Soooo, let me get this straight... A tiny number of investors bought a ton of real estate in NY City under the premise that the real estate market would infinitely grow and were more than happy to soak up all the profits when that happened, then when that same growth caused the average person to have to leave NYC due to insane housing prices, they complain that rich people are paying all the taxes. What a shocker! When you buy everything, you wind up paying all the taxes.

Cities have been made and remade for centuries because of war, plagues, etc. The lack of imagination about this issue is embarrassing.

It's almost like zoning and designing cities with an unnaturally high separation of work and housing, creating black hole neighbourhoods when ppl aren't in offices, was a bad idea.

being a landlord has always been known as being a big risk it’s so annoying that they’re babied whenever things go wrong in their favor

Here’s the thing: Following 9/11 attacks, so many forward thinking experts made it clear that replacing the WTC with new high rise towers wasn’t necessarily a good idea, because in the age of internet, employees wouldn’t need to come to the office. Yes this was 2001, yet for two decades developers/investors ignored this reality and stubbornly kept building and building and building. What we are facing right now was just a matter of time.

NO BAILOUTS.....its called investing and YES, it is not risk free

Stop blaming people doing WFH.

Greedy landlords are the problem. If I work remote and had option to rent a 3 bedroom house for $ 1600 vs a studio apartment in the city for $ 2,500 per month its no brainer. Work is no longer tied to location and people can move around. Landlords want to force back to the office so they can keep prices high and rip off people.

Empty buildings, and a housing crisis happening at the same time. Seems like there’s a match to had.

I suppose letting people work from home and converting office buildings into living space to drop the ridiculous rent prices is out of the question then.

Something they touched on in the very beginning is that many people have moved and are no longer in commuting distance of their former offices--often taking advantage of lower housing prices further away from the city. In that case "returning to the office" would mean moving again, just after getting settled in to a (presumably) more enjoyable lifestyle. And since housing prices and now mortgage rates have risen, housing near the office may simply no longer be affordable on their current salary. Companies that try to force a return to the office may suddenly lose a lot of their talent, as people choose to (or are forced to) find new jobs closer to where they now live.

Office work was largely archaic about a decade ago, the pandemic just knocked over the house of cards. Modern internet speeds and accessibility (especially in urban areas) was just ignored to justify the office space. My wife works from home, she hasn’t needed to actually visit an office with any regularity for 5 years, but until the pandemic she was doing it for basically no reason. In her current position there isn’t even really even an office to go to and the ones she would go to (if required) wouldn’t have anyone in them for her to “collaborate” with. My job requires me to be physically present for 30-40% of my work, but an accountant, a programmer, a web designer, customer service… why?

Reading these comments gives me a little hope. Im happy to see people mentioning zoning problems, greedy landlords, and investors as the reasons behind these problems. Dont forget that the car companies are a major reason why we are so car dependent. Theyve been lobbying county and federal governments for nearly a century. We need livable, walkable cities using mixed zoning laws.

This is an unfortunate collateral consequence of our lives improving. Leaving your home for the vast majority of your waking hours to commute to go work in a random building in a downtown never made sense. I'm so grateful technology has caught up and I will never have to do it again (I'm down to once a week). We'll have to figure out what to do with all these buildings, but me going back to work in them is not one of the possible solutions.

Make these city buildings mixed use, so people can live, work and shop all within walking distance.

Offices are not suitable for conversion because the landlords want to follow minimum square footage laws in order to maximize their gains. So a nice large office building with open floor plans and nice natural light, when divided into the minimum square footage requirements leads to interior windowless units which cannot be sold. So instead of making nice large warehouse style units with open floor plans and plenty of square footage and natural light, they refuse to convert them and complain to their politicians they cannot turn AS MUCH of a profit using the current laws. Greed has no bounds and we all see it.

The unstated underlying problem behind this is that cities allowed themselves to depend too much on highly concentrated commercial and ultra-luxury residential real estate. Those sectors are far more volatile than intermixed commercial and middle and lower-middle class housing. It is very analogous to the spate of failures of banks that catered to the high-end customers. It's very tempting, because while those are in their growth phases they generate far more tax revenue and there is intense, and well-funded, political pressure to yield to the desires of those behind those projects. But, unlike private equity, governments need to think of long-term effects after bubbles burst and economic conditions change. It's actually good economics to reserve part of your assets in lower reward and lower risk investments instead of chasing the momentary huge earners.

Every friend I had moved out of New York because it became unaffordable. If my family wasn’t here I would have been gone too. I’m currently at the peak of what I’m willing to pay these people for rent. Another dollar more and I need to pivot because I’m not about to spend my whole life being squeezed into a dirty ass train fearing for my life with every commute and working just to pay to live in an overpriced box.

