 1: day of week, which I think everyone is observing if
Speaker 1: they're in the office in a big city. And then
Speaker 1: to sort of like what is the cost of that?
Speaker 1: And we were able to come up with a number
Speaker 1: to sort of figure out how much this is costing
Speaker 1: New York City or specifically Manhattan in terms of you know,
Speaker 1: sales to businesses like Sweet Green that sort of weekday
Speaker 1: warriors favor, right, and uh, you know, to transit systems
Speaker 1: because there's like misfares for instance, and all these other
Speaker 1: you know, knock on effects of me working from home
Speaker 1: on a Friday. It doesn't seem so bad, but in
Speaker 1: mass an aggregate that really adds up. Our reporting and
Speaker 1: analysis show that worker spending has reduced by at least
Speaker 1: twelve point four billion dollars a year in Manhattan alone
Speaker 1: due to remote work. Down in your story, you write
Speaker 1: that to get that number, you asked for help from
Speaker 1: a professor. His name is Jose Maria Barrero and he
Speaker 1: is at Mexico's Instituto Technological Autonomo and he's also part
Speaker 1: of Stanford University's Work from Home research groups. So how
Speaker 1: does he sculate this in Barrero and his colleagues had
Speaker 1: asked in their survey as part of their work from
Speaker 1: home research, what workers had estimated they were spending on
Speaker 1: a weekly basis on meals, shopping, and entertainment near the
Speaker 1: workplace a year prior. So this research really was closest
Speaker 1: to to get a sense of what were people spending
Speaker 1: pre pandemic. Using that number, he was able to show
Speaker 1: how much less workers were spending. By adjusting for a
Speaker 1: thirty percent reduction in return to office that ends up
Speaker 1: translating to about four thousands, six hundred and sixty one
Speaker 1: dollars per person per year in Manhattan. They calculated similar
Speaker 1: analysis and other major cities, including San Francisco, which was
Speaker 1: just over three thousand dollars a year per worker that
Speaker 1: was being lost due to remote work, and in a
Speaker 1: city like Chicago just a little over. So we came
Speaker 1: up with this number for New York. But it's cool
Speaker 1: about you know what jose has done and his colleagues
Speaker 1: at w FH Research Group is that they also came
Speaker 1: up with all these estimates for how much in person
Speaker 1: work has been reduced in all these other cities in
Speaker 1: the United States, and they came up with spending calculations,
Speaker 1: you know, similarly per person per week reductions and spending
Speaker 1: for all these different places. So it's really interested to
Speaker 1: see this list because at the top of it is
Speaker 1: actually it's not New York, it's Washington, d C. Interestingly,
Speaker 1: with a thirty seven percent reduction in person days. And
Speaker 1: that's probably because you have all these federal workers who
Speaker 1: have lenient work from home policies. And in fact, the
Speaker 1: mayor of Washington, d C, Neuraler Browser, has been kind
Speaker 1: of begging the Biden administration to require federal employees to
Speaker 1: get back to work so that they can make up
Speaker 1: the loss money exactly. And in fact, in New York,
Speaker 1: Mayor Eric Adams has been a huge proponent of in
Speaker 1: person work. He's you know, has federal employees in the office,
Speaker 1: you know, depending on their jobs obviously like you know,
Speaker 1: during the week, um, and it's been a big issue
Speaker 1: because people don't really want to be in fun days
Speaker 1: a week the way they were used to before. So, yeah,
Speaker 1: do you see at the top of the list, followed
Speaker 1: by Atlanta, number two, Number three is Phoenix, Number four
Speaker 1: is l A, New York City coming in at number five,
Speaker 1: but it's very similar to l A with a thirty
Speaker 1: three reduction in person days. Then San Francisco, Boston, Miami, Chicago, Dallas, Philly, Houston,
Speaker 1: And so we're seeing this happening all over the country
Speaker 1: where cities are taken big hits because people aren't coming
Speaker 1: downtown as much. Yeah, and we're seeing it all over
Speaker 1: the world in fact, but you know, their data was
Speaker 1: pretty u S specific. So we also have the spending reductions.
Speaker 1: And even though New York is only sort of number
Speaker 1: five in terms of reduction in person days, it's number
Speaker 1: one in terms of spending because New York is expensive.
Speaker 1: So New York is at the top of the list
Speaker 1: with a reduction of four thousands, six hundred and sixty
Speaker 1: one dollar per person per year. L A is four thousand,
Speaker 1: two hundred d C is closer to about four thousand.
