The era of the daily gasoline-powered car commute coming to close in Golden State

California is known for its bad air quality and freeways packed with gasoline powered automobiles, particularly during commute times. And long distance “super commutes” spurred by its high housing costs. That is poised to quickly change over the next couple of decades.

Public health restrictions to control the SARS-CoV-2 viral contagion accelerated the trend of knowledge workers working from their homes some or all of the time rather than in a distant commute-in office building. Now California Gov. Gavin Newsom set in motion a plan to transition the state to electric vehicles over the next 15 years and ban the sale of new internal combustion engine vehicles by 2035.

Knowledge workers might still go to team meetings and other business functions but get there via electric vehicle or public transit on some days each month. This is major change and it’s happening relatively rapidly in a leader state.

Zillow survey suggests housing preferences could be upended in a post-pandemic America, leading to major questions about the future of dense metro cores

SEATTLE, May 13, 2020 /PRNewswire/ — Where people choose to live has traditionally been tied to where they work, a dynamic that through the past decade spurred extreme home value growth and an affordability crisis in coastal job centers. But the post-pandemic recovery could mitigate or even produce the opposite effect and drive a boom in secondary cities and exurbs, prompted not by a fear of density but by a seismic shift toward remote work.

Source: http://zillow.mediaroom.com/2020-05-13-A-Rise-in-Remote-Work-Could-Lead-to-a-New-Suburban-Boom#Closed

This is consistent with a long tern trend I discuss in my recently published eBook Last Rush Hour: The Decentralization of Knowledge Work in the Twenty-First Century. Before the maturation of Information and Communications Technology (ICT) that enables knowledge workers to work from most anywhere with good Internet connectivity, the length of the commute to the office was a paramount consideration in terms of where people chose to live. ICT has reduced its importance since it shrinks time and distance. The personal computer is the automobile of the information economy and the Internet is the highway.

The current SARS-CoV-2 pandemic and social distancing out of centralized commuter offices (CCOs) demonstrated to knowledge workers and their their organizations it’s no longer necessary to commute every workday to a CCO.

We’ll see varying degrees of migration out of CCOs in the coming years. Some will continue to be used part of the week or as meeting spaces for larger gatherings. Other organizations will opt to go fully virtual and shut down their offices.

State of California looks to reduce office space requirements, citing “increased remote workforce.”

California Gov. Gavin Newsom’s revised budget for FY 2021 is seeking considerable savings over the budget his administration proposed in January prior to the COVID-19 pandemic and sharp economic contraction that’s expected to drastically reduce tax revenues.

A component of the May Revise budget proposal would examine cutting the state’s real estate costs in light of state employees increasingly working outside of centralized commute-in offices as a disease control measure during the pandemic. This signals that the Newsom administration sees the shift as one that can be permanently adopted going forward.

With an increased remote workforce, the Administration, led by the Department of General Services (DGS), will evaluate the state’s real estate portfolio to determine which agencies and departments may be able to reduce lease space. Agencies and departments may be able to reconfigure their workspace to include additional meeting rooms and hoteling space, thereby reducing their lease footprint. Reducing space will decrease not only lease costs, but also energy costs. Additionally, DGS will look for possible restacking opportunities in state-owned buildings.

NYT: Big Apple facing inflection point on centralized, commute-in offices

But now, as the pandemic eases its grip, companies are considering not just how to safely bring back employees, but whether all of them need to come back at all. They were forced by the crisis to figure out how to function productively with workers operating from home — and realized unexpectedly that it was not all bad. If that’s the case, they are now wondering whether it’s worth continuing to spend as much money on Manhattan’s exorbitant commercial rents. They are also mindful that public health considerations might make the packed workplaces of the recent past less viable.

“Is it really necessary?” said Diane M. Ramirez, the chief executive of Halstead, the real estate company, which has more than a thousand agents in the New York region. “I’m thinking long and hard about it. Looking forward, are people going to want to crowd into offices?”

Once the dust settles, and companies make their decisions, New York City could face a real estate reckoning.

Source: Coronavirus Live Updates: Top Health Experts Paint Bleak Picture of Pandemic – The New York Times

Pandemic previews, hastens arrival of the last rush hour

The social distancing brought on by the SARS-CoV-2 pandemic offers a preview of the benefit of decentralizing knowledge work and will hasten the arrival of the last rush hour. Prior to the pandemic, only a small but growing percentage of knowledge workers spent most of the week working outside of centralized, commute-in offices (CCOs). With the closure of offices to slow the infectious disease outbreak, many more are now forced to do so. They may have grudgingly accepted daily and often long commutes as part of the job. Working outside of a CCO demonstrates they can still get their work done without the daily commute. Instead of turning a car key to start their workdays, they turn on the lights and their computers.

The reduction in commuting is also demonstrating how the automobile-oriented transportation infrastructure built up in starting in the mid-20th century is supposed to function per its original design. In metro areas, that infrastructure is overloaded with cars well beyond that specification, rendering it an inefficient means of getting people to CCOs. Over the decades, more highway lanes are added and public transit funding increased in the hope of improving transportation efficiency. But the effort and billions of dollars spent has largely been futile. The rush hour congestion remains and for too many, it takes too damn long to get to the CCO and back home again.

Freeing up personal time otherwise sacrificed to the commute brings into sharper focus the cost of daily commuting to CCOs. Working in the same space with co-workers has its benefits. Some info tech companies see it as essential to creativity, allowing for the spontaneous sharing of ideas. Having other workers around helps spark that, they believe. It likely does but with a tradeoff that’s not adequately recognized. In congested metro areas and their high cost of housing, bridging the distance daily between knowledge workers’ homes and the CCO with mid-20th century technology comes with a big price. There’s personal time lost every workday that could be used exercising, spending more time with family and friends as well as money spent on transportation, business attire and meals outside the home.

When that cost is suddenly removed from the picture and the savings realized as during the current pandemic, the benefits are also brought into clear focus – as clear as the previously fouled air in these metro areas now. Knowledge workers are learning they can share ideas and be creative without being co-located in CCOs thanks to 21st century information and communications technology.