Remote School's End Paves Possible Path For NYC Office Return
New York City’s announcement this week that remote school will end in the fall is a welcome relief for the city’s office owners — parents have said they can't go back to the office while kids remain at home. But even with the certainty that children in the nation’s largest school system will be back in the classrooms, the future of the office remains unknown.
“Childcare affected so many people and was a hindrance for a full return to work, even with the relaxing of the masking and people’s comfort about mass transit, they still had the issue of childcare,” Transwestern partner Lindsay Ornstein said.
Though the city has slowly brought in-person instruction back since the worst of the crisis, some 61% of the kids in the system — about 582,000 students — have remained remote. Enrollment has dropped 4%, meaning thousands of students have left the district altogether.
Mayor Bill de Blasio said Monday academic instruction and supporting children socially and emotionally “only works if everyone is back in person, the way education is meant to be.” In Los Angeles, by comparison, remote school will still be available to children next academic year, even though all campuses will be open.
The decision is being seen as a line in the sand for many New York City businesses that have delayed putting in place formal arrangements for the return to work.
Though offices have been legally allowed to reopen for nearly a year now and vaccination rates in the city have risen, most buildings have remained largely empty, and many market-watchers have worried that without the steady flow of office workers who drive so much of the city’s economy, strained businesses will be pushed over the edge. Restaurants and hotels have reopened, but many have done so tentatively and with reduced numbers, knowing there is simply not the market there yet.
Foot traffic in the city is still down 32% on pre-pandemic levels, according to data from the Manhattan Chamber of Commerce — but this announcement about schools could be a game-changer.
“It’s huge … It’s a real incentive to help our remote workers to get into the swing,” Chamber President Jessica Walker said.
The chambers of commerce for the five boroughs partnered with WeWork last month to market the coworking company’s discounts for smaller and midsized firms. The idea is that smaller firms are more flexible than the major financial, law and technology firms and more likely to return sooner rather than later.
“It is very helpful that the mayor has been very clear and definitive,” Walker said. “Parents need to plan, one way or another.”
Durst’s Jordan Barowitz said occupancy in the company's office buildings is about 10% to 12%. Now, the firm is hearing its tenants are starting to make plans, finally, and plot their return.
“People are going to start testing the waters and bringing people back on a voluntary basis over the summer, and then with the larger scale return in September,” he said.
“So they’ll be using the summer to get everybody comfortable coming back, riding transportation into the office, with the expectation in the fall, provided the Covid trends continue as they are, things will be back to normal.”
He said he expects there will be high building occupancy come September.
“[Without school] there is no sports season, there are no after-school programs going — all of those things are vital to a functioning office market for a big section of the population — and in the fall you’ve got those critical building blocks,” he said.
But as normalcy returns, September could also usher in a moment of reckoning for offices in the city.
The details of a hybrid work arrangement will be worked out, levels of productivity in a post-crisis environment will be analyzed and — crucially — employees will begin to truly decide how they want to work. Suspended reality is coming to a close, and workers will have to start making long-term plans for their lives and families; in many cases that may mean a full structural shift set in place by the fact that five days at the office is no longer a requirement.
“The way I see this unfolding is that the fall will be a trial ground for companies to see what flexibility they may or may not provide their employees on an ongoing basis and how that in turn impacts how much real estate they will need on an ongoing basis,” Transwestern’s Ornstein said, adding she remains certain the office is a key part of company culture.
“When the rubber hits the road is in 2022. [The] balance of 2021 will be the re-acclimation to the workplace. By the end of the year, early next year, companies will have clarity to make long-term decisions.”
SquareFoot President Michael Colacino said September will bring clarity as to whether work from home is a permanent phenomenon. Plus, it will also show if the shifts in workplace cultures are here to stay.
“The employers have [traditionally] had the upper hand, but during the pandemic the roles were reversed … Every time we made management decisions, they were about employees and safety,” he said. “The question is will we revert to top-down management, or will we go back to bottom-up?”
He said CEOs are now beginning to analyze whether or not they can successfully run the businesses with some of the employees out of the office, or some of the employees away part of the time.
“A lot of CEOs are going to say ‘enough is enough’ — we need everyone back in the office,” he said. “Sept. 15 we will feel like we are tracking back to pre-Covid, and I think that reshuffling the deck brings a lot of issues with it.”
Pierre Debbas, a partner and founding member at law firm Romer Debbas, believes that even companies that have officially implemented hybrid arrangements have still had uncertainty hanging over their heads. However, he believes the vaccination rates and the arrangements around school have been the biggest pieces of the return-to-work puzzle.
“None of this can be determined without schools being opened,” he said. “One of my biggest fears is the psychological damage that this has caused … I don’t think you are going to flip the switch and everyone is going to run back to the city.”