This is the source of debate with my BIL. He works for a big bank that owns a huge hi rise in Manhattan. He swears Manhattan will go back to normal like it always has.
I keep telling him my industry and many others like it have just learned they don’t need a physical presence. They don’t need all this real estate. So why pay for it? Manhattan isn’t factories and R&D facilities. It’s offices with white collar service professionals who can now, so we’ve learned, do their jobs from anywhere.
He refers back to 9/11 and asks what has changed?! People thought that was the demise of NYC and it wasn’t. I told him what has changed is bandwidth. Technology. In 2002 we couldn’t operate remotely. For the first time in human history now we can. Why wouldn’t smart businesses start taking advantage of those savings, like any other savings or tax loophole or other item smart businesses can exercise to increase profit?
Most if the smart people I’m hearing from are saying Manhattan and other big cities will never return to what they were. This is a game changer.
I tend to agree. Manhattan is a city built to support a huge commuting workforce. Those businesses can’t survive if the big businesses decide they just need 1/2? 1/3? Of the real estate they had before. Or less?
And if you’re paying a premium to live in NYC so you don’t have to commute, as many people are? Why on earth would you pay so much to live there if you don’t have to commute anyway?
BIL keeps sending me articles suggesting the real estate market isn’t significantly affected. Maybe it hasn’t been yet? Or maybe people don’t sell and pick up and leave in a span of months, and this will take longer? Or maybe the data is wrong?
Who knows. Either way I’m not sure what to believe, but I find the whole thing fascinating.
I've actually been doing some work on this topic so here's my 2 cents:
I think what we have to consider is that this isn't a shift all the way over from one side (pre-pan) ALL the way over to the other (current state). Some of what we are seeing right now-
In terms of working remote, it's not exactly that we have seen that we can WFH in some industries, in total. Instead, it is that we have seen that we don't need "that much" space. So, a permanent downsize is inevitable. So, maybe we see that instead of 20 people in an office 5 days/week, we see 3-4 full time and a few staggered 2-3 days and some not at all. That is going to cause some significant changes in the tax/revenue of any major city; especially NYC. We have already seen those forecasted concerns recently when we saw the mayor of NYC basically begging people to come into the city for various activities and this new specialization of hair washers in salons (for those not up on this, there is a licensure being put together for people who was hair in salons which was previously not required. 1000 hours of instruction to then apply for a license to operate. This is a clear revenue churning attempt as the city anticipates their losses). In the end, there will be real estate opening up and prices will have to adjust (fall).
The stats on businesses such as restaurants are something in the 40-60% neighborhood of business that has or will permanently close. That doesn't mean that instead of 1000 places to eat there will be 500, it just means THOSE businesses will be gone (the owners/investors may open up something else, a new person may take the plunge and try to open a restaurant, etc). These numbers will be impacted by demand as we noted above there WILL be fewer people in the center hubs of NYC as well as other cities across the USA.
The unrest in some cities has caused some people to leave and combined with things you guys mentioned already in terms of them realizing that they CAN do this, the shift now makes people take stock and question if that lifestyle they wanted of living in the city measures up to being able to live somewhere else with less taxes, less commute, et.c But it also poses the questions of "am I giving up educational opportunities for my kids, luxury of theatre, dining, shopping, etc)? Normally, this questions would be big drivers in the decision but we have seen every one of those things eroded severely in the past few months and many of the traditional, long-standing business are gone for good.
---I have seen an influx of "covid refugees" that moved their work from cities up into their summer places and holiday homes and its looking like some are deciding to stay. It just so happens that in my area, a lot of those people have good timing for this (their kids are at the end of school or they are close to retirement...obviously not the case everywhere).
One of the bigger challenges with exodus in cities that may help retain it some better than we think is that there aren't a lot of places to go that can handle the infrastructure. The "new city gems" like Abilene, Nashville, Memphis, Tuscon, Tampa were already attracting the up and coming generation. So, for older, more established folks, that idealistic life of moving out to somewhere remote and "off the grid-ish" is difficult because the technological broadband to support the white collar work is challenging in a lot of places.
It IS very interesting and I typed so much you'd think I'm a lawyer charging by the word but to answer the OP's question: The answer is "Rocket Man" (it's gonna be a long, long time). I honestly don't think the world will ever be the same. Not everything will change but, certainly, not nothing will change. It's going to be significant and that's not saying it is negative. But it will be significant.