Unsurprisingly, when people are forced to convert their homes into home-office-gym-bars, they feel a striking urge for more space. The widespread adoption of remote work gave many people the chance to abandon expensive, dense places for cheaper locations in the suburbs or other parts of the country. But this shift also led to stark changes within big cities: People struck out on their own or broke into smaller units.
The significant increase in household formation provided a counterbalance to the pandemic exodus, a new analysis from the bipartisanfound, and kept housing demand in big cities such as New York or San Francisco from falling off a cliff. It also underscored the need for more construction in these areas: With more people elbowing each other for places to live, the only way for cities to continue growing and lower the cost of living is to find somewhere to put everyone.
But it takes awhile for cranes to give rise to new towers. In the meantime, if you're wondering why your rent is still so damn high, you may simply need to look at all the people who now have spacious one-bedroom dwellings all to themselves. When millions of workers went remote earlier in the pandemic, it opened up a world of possibilities — and life-changing decisions.
"Every time I write a remote-work paper, I say, 'All right, that's the last one. It's time to move on to other topics,'" Adam Ozimek, the chief economist at the Economic Innovation Group and a coauthor of the latest paper, told me."And then every time I do it, I think of something new." In this case, Ozimek and his coauthor, Eric Carlson, used heaps of 2021 census data to illustrate how housing markets in large cities were caught between two powerful, competing forces. The first was outbound migration, which led to weaker housing demand in city centers.
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