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What does it mean to work from home? It means that you can have a better climate and lower house prices.

What does it mean to work from home? It means that you can have a better climate and lower house prices.

What work from home means for the climate and house prices

It’s not just another perk in a benefits package — remote work could fundamentally reshape the urban geography of the United States.

Wherever we live, it has been The location where we can find a great job is what will determine our success.. This truism is Many Americans live in defined areas — clustered in and around lucrative job markets.

Particularly: “superstar cities”They are a significant technological breakthrough. According to a 2018 article, economist Richard Florida, “the five leading metros account for more than 80 percent of total venture capital investment and 85 percent of its growth over the past decade.” Another economist, Enrico Moretti, recently noted that “the ten largest clusters [cities] in computer science, semiconductors, and biology account for 69 percent, 77 percent, and 59 percent of all US inventors.”

Remote work could make this possible.

Only 37 percent of jobs can be performed remotely, however,According to two University of Chicago economistsThese jobs are more expensive than the purchasing power (accounting). 46 percent of all US salariesThe same estimate. These jobs create demand for a wide range of services sector jobs, including teachers, lawyers, and taxi drivers. This is hugely important — it means that Remote work could increase the choice of where to live for millions of Americans.

Imagine, for example, that you’re a human resources manager at a tech firm in San Francisco, married to a baker and paying $2,800Rent for a one-bedroom apartment starts at $125 per month. Remote work can allow you to relocate to Nashville or Orlando to be near your family. This will save you a lot of money on rent. And when you move, you’ll take your family and your demand for services with you to those locations, opening up opportunities for other workers — including, say, your spouse, who could confidently move with you and open a bakery catering to other new transplants.

To be sure, there’s good reason to believe that very little of this will happen.

Productivity is a complex question, and it is perhaps the most important. Remote work doesn’t have one clear effect on workers’ productivity, Emma Harrington and Natalia Emanuel provide evidence shows. Productivity LossesOr GainsRemote work can be found in many industries, firms, and roles.

However, if the majority of firms choose to work in person, it could push the equilibrium back where it was before the pandemic. That’s what Moretti I was predicted to be back in April 2021: “The moment you start losing that creativity and productivity, that’s when both the employer and employee have something to lose from this decentralized application.”

Moreover, agglomeration economies — “the tendency of employers and workers to cluster” in big cities — are very powerful. One reason this is so is because of Matching between labor demand and labor supply. For highly skilled workers, it is important to live in an area with many companies you can work for so you can raise the price of your labor. Firms want to live in areas with a lot of workers that they can hire for specialized roles so they can find the best.

For remote work to delink where people live from where they work, it’s likely not enough for just one biotech firm to decide its employees can work from home full time. That would require many firms in this industry to make the shift.

If that happens — one economist thinks about 20 percent will be fully remote in real life. in the long run — there will be massive implications for where Americans live and work, presenting new challenges and solutions for the housing crisis, climate crisis, and our political institutions.

From “Remote Work Persisting and Trending Permanent”Ben Wigert and Lydia Saad, demonstrating the persistence of remote work during the pandemic.
Gallup

Remote work and housing market

America’s “superstar cities” are lucrative labor markets — but the price of entry has become the cost of living, namely, the price of shelter. Because supply has been artificially constrained due to the labyrinthine regulations and veto points during the housing development process, housing costs have soared in these areas.

This is why it is so important to fix this problem. Expert after ExpertThis has been maintained. And while there has been some progress in recent years — notably on the West Coast — as of May 2021, the country has a shortage of about 3.8 Million HomesThe problem is concentrated in the most lucrative labor markets in metropolitan areas.

Remote work could help alleviate some of the housing shortage in these cities by spreading the demand in the metro-suburban area. One Study, for example, showed that a shift to working from home would “directly reduce spending in major city centers by at least 5-10 percent relative to the pre-pandemic situation.” And Matt Delventhal, economist Found that an increase in remote work in the Los Angeles metro area would lead average real estate prices to fall: “As many workers move into distant suburbs, prices in the periphery increase. These price increases are more than offset in part by the decline in core prices. … In the counterfactual where 33% of workers telecommute, average house prices fall by nearly 6%.”

For those who work remotely, it could be possible to avoid the high housing prices in places like Boston or Seattle and still have access to the jobs that they offer.

