Remote Work Costs Manhattan More Than $12 Billion a Year

What’s the value of a city when workers don’t need to be there anymore?

It’s a question municipalities around the globe have been trying to answer for three years, since Covid-19 changed the way we work. New exclusive data analyzed by Bloomberg News and Bloomberg Tax reveals that for many US cities, Fridays at the office are dead, Mondays are a crapshoot, and returning to pre-pandemic work schedules looks like a lost cause.

In Manhattan alone, workers are spending at least $12 billion less a year due to fewer days in the office. Office vacancies pose a multibillion-dollar crisis for America’s biggest office real estate market. The transit system’s finances are in free fall. Chief executives are growing impatient with workers. And the fiscal threat to tax revenue verges on the existential.

According to a Bloomberg analysis using exclusive data from Stanford University economist Nicholas Bloom’s WFH Research group. That tally comes out to almost $5,000 less spent per year for every worker on meals, shopping, and entertainment near the office.

How to respond to this new normal is the question now for some city officials.

“If less income tax is being paid in New York City,” said Comptroller Brad Lander, “then it’s hard to figure out how to capture enough value to maintain the subways and invest in the schools and keep the city safe and clean and all the things that really matter.”

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