Tag Archives: COVID-19

What will happen to those large, all-encompassing tech headquarters if employees can now work from home?

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Employees in the tech industry may have more ability to work from home in the future:

Now that a large company like Twitter has announced the option to not return to the office, it will likely “drive momentum across the industry,” says Aaron Levie, the CEO and cofounder of Box. “Other companies look to those events as a signal for what they should do in their organization.”…

Not all companies are so eager to extend the work-from-home life. Employees at Apple’s headquarters in Cupertino have been told they will start returning to Apple Park in phases, starting in late May. Apple’s security policies, meant to protect the company’s internal work, have reportedly made it difficult for employees to do their jobs while at home, especially if their jobs are related to building hardware….

Of course, Twitter is not abandoning the office altogether. In the wake of the pandemic, Box CEO Levie thinks bigger tech companies are more likely to take what he calls a “hybrid approach,” blending remote teams with in-office ones. “We’re still far from saying, ‘We’ll shut down entire offices,’” Levie says, adding that the realities of childcare would make it difficult for all employees to enjoy working from home permanently. “There’s a lot of power in people coming together, certain types of functions being able to collaborate in person, but there’s equally power in the flexibility and convenience of no commute and being able to work in a more efficient way.”

But other companies may reconsider the expense of office space, or at least downsize it, if enough employees choose to work remotely going forward. In 2017, Automattic—the company that owns WordPress—decided to give up its sprawling 15,000-square-foot office in San Francisco, because its employees never came in. For some smaller startups, this massive work-from-home experiment has made it obvious that they don’t need offices at all.

What does all of this mean for offices and headquarters and big campuses? The big office or work campus, such as those for Facebook, Apple, and Google, offers multiple advantages: the ability for people to meet, gather, and interact formally or informally face-to-face or in the same room; the company can know where everyone is; the ability for the company to control the work environment; and they are status symbols both for the companies and their communities.

But, working from home or away from the office also offers advantages: the employee is more in control of their immediate surroundings; there is limited commuting time; workers can connect via technology when needed and shut that off or limit contact when needing to focus; and expenses related to a big building are reduced.

And, as the article notes, the implications are huge for how organizations operate, what it means to be an employee, and for communities where businesses use land and pump money into the local economy. A more decentralized landscape for companies might reduce the need for cities to compete for headquarters (Amazon example) or even make the competition more cutthroat fighting over scraps. What happens to all that office space and how can communities fill vacant space in an era of budget issues?

For the record, I do not think the big offices will go away. At the least, they provide a physical reminder of the company and social interaction is different in-person than through technology. But, if a significant number of companies allow more employees to work from home, this could transform many physical locations.

Looking for data reporting and presentation standards for COVID-19

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As the world responds to COVID-19, having standardized data could go a long ways:

All in all, information made available by state health departments has been more timely and complete than information coming from the CDC, especially from a testing perspective, for which the CDC only offers a national aggregate not counting private labs. However, there is no overall standard when it comes to the information that has to be made public at the state level, which has led to a large variation in data quality across the country…

The COVID Tracking Project has assembled what the “ideal” Covid-19 dataset should look like. It includes the number of total tests conducted (including commercial tests), the number of people hospitalized (in cumulative and daily increments), the number of people in the ICU, and the race and ethnicity information of every case and death. Few states check all the boxes, but the situation is improving…

Some kind of standard as how to present the data to the public would be helpful. Health departments do not all have the resources to put together custom elaborate data visualizations of the Covid-19 pandemic. Most health departments have adopted geographic information system mapping programs from companies like Tableau and Esri — similar to the John Hopkins University dashboard — but there is no standard and no guidance explaining what should be put in place.

Organizing actions in a variety of sectors – from healthcare to the economy to social interaction to political interventions – relies heavily on statistics about the problem at hand. Without good data, actors are reacting to anecdotal evidence or acting without any basis at all; this is not what you want when time is of the essence. Of course, you can also have good data and then actors can choose to ignore it or draw the wrong conclusions. At the same time, we tend to argue “knowledge is power” and having good information could lead to better decisions.

Hopefully this means that all of the various actors will be better prepared next time with a process in place that will help everyone be on the same page and have the same capabilities sooner.