The upward pressure on housing prices could be eased by reducing the demand in these major cities. This could also mean that the demand could be spread more evenly across the United States. We This dynamic was evident from the beginningDuring the pandemic, rents rose more in more affordable cities such as Baltimore and Dallas. However, cities must make it easy for these areas to be built homes. Otherwise rents will follow the same pattern that in. San Francisco, Los Angeles, Washington, DC.

Cities such as Austin, Phoenix and AtlantaWhile they are some of the most favored inheritors of city-dwellers, there is still a chance for smaller cities to reap the benefits of a shift to remote work. One is already trying.

Tulsa, Oklahoma, is struggling with high-wage workers and population growth, just like many American cities. This is why a program called Tulsa Remote was launched offering $10,000 grants and “numerous community-building opportunities” to fully remote workers to move to Tulsa for a full year.

“Tulsa did not just offer the $10,000,” Upwork chief economist Adam Ozimek told Vox. “Tulsa has also worked to build community for remote workers and create lots of local amenities. Tulsa was also first to do this, and it has been unquestionably good for Tulsa. But I would be surprised if anyone else discovered. [$10,000]It all works out for you. No one’s going to make lifestyle decisions around $10,000.”

Downtown Tulsa (Oklahoma), May 10, 2021
Andrew Lichtenstein/Getty Images

The Economic Innovation Group released a Report in November outlining the results, finding that the program “is expected to be responsible for 592 full-time equivalent (FTE) jobs and $62.0 million in new labor income for Tulsa County in 2021 alone. In total, for every dollar spent on the remote worker incentive itself, there has been an estimated $13.77 return in new local labor income to the region.”

Making housing more accessible is great, but the impact of remote work won’t be cheaper house prices for everyone. People who lived in urban areas in the past and can now move to the suburbs would likely see a drop in housing costs. However, those who live in cities with higher housing prices or are already there would see their housing expenses rise. Although the average cost for housing would fall in this scenario, policymakers must consider the different impacts so they can prevent unwanted displacement.

Remote work and the climate

Density is a great tool to reduce carbon emissions. Transit and walkability are most beneficial in densely populated areas. They can also benefit from walking and transit. Reduce energy costs. It is possible to work remotely, as the vast majority American municipalities plan for sprawl. Electric vehicle growth is slowIt could make our built environment more unfriendly.

“Both logic and empirical evidence suggest that developing more compactly, that is, at higher population and employment densities, lowers VMT [vehicle miles traveled]. Trip origins and destinations become closer, on average, and thus trip lengths become shorter, on average,” reads a ReportBy the National Academies. Remote work can have a negative impact on the environment if it is done in communities that are favorable to their energy consumption and driving habits.

Most evidence thus far has shown that as people have moved over the last year, they’ve generally stayed within the same metro region but tended toward the suburbs. In May, Stanford economists Arjun Ramani and Nicholas Bloom termed this the “donut effect,” with the hollowed-out center representing the declining demand for urban life during a pandemic that forced many urban amenities to shutter. This effect is concentrated within the 12 most populous metro areas.

But these don’t have to be your father’s suburbs. Recode’s Rani Molla has reported on the “urbanization of the suburbs,” writing that while people are leaving cities for the suburbs, they are bringing their taste for city amenities with them — these new suburbanites like walkability and access to a diverse array of restaurants and stores. It could reduce the negative effects of this change if suburbs are more walkable and more transit-friendly. Our land use laws allow mixed-use development so that housing can be built near schools, shopping centers, job centers, and other important areas. As always, Parking costs should not be subsidised by any localityMake it easier to use climate-friendly transportation

The Stanford researchers note there isn’t a significant amount of movement happening between metro areas, which indicates that at least so far, hybrid remote work is a more likely outcome than a large number of workers going fully remote.

Remote work may take longer to have an impact. Many people may have moved to suburbs in states where they are already residents, but this decision was likely influenced in part by uncertainty about how long remote work would be allowed in the aftermath of the pandemic.

It is difficult to predict the carbon impact of remote work. There are many reasons why it might be negative. For example, people moving to areas with less dense populations and without access to transit networks. Also, land-use legal frameworks that favor sprawl over large single-family homes.

Remote work may be an option for those who are unable to commute. which is a significant contributor to workers’ emissions. As the Atlantic’s Derek Thompson explained in a recent interview on Vox’s policy podcast The Weeds, “a culture where Zoom is considered a perfectly decent replacement” could curb the Air travel is the most carbon intensive of all forms of travel. Depending on many factors, Reduced flyingThis could outweigh any increase in car commutes.

