NYC won’t be back until empty office towers are filled with workers

“New York City Is Back,” proclaims City Hall and even The New York Times, The Dealer of Doom. A renaissance may appear to be underway, thanks to the blessed success of vaccines to defeat COVID-19.

But the Big Apple won’t really be back until employees return to their offices in droves. So far that’s not happening anytime soon, especially not in the still ghostly Midtown. Meanwhile, employers and elected officials mostly sit idle and hope for the best.

According to Kastle Systems’ widely tracked return-to-work barometer, office occupancy rates in the New York metropolitan area rose last week to 21.7%, from 20.7% the week before (Kastle did does not publish data specifically for Manhattan). The figure is 49% in Dallas, 48% in Houston and 29% in Philadelphia.

Why is Gotham so late? Working from home has become a habit for many who have experienced or witnessed the terrible viral carnage in the city in the spring of 2020 – regardless of the loss of creativity and the drop in productivity of the companies that pay their wages. Some won’t give up on Zoom meetings until and unless government and employers get them off their laptops.

But unless there is a massive return to offices, the city faces a catastrophic loss of tax revenue and permanent closures of stores, restaurants, hotels and service businesses in Midtown, Midtown South and Downtown.

Most empty buildings have yet to translate into significant losses for landlords, just because businesses have long-term leases on which they continue to pay rent. But these tenants are keeping a close eye on future trends in the workplace. If they were to ultimately reduce their square footage by 25%, it would have a devastating impact on homeowners – and on property and other property taxes, which contribute more to the city’s cash flow than Wall Street.

Yet mayoral candidates have barely mentioned the crisis in their campaigns. This, despite the scale of the threat: while the chaos of the streets will undoubtedly harm the economic future of the city, definitely empty towers will destroy it completely.

Some big companies, including Morgan Stanley, have ordered people to return to their desks or face a pay cut. JPMorgan Chase, Facebook, Apple and Bank of America, among others, have said they are “waiting” for staff to return after Labor Day.

But it remains to be seen which teeth will have the “expectations”.

A general view of nearly empty streets and sidewalks in the Midtown Manhattan section of New York, NY during the coronavirus pandemic or COVID-19 pandemic on April 8, 2021.
An almost empty Midtown in April. Barring a massive return to offices, New York faces a catastrophic loss of tax revenue and permanent closures of stores, restaurants, hotels and service businesses.
Christophe Sadowski

The state this month lifted unnecessary capacity and spacing rules for commercial properties, a welcome step that scrapped companies’ latest excuses for keeping floors empty. But with daily reports of street cuts and trampling on the subway, it may take more than “Please Come Back” to coax employees, especially older ones, into their Greenwich, Connecticut and Hamptons offices.

Of course, the New York City Partnership predicts that 62% of workers will be back in their desks this fall. It would be a big step forward even if most only show up three days a week.

But no one, optimist or pessimist, really knows how full the offices will be this fall and winter. The owners have no influence to keep the employees coming back. It is up to the tenants and the town hall, soon to be adrift between the mayors, to give themselves a hard time.

Unless there are demonstrable difficulties, companies should require their staffs to come back – period. Too many have forgotten that it is their right to do so. Long-term homework is not viable for most businesses, and any boss who is worth their salary wants face-to-face interaction with team members.

It is also the right of companies to require vaccinations, which would give employees much greater confidence in their return to physical workplaces. Such a rule has been confirmed by several courts and reaffirmed by the Federal Commission for Equal Employment Opportunities.

More than cheap cheerleaders, the state and city must facilitate a safe return from street crime and public transportation as well as the virus. This means improving the conditions of the streets and public transport with much more determination than the authorities have shown so far. The sight of half a dozen uniformed police officers idling on subway mezzanines is less reassuring than a single example of a cop on a station platform interrupting a stampede or sabrage in progress.

And our leaders must show sedentary people, some of whom have rarely ventured into the city since March 2020, how much everything has changed. Don’t just say “We’re back” – show they are veritable theaters, restaurants and shops that come back to life. Only when office workers rediscover the pure delight city, will the Big Apple really be back?

About Sandy Fletcher

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