By SCOTT KIMBLER
As the debate about returning to the office continues nationwide, people in the city of Atlanta and its surrounding communities are adapting to the reality that hybrid and remote work are likely here to stay.
Over six million people live in the Atlanta Metropolitan Statistical Area, which has long been a hot market for housing for a variety of reasons, including job opportunities with companies such as Delta Airlines, Coca-Cola, and UPS.
When the pandemic hit in 2020, a lot of changes happened as the region was introduced to shelter-in-place, which morphed into a work-from-home model. Now in the post-pandemic period, many companies have adopted a hybrid work schedule, with employees driving into the city about three days a week, on average.
According to Rohan Ganduri, assistant professor of finance at Emory University’s Goizueta Business School, there has been a big shift in the workplace model, and he is confident the hybrid work model will likely be a trend for years to come.
It could even become permanent in many areas, Ganduri said.
“With the flexibility to work from home, many people have moved to the suburbs because the lower cost of real estate outside of the city has allowed them to buy larger homes,” Ganduri said. “And enjoy living in a larger home as they are raising families. All that has happened as a result of the work-from-home or hybrid work models.”
Ganduri explains that one way to track economic trends and if people are coming back into the large cities is retail sales trends.
“If you look at the retail sales at restaurants and shopping malls in and around office centers, you see that these businesses are suffering due to the lack of office dwellers coming into the city. Many of them just are not there anymore,” said Ganduri.
Ganduri points out that a fairly high number of workers are making the extended trek into Atlanta for those two or three days a week, but other cities such as New York are having a tougher time filling offices and that is forcing many companies that hold commercial real estate properties to look at different business models.
“New York has been struggling to get people back into the offices and if you take a look at the subway ridership, it is about 70% of the peak limit level. You see office buildings are empty and people have not renewed their leases,” Ganduri said.
Ganduri said the inability to rent this office space out has caused a wave of defaults. Some of this is also shifting to the bank’s property sheets.
“One of the ways they are trying to put these properties back to use is to consider converting to residential rental use. This will take a while because of zoning requirements, so now places like New York and San Francisco are beginning to rezone and convert these buildings, but there is no guarantee that after a conversion, people will want to live there,” Ganduri said.
Ganduri pointed out that different regions of the country have varying success rates when it comes to getting people back into the office. In California, for example, where there are lots of tech jobs, going back to an office seems unnecessary to many workers.
“We are seeing that in the south people have a different work ethic and want to come back into the office, where in New York and San Francisco, people generally do not want to come back,” said Ganduri.
Atlanta broadcaster and voice talent Bob Carter is an example of a person from the metropolitan area who has embraced working from home.
Carter works primarily for a major broadcast company but says most of what he does now is remote.
Carter moved his family to Pendergrass from the suburb Lawrenceville when he discovered the home prices of living further out were much lower and his then property was worth much more.
“With what I needed to do, working remotely was perfect,” Carter said. “I could do my employment work and do my voiceover teaching and student work, as long as I had high-speed internet, I was good to go.”
When Carter was required to go back to the office, he made a change to avoid the 58-mile one-way commute.
“The company built a new multi-million-dollar office and studio space so it was not unexpected that they would want us to come in more often, but with the cost related to such a long commute, I had to make changes. So I converted from the broadcast department to the sales department,” Carter said.
Carter does go into the office, but he says he can decide when to go to work, if at all.
“With where I am now, I feel energy, I feel purpose, I feel direction and honestly, I feel support. I feel blessed and excited for the opportunity and blessed by the people,” Carter said.
Carter is so pleased in the area he relocated his family to, this fall he ran for office, won, and is now the newest member of Pendergrass City Council.
The Biden-Harris Administration has announced new actions to support the conversion of high-vacancy commercial buildings to residential use.
New financing, technical assistance, and the sale of federal properties are part of the initiative, which builds upon the White House Housing Supply Action Plan.
“A new blog released today by the Council of Economic Advisers finds that office vacancies have reached a 30-year high from coast to coast, placing a strain on commercial real estate and local economies. At the same time, the country has struggled for decades with a shortage of affordable housing units, which is driving up rental costs, and communities are seeking new ways to cut emissions, especially from existing buildings and transportation,” a statement released on Oct. 27 says.
The White House is releasing a Commercial to Residential Federal Resources Guidebook with over 20 federal programs across six federal agencies that can be used to support conversions. These programs include low-interest loans, loan guarantees, grants, and tax incentives, according to officials.
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