 

Chicago’s rail and intermodal facilities, pollution, and COVID-19

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One of Chicago’s advantages is its transportation sector, particularly the railroad and truck traffic that passes in and through the region. But, the railyards and intermodal facilities where rail and truck traffic converge can cause a lot of pollution, even during COVID-19:

But for reasons that have yet to be fully explained, people in Chicago and its suburbs aren’t breathing dramatically cleaner air during the pandemic…

Likely culprits include buildings, factories and diesel engines that burn coal, oil or natural gas. Diesel emissions in particular remain a chronic problem in Chicago, a racially segregated freight hub where rail yards, warehouses and intermodal facilities are concentrated in low-income, predominantly African American and Latino neighborhoods.

“We already have roughly double the amount of heavy-duty traffic than other major cities in the country,” said Zac Adelman, executive director of the Lake Michigan Air Directors Consortium, a group of state officials from Illinois, Indiana, Michigan, Ohio, Minnesota and Wisconsin…

During the past decade, scientists at the U.S. EPA have discovered daily spikes of soot pollution near intermodal facilities in Chicago and other cities that far exceed average urban concentrations.

The article primarily focuses on Chicago where intermodal and railroad facilities tend to be located near poorer residents. Leaders have sought to move traffic away from the center of Chicago and more to the edges of the region, but this means this is also a problem for the entire region. With numerous facilities far from Chicago, such as in Will County or as far as New Rochelle near Rockford, the air quality for millions is affected. It would also be worth looking at where the suburban and exurban facilities are located; what residents are most affected? How far away are these facilities from wealthier communities?

The article also suggests new regulations mandating cleaner locomotives and trucks would help. How this would play within a region that relies on the transportation industry – Chicago was not only the convergence center for Midwest commodities, it also developed the capacity to move those goods throughout the United States and world – would be interesting to watch. Suburbanites would not like the pollution if they knew about it or were concerned about it in their own neighborhoods or elsewhere nor do they like the inconveniences of a lot of rail and truck traffic. Yet, they like cheaper goods and jobs, perhaps even more so if the immediate problems of pollution are borne by other residents of the region.

The budget gap facing Chicago area suburbs due to COVID-19

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An online forum with House leaders provided details on how suburban budgets in the Chicago area are affected by COVID-19:

Not only are sales taxes plunging but costs of preventing the respiratory disease are mounting, suburban leaders explained to House Majority Leader Steny Hoyer at an online forum hosted by U.S. Rep. Sean Casten Monday.

Glen Ellyn expects a 20% to 25% reduction in revenue over the next three to six months in the general fund, half of which goes to the police department, Village President Diane McGinley said…

Algonquin Village President John Schmitt said not only is the village shelling out for items like face masks but so far there’s been a 26% reduction in sales taxes revenues…

He noted Hanover Park is facing about $242,000 in COVID-19 expenses and a drop of almost $5.6 million in taxes.

If a retailer or business cannot open or sell at the same level as prior to the pandemic, this affects all sorts of outcomes. As noted above, communities have limited numbers of ways to fill this budget gap. They can look to governments above them – states, the federal government – but that puts their fate in the hands of others and that money may not come quickly or in sufficient amounts. In the short-term, this likely means putting off projects. Longer-term, it could mean some hard decisions about services and local amenities that suburbanites enjoy or think are essential.

The tax revenues might just be the tip of the iceberg; if retailers have to close (already an issue from urban shopping districts to shopping malls), this puts pressure on landlords as well as on communities to fill vacant space (already an issue in suburban communities whether filling big box locations or office parks) both to generate revenue and avoid the appearance of economic loss or blight. Local jobs are affected.

It will be interesting to see if these budget issues widen the gap between suburbs with a lot and those with less. There is already a bifurcated suburban landscape: some communities really struggling and some with a lot of resources, amenities, and status (and many somewhere in between). Those who have more can likely weather this storm better than the suburbs already struggling.

Data from Washington, D.C. does not suggest people are fleeing for the suburbs

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A new analysis from Brookings Institution suggests real estate sales are down in both Washington, D.C. and its suburbs during COVID-19:

In the Washington, D.C. metro area, there’s no sign so far that residents in the urban core are more anxious to sell their condos and rowhouses than suburbanites are to ditch their McMansions. Home sales for the entire metro area dropped in March 2020, very similar to the pattern in the District. (Washington, D.C. accounts for less than 15% of the metro area’s population and home sales.)