Part of the problem is people don't want to commute an hour into the city. If the city and companies want to attract people find a way to make living in the city affordable.

If there is an oversupply of commercial real estate and a severe shortage of residential units in most big American cities, it seems like work from home is actually the solution. Just convert more of these buildings into residential units

Convert office buildings to apartments, way too much office space , not enough housing

Urban Doom Loop - Are We Serious? It's high time we encouraged people to break free from the daily commute, sparing our environment from the relentless CO2 emissions, especially when remote work is a viable option. The colossal, soulless office structures that house countless cubicles must undergo a transformation. Imagine repurposing these massive edifices to alleviate the burdens of rental costs, and offer living spaces to those in dire need of shelter.

Once people started working from home a percentage were never going to want to return to the office. Remote work is just better, as long as you are professional enough to get your job done well. I've put maybe 3,000 miles on our 2nd car in the last 4 years. I have more time for my family, and I don't have to drive into a crowded, gridlock, dangerous city.

Usually when the rich hurt the poor benefit and when the poor benefit the rich hurt. So I take this as a f****** win. Even if it does mean less tax money for a city, it also means that less people need to live in the city to begin with because they don't have to work there which is good. So overall I see this as a good thing

The contradiction is very poignant. There is a lot space available, there are a lot of people lacking a home, and somehow the market seams to separate the supply and the demand rendering an over production of goods unreachable to the consumer. Something has gone wrong there. It will be interesting to see how the market balances it self in this one.

investors when they make money after gambling "noooo government please dont tax meeee", investors when they lose money after gambling "pleeease help government save meee"

Only a doom loop because of terrible financial models that allowed this to happen, both in the public and private spheres. There was always a reckoning. Highly centralised and expensive real estate became increasingly unaffordable, unsustainable and illogical in modern internet-connected society. So-called wealth built not on productivity but speculative interest-only debt.

We don’t have this problem in Canada. Our cities are designed to be densely populated, prioritizing living spaces in the city centre’s, rather than office buildings. We also never have major highways intersecting our city centre’s.

Uh, no. Building high rent offices instead of housing that people desperately need and can't afford is ruining cities.

So basically rich ppl havin a hard time paying the bills

Dividing the city into strict zones may make such changes in the nature of office space development more difficult. I am very curious how American cities will deal with this and whether they will move away from the archaic division of the city into zones.

Let’s just accept the fact that we have entered a new era. With technological and communication advancements which compresses distances that allows us to do things differently with business and ways of working.

"city property prices fall". That's a good thing. For the last 50 years, urbanisation has caused prices to sky rocket to the point of ridiculousness. Cities become overcrowded, and small towns become ghost towns. I've been saying for years. Don't complain about property prices pricing you out of your own home town. You can move. There are towns and cities across America where the land is so cheap that the paper work probably costs more than the land itself. Perhaps this wave of "empty offices" can bring a little sanity back to property prices.

Rich people do NOT pay a disproportionate share of income tax. Rich people OWN the buildings that are taxed, middle class and poor people PAY that tax through their rent.

Greedy landlords and greedy banks now crying.....and Government having to live on a budget....welcome to the REALITY that is for the rest of us!

Couldn't care less about the struggles of greedy landlords. Love this for them. ❤

they just said commercial tax revenue is only 10% of all tax revenue. and if people continue to remote work then the property values in NYC will finally decrease, this means people in New York can finally afford to buy a home. How is this a bad thing? Also, seems like majority of the property tax comes from personal property tax instead of commercial real estate tax. This means if the property value decreases and people start buying properties in New york then the city will be able to collect the tax from that. This benefits the people more. Why must the people sacrifice themselves for the sake of the landlords and real estate tycoons?

Stijn at the end mentioned only about 10% of offices in his estimation were good candidates for conversion to apartments. He then listed hotels as another possible use. I wish he had briefly detailed why a hotel would be possible in a building where apartments wouldn't make sense. The base infrastructure for either type of building would seem to be pretty similar as far as water, sewage, electrical, etc.

This is a bad thing for overpriced big city prices??! Why should workers on pathetically low wages have to pay to travel to work because they cannot pay BS rent in NY or Manhattan. What's the point? When the rent in Manhattan is higher than your income.

The problem is these big buildings with little to no residents, we need residential spaces not offices

What has been impacting suburbs for a long time, finally came to the cities. Online retail has a large part to do with it. COVID just sped it up. Unless people can get creative, I suspect there will be a whole lot of empty buildings (companies, apartments, houses, malls, plazas, etc) all over the U.S. We need to completely rethink how we live. I’m out of touch with most people, because I’ve never bought all the crap most people do, but I wonder if people are buying as much as they used to. If not, doesn’t bode well for a greedy, capitalistic society, where our economic well-being rests on buying crap we don’t need.