Speaker 1: Atlanta is three thousand, nine hundred and so on. But
Speaker 1: we thought it was a really interesting kind of window
Speaker 1: into sort of how cities are getting impacted by this trend,
Speaker 1: and you know how big a hit they're taking. There
Speaker 1: is a so what to all of this, Right, they
Speaker 1: have ripple effects of causing a decline and consumption of
Speaker 1: food and beverages, right, transit rides impacting small business owners,
Speaker 1: lowering sales tax revenue, transit operating revenue, which we're clearly
Speaker 1: seeing in New York with the m T a shortfall,
Speaker 1: and those drop offs have been especially acute as our
Speaker 1: reporting is showed on Mondays and Fridays, right when employees
Speaker 1: have shown the strongest preference to work from home. And
Speaker 1: so cities really have to figure this out. The importance
Speaker 1: of these revenue sources varies from city to city in
Speaker 1: some cases for cities and regions, the US is there
Speaker 1: so urgent and are just requiring immediate fiscal help in
Speaker 1: the very near term. And even if you look at
Speaker 1: New York City, Eric Adams ruled out his hundred and
Speaker 1: three billion dollar budget and is already projecting tax revenue
Speaker 1: shortfalls in the out years, like, yes, we can balance
Speaker 1: this year, but there's going to be a lagging effect
Speaker 1: to the impact of all of this. So all that
Speaker 1: money has to go somewhere. It's not that people aren't
Speaker 1: spending at all anymore, they're just spending closer to home
Speaker 1: when they work from home. And so we are seeing,
Speaker 1: you know, MasterCard has this really cool kind of data
Speaker 1: and it measures in store and online retail sales across
Speaker 1: all forms of payment. So this is literally New York
Speaker 1: City spending data that they have, which is such a
Speaker 1: cool data source we found. And what we saw in
Speaker 1: their data is that you know, Manhattan growth in like
Speaker 1: in certain months like September, versus that retail sales was growing,
Speaker 1: you know, a little bit, but not a lot. And
Speaker 1: then you saw in the outer boroughs higher levels of
Speaker 1: growth relative versus in Manhattan, and I think that tells us,
Speaker 1: you know, we don't know obviously exactly what's going on,
Speaker 1: but we were looking at week days and so we
Speaker 1: believe what's happening is that, you know, work from home
Speaker 1: is providing an economic benefit in these other parts of
Speaker 1: the city. Emma and Donna Lease stay with me, will
Speaker 1: continue talking after the break. Donna, Emma, you've painted this
Speaker 1: very vivid picture of how cities are being affected by
Speaker 1: workers not coming into the office as much on certain days.
Speaker 1: So the big question now is what are cities actually
Speaker 1: doing about it? Businesses affected mass transit. You have lots
Speaker 1: of office buildings that are standing empty or underused part
Speaker 1: of the week. How is this affected cities and like
Speaker 1: sort of why is it so important to cities? Cities
Speaker 1: really care about this because for one thing, they use,
Speaker 1: you know, tax revenue from consumer spending to fund the city.
Speaker 1: They also care about it because another big form of
Speaker 1: revenue for cities is income taxes. And if I don't
Speaker 1: have to live in New York City because I only
Speaker 1: have to be in the office one time a week,
Speaker 1: and I can, you know, take the hit of a
Speaker 1: two hour commute from some other state, maybe I'm going
Speaker 1: to move away. Uh. And in a city that's as
Speaker 1: expensive and difficult to live in as New York and
Speaker 1: many cities are expensive and difficult to live in, that
Speaker 1: is a big existential risk. What is the point of
Speaker 1: living in New York City if you don't really have
Speaker 1: to live there and you're paying a big price? Yeah, So,
Speaker 1: I think for city officials, the big shift to work
Speaker 1: from home has really increased the sensitivity of the local
Speaker 1: tax base. So people residents in New York are going
Speaker 1: to be a lot more attuned to the quality of
Speaker 1: local governance, the quality of local public goods that are
Speaker 1: being provided to the people that live and work here.
Speaker 1: So the stakes are really high. So if you have
Speaker 1: a city that gets it right, either by virtue of
Speaker 1: a great functioning political system or is just endowed with
Speaker 1: the kinds of amenities that people value, like here in Manhattan,
Speaker 1: those cities might be like well positioned to benefit from
Speaker 1: work from home. But for the cities that don't get
Speaker 1: it right, like due to a number of factors, whether
Speaker 1: they're economic or political reasons, some researchers worry that they
Speaker 1: may face a potential doom loop right as downward spiral
Speaker 1: where residents leave and inward commuters diminished. I think are
Speaker 1: reporting has shown that really the economic benefit of having
Speaker 1: these inward commuters into the city is incredibly important. And
Speaker 1: so there's this monumental task that policymakers are now faced with,
Speaker 1: and they're trying to work out how to best make
Speaker 1: this transition happen, which they anticipate are going to take
Speaker 1: years to achieve, and what does it look like? What changes?
