Post-COVID Urbanism Discussion

[bigpicture7]

I was debating whether to post this to one of the "good book" threads or here.

Anyway, I may have missed it but I was surprised to have not seen this book mentioned in aB:
The Organization and Architecture of Innovation by Thomas Allen & Gunter Henn

This is old (2007) but it's a wonderful read about the role of physical space in innovative work. It's coauthored by an engineering management scholar and a German architect (known for designing BMW's R&D headquarters in Munich, among other things). There are some beautiful graphics on workplace layout and office building design.

Too much to summarize here, but there are messages abound for the role of offices post-Covid. In short, simply making people come to a building is not what breeds innovation: this book points to 100 ways you can do this entirely wrong and waste a lot of money. However, it does make a strong case for how physical layout and orientation of people can influence idea exchange and collaboration. I was skeptical whether these ideas would hold with 2021's technology, but I recently re-read this and sense that many of them still would. This is not to say that 5 days/week in the office will be the norm, but if there is core/overlap time in the office (~2-3 days/week) at innovative firms, folks would do well to pay these lessons a re-visit. One key theme is the role of positioning different occupational functions who benefit from reducing the formality of interacting with each other, yet whose day-to-day work does not force them to interact together. I find that interesting because, with remote work, a lot of people speak about who they "need" to speak to or collaborate with, as if that's some pre-knowable absolute information...what about the folks whom you're unaware you'd benefit from interacting with? I'll leave it at that for now.

Work like this leads me to believe that there will be some enduring place for cities as innovation hubs, despite Covid & the rise of remote work.

EDIT: it is worth mentioning that they talk about the benefits of horizontal proximity vs. vertical proximity, pointing to upsides of large floorplates

 

[bigpicture7]

^Perhaps pertinent to considerations above, an interesting article in the Chicago Tribune about Salesforce's recent hybrid work announcement coupled with their doubled-down commitment to maintain planned occupancy in a new skyscraper in Chicago:

Salesforce sticking with plans for 60-story Chicago skyscraper, despite telling workers they can work remotely after COVID-19

Salesforce isn’t backing off plans to anchor a 60-story office tower under construction along the Chicago River, despite telling employees they can keep working remotely after the COVID-19 pandemic.

www.chicagotribune.com

The software giant on Wednesday told the Tribune it will occupy all 500,000 square feet it has leased in Salesforce Tower, which is being built on the Wolf Point site near the Merchandise Mart.

It also happens to look pretty slick, and is brought to us by the same developer/architect pairing (Hines/CPC) bringing us Boston's South Station tower:

The reason all of this is relevant: a lot of people seem to think that hybrid work plans will correspond with a drastic reduction in office leasing, but I am not convinced, once all the dust settles, that will be the case.

 

[xec]

The reason all of this is relevant: a lot of people seem to think that hybrid work plans will correspond with a drastic reduction in office leasing, but I am not convinced, once all the dust settles, that will be the case.

I agree with your take, and there's even a sort of precedent for that. The conventional wisdom after 9/11 was that the skyscraper was dead, yet here we are...

 

[bigpicture7]

This is the paradox that makes things interesting at the present moment:

If Work Is Going Remote, Why Is Big Tech Still Building?

Google, Facebook, and others promise more flexibility to work from home. But they’re charging ahead with plans for more offices.

www.wired.com

​

In the depths of the pandemic, “it’s easy to lose track of the bigger picture,” says Mark Muro, a senior fellow at the Brookings Institution who studies how cities attract high-tech development. For decades, Muro has been searching for evidence of decentralization—the spreading out of talent and wealth enabled by the so-called “death of distance.” The idea was that technology would make it possible for people to work from anywhere, making offices and cities less relevant. What we got was the opposite. Fast-growing tech firms clustered in a few cities.

 

[jklo]

^^^

Because they love College Grads & College Grads need to be in the office.

 

[393b40]

Because they love College Grads & College Grads need to be in the office.

That's a hot take, but I'll give a more interesting take as a software developer that has done the office and work from home career (pre-COVID) and is involved with "Big Tech".