If office work and environment was less toxic, stressful and political most people would return voluntarily. But that's never going to happen, so hybrid or remote it is.

I'm a Federal employee--I still technically have an office in downtown DC that has sat unoccupied since March 2020. Roughly half of my co-workers have been instructed to report to the office at least 4 days per period starting next week, but my telework/remote agreement has actually been extended for another year. Despite me not minding coming into the office (since I just live across the river in Arlington).

Since the Pandemic, nobody wants to be in enclosed spaces anymore. It's happening in many Metropolitan areas in the world. Work days are divided between work-from-home and office time.

Interesting to learn about. Appreciated his ending comments about how cities have always had to reinvent themselves throughout the ages. This is just another one of those challenges.

"Rich people pay the majority of taxes"...where? I don't see the nightly news saying poor folks have the option to work from home or leave to other states as they will. I feel for the cities that are having tax issues now, but don't give these billion dollars corporations billions of tax credits with no way to get adequate means of recuperating those grants if the company can't meet the requirements.

Cities have been about work commutes for too long, it’s time for them to be about the people who live in them again

He says towards the end most office buildings are not convertible into apartments but then suggest the office buildings can be converted into hotels? lol

The internet has been around for 30 years, the only reason this is an issue is because of complete power tripping by large companies, as well as just awful city design with stupidly expensive infrastructure maintenance, where endless sprawl means generally corporate chains are the only viable option, thus then requiring the big office spaces that are now in trouble. Constant short sighted goals is blind to the future.

5:30 Unsuitable for conversion to apartments is a shorthand for "apartments for living is too cheap per squarefoot we want higher rent per square foot that can only be generated from cinema halls, hotels etc"

Wait - Building giant single purpose buildings may not have been a flexible long term investment strategy?

No mention of the fact that this is the simple and predictable reversal of the urban inflation that has gone on for decades at the expense of the rest of the nation. The growth of big cities has been mostly explained by inflation of values. City governments not only spent these windfalls, they handed out huge pensions to the public employee unions that guaranteed their election in return. The small 4% decline in tax revenue would be no problem if these cities hadn't committed their cities to trillions of dollars in entitlements buying votes!

I would say convert them to condos/apartments if possible. In various cities a lot of people would love to live right downtown so I think the demand would be there, and it could help ease housing issues. However I see greed as a major obstacle to that and they would rather cope by blaming remote work. Any investment comes with risk and simply put, a lot of office space has been made obsolete.

It's not just about a pandemic, its also about apps like zoom and Facetime making the need for an office location almost obsolete. Technology is truly a double edged sword.

He might be a professor in a business school, but I don’t think he knows much about construction. The fear is usually that creating too much residential real estate crashes the market. North America’s dire need for residential property means that’s unlikely to happen. Those office blocks could be turned into flats in very little time. The big hurdle is planning. If the local government is willing to let millimetre precision go, drylining would repurpose those offices in six to nine months. But then you’d crash the residential property market.

How to stop the real estate doom loop is rezoning and building purpose is needed (especially politically for a more balanced urban and suburban environment.) Keep in mind that the doom loop is not new. Detroit went through a "doom loop" via automaker layoffs and downsizing. New Orleans is also going though a "doom loop" but is more nuanced by proximity to nature (Gulf Coast flooding) than economic, just too expensive to renew from natural disasters.

At the 2019 Ohio State University commencement, Fareed Zakaria spoke emphatically about the decay of small towns, suggesting cities were taking over. I scoffed at the time.

Screw the land lords. Let them collapse.

I know few offices "available" for rent for many years and still empty. They prefer to set crazy expensive rent, paying property taxes, maintenance etc, and waiting someone, instead of normalize rent to adequate level and do business. That could be benefits for everyone, jobs, business, less expenses, but they prefer to keep "property" empty.

Instead of bailing out the landlords cities should invest in infrastructure and services that make the city more attractive to people. Remote work is here to stay, some jobs will be in person but remote work will play a significant role going forward so instead of bailing out landlords and businesses in the long term they should focus on making a city somewhere you want to live outside of work culture. Make them walkable, build parks and nature reserves, invest in public transit and invest in the people living in your city.

housing is scarce and overpriced. i'd like to know why, by his estimates, only 10% of empty office space could be converted into apartments. build walls, add plumbing, someone will want an industrial style apartment with floor to ceiling windows.