Breaking out the year-over-year change in home sales for each local jurisdiction in the metro area shows similar patterns in the urban core (darkest gray), inner suburbs (medium gray), and exurban jurisdictions (light gray).

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Other items of note:

  1. Prices have not dropped (similar to elsewhere).
  2. As I noted a few posts ago:

In the U.S., large cities have been hit earliest—and hardest—by the coronavirus pandemic, spawning a cottage industry of speculation over whether city-dwellers will flee to low-density suburbs.

Without seeing the data from a lot of major metropolitan areas in the United States, it is hard at this point to conclude much of anything. Perhaps New York City is an outlier where people want to go to the suburbs to escape all of its density. Are transportation patterns in Washington D.C. where a majority of residents drive daily more like Los Angeles than New York City?

Analysis from Moody Analytics suggested Washington D.C. is one of the metro areas more likely to rebound from COVID-19. Would such a recovery help the city and region move toward being the true second city in the United States?

Maybe Washington D.C. is another outlier in all of the possible data. That leads to another question that often comes up when talking about urban theory: what is the modal American city, particularly in the time of COVID-19?

Another claim that COVID-19 will push people to the suburbs

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I have seen a version of this argument several times already and here is the most recent one: according to the New York Times, more New Yorkers are moving to the suburbs.

Cooped up and concerned about the post-Covid future, renters and owners are making moves to leave the city, not for short-term stays in weekend houses, as was common when the pandemic first arrived, but more permanently in the suburbs.

While some of the fresh transplants are accelerating plans that had been simmering on the back burner, others are doing what once seemed unthinkable, opting for a split-level on a cul-de-sac after decades of apartment living. Others seem to have acquired a taste for country life after sheltering with parents in places with big lawns or in log cabins.

But there’s also a sense that in today’s era of social distancing, one-person-at-a-time elevator rides to get home and looping routes to avoid passers-by on city streets has fundamentally changed New York City…

For starters, people seem to be packing their bags. Between March 15 and April 28, moves from New York to Connecticut increased 74 percent over the period a year ago, according to FlatRate Moving. Moves to New Jersey saw a 38 percent jump, while Long Island was up 48 percent.

Also, suburban towns not really known for their rental stock have had huge spikes in activity, which is being driven in part by escaping New Yorkers, according to brokers in those areas.

There is both a short-term and long-term view of this possible trend:

1. COVID-19 might lead to a sudden change in New York City and possibly other locations that are very dense (which does not necessarily apply to Los Angeles). For example, one report suggests denser cities and places with lower levels of educational attainment will struggle to recover.

2. The population of the big three cities – New York, Los Angeles, and Chicago – had already plateaued or started decreasing. COVID-19 may just be accelerating what was already happening.

Only time will tell which is more correct. In moments like these, it is easy to suggest cities will decline or people will have long-term fears – and I have seen these pieces as well – but Americans have preferred suburbs for decades. In the meantime, it is probably safe to say that life in cities has changed. What is often attractive in cities is the street life, the culture, the opportunities all within a short distance. COVID-19 is a unique problem in that it limits social interaction, the lifeblood of numerous city neighborhoods and gathering places. In contrast, the suburbs prize private spaces like homes and privilege driving. When people need to isolate, they are already used to it to some degree in suburbs.

A third option might end up being closer to reality: New York City, with all of its COVID-19 cases and its unique features, might suffer more from the pandemic than anywhere else in the United States. At the same time, this leading city will still have a lot going for it after COVID-19 fades and it will continue to be attractive to many.

Americans watching more TV during COVID-19

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Nielsen reported in 2018 that Americans consume on average over 11 hours of media a day, with over four hours a day of television viewing. Several sources suggest people are watching more TV than ever during COVID-19.

From Comcast:

The average household is putting in an extra workday’s worth of viewing each week – watching 8+ hours more per week than they were in early March, going from approximately 57 hours a week per household to 66 hours…

Since the start of COVID, these distinctions have blurred and weekdays are seeing viewing levels and trends akin to the weekend. As a matter of fact, in the past two weeks, Monday has become a more popular day to watch television than Saturday.