Engineers as a demographic tend to be introverted and socially reserved. Putting them in an office may cut their pure work output a little but it gets them talking and communicating among each other in a way that leaving them to their own devices at home does not always accomplish. These companies thrive on innovation and so its worth it to them to keep employees clustered in the office. I know when I'm WFH I'm basically absorbed in my immediate tasks and goals and I rarely chat with my coworkers except to solve a pressing immediate problem. There's no lunch banter, campus walks, or hanging out for beers after work in this model. These are the places real collaboration and long term visionary work happens because during the actual day we're all too focused on our short-term goals to think beyond the horizon.

My long term hypothesis is that in the future companies that do end up either as pure WFH will be at a competitive disadvantage. My other hypothesis is that there will be a bifurcation of labor and career advancement between the people that work from home and the people that work in an office even if working in an office is part of the time (the hybrid model).

 

[Suffolk 83]

MOD EDIT: Following convo from here.

A lack of demand for straight office space primarily. Wasn’t that kind of obvious?

No, what's going happen in 5 years isn't obvious

 

[stick n move]

A lack of demand for straight office space primarily. Wasn’t that kind of obvious?

South Station tower and Winthrop center were never going to happen either. Parcel 13 over the pike REEEAALLY was never going to happen, all 3 are u/c right now. The biggest boom in Boston history isnt really pump faking very much these days anymore. This is a tough spot, but was never going to happen is a bit strong.

 

[kmp1284]

No, what's going happen in 5 years isn't obvious

Every development enthusiast’s favorite refrain but I’m afraid we do have a pretty good idea where things are going. Even if we were to miraculously get offices back to pre-pandemic staffing levels and occupancy rates there’s still probably more inventory in the pipeline than the market can absorb in the next five to ten years.

 

[KentXie]

Every development enthusiast’s favorite refrain but I’m afraid we do have a pretty good idea where things are going. Even if we were to miraculously get offices back to pre-pandemic staffing levels and occupancy rates there’s still probably more inventory in the pipeline than the market can absorb in the next five to ten years.

I'm going to have to agree with kmp. There was a recent article talking about the trouble with NYC office vacancy in the coming years as companies after companies have moved past the "working at the office" era as it is not only going to make them more competitive at attracting talent, but the money they save by downsizing and reducing the utility bill is nothing but a win win for them.

 

[Patrick Winn]

I'm going to have to agree with kmp. There was a recent article talking about the trouble with NYC office vacancy in the coming years as companies after companies have moved past the "working at the office" era as it is not only going to make them more competitive at attracting talent, but the money they save by downsizing and reducing the utility bill is nothing but a win win for them.

You guys are just speculating as laypersons.

Every development enthusiast’s favorite refrain but I’m afraid we do have a pretty good idea where things are going. Even if we were to miraculously get offices back to pre-pandemic staffing levels and occupancy rates there’s still probably more inventory in the pipeline than the market can absorb in the next five to ten years.

Do you have expertise in this sort of macroeconomic forecasting? So long as were offering inexpert speculation, I think it's highly unlikely employers will trust employees to work remotely post-pandemic (with the exception of jobs like software engineers where employers can track every keystroke via github, etc.) The advantages of working in person are obvious to me: better team building, better relationship building, and most importantly--a much better ability to supervise workers. Remote employment will come with huge agency costs that I doubt most businesses will tolerate. In general, I'm inclined to trust the judgment of investors that put millions into projects like these over some person that's read a few articles.

 

[stefal]

You guys are just speculating as laypersons.

Do you have expertise in this sort of macroeconomic forecasting? So long as were offering inexpert speculation, I think it's highly unlikely employers will trust employees to work remotely post-pandemic (with the exception of jobs like software engineers where employers can track every keystroke via github, etc.) The advantages of working in person are obvious to me: better team building, better relationship building, and most importantly--a much better ability to supervise workers. Remote employment will come with huge agency costs that I doubt most businesses will tolerate. In general, I'm inclined to trust the judgment of investors that put millions into projects like these over some person that's read a few articles.

...but his point is that, even prior to the Pandemic, we were going to see a huge influx of available office space, between SST, Winthrop Square, State Street, bringing millions of sq ft to the market, and a few other sizeable developments adding hundreds of thousands of square feet of office. Pandemic or not, we were very likely going to see a decrease in demand for new office space for a few years.

