Special Briefing on Work from Home: What it Means for State and Local Economies and Revenues

The shift to working from home, accelerated by the COVID-19 pandemic, poses a fiscal threat to the nation’s biggest cities, which depend on commercial property taxes for revenue, according to panelists at the March 17 Special Briefing hosted by The Volcker Alliance and the Penn Institute for Urban Research.

 Panelists discuss research on the rise of at-home employment and its implications for budgets, real estate markets, and transit systems. This special briefing features a panel of experts, including Jose Maria Barrero, associate professor, Instituto Tecnològico Autònomo de Mèxico; Howard Chernick, professor emeritus, Hunter College, CUNY; Ally Schweitzer, reporter, WAMU; and Anthony Williams, former mayor, Washington, DC. 

Notable Quotes: 

“We’re in for some heavy lifting, politically,” said Anthony Williams, mayor of Washington, DC from 1999-2007 and current chief executive officer of the Federal City Council, a nonprofit organization of business and professional leaders

. “The pandemic acted like a mass experiment,” said Jose Maria Barrero, who helps conduct a monthly work-from-home survey. “The forced experiment that the pandemic imposed on us has taught us how well it works,” he said. “Employees and their companies have learned that work from home can work and that trying to get back to full time is something that we don’t need."

 Howard Chernick said that a 9 percent increase in the valuation of residential property would be enough to offset a projected decline in commercial property taxes. “The political problem,” he said, “is how do you tax that?” For example, New York City has had a property tax system that deliberately shifts the burden away from homeowners, he said, and that many cities have limits on property taxes and levy increases. 

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Special Briefing is published by the Volcker Alliance, as part of its Public Finance initiatives, and Penn IUR. The views expressed on this podcast are those of the panelists and do not necessarily reflect the position of the Volcker Alliance or Penn IUR.