Speaker 1: Because there's a thing happening now in a lot of
Speaker 1: cities where politicians answer to it is to try to
Speaker 1: force people to get to come back to work five
Speaker 1: days a week, because that's what the system is set
Speaker 1: up for. But it doesn't seem realistic. A lot of
Speaker 1: workers they're saying, well, why should I have to pay
Speaker 1: to sustain the system that no longer works for me?
Speaker 1: So change will have to come. What does it actually
Speaker 1: look like? City officials right now are really trying to
Speaker 1: wrap their arms around possible solutions. Office conversions is one
Speaker 1: of them. You know, as Emma mentioned, this is a
Speaker 1: very difficult undertaking. There's ten million square footage that Mayor
Speaker 1: Adams thinks is like something that could be repurposed to
Speaker 1: get people back into downtown so that they're not just
Speaker 1: there to go to the office, but they're living and
Speaker 1: going out to restaurants and helping support small businesses. How To,
Speaker 1: it's going to be really tough, and we don't really
Speaker 1: want to overdo the office conversions because you still need
Speaker 1: office buildings to be there as an like an economic
Speaker 1: engine of growth for the city. The one thing that
Speaker 1: I also want to add on to this, like with
Speaker 1: the rise of office vacancies. Right so, because we have
Speaker 1: this like stark contrast from the old ebb of daytime
Speaker 1: population surges in the middle of the day, you know,
Speaker 1: you end up having these declining office rents that reduce
Speaker 1: the value of commercial buildings and ultimately end up negatively
Speaker 1: impacting property revenue, which is such an important part of
Speaker 1: the city's livelihood. So some of the researchers at Colombia
Speaker 1: n YU have modeled this drop in office market value,
Speaker 1: which their estimating could cost like five billion dollars in
Speaker 1: annual loss tax revenue, or really five percent of the
Speaker 1: city's budget. That is a significant chunk. Having that five
Speaker 1: percent of the city's budget be eaten a way because
Speaker 1: of office building depreciation. Market value depreciation, I mean, really
Speaker 1: eats into the coffers of the city. But there's a
Speaker 1: big hole that will be left to be filled, right
Speaker 1: that you need that additional tax revenue to fund schools,
Speaker 1: to fund the rats are so that like the streets
Speaker 1: are clean, you know, pick up trash, policing, all of
Speaker 1: these things that are also at the crux of you
Speaker 1: know what Eric Adams has to wrestle with in order
Speaker 1: to even create a feeling of economic recovery, right that
Speaker 1: the city is back, that they don't have these ongoing
Speaker 1: issues for every different piece of the puzzle, there's perhaps
Speaker 1: a different solution. One thing we've heard from Sweet Green
Speaker 1: is in these stores that have been really hard hit
Speaker 1: from this, they're actually trying to renegotiate their agreements with
Speaker 1: landlords so they can instead of paying sort of fixed
Speaker 1: rent every month, maybe they can do it as a
Speaker 1: percentage of sales. For instance. Um, you know, with the
Speaker 1: m t A, with these big kind of budget gaps
Speaker 1: that they're facing down, you know, they've said, unless we
Speaker 1: get some more money from you know, the city and state,
Speaker 1: we're going to need to cut service. And in fact,
Speaker 1: they are already cutting service on Mondays and Fridays. They're
Speaker 1: planning to on several lines that you know, largely connect
Speaker 1: Manhattan and other borrows. You know, there's a lot of
Speaker 1: emphasis by city leaders trying to inch your way back
Speaker 1: to what things look like in and I think something
Speaker 1: we found really fascinating from this reporting is might there
Speaker 1: be another path forward, for instance, by leaning into more
Speaker 1: of that outer borrow silver lining that we're seeing. And
Speaker 1: so I think what's really interesting about kind of putting
Speaker 1: some numbers on these problems that hopefully helps city officials,
Speaker 1: business leaders, everyone else find a way to take a
Speaker 1: path forward and create a better way for the city
Speaker 1: to recover. Emma Court, Donna Bora, thanks so much for
Speaker 1: coming on the show today. Thank you so much, Wess,
Speaker 1: it's been a pleasure. When we come back, we'll talk
Speaker 1: about ways cities can reinvent themselves. So what are some
Speaker 1: of the things cities can do to meet all these
Speaker 1: changing needs and not go broke? Tracy Hadn't Low thinks
Speaker 1: about these questions for a living. She's a fellow at
Speaker 1: the Brookings Institution and her research focuses on commercial real
Speaker 1: estate and how cities can become better places to work
Speaker 1: and live. And she joins me from Baltimore. Tracy, if
Speaker 1: employees won't come back five days a week, and it
Speaker 1: seems like in a lot of businesses where physical presence
Speaker 1: isn't required, that seems to be the new way of
Speaker 1: doing things. How are cities going to have to adapt?