The trust thing seems a little far-fetched to me. If you're slacking off at home, it will show, either tomorrow or next week or next month. You can't really escape poor performance for a company behind a screen. I do agree that team-building and relationship-building are much better in person. The past few we've onboarded 100% virtually have had rocky starts. I will say a benefit of virtual work is the ability for myself and others to attend a lot more meetings I would have otherwise passed up, and just keep them on in the background. It's really helping in seeing opportunities for more collaboration between departments and projects.

When we go back to the office, we'll see how much space we're utilizing - I don't think HR teams are going to speculate just yet. I suspect the general trend will be a modest decrease in SF leased in a lot of firm's lease cycles. This seems to be the case across a number of firms that I've heard of. I've also heard of at least one place that has actually hired more than their office can handle at a given time, so they're either keeping a hybrid system or expanding their offices soon (and they'll have plenty of options), but that's likely to be an anomaly.

 

[citydweller]

There will be a lot of subletting going on for leased office space. Many companies, such as the one I'm working at it, is consolidating their current office space and attempting to sub-lease (good luck with that) as employees now have the privilege to work-from-home indefinitely. Existing office space is being re-configured as bullpens which is cramp quarters. They assume the pandemic is a thing of the past. I see a glut of office space on the horizons for many years to come.

 

[Rover]

Nothing personal but I think many of us saw all the predictions made with certainty that Winthrop Square, South Station Tower, Whiskey Priest site etc were all dead and buried last year. I chalk up the glut of office space prediction with those earlier ones.

The problem with shared workstations and flexing between WFH and office visits is that it's based on a model developed before Covid existed. Who really wants to share a desk nowadays with someone who may or may not take vaccinations and viruses seriously? Who wants to be seated like cattle in an open floor plan sitting cheek to cheek? Companies are going to need to rethink all that an expand their square footage needs, or court disaster when the next virus hits.

 

[Patrick Winn]

Nothing personal but I think many of us saw all the predictions made with certainty that Winthrop Square, South Station Tower, Whiskey Priest site etc were all dead and buried last year. I chalk up the glut of office space prediction with those earlier ones.

The problem with shared workstations and flexing between WFH and office visits is that it's based on a model developed before Covid existed. Who really wants to share a desk nowadays with someone who may or may not take vaccinations and viruses seriously? Who wants to be seated like cattle in an open floor plan sitting cheek to cheek? Companies are going to need to rethink all that an expand their square footage needs, or court disaster when the next virus hits.

Right...or the constant predictions in the COVID thread that there was too much luxury housing and no demand for it after the COVID exodus to the suburbs. Then they started selling for 20 million a unit. Oops! It's all amateur speculation.

 

[bigpicture7]

I tried dutifully to divert all this "post covid market" banter out of this development thread, but got mocked for it (#s 528-531), so I'll indulge here and pile on too. Whoohoo.

For every "I know a company who is going remote forever" unsystematically retrieved anecdote, there is somewhere between 0.5x - 1.5x anecdotes along the lines of "we are committed to our office culture, even if there's more 'flexibility' granted". Amazon and Google both released "office commitment"-related press releases last week. No one has the data yet on what's going to happen across the board - and even as some of the "industry analysts" on here try to protest, claiming they have some inside source of gold-standard data, their data is tainted because the companies themselves don't know what they are doing yet in many cases (even if they INTEND to know what they are doing; even if they smooth-talk their investors about knowing what they are doing).

I'll avoid rehashing some prior points made, and toss in a few more:

• Companies with any sort of less-than-stellar financial performance simply cannot resist showing their investors some projected cost savings by opportunistically jumping on the office lease dumping bandwagon, in the near term. There's an "it's all about optics" aspect to this.
• When a CEO says "indefinitely," it means absolutely nothing. It means: "here's what some people want to hear right now, and there are zero consequences for me saying this, so I am just going to say it."
• "Hybrid" does not inherently mean space savings. A key point of hybrid is to provide some occasions (~3 days/week) where the staff can be co-located so they can interact/collaborate/build-sense-of-team. You still need essentially the same capacity for that, even if the office is lighter-utilized on other days.
• The white collar economy had been growing pre-covid, not shrinking, so even if companies use slightly less office space than before, the fact that they were/are growing might neutralize the effects of lower office utilization. See recent statements from Google exactly along these lines.
• Office space was over-priced before. There are likely many companies thirsting for urban office space but who were priced out. A slight correction here might open doors for them.
• Young people love cities (pre-starting-a-family age) and companies love young people. Companies are not all going to ditch their urban office hubs, and there were many others who craved being able to have an urban office hubs pre-covid (and hand't yet opened one due to cost) but who now might be attracted to opening such spaces with a slight price correction.
• While "remote" is a perk for some, "getting to have my own space" is a perk for others. Do we honestly know any employees who truly like "hot desking" (especially given pandemic-era germophobia, as Rover pointed out)? That trend was dying pre-covid, for crying out loud (and even then, it was all based on being able to report cost savings).