From the Washington Post:

Explosive demand for TV content led almost 16 million people to sign up for Netflix — more than double what the company predicted before the Covid-19 outbreak. The extended time at home also has been a chance for consumers to take new apps out for a spin, including Disney+, Apple TV+, Quibi and Comcast Corp.’s Peacock. Disney+ has added 28 million subscribers since December. Meanwhile, as the recession causes consumers to tighten their budgets, pricey cable-TV bills will be on the chopping block. Already last quarter, the big four pay-TV providers saw an exodus of nearly 2 million customers, with AT&T Inc.’s DirecTV accounting for almost half of those cancellations.

The desire to save money is boosting interest in free streaming-video services, such as Pluto TV and Tubi, that are funded by advertisers. Pluto TV’s growth proved to be the biggest bright spot in ViacomCBS Inc.’s quarterly results, as the cancellation of the NCAA March Madness tournament crushed traditional network ad sales

From the Denver Post:

Ever since city and state stay-at-home orders abruptly arrived with social distancing in mid-March, Denverites’ TV-viewing plus internet-connected device TV usage (as Nielsen calls it) has jumped up to 20% over comparable periods in the previous weeks.

Local TV stations also have become many viewers’ go-to source for information about the coronavirus and COVID-19,  reversing a trend that saw sharp declines in local news viewership in recent years. In the top 25 markets, local news experienced a 7% viewership lift between early February and the week of March 9. Among people 25-54, the spike was more than 10%, and 20% for people aged 2-17, Nielsen reported.

In total, the biggest weekly viewing increase across the country — when compared with the same period last year — occurred the week of April 6, Nielsen data showed.

Several thoughts on this:

  1. This all makes sense: people are home more and television is one of the top non-work activities for Americans. Even in the age of Internet, social media, and smartphones, television is a force to be reckoned with.
  2. This adds up to a lot of television on a daily and cumulative basis. For those worried about its effects, when people have more time, they still turn to television.
  3. This is not necessarily all good news for television networks and content creators. Advertising revenues are tough to find and cord-cutting, connected to unemployment and economic uncertainty, is up.
  4. It will be interesting to see what happens with long-term viewing patterns. COVID-19 restrictions could last a while in some places and fear about going out in public could continue even longer. Does this mean TV viewing will be up for a while? If so, is there a way for content creators, advertisers, and others to capitalize on the opportunities? Or, imagine a public campaign that pushes other activities beyond sitting in front of a television or smartphone screen (unlikely, I admit)?

Argument: “the real civic religion of America, business at all costs”

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Which values should guide decisions in a time of crisis? Here is one argument regarding how decisions are made in the United States:

These approaches are the horns of America’s corona-dilemma. Every society has reacted to COVID-19 according to its principles or, if no principles were to hand, its habits. It has been America’s misfortune that its principles and habits are ill-suited to managing an epidemic. The federal system, by functioning as it should, prevented the kind of nationwide shutdown that worked in smaller countries like Austria. The real civic religion of America, business at all costs, can accept the redirection of the economy by the Defense Production Act, but it cannot tolerate the suspension of all economic activity. Yet a powerful counter-impulse — averse to risk, trusting of authority, and hence likely to seek out niches in the economy which are immune to booms and busts — prefers to shelter in place.

It is hard to make sweeping claims about cultural values in the midst of significant social change. At the same time, understanding “patterns of meaning-making” (the definition of culture from sociologist Lyn Spillman) is invaluable for analyzing why certain actors respond as they do in such times.

This reminds me of two sociological works that get at the same issue:

1. Emerson and Smiley’s 2018 book Market Cities, People Cities examined cities around the United States and the world to see if they put markets or people first. On the whole, American cities privilege markets with their policies and rhetoric. In American communities, growth – usually measured as economic growth and/or population increases, is always good. (See an earlier post on this book here.)

2. Dobbin’s 1994 book Forging Industrial Policy suggests in the early decades of the railroad the United States pursued a public-private policy regarding develpoment compared to the laissez-faire approach of Britain and the top-down, centralized approach of France. Yet, in the last few decades, a growing chorus of voices argues the United States privileges the interests of corporations over the welfare of all residents.

