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When the COVID pandemic began in , daily life changed for billions of people in countless ways. The most important, from the perspective of real estate in superstar cities, was a sudden and massive shift to remote work, a change that was enabled by widespread adoption of videoconferencing and file-sharing technology. In the blink of an eye, millions of employees were working not at their offices downtown but from their bedrooms and couches. That shift affected their behavior in three main ways.
First, of course, it changed where they worked. Second, it changed where they lived; untethered from their daily commutes, many of them moved away from urban cores. Third, it changed where they shopped, as online shopping and stores near home became more attractive than urban establishments. Those three behavioral changes, in turn, affected the three classes of real estateβoffice, residential, and retailβthat we discuss in the next chapter.
The three changes were not all permanent, but they have left cities permanently altered. In this chapter, we examine them in detail. Our research suggests that remote work will continue, that accelerated urban out-migration is slowing but not reversing, and that shopping in cities will remain weaker than it used to be. After abandoning their offices at the start of the pandemic, employees are now working there more oftenβthough still far less than they used to.
Office attendance varies by city; for example, it tends to be lower in cities with expensive housing and a large share of knowledge-economy workers. There are several reasons to think that office attendance has stabilized and will continue at current rates.
In early , office attendance plummeted for workers in superstar cities. Lockdowns, office closures, and uncomfortable masks gave them a reason to work remotely, and existing technology gave them the means. The drops in Austin, Dallas, Houston, and Los Angeles were less severe but still stark at about 70 percent. As of fall , workers were going to the office just 3. Three years later, remote work has given way to hybrid work a combination of in-office and remote work , and office attendance has rebounded substantially.