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WaPo & Co. Scapegoat Remote Workers for Urban Real Estate Woes Julianne Tveten ([link removed])


WaPo: Downtown D.C.’s struggles mount as many workers remain remote

Washington Post (1/27/23 ([link removed]) ): "With most federal employees still working at home...downtown can still feel like a deflated balloon."

According to the Washington Post, the nation’s capital is withering. Washington, DC, has become a “ghost town,” the paper mourns (4/18/23 ([link removed]) ), “pocked by vacant storefronts, moribund sidewalks and offices that, even on the busiest days, are just over half occupied” (1/27/23 ([link removed]) ).

Who’s responsible for DC’s grim state? Remote workers.

Employees who continue to work from home, the Post’s logic goes, have abandoned the offices to which they used to commute, devastating the commercial real-estate market and retail businesses within municipal downtowns. These admonitions aren’t limited to Washington; in New York, remote work will “wipe out 44% of office values” (NBC New York, 5/24/23 ([link removed]) ); in San Francisco (Washington Post, 6/12/23 ([link removed]) ), it “could portend disaster;” and in Los Angeles (NPR, 5/16/23 ([link removed]) ), it is already “upending [downtown] ecosystems.”


** Sympathy for the landlords
------------------------------------------------------------

Within this narrative, outlets suggest that wealthy office real-estate developers have become the victims of a recalcitrant remote labor force.
WaPo: Scaling back remote work at federal agencies is a long overdue step

A Washington Post editorial (4/18/23 ([link removed]) ) says that "the deadly virus remains a serious risk but is now a known commodity.... So it is ironic that a large percentage of federal workers still haven’t returned to the office."

In a story headlined “Downtown DC’s Struggles Mount as Many Workers Remain Remote,” the Washington Post (1/27/23 ([link removed]) ) invited readers to pity commercial real-estate developers, whose office properties’ multimillion-dollar values were at risk of decline as staffs worked from home, and tenants accordingly let their leases lapse. The piece featured Anthony Lanier, president ([link removed]) of the multinational Eastbanc, who’d found himself “awake at 5 a.m., worrying,” since the devaluation of his downtown Washington building from $249 million in 2021 to a paltry $154 million by the time of the article’s publication.

“With most federal employees still working at home,” downtown DC “can still feel like a deflated balloon,” the Post continued, highlighting an unused 12-story office building and 20 vacant storefronts. Because of diminishing revenue from large downtown office properties, a source told the Post, “the transition is going to be painful for property owners, asset holders” and municipal services. (That source was Yesim Sayin of the DC Policy Center, a “nonpartisan research organization” that just so happens to receive funding ([link removed]) from multiple real-estate companies.)

Little had changed, apparently, since the New York Times (4/8/21 ([link removed]) ) warned that a contraction of office space caused by telework could “crush,” “wallop” and “pummel” commercial landlords. In one estimate the Times included, office landlords’ profits “would fall 15% if companies allowed workers to be at home just one and a half days a week on average. Three days at home could slash income by 30%.”

And again this year, the Post (6/12/23 ([link removed]) ) declared that workers who wanted to stay remote were “prompting an office real estate crisis,” rendering commercial landlords “desperate.” Amazon and Google, the paper continued, had paused plans for sprawling real-estate developments amid a “debate over return-to-office mandates,” much to the Post’s dismay. (The Post disclosed that it’s owned by Amazon founder Jeff Bezos, but, perhaps relatedly, didn’t deem it relevant to note the historical ([link removed]) opposition ([link removed]) to these sorts of projects among local communities.)


** Misplaced blame, distorted stakes
------------------------------------------------------------
WaPo: Workers want to stay remote, prompting an office real estate crisis

The Washington Post (6/12/23 ([link removed]) ) does not seem to recognize the irony of blaming empty real estate not only on remote work but on "a long-festering homelessness issue the city has failed to resolve."

While it’s convenient for media to name a single culprit for falling office values, it’s also simplistic. Remote work certainly affects occupancy: An April 2023 estimate ([link removed]) placed the US office vacancy rate at 12.9%, compared to 9.4% in the second quarter of 2019. However, commercial real estate had seen record vacancies prior to the onset of Covid and the attendant growth of telework.

Just before Covid surfaced, thousands of US stores had shuttered, and mall vacancies reached their greatest extent “in at least two decades” (Financial Times, 1/20/20 ([link removed]) ). Theoretically, landlords could have filled the empty spaces by decreasing rents for mall tenants. Yet they mostly opted not to, calculating that it would be more lucrative to leave units vacant than to reduce asking prices; the latter would drag their property values below their speculations, and could inspire other tenants to demand reductions.