Buckle up and enjoy the ride, folks, because there are too many competing factors, and not enough resolution of still-open issues yet...

 

[maxdatabook]

I've read some of these threads and it seems the last thing most members want is another @Johnnyrocket891 I apologize in advance!

I became interested in the Cambridge Crossing project. I went from super skeptic to true believer. Nonetheless, there are some questions I'm curious for anyone's take on.

#1. Is it confirmed that people will want to live in one shinny minimalist condo building and take a bike to another minimalist condo building for the next 20 years? I don't see it (doesn't mean it isn't true). Whether Fed policy or tax breaks, it does seem more money is going in than real demand for that lifestyle would predict. (Yes, I believe Boston in unique in its remaining variation of real estate, parks, water, etc.) Specifically, what has been the occupancy rate of the buildings in the past few years and their income? Where is the data? In the numbers I can get, I see big imbalances...

#2. Since 2011 homes in Cambridge have risen about 90% while wages have risen 30%. Is is A) Doesn't matter because it's just a fallout from income inequality (that is,there is a consolidation of wealth in Cambridge, and areas like it). Or B) Either prices will fall or there will be significant wage inflation? If the developers are building from demand, and not for some of the reasons @Johnnyrocket891 has mentioned, then how will it solve this...

#3 The overall unemployment situation in MA is horrible, among the worst in the nation. The State owes the Fed around $6 billion in UI insurance borrowing. Back of envelope, I believe there are about 600,000 people in MA that have become chronically poor, leading to increased crime around the central Boston area. Is this a thread to post Covid urbanism? And if it is, how can it not change urbanism post Covid?. Stimulus payments do not address the wealth inequality between those who haven't been able to pay rent/mortgages and those who have. Indeed, it makes matters worse by giving time, not for these people get solvent again, but to go past the point of financial return. Many people seem resistant to addressing that sad fact of life. I see a connection between the last time that happened (2008) and chilling changes in the political landscape.

What is meant by urbanism in this thread? Urban as in Boston or Cambridge? Urban as in Worcester or Springfield?

 

[bigpicture7]

Oh my, it turns out that some people like living in cities after all. Boston featured very briefly w/in here:

Reverse Migration: Moving to Cities While Others Flee

Suburban homeowners who have profited from the urban exodus during the pandemic are leaving small-town life behind to find out what they have been missing.

www.nytimes.com

 

[Massachoicetts]

Oh my, it turns out that some people like living in cities after all. Boston featured very briefly w/in here:

Reverse Migration: Moving to Cities While Others Flee

Suburban homeowners who have profited from the urban exodus during the pandemic are leaving small-town life behind to find out what they have been missing.

www.nytimes.com

Parents bought a home in an upscale Orlando community for $160,000 in 2010. Sold it last year for over $450,000.
Headed right back to the city, eyeing condos in Chicago for under 300k. Because suburbs are (were?) overhyped.

I agree with this article though. I am seeing scores of people moving back to cities because deals are good. Especially Boston, Chicago, Philadelphia and Atlanta/Charlotte where deals are good and QOL/Jobs are high.

 

[maxdatabook]

From the Times article, " Shoul, who estimates that in addition to sacrificing most of his weekends to home repairs for the past four years, the couple also spent between $10,000 and $15,000 on fixes, not counting nearly $35,000 in damage that was covered by home insurance. "

It's easy to move into a city and forget about the maintenance costs of your condo or apartment. Their next lesson is discovering that, unlike a house, you can't decide not to fix the boiler for your unit. When something goes wrong everyone must pay. The cities have and continue to rack up huge debts. The stock market has silenced all the economic historians. All that said, yes, should be good deals in the city until the fiscal realities of maintenance and upkeep crash the party.