It’s also possible that focusing on urban geography as a major part of the solution to the climate crisis is misguided. “My bet would be that the energy sector-specific changes are more important than the future of remote work,” Thompson said. This means that urging the US electrify cars and to get more energy from low carbon sources like solar, wind, or hydropower is likely to be more important than any marginal changes in density.

Remote work and politics

Democrats have become increasingly concerned about the concentration of college-educated voter in liberal-leaning states in recent years. This creates a Senate and Electoral College advantage for Republicans, whose constituency tends to be more evenly distributed throughout the country.

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In a Niskanen Center research paper Will Wilkinson highlighted many of the political problems that have accompanied urbanization. “The Density Divide: Urbanization, Polarization, and Populist Backlash.” He argues that polarization has been amplified by “the self-selection of temperamentally liberal individuals into higher education and big cities while leaving behind a lower-density population that is relatively uniform in white ethnicity, conservative disposition, and lower economic productivity.”

It’s not just that there are higher-paying jobs in Los Angeles than in Youngstown, Ohio — the nation has been segregating based on people’s openness to experience and liberal attitudes.

Dense places vote for Democrats.
Niskanen Center

Remote work could change this. While some people will still choose to stay in deep blue states because of these traits, others will find that there are enough liberals around cities like Bozeman and Columbus to make them happy. Others still could forgo these preferences in favor of slashing their cost of living, deciding that it’s fine to live in a neighborhood of the opposite political party as long as you can afford a pool.

As Arizona’s population has grown in part from California emigrants (One study found that that 23 percent of all Arizona immigrants came from California) Democrats have netted benefits, winning both Senate seats and the state’s 11 Electoral College votes in the 2020 presidential election. Democrats may see an increase in college-educated voter in Arizona as well as Florida, Texas, and Georgia.

However, remote work could have a more profound impact: Thompson was interviewed in August 2020. Theorized that a “demographic shift could reshape American politics. A more evenly distributed liberal base could empower Democrats in the Sun Belt; accelerate the Rust Belt’s conservative shift; strengthen the moderate wing of the party by forcing Democrats to compete on more conservative turf; and force the GOP to adapt its own national strategy to win more elections.”

The political trends of the existing residents could be affected by an influx in highly-educated and well-paid coast expats. Coastal emigrants’ views might change because part of what was making them Democrats was living in diverse and dense communities.

There’s also a chance that in many of these states, existing institutions could stifle liberal sentiment.

At the local level, as long as these states’ governors and statehouses remain Republican, state preemption laws could hamstring localities from enacting policies that reflect an increasingly liberal electorate. It has been made easier by Republican states It is against the law for localities to tax plastic bag for environmental reasons.To. Stop localities from extending antidiscrimination protections LGBTQ people., and Indiana Tried to crippleA bus rapid transit system is available in Indianapolis.

As blue cities rise in prominence in red states it is likely to lead to a fight over municipal power limits. These battles will only get more intense if left-of center voters flock to electorally vital purple and red states.

Another important political trend is the emergence of NIMBY sentiment everywhere newcomers go. NIMBYism is not a result of scarcity but a deficiency only found near the ocean. Existing community members will likely resist the changes as higher income Americans move farther away from the ocean.

As the New York Times’s Conor Dougherty reported last February, “The Californians Are Coming. So Is Their Housing Crisis.” Locals are angry, Dougherty writes: “in Boise, ‘Go Back to California’ graffiti has been sprayed along the highways. The last election cycle was a referendum on growth and housing, and included a fringe mayoral candidate who campaigned on a promise to keep Californians out.”

Localities have the ability to reduce economic costs for newcomers and prevent rising temperatures by liberalizing their Zoning laws and investing in affordable and market rate housing. Anti-displacement MeasuresTo reduce conflict. Some conflict is inevitable, however. one dispatch from East Austin recounted, residents of a “new luxury building” began calling the police on a neighborhood tradition.

This past year has shown government can have a large influence on how remote work is done. Expanding broadband access to ensure that the ability to do remote work is equitably distributed, liberalizing zoning laws, investing in amenities to attract knowledge economy workers, and ensuring that the gains from growth do not solely accumulate to the most well-off — that’s all in policymakers’ hands.



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