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This summer, a gaggle of powerful NYC landlords pushed
the city's biggest bosses to bring their workers back into the office,
Bloomberg wrote. One of their main arguments: It’s the “patriotic thing
to do.”
The pitch:
Do you care about the American economy, Mr. CEO Sir? Look at all these
Manhattan businesses failing because your workers aren’t going into the
office. Consider the economic devastation when you let your employees
work from home and make egg salad sandwiches instead of buying a $15
Sweetgreen bowl.
- “I’ve been using a
little bit of guilt trip and a little bit of coaxing,” Jeff Blau told
Bloomberg. Blau is the CEO of Related Companies, the developer of
megaproject Hudson Yards on Manhattan’s west side.
- “It’s as much of a civic
obligation as anything else,” said RXR Realty’s Scott Rechler. His
company controls 25.5 million square feet of commercial real estate.
We’ve been here before
19 years ago this week, the U.S. was recovering from another tragedy that left NYC streets silent and its skyscrapers empty.
On Sunday,
September 16, 2001, Americans stared down their first full workweek
following the terrorist attacks the previous Tuesday. Writing in the
Washington Post that day, Mark Leibovich captured the mood in a piece
titled, “When 'Business As Usual' Becomes A Patriotic Imperative.” He
describes how companies were trying to balance the fragile emotional
state of their employees with the “obligation” to get back to work and
prevent a recession.
- In the article, you can hear themes that echo today—“grief, fear, and confusion,” “help the economy,” a yearning for “normalcy.”
But if the
similarities between September 2001 and September 2020 are obvious, the
differences are more so. Going back to the office then was a perceived
threat, more psychological than anything else.
Now, going
to the office (much like anytime you leave your house or gather with
others) is an actual threat; it heightens your risk of contracting the
coronavirus and spreading it to others. This, of course, significantly
complicates the picture painted by the city’s real estate moguls.
Others
hoping to spur economic activity with “let’s get back to the office”
messaging have run into similar issues. About two weeks ago, the UK
government postponed
its big media campaign to nudge workers back into their cubicles after
realizing the government's own safety policies prevented doing so
effectively.
Big picture: There’s truth to the NYC landlords’ argument. Low-wage service workers have been hurt the most from the pandemic, precisely because
higher-income folks (the typical office worker) hunkered down at home.
More office workers working safely in their offices would indeed help
the NYC economy rebound.
But asking
employers to treat their workers like U.S. infantry might not be
effective. CEOs are capitalists above all; if they feel like their
company is slacking with an entirely remote workforce, only then will
they start repopulating the office.
Bottom line: The
future of NYC’s commercial real estate may hinge on how many execs
share a mindset with Netflix’s Reed Hastings, who recently said working
from home was a “pure negative.”
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