There could be other contenders for the civic religion of Americans including individualism, the civil religion described by sociologist Robert Bellah, middle-class values, and the importance of private property and private spaces. But, in this particular situation, what exactly should be done regarding businesses and the economy is a particular hot point.

Changed suburban spending because of COVID-19, Naperville edition

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While most public attention with COVID-19 has focused on big cities and countries, numerous suburbs will deal with the effects of the pandemic as well. Here is how Naperville, a large and well-off suburb, is planning to tackle a budget gap:

The city of Naperville is shaving nearly $25 million off its 2020 budget in the wake of the economic downturn caused by the coronavirus pandemic…

City Manager Doug Krieger said some of the projects were selected to be postponed because they’re considered “nice-to-haves” and aren’t expected to cost significantly more to be completed in future years. One major project, a $2.6 million plan to improve downtown streetscapes, was included on the list for deferment because “the downtown merchants did not want to proceed” with it in light of the pandemic, he said.

The moves will help the city offset anticipated declines in revenue sources — such as sales tax, food and beverage tax and motor fuel tax — as residents and businesses continue to follow the stay-at-home order…

Other work that will not take place this year includes $9 million in water meter-reading technology upgrades, a $7 million road widening project on North Aurora Road and $1.1 million of work toward a park at 430 S. Washington St. to be built in conjunction with North Central College, as well as smaller projects such as LED lighting conversion, tree planting, electric vehicle charging stations, flooring replacements and conference room IT and electric upgrades.

Suburbs and other municipalities can generate tax revenue through several sources (as noted above). Property taxes are affected by property values, which appear at this point appear to be holding firm during COVID-19. Sales taxes are generated by local businesses; this will certainly be down in communities (though the decline of retailers was already an issue). Food and beverage taxes will be down. And the number of people buying gasoline – feeding into the motor fuel tax – is down (and projections for the state’s funding through this suggest a big dip). In Illinois, we are near a third month of reduced business and social activity and this will make a big dent in municipal finances.

At the same time, based on the descriptions here, it sounds like an average resident of Naperville would not even notice that these improvements are not addressed this year. Of course, it could create a backlog for future years – pushing projects down the road means other planned projects might be delayed later – but the focus is on helping to address the current issues.

Naperville may be an unusual case compared to many other suburbs. It is a big community with a lot of successful businesses. The local government prides itself on being well-run and stable. It is not clear how long Naperville could continue to work through budget shortfalls but it is likely better prepared for this than many places.

This means that many municipalities could be facing tough questions in the months ahead about local projects and local funding. If the federal government and states are struggling with missed revenues, this will certainly affect municipalities who have to address local budget issues.

Housing prices up during COVID-19

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During COVID-19, few people are looking for homes – and even fewer are selling:

The median home price rose 8% year-over-year to $280,600 in March, according to the National Association of Realtors. While buyer demand has softened and sales fell 8.5% that month from the prior month, the supply of homes on the market is contracting even faster, recent preliminary data shows…

What’s more, many sellers have been reluctant to cut prices. Only about 4% of sellers cut their prices in the week ended April 25, down from 5.7% during the same week last year, according to Realtor.com. ( News Corp, parent of The Wall Street Journal, operates Realtor.com.)…

Total listings of homes for sale, meanwhile, have hit a five-year low, while the median listing price was up 1% from last year at $308,000, Redfin said.

The housing market has been undersupplied for years. During the pandemic it may get worse. There were 1.5 million units for sale at the end of March, NAR said, down 10.2% from a year earlier. Homeowners are waiting to list their houses, real-estate agents say, because they have decided not to move or they are worried about letting buyers into their homes during a pandemic.

It will be interesting to see how long this holds up given the rapid spike in unemployment. How many people will be in a position to buy or sell in the coming months? And how long will it take for housing markets to return back to pre-Covid levels of activity?

Beyond prices, which matter to many homeowners who want to do everything they can to keep property values going up, there are additional big issues at play. One is noted above: a lack of housing supply long-term, particularly in certain markets and in certain segments. Another is the possible effects on the mortgage industry. A third is what this does to the idea of housing when there have been two  major shocks to housing in the last fifteen years. A fourth is whether people decide they want to live in certain locations more because of health risks. Like other sectors of society, COVID-19 may expose or hasten problems with existing issues.

In other words, stay tuned.