March 22, 2024

Why are we resistant to traditional offices, and how can we repurpose vacant spaces?

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Nadia Diakowska in Warsaw, Poland

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March 20, 2020. Many employees were teleworking during COVID-19.

Picture by: Oregon Department of Transportation

I think my generation is so accustomed to online schooling, especially following the pandemic, that we can’t imagine ourselves working from an office.

I can’t even visualise being confined in an office for 8 hours daily when I have the choice to work from home or blend work with travel. I find this truly amazing as it opens up a world of possibilities for repurposing those empty office spaces.

With new technologies such as Microsoft Teams or Google Meet that are accessible to every worker, remote work seems to be a comfortable option for workers while also being beneficial in minimising pollution and CO2 emissions.

It will enable cutting off unnecessary loss of time on commuting to work and back while saving more land resources.

Additionally, a staggering 77% of Gen Z respondents in a survey consider work-life balance a priority when evaluating career options with 72% either willing to or have already left a job due to a lack of flexible work options.

Beyond all previous generations, Gen Z is the most concerned about work-life balance. For us – the digital natives – flexibility means having the freedom to work from anywhere and take breaks as required.

Our preference is becoming increasingly more important, as we are expected to make up 27% of the workforce by 2025, with that number only continuing to rise in the upcoming years. This will likely contribute to further increases in office vacancy rates.

The unpopularity of in-person attendance, caused by the COVID-19 pandemic, revealed a convenient substitute for workers that proved to be a prominent alternative in offices globally.

According to a study from the McKinsey Global Institute, which is mostly focused on Beijing, Houston, London, New York, Paris, Munich, San Francisco, Shanghai, and Tokyo, office attendance is now at only 30% and just 37% of workers are going back into offices every day after the end of the pandemic.

The predicted $800 billion losses in office building valuation in these cities is a 26% decrease from levels in 2019. A more dire situation may see a 42% decline in the value of office premises, according to Bloomberg.

It seems as though firms are facing a tough dilemma – opposing hybrid work and suppressing Gen Z talent, or accommodating their preferences and devaluing office spaces thus causing financial losses for real estate owners.

This prompted the question – in what alternative way can the vacant office spaces be used to ensure the financial safety of their owners, while still catering to the needs of Gen Z?

Vacant offices may become our living spaces

One of the options for repurposing those office spaces would be turning them into affordable housing accommodation. This would enable us to remedy the global housing crisis while still being environmentally friendly and resource-efficient.

According to a survey, office vacancy rates in the US reached record highs since 1979. The US national vacancy rate reached a record-breaking 19.6% in the fourth quarter of 2023, while the average pre-pandemic office vacancy rate was around 16.8%.

Learn more:

Can we turn all those empty office buildings into housing?

‘There’s a dream solution to America’s housing crisis and to its increasingly deserted downtowns: Convert the empty offices into homes’.

By Anna Bahney | CNN

While the entire US is grappling with this problem, certain American cities are displaying resourcefulness in the search for a solution. New York, Boston and Cleveland are embracing the idea of residential retrofitting and inspiring other US cities to do so.

The Biden administration is easing the way with federal programs and tax breaks and local leaders are accelerating changes to zoning and construction restrictions.

Reconstructing office spaces may not be an easy alternative as it will still be expensive, however in my opinion the benefits will dramatically outweigh the losses.

Turning vacant offices into housing accommodations would allow us to use the resources we already have, without the depletion of any more natural assets to build new houses. Additionally, no expansion of cities would be necessary, since we’re starting to re-utilise the previously abandoned firm-oriented downtowns. Environmentally this is much more beneficial from less deforestation alone.

The reconstruction of downtown offices would prove to be most beneficial to Gen Z, as we will most likely be the ones most affected by the global housing crisis.

This is likely to hit us harder since most of us are still studying or fresh out of universities, meaning we still lack proper work experience and job stability.

To me, it seems impossible to afford a house anywhere in the near or even far future without financial aid from a parent. Now, more than ever, we need affordable housing to meet the rising demands for accommodation and meet the financial possibilities of the major part of our society.

If companies want to retain Gen Z talent the demands are clear, they must offer flexibility, such as remote work options, which will increase both worker efficiency and access to affordable housing. But will more firms and office owners embrace such a significant shift?

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Nadia Diakowska

Economics Correspondent

Warsaw, Poland

Born in 2005, Nadia is a graduate of Stefan Batory High School in Warsaw, currently taking a gap year to complete A-levels.

Her main interests include economics, mathematics and psychology. In the future, Nadia plans to study economics and management in the UK.

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Timur Boranbayev

Economics Section Editor

London, United Kingdom

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