Implications of Remote Work for Palo Alto

During the pandemic a growing number of workers could and chose to work remotely, mainly from home. While the number is declining as workplaces reopen, it will remain an option chosen by some after the pandemic is over.

Most remote workers are in professional occupations or in assistant roles in offices and other workplaces. Service workers as well as restaurant and retail workers work in their workplaces. The same is true for construction, logistics, manufacturing and most health care occupations. I expect most education and government employees will return to their workplaces soon.

I see some implications of remote work in Palo Alto every day as I live and walk in downtown. There were office vacancies downtown before the pandemic but the number has continued to grow. The same is true for retail spaces. There are vacancies all about.

I think all of this will put a dent in our retail sales and tax revenues. There will be a rebound from pandemic lows helped by Stanford reopening and foreign visitors when that happens but it will not overcome the drain from continuing remote work and the steady shift to online shopping and delivery.

Office vacancies, particularly for smaller offices, will remain high in part from the remote work phenomena and in part from the city’s unfriendly attitude toward businesses.

These trends have reduced car traffic and increased parking availability downtown where I live. For short-term parking, the spaces on University Ave. are mostly full but the short-term lots a block away are mostly open to new cars. WE should follow these trends as more and more workers return to their offices and Stanford reopens more in the fall.

If I am correct that vacancies will continue for store retail and downtown offices (there is space on the ground floor of our condo building and in my office on Homer that has been vacant for nearly two years), then there is an opportunity for the city to implement zoning and other policies that provide incentives for these owners to develop housing on some or many of these sites.

The opportunities for remote work that the pandemic has brought combined with the welcoming of office development in neighboring cities could also affect the attractiveness and necessity to locate in Palo Alto.

Finally, the pandemic has accelerated an already surging trend toward more and more online shopping. Our city government and residents need to take a realistic assessment of the outlook for store retail space as we move into the future.