Research Paper

Reflections on Doom Loop or Boom Loop Work from Home and the Challenges Facing America’s Big Cities

June 26, 2024
Authors Richard Voith , David Stanek , Susan Wachter
Current Themes
State & Local Finance
Doom Loop or Boom Loop STATE AND LOCAL BUDGETING IN THE COVID ERA ISSUE PAPER Work from Home and the Challenges Facing America’s Big Cities - Title Page
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Overview

This Penn Institute for Urban Research (Penn IUR) brief presents a discussion of Doom Loop or Boom Loop: Work from Home and the Challenges Facing America’s Big Cities, a Volcker Alliance report co-authored by Richard Voith, Susan Wachter, David Stanek, and Hyojin Lee. The report was featured in a Volcker Alliance/Penn IUR Special Briefing on May 30, 2024. This brief presents a shortened version of the discussion, edited for clarity, with closing comments by Susan Wachter.

Key Message

The COVID-19 pandemic significantly increased working from home (WFH) in major U.S. cities like New York, reshaping economic landscapes by reducing in-person activities in sectors such as real estate, housing, labor, and transportation. This shift has raised concerns about a potential "Doom Loop," where declining urban productivity leads to fiscal stress, vacant offices, and reduced economic competitiveness. However, cities can also seize the opportunity for a "Boom Loop" by leveraging technological advancements, optimizing remote work for tasks not requiring physical presence, and modernizing infrastructure to accommodate flexibility. Policy recommendations for cities, particularly New York, include promoting innovation sectors, adjusting tax systems to encourage in-person work, reforming zoning regulations to lower housing costs, and enhancing amenities to attract residents. These measures can help cities navigate the challenges of WFH and capitalize on its potential for economic growth.

 

 

 

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Downtowns Economic Development Municipal Governance Policy

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Key Message

The COVID-19 pandemic significantly increased working from home (WFH) in major U.S. cities like New York, reshaping economic landscapes by reducing in-person activities in sectors such as real estate, housing, labor, and transportation. This shift has raised concerns about a potential "Doom Loop," where declining urban productivity leads to fiscal stress, vacant offices, and reduced economic competitiveness. However, cities can also seize the opportunity for a "Boom Loop" by leveraging technological advancements, optimizing remote work for tasks not requiring physical presence, and modernizing infrastructure to accommodate flexibility. Policy recommendations for cities, particularly New York, include promoting innovation sectors, adjusting tax systems to encourage in-person work, reforming zoning regulations to lower housing costs, and enhancing amenities to attract residents. These measures can help cities navigate the challenges of WFH and capitalize on its potential for economic growth.