ABSTRACT
The covid-19 pandemic induced a major shift in the prevalence of remote and hybrid work arrangements. This review article studies the effects of this remote work revolution for residential and commercial real estate values and for the future of cities. It also discusses consequences for productivity, innovation, local public finance, and the climate. The last part of the article discusses policy interventions. © 2023 American Real Estate and Urban Economics Association.
ABSTRACT
We show that the COVID-19 pandemic brought house price and rent declines in city cen-ters, and price and rent increases away from the center, thereby flattening the bid-rent curve in most U.S. metropolitan areas. Across MSAs, the flattening of the bid-rent curve is larger when working from home is more prevalent, housing markets are more regu-lated, and supply is less elastic. Housing markets predict an urban revival with urban rent growth exceeding suburban rent growth for the foreseeable future, as working from home recedes. (c) 2021 Elsevier B.V. All rights reserved.