"Rich people pay a disproportionate share of income taxes" perhaps that is because they have all that income. Funny how that works

It would be great to use all that space for residential space. If you can work from home, all you need is some meetup collaboration space occasionally.

In many cities around the world, I want this doom loop to arrive quicker and mightier so the f**k*d inflated prices come crashing down!!

"Rich people pay a disproportionate share of income taxes" 2:16 It's misleading to tout how much the rich pay in taxes without showing it as a percentage of their astronomical incomes. Let's get real. Many of these so-called 'high contributors' might be paying a pittance in relation to their earnings. For them, it's just another luxury expense. Meanwhile, the lower 50%? Taxes for them can mean choosing between essentials and luxuries, health and sickness, joy and sorrow. Let's not distort the narrative with selective data presentation.

The cities are just experiencing what small town USA has already experienced when a lot of manufacturing plants and businesses went overseas. Now, there are dead and dying towns all across the US landscape. That happened when employers abandoned the towns and the people that live(d) in them. This time, it is the employees who are abandoning the cities and the people who live in them. That is a result of people NOT living where they work. A lot of people are commuters to the cities for the purpose of working there, BUT they don't live there and many, if not most, don't want to. They had no choice when the businesses left from the smaller towns. So, when given the opportunity to NOT commute to the city and still be able to work, they grabbed that chance and held on. Now, they live where they work and don't have to commute. The businesses are upset because they paid for the buildings that they expected their employees to work in. The cities are upset because they lose out on the tax money from the employees. Well, too bad, so sad. I've said it before and I'll say it again: Commuters from the suburbs don't give a rat's hind end about the city that they've had to work in. They ONLY work there because that is where the workplace is located. Work is the ONLY reason to even go into a city. Cities are not attractive to suburbanites. They never were, and they never will be.

What I’m hearing is “boohoo the millionaire/billionaire hedgefund banker types are ‘struggling’” this is not a real problem. Like you can repurpose buildings into anything, or just tear them down and make agricultural spaces why is this an issue

If people don’t want to live in cities, don’t force it. Society is changing, for the better, to how its citizens want it.

Its because big cities in US aren't as desirable as it is in Asia and Europe. Blame crime, drugs, homeless, bad schools, and poor infrastructure.

"...so if a few rich people or families leave, that could leave a large hole in the [tax] budget." I wonder who has been saying the exact same thing?

I moved to an English town 45 years ago and saw how it had lots of empty office blocks. They're still empty. I've often wondered why all these tall buildings were built and what goes on in them. Apparently not much.

This is not surprising in any way shape or form. Our society is centred around economics and everything else is well down the list of priorities for the decision makers and the consumers. When economics is #1, its a hard fall when a disruptive change occurs.

I feel one Of the greatest challenges that we first timers face in the ma rket is that we end up losing all we have,making it difficult to find ourselves back to our feet. My biggest advice is to always seek the services of a professional just like I did when I ventured into it for the first time. Big thanks to Jasmine Querida. I now make huge profits by weekly through her services while still learning to stand on my own.

"Only 10% of office spaces are physically suitable for a conversion to appartments". No. 100% of all office spaces are already more suitable to live in than the street (and arguably more suitable than a lot of the lead-painted and mould-ridden "low-income housing"). At some point, people will take that space by force if necessary, they're not being given a choice.

Posting from England, I work from home and we routinely get guilt tripped by the government and chief executives to come back to the office, lime we are deliberately withholding money from overpriced sandwich shops and unreliable train services. Like many in England and I suspect the USA my wages and standard of living has been squeezed in the past 13 years whilst the 1%s who own these buildings have got richer, so you will excuse me if I dont get too weepy at the thought of them losing money.

Inflated cost of living does this.

I see stuff like this and I'm left thinking about how screwed up our system is. For example, halfway through the professor mentions a 10-ywar mortgage in which the company never paid any equity, but the property value goes down and they're screwed... If that we're a person and their house, we'd say they deserved to lose it. And it's worth remembering here, these major companies, these extremely wealthy people... They have all the money, make these terrible choices in order to give themselves more money, then come crying when their bad decisions hurt everyone. If a handful of people were to leave a city and it makes a billion dollar hole, that's a bad situation that could have entirely been avoided by having federally funded services. Truth is, they won't leave because the urban lifestyle is what they want... They have to be near the services that are truly only in the city. I can't help but look at stories like this and be reminded that it is the fault of the wealthy and powerful for setting up such a vulnerable system.

reduce the prices of property and demand will obviously pick up! why are you cribbing about it? These real estate brokers and landlords have taken the prices to exorbitant levels and now they are cribbint. get over it, employees are not gonna return