The result, as FT reported: Property owners like Cushman & Wakefield—which also leases ([link removed]) office space, and has been cited as yet another “desperate” landlord (NPR, 5/16/23 ([link removed]) )—not only refused to lower rents, but in fact increased them to then-unprecedented levels in 2019. (Residential landlords, too, employ this form of artificial scarcity—Curbed, 1/27/23 ([link removed]) —and some commercial real-estate companies openly tout ([link removed]) it as a business strategy.)

The Washington Post (1/27/23 ([link removed]) ) addressed a related issue in one of its many commercial-property elegies: “Even before the pandemic, downtown Washington had an oversupply of offices,” the outlet noted, adding that this excess was “aggravated”—not caused—“by the emergence of telework and competition from emerging neighborhoods such as the Wharf. ([link removed]) ”

The Wall Street Journal (2/28/23 ([link removed]) ) offered a similar casual mention weeks later: “It doesn’t help that US offices were emptier long before the pandemic. A construction glut ([link removed]) led to high vacancy rates.” But these complexities conflict with the anti‒remote work narrative, which could be the reason the Post relegated this critical information to the 21st paragraph and the Journal to the 18th.

Additionally, it’s hard to buy the notion that even the most fabulously wealthy commercial landlords—including Donald Trump’s eponymous Trump Organization (Washington Post, 6/12/23 ([link removed]) )—are struggling to make rent or pay off loans because of remote-work trends, let alone that they’ll be allowed to fail.

The Post itself (6/12/23 ([link removed]) ) noted a crucial point: As a Brookings Institution fellow explained, banks would deliberately prevent mass foreclosure of commercial properties if said foreclosures weren’t in their interest. “The issues have been known for a while,” the outlet conceded, “giving lenders plenty of time to consider what to do.” As in its January piece, the paper waited until well into the piece—21 paragraphs, in this case—to acknowledge this.


** Against industry interests
------------------------------------------------------------
WaPo: The pandemic is over. Excuses for allowing offices to sit empty should end, too.

Michael Bloomberg, a multi-billionaire with over $100 million in real estate investments, lobbies in the Washington Post (8/1/23 ([link removed]) ) for the federal government to force workers back to the office—because remote work is bad for "small businesses...poor people and elderly people," of course.

Why are teleworkers the objects of such disdain? Perhaps because having the option to work remotely—remarkably popular ([link removed]) but increasingly ([link removed]) rare ([link removed]) among both private- and public-sector workers—is one of the few forms of power the US labor force has retained since the pandemic struck, and is thus at odds with the interests of industry. Hence corporate media’s frequent finger-wagging: The Wall Street Journal (2/28/23 ([link removed]) ), for instance, claimed that workers have “turned their backs on offices.” NPR (5/16/23 ([link removed]) )
cautioned that cities and businesses stood to “flounder—and even fail—without” employees who’d gone remote.

The Washington Post’s editorial board, meanwhile, has published multiple broadsides against remote public-sector workers (11/23/22 ([link removed]) ), calling their workplace arrangements “unsustainable” (4/18/23 ([link removed]) ). More recently, an indignant Michael Bloomberg penned an opinion piece for the Post (8/1/23 ([link removed]) ) declaring that federal employees and their unions had no more “excuses” not to return to the office permanently, based on the dubious ([link removed]) premise that “the pandemic is over.” (More than 160,000 people in the US have died from Covid ([link removed]) in the past year.) A photo of a storefront with a for-lease sign embellished Bloomberg’s
tirade, reinforcing the conceit that federal teleworkers had ruined urban businesses.

Somewhat surprisingly, one of Bloomberg’s own media verticals, CityLab (3/9/23 ([link removed]) ), quoted two public-sector union officials in its coverage. One, Jacqueline Simon of the American Federation of Government Employees (AFGE), challenged the disciplining of public-sector employees, stating, “The federal government doesn’t exist to provide business to downtown restaurants.” The other, Tony Reardon of the National Treasury Employees Union (NTEU), pointed out that remote work "reduces leasing costs for the government." (There are reasons to criticize AFGE and NTEU, which represent employees of the Departments of Defense ([link removed]) and Homeland Security ([link removed]) , among many others. But, contra Michael Bloomberg’s screed, their embrace of remote work isn’t among the most compelling ones.)

The two labor leaders, however, were outnumbered by sources advocating for commercial real estate: the chief executive of the US Chamber of Commerce, a senior director at the aforementioned real estate firm Cushman & Wakefield, a former consultant for the infamous ([link removed]) McKinsey & Company, and the owner of a shuttered jewelry store.

In case the Washington Post hadn’t made it clear enough, CityLab offered a stark reminder: Corporate media will defend property long before it’ll defend the people who work, or used to work, within it.
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