They say the future is already here, it’s just not evenly distributed.
Working from home is the zeitgeist, the mega-trend that has called to a halt construction of new office buildings and hollowed-out CBDs. Behind the dusty sliding doors of city-centre shopfronts lurk piles of envelopes that date back to 2020. Landlords can’t find a tenant brave enough to take on a lease. Meanwhile, in the suburbs, spare bedrooms are in hot demand as workers log on remotely. That’s the story anyway.
But new data from the census shows the phenomenon is spread very unequally across Australia. If you live in Sydney’s north shore, you probably can’t even remember the last time you went into an office. But if you’re in Darwin, you’re probably hopping in your Ford Ranger most mornings, same as ever.
New census data was released on Wednesday. It showed people working from home at very different rates in different cities on census day last year, as the next chart shows. The very high results for New South Wales and Victoria are driven by lockdowns (remember those?!), but nevertheless everywhere you look, the rate of working from home is much higher in 2021 than in 2016.
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What will it do to cities?
Working from home holds the potential to completely reshape our cities, eroding the value not only of city centres but of proximity to them. The whole concept of a skyscraper cluster is based on the idea that proximity matters; that the spill-over effects of a city — what economists call agglomeration — depend on people being near each other.
If you can get that on Zoom, will nobody commute to work in the CBD? And if nobody is commuting to work in the CBD, why are they paying sky-high prices for small homes in close proximity to it? The whole property market could be turned inside out like a sock.
There is precedent for technology change transforming economic geography. The car gave us suburbs that were never previously possible. In the US the shift of wealth to the suburbs led to a “hollowing out” of city centres. Think of US TV shows like The Wire where inner urban streets full of terrace houses are the site of drug running and murder. (Of course, that doesn’t have to happen — in Australia similar streets are coveted and the homes would go for millions.)
Cars also led to the decline of small rural centres at the expense of larger ones, as people were able to travel further to larger hubs.
Can Zoom make fashionable inner cities unfashionable again? It’s worth noting the suburbs with the highest rates of working from home. In Sydney, Lavender Bay and North Sydney. In Melbourne, East Melbourne and Fitzroy North.
These are very expensive suburbs a short stroll from the CBD. Rates of working from home map neatly onto property price per square metre. Which creates a tension, when you think of all the spare bedrooms that need to be converted into home offices. Why pay a premium for a four-bedroom terrace when you could buy a five-bedroom, three-garage place on an acre for less, and work from home just as effectively?
Could Australian elites end up living at the coast — in striking distance of town in case of important meetings, theatre or football — but without owning significant property in town? And what would that mean for firms who are based in the cities? Are they really based anywhere if their employees are dispersed?
Speaking of dispersion
The next chart shows the rates of working from home across Sydney’s many suburbs. Even within the city with the highest rates of working from home, they vary enormously. This matters a lot — public servants and their ministers may feel as though working from home is ubiquitous, but they must not overlook the tradie, the nurse, the chef and the delivery driver. They live in areas like Auburn, where just 12% of people were working from home last year. Most people don’t work from home — not even in a lockdown.
But who is working from home? Knowledge workers, yes. Richer people, definitely. Hipsters, fair enough. But there’s another answer too: women. We will use Melbourne as our example, but the pattern holds around the country. Across the city, and with the exception of just a few flashy suburbs, women work from home more than men, as the next chart shows.
If working from home turns out not to be supported by companies and governments — perhaps in defence of property prices — it is women who will be hurt most.
This article was first published by Crikey.