All of a sudden everyone forgets climate change when their bottom lines are hit. Less people driving into work each day is a great thing for humanity

I’m a current Urban Planning graduate student at Columbia and the two main issues we’re studying in NYC are 1.) (re)zoning, and 2.) tax breaks for affordable development. Most of the city needs to be rezoned to allow for higher residential density needed to build more units. Mayor Adam addresses this in his “City of Yes” plan. These buildings need to be converted to mixed-use and mixed-income in order to meet the housing need, and to generate taxable rental income for the building. More importantly, the state legislature has to reconsider or replace the 421-a tax abatement program which was designed to spur affordable housing rental development. Developers cant make the deals pencil without it. The costs of acquisition, labor, and materials are all fixed so unless there’s some tax relief they will never convert these office buildings or construct new ones.

The "urban doom loop" is a term coined by Columbia Business School Professor Stijn Van Nieuwerburgh to describe the negative impact of remote work on cities. With many office workers still working from home due to the pandemic, there is a reduced demand for office space, leading to revenue and value declines for office owners. This, in turn, leads to declines in property values, reduced property tax revenues for the city, and less money for public services. As a result, people may migrate out of the city, property values fall further, and the city enters a downward spiral of fiscal health. The problem is particularly acute in cities like New York, where property tax revenue is about half of all tax revenue, and commercial property tax revenue is about 10% of all tax revenue. The technology sector is particularly affected by the urban doom loop, as it has been more permissive of remote work. The impact of remote work on commercial real estate is also affecting regional banks, which are facing a credit crunch due to a deterioration in the credit quality of commercial mortgages.

I don't understand how office buildings can be turned into hotel space but can't be turned into apartment space.

Many businesses are leaving cities because of the massive increases in crime and people living on the streets in front of businesses. At least where I live.

2:10 - That one graph ain't telling the whole story. What percent of a person's income aka the effective tax rate is what really matters to most people, not just the total amount being paid....nice try CNBC

Urban central centers had a second chance following the decline of population from the 1950s-1980s. They failed. It is time they suffer and truly learn their lesson. The only upside many of these cities have is they are walkable and transit friendly with pretty good architecture.

These cities want people to live and work in the cities, but these cities intentionally not want to reduce crime.

I've been working 80 to 100% from home for 3 years (100% in the last year) and love it. I don't care about these offices.

This feels short-sighted... out with the old and in with the new. Deconstructing what doesn't work to build a new social structure. But I think we are going to start seeing home pods where they can stuff as many people in as little space as possible.

As someone who started working remotely during the pandemic I was like this is the best thing ever! But now after so many years and still working from home I miss meeting with my colleagues in person, grabbing a coffee on my way to work from my favorite seller, walking past other people and stores and shops.. doing activities with my colleagues DURING work. Meeting NEW people organically. Now I just wake up later than usual go to my computer to work and then order food and groceries to my house.. rinse and repeat everyday.

And yet all the cities mentioned here have a housing crisis and no affordable housing. Most employees have to commute long distances, wasting gas in heavy traffic. This is karma for companies and real estate companies. Employees take back your rights. If can do the same work from home.

I'm missing the part where this affects me or most common people. Your average person does not have a stake in commercial real estate or even in REITs. Even the tax revenue may be reduced but won't be eliminated completely.

Nobody thought that it will come to a time when people will prefer working from home to office. The pandemic brought that seismic shift. In the past, social interactions at work places didn't cause much problems but nowadays some comments that could let go would land you at HR which could ruin you. If you consider these issues, it's advisable to work from home if you don't want any problem.

I think a big part that’s missing in the equation is the general safety of some the cities listed. The homeless and crime problem in SF and LA would still be a big deterrent for many people to return to those cities

No bailouts and these buildings should be turned into affordable apartments.

homeless people sleeping outside empty buildings. Despicable.

San Francisco's my 2nd favorite US city I always enjoy visiting

unrelated comment but i just want to share something: "the generalized fourth power law" 10 times heavier load per axle=10 000times more road damage cars are only a rounding error for road maintenance (buses and semis destroy the roads the most) 10$ for 1h parking=87k $ in one year for a 2.5m x 5m patch of asphalt thanks for your attention bye

Zzzzz... corporates and lease owners want to make us go back to the office again, waste our time in traffic to please a micromanager. You know what: NEVER AGAIN!

Newsflash - the 15 minute neighbourhood is a reality! City councillors and mayors need to wake up and implement very simple policies. But of course it's just easier to blame the worker who refuses to commute for financial, environmental and personal reasons.

Comcast should embrace WFH and Remote Work!!! They are an ISP company. Let the Doom Loop happen!!! #WFHForever