Dr. Tracy Hadden Loh: What’s next for downtowns?

July 27, 2021

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Many people who used to commute to offices have been working from home since the early days of the pandemic, and some of them might not return—regularly, or at all—even when COVID-19 recedes.

On July 27, 2021, SciLine interviewed: Dr. Tracy Hadden Loh, a fellow at the Brookings Institution, where she studies commercial real estate trends. See the footage and transcript from the interview below, or select ‘Contents’ on the left to skip to specific questions.

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Interview with SciLine

Introduction

[0:00:22]

TRACY HADDEN LOH: Hi. I’m Tracy Hadden Loh. I’m a fellow at the Brookings Institution in the Metropolitan Policy Program at the Bass Center for Transformative Placemaking, and I study commercial real estate.

How have downtowns and other commercial districts been affected by the pandemic-induced shift to teleworking?

[0:00:42]

TRACY HADDEN LOH: So it’s been pretty devastating for American downtowns since the beginning of the pandemic. Pretty much across the board in the United States, downtowns are really oriented around office land uses. So on average, across the top 30 U.S. downtowns, 70% of the downtown is office space, and that’s just a really unusual dominance of a single land use in a place. And so that means that when something hits that one land use really hard – in this case, the very necessary move of most office employers to telework in order to contain the coronavirus pandemic – that means that those places have basically been emptied out and that the people who used to be there every day paying transit fares, buying lunch, running errands and also, you know, doing their jobs and being productive and collaborating with each other, those people by and large are not there anymore.

To what extent do you think the changes in where people live and work may be here to stay, even when the pandemic recedes?

[0:01:54]

TRACY HADDEN LOH: So this is the million-dollar question that everyone is asking, especially about downtowns but really every office-based employer, and those who depend on the markets of office workers wants to know the answer, too. I think that it’s still uncertain, and anyone who provides you with a really certain answer is probably selling something, and the something they’re selling is probably office real estate. But what it’s looking like is that while most office workers will likely be returning to the office, they will not be returning to the office full time and that the model that we’re seeing emerge is one of hybrid work in which those who have office-based occupations are working from home or other locations sometimes and then working from their office location sometimes.

Now that teleworking may be a long-term reality for many workers, how might cities and towns evolve?

[0:02:59]

TRACY HADDEN LOH: So I think a big question is what’s going to happen with all of this office space. So for starters, if an employer, you know, previously used a hundred-thousand-square feet of office space, but they now have their workforce coming to work maybe one, two or three days a week, the reality is that it’s inefficient and impractical for that employer to maintain the same square footage to be utilized at a lower rate. And so I think that employers and landlords are going to be working together to find creative new arrangements and new ways to use space more efficiently. Whether that means sharing it or reconfiguring it, there’s going to be changes in what it feels like to be in an office. And that’s something that I’m expecting surprise and innovation around as we emerge from the pandemic. But I think also now that office space workers who are the majority of the workforce in most large U.S. metro areas, now that those workers are at home in their neighborhoods for significantly more time during the day, what those workers want from their neighborhoods is also going to change. And so there are going to be – there’s going to be an evolution in terms of the kinds of activities, amenities, the kinds of infrastructure that neighborhoods need in order to sustain a knowledge workforce that previously was not concentrated in these neighborhoods during the day.

What’s your overall take on the future of downtowns?

[0:04:50]

TRACY HADDEN LOH: I believe in downtown. And I think that American downtowns can emerge from this pandemic strong, but it’s going to take innovation and adaptation. And we should not overlook the opportunity to connect the healing of the people in neighborhoods most harmed by COVID-19 with reinvesting in our downtowns. It is possible to do both, and we don’t have to accept a false tradeoff between growth and equity.

Contents