Speaker 1: We have a lot of office buildings which will no
Speaker 1: longer be needed. You have a lot of businesses that
Speaker 1: can't make as much money. So I guess what we're
Speaker 1: looking at down the road or cities changing as they
Speaker 1: always do. What sort of changes do you see? So
Speaker 1: a trend that was going on before the pandemic that
Speaker 1: has certainly been accelerated is that employers are consuming fewer
Speaker 1: square feet of office space per worker. That's been declining
Speaker 1: in the top ten U S office markets for over
Speaker 1: a decade, and it's going to hit new low is
Speaker 1: now and it's going to hit more markets. This is
Speaker 1: going to be everywhere in the US, not just in
Speaker 1: the biggest office markets. So the question there is how
Speaker 1: low is it going to get? Because if your employees
Speaker 1: are in the office three days a week, you still
Speaker 1: need an office. The question is like how much obsolete
Speaker 1: office space is there? And that depends on how much
Speaker 1: employers can reduce their footprints. Relatively few employers are taking
Speaker 1: those footprints to zero and going fully remote. So the
Speaker 1: question is what does the in person component of a
Speaker 1: hybrid workplace look like, how much space does it take?
Speaker 1: And then of the remaining space, how much is now
Speaker 1: obsolete because it doesn't match these new demands for what
Speaker 1: offices have to be like and how much of it
Speaker 1: can be adapted. From a city planning perspective, when you
Speaker 1: know planning commissions and mayors and city councils start looking
Speaker 1: down the road at their cities. What sort of things
Speaker 1: are you hearing about the way they want downtowns to change,
Speaker 1: not just office buildings, but restaurants and shops that depended
Speaker 1: on that nine to five revenue that is now no
Speaker 1: longer as big as it used to be. There's a
Speaker 1: few obvious things that cities are already doing and baking
Speaker 1: into their strategies that makes sense. So the first is
Speaker 1: incentivizing the conversion of office into housing. So saying like, okay,
Speaker 1: you can strengthen demand for local retail, for example, by
Speaker 1: making sure that downtown is a place where people are
Speaker 1: not just between nine and five, but also five and
Speaker 1: nine and uh. And you can also do that by
Speaker 1: increasing the quality of the other amenities that are in
Speaker 1: a downtown neighborhood, like waterfronts, other high quality open spaces,
Speaker 1: places just for people to spend time, um, whether they're
Speaker 1: working or doing something else. Right, Since uh majority of
Speaker 1: travel is non work travel, and a majority of the
Speaker 1: time in our lives is not spent at work, it
Speaker 1: makes sense that if you just want more people, then
Speaker 1: you need more nonwork amenities and activities and experiences and things.
Speaker 1: How hard will it be for cities to begin to
Speaker 1: adapt to this new reality. So was what is holding
Speaker 1: up downtowns from adapting is that of the built environment
Speaker 1: is controlled by the private sector individuals or companies who
Speaker 1: make their own decisions about their own assets. What cities
Speaker 1: can control is what's happening in the public right of way,
Speaker 1: and there are huge untapped opportunities in most cities to
Speaker 1: rethink that, not just in terms of high quality open spaces,
Speaker 1: but traffic safety, and to think about supporting retail, for example,
Speaker 1: by reallocating space from car storage and to retail. Like
Speaker 1: there's there's plenty of opportunities there that cities can take.
Speaker 1: But what about this that the built environment that's controlled
Speaker 1: by the private sector. Figuring out how to incentivize the
Speaker 1: owners of these assets that are located at the heart
Speaker 1: of our cities. That is the big question right now
Speaker 1: of how to motivate these players to think differently about
Speaker 1: how they use their assets and put them to work.
