Empty Offices and Busy Neighborhoods: The Post-Pandemic Hybrid City

Cities are back. But they’re different than before.

The pandemic saw an early exodus from urban centers around the globe. Whether for health concerns, a cheaper lifestyle, or simply because remote work meant a change of pace, city dwellers left high-density neighborhoods for the suburbs.

Work-from-home technology meant decentralizing cities, as employees no longer needed to live close to their offices. Business districts, typically significant sources of revenue for city governments, emptied almost overnight.

The pandemic-driven population decline in cities is slowing or reversing as people filter back to metropolitan areas. Mobile device activity shows foot traffic is up to 75% of pre-pandemic levels in New York City. Travel on London’s Underground and bus services in February 2023 was back to over 80% of its previous height.

The streets may not be as crowded as before, but people live, eat out, go to shows, and shop in cities again.

One place that isn’t fully back to pre-pandemic capacity is the office – at least, not yet.

As more companies push for hybrid schedules with workers in physical attendance two to three days a week and using remote technology from home, there could be another shift in the new normal for cities.

The Post-Pandemic Urban Population

Major metropolitan areas saw sharp population losses in 2020-2021 as city dwellers decamped to the suburbs. However, younger professionals have moved in to fill the vacancies, undeterred despite higher living costs.

The new urban population is young, ambitious, and more diverse than ever before. They’re taking advantage of proximity to local businesses and culture. Restaurants and retailers are rebounding in residential neighborhoods as vacancy rates continue to decline.

Remote employees aren’t just sitting in their apartments. They’re working virtually from cafes and bookstores. Bike lanes, outdoor dining, and reinvented public spaces create a vibrant street culture where residents can connect with their neighbors.

Cities are becoming places where people choose to live because they want connections to culture and community rather than necessary proximity to work.

The Future of the Business District

In contrast to revitalized residential neighborhoods, offices remain relatively empty. New York City’s empty office space sits around 50% of pre-pandemic levels. European office occupancy increased from 43% in 2022 to 55% in 2023 but is still behind the pre-pandemic average of 70%.

Even though companies encourage employees to return to the office, hybrid schedules mean fewer workers in the building at any time. Virtual offices, desk sharing, and flex spaces are shrinking corporate footprints, leading to reduced revenue in rent, taxes, and income for local businesses.

What is to become of the once-bustling business district? Some believe lowered rents will attract smaller employers. Others envision turning unused office space into residential units to combat housing shortages and reinvent downtown areas.

Whatever happens, these spaces will unlikely function the same way they did before the pandemic. Work has changed, and cities are adapting.

What's the deal with return to office? We exam RTO trends.

Hybrid Work, Hybrid Cities

The initial onset of remote work meant employees could collaborate with coworkers worldwide. People moved far away from urban cores like Paris, San Francisco, and London to lower-density, less-expensive areas without commuting.

The shift from fully remote to hybrid or on-site work draws people back to cities as they factor commute times into their lifestyles. Census data shows that domestic and international migration rates for urban cores and inner suburbs are increasing.

Where offices used to have steady occupancy rates daily, they now peak mid-week. Employees are more likely to work remotely on Mondays and Fridays, collaborating virtually instead of making the commute into the city.

Even though many city dwellers still work remotely part of the time, they contribute to the local economy. Whether they bring their laptops to coffee shops or order lunch deliveries from nearby restaurants, they support neighborhood businesses.

A Tech-Driven Urban Renaissance

Cities are still critical economic hubs but will likely become less business-centric than pre-pandemic. Instead, communities will be built on work-from-anywhere principles, such as shared office spaces and Wi-Fi availability closer to where people live.

The evolution of unified communications technology, spurred on by the pandemic, has facilitated the development of the new urban normal. Video calls, virtual meetings, and long-distance collaboration will play central roles even as companies move back on-site.

Hybrid coworkers will collaborate from all over the city or suburbs, from home or in the office. Reimagined workspaces will accommodate in-person and remote colleagues with virtual conference rooms and smaller footprints. Collaboration software makes it easy to connect from anywhere, on any device.

The hybrid city is decentralized from the traditional business district. But this means urbanites can choose where they work, spending more time and money in their local neighborhoods. They’re connecting with their community as well as their coworkers.

The reinvented city isn’t just for working – it’s for living, too.

Connect with a Mitel expert to learn how your business can support the rebirth of cities and remote work.