Return to office policies are not working

Return to office policies are not working
Return to office rates are at there highest level since the onset of the pandemic. Despite this, office attendance is barely half of what it was in 2019. Company’s measures to get workers into the office have largely proven ineffective.
This fall, there is the potential for a resurgence of COVID cases doubled with a weakening economy that could depress office attendance. While I think the threat of a fall COVID wave may be overstated, I have mixed feelings about the general state of the US economy and its trajectory. I don’t think anyone truly understands what is occurring in the USA economy. There are a great number of mixed signals and Americans are somewhat pessimistic about the economy.
Blue chip companies are vowing to fill their workspaces as they commit to get tougher on employees that do not show up to the office. Meta has threatened disciplinary action. Despite these tougher policies, the return to office rate has not budged much.
Most employees go into the office during the middle of the week, with most people being out Monday and Friday. In Chicago, we have seen office attendance rates over 66% on certain days, but less than 30% on Friday. This range is about 25% to 65% in New York City. Kastle Systems puts the average rate at about 50.4% across the ten US cities it tracks.
The average national office vacancy rate rose to 19.2% last quarter. This is just below the historical record of 19.3% in 1991 according to Moody’s Analytics.
Part of the reason for low office attendance could be lax enforcement.
We are seeing a homelessness crisis across much of the country concentrated in urban centers. 90% of the members of the Seattle Metropolitan Chamber of Commerce said that the city could not recover until homelessness and crime was addressed. Crime and homelessness is reducing office attendance.
Spending cuts to government services and transportation are also weighing on office attendance. It is common to have long periods of time between transit trains in Chicago. Long wait times for trains and buses are occurring through many large cities. A long commute makes the work day that much longer and more of a pain.
Business will have more leverage to enforce office mandates if the economy weakens. Many people, including myself, have been amazed at how resilient and seemingly bulletproof the economy has been. However, I just did a video on the increasing amount of spending and credit card debt consumers are piling on. I have concerns that the average American is overextending themselves.
The flip side of a weak economy is that it reduces demand for companies to rent office space.
City and business leaders are increasingly turning to the federal government for help. There are lobbying efforts occurring to incentivize businesses to rent office space in cities. However, the chances of legislation is low.
On a personal note, I greatly enjoy working from home and I know this view is shared by a great number of people. I’m sorry that all this investment into office space is not working out but it is time to stop socializing business losses. There should be no government bailout of commercial property. If you took out the debt, you should pay it back.
Works Cited:
https://www.wsj.com/real-estate/commercial/tougher-return-to-office-policies-are-no-remedy-for-half-empty-buildings-57f41886?mod=hp_lead_pos1
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