Speaker 1: If we make adapting buildings really hard to do, people
Speaker 1: just won't do it and they'll just walk away, like
Speaker 1: there's always another option. What's going to happen with some
Speaker 1: of these office buildings is like there is going to
Speaker 1: be a wave of foreclosures, people are just going to
Speaker 1: give the keys back to the bank, and you know
Speaker 1: who's really going to do nothing with it? Banks? Are
Speaker 1: there tax incentives or there other things that cities are
Speaker 1: already starting to offer to make those switchovers. Yeah, very
Speaker 1: few office buildings are a hundred percent vacant. Even if
Speaker 1: they're half empty, that means they're also have full So
Speaker 1: when you're talking about an office building, you're talking about
Speaker 1: an income producing asset that has current tenants in it.
Speaker 1: First off, the motivation is low for the owner to
Speaker 1: do anything with it because it is generating income, maybe
Speaker 1: not as much as it used to, but if you
Speaker 1: wanted to do anything else with it, that would come
Speaker 1: with costs. So that's a disincentive to do anything different
Speaker 1: with it, especially when you do have some revenue. So
Speaker 1: in terms of incentivizing it, that means that the carrying
Speaker 1: cost of the vacant space has to increase, and the
Speaker 1: trick is increasing that carrying cost in a way that
Speaker 1: doesn't further disincentivize the owner from actually doing anything with
Speaker 1: it and investing in the property. Doing something different with
Speaker 1: the property attractive. For example, Pittsburgh and Harrisburg in Pennsylvania,
Speaker 1: both have a land value tax system in which they
Speaker 1: separately acts the land under a building and the building itself.
Speaker 1: So even if an office building is dwindling in value
Speaker 1: as it becomes more and more vacant, the land and
Speaker 1: the location remain valuable, and that increases the carrying cost
Speaker 1: of the asset because you can't escape the land tax.
Speaker 1: I was speaking to a couple of my colleagues earlier
Speaker 1: about how all of this is playing out in New
Speaker 1: York City, which of course is you know, sort of
Speaker 1: the center of attention a lot of the time whenever
Speaker 1: it comes to real estate, and in New York and
Speaker 1: other big cities, one of the huge complaints is no
Speaker 1: one can afford to live there, and so it's hard
Speaker 1: to live where you work. Do you see this as
Speaker 1: being an opportunity to change cities into places where people
Speaker 1: can actually afford to live and work. So I don't
Speaker 1: think that converting offices into housing is going to make
Speaker 1: a meaningful down in the housing crisis, because we were
Speaker 1: talking about a pretty small number of units relative of
Speaker 1: to the need that is out there. What it can
Speaker 1: do is revitalized downtowns as places by bringing more people
Speaker 1: into them, and everyone should have that chance, not just
Speaker 1: the people with the most money. So in terms of
Speaker 1: policies and incentives that cities can offer in order to
Speaker 1: encourage the highest and best use of these locations, I
Speaker 1: think there's a strong argument to be made that incentivizing
Speaker 1: the production of housing, including affordable housing, and including housing
Speaker 1: for particular communities of concern that are concentrated downtown, like
Speaker 1: people experiencing homelessness, there's a clear case to take these
Speaker 1: underused real estate assets and serve a greater public good.
Speaker 1: So I think that we will see more policies incentivizing
Speaker 1: the production of housing and affordable housing in downtowns. And
Speaker 1: I think that there's a role for the federal government
Speaker 1: here too. Just like the federal government offers tax credits
Speaker 1: for the preservation of historic buildings, why not offer a
Speaker 1: tax credit for the recycling of buildings into affordable housing.
Speaker 1: As someone who looks at especially commercial real estate and
Speaker 1: how that's changing all the time, look down the road
Speaker 1: for us in I don't know, three years, five years,
Speaker 1: in cities like Baltimore and New York Chicago, what looks
Speaker 1: much different than it looks right now. I Mean, my
Speaker 1: greatest fear is that nothing looks different, and that cities
Speaker 1: enter generation of decline because of the lack of dynamism
Speaker 1: in the real estate sector that prevents the built environment
Speaker 1: from adapting in a timely way. That is my greatest fear.
Speaker 1: My greatest hope is that we see uh boom in population.
Speaker 1: We see all kinds of new housing downtown, that we
Speaker 1: see right of ways reimagined from being enormous channels for
Speaker 1: commuters into um live work play spaces for people, and
Speaker 1: that we see office buildings incorporating some of the comforts
Speaker 1: of home with all of the important things that we
Speaker 1: need for work, like spaces to collaborate and incredible connectivity.
Speaker 1: Tracy had Low, Thanks so much for talking with me today.
Speaker 1: Thanks Wes. You can read more from Emma Court and
Speaker 1: Donna Borak at Bloomberg dot com. Thank you for listening
Speaker 1: to us here at The Big Take. It's a daily
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