RSG Solutions

July 27, 2021

By Alejandra Martinez, Research Assistant

In 2020, we saw a decline of office use in major city centers and a simultaneous worker exodus to the suburbs. Individuals with the opportunity to work from home embraced the freedom to move into larger, more affordable living spaces away from once-bustling dense, urban cities. Now, this evolution toward remote work has become a fixture even as thousands of workers return to the office. National figures indicate that a large number of major companies and organizations will move toward a blended office-and-remote environment for the foreseeable future, leading to an estimated 10–20% drop in demand for office space. Consequently, the seemingly transitory exodus to the suburbs may in fact continue and lead to growth in suburban regions that had been falling behind their urban counterparts. Whether the suburbs can capitalize on these new patterns will depend on their ability to attract and retain prime working-age adults, as a significant portion of the labor force will be able to consider whether the amenities of central city living sufficiently outweigh the costs of job proximity.

Suburbs once relied on brick-and-mortar retail and sprawl as fuel for growth, but a change in consumption patterns, the rise of e-commerce, and an aging population indicate that a successful suburban model of growth will require fundamental changes and adaptations. With the new class of remote workers comes a need for the suburbs to depart from quiet living. Although the bustle of the city may not necessarily be missed, its amenities are a defining feature that serve to attract high earning working adults. Without sufficient amenities that appeal to this group, the exodus may not be as great of an opportunity for suburban cities that have felt the impacts of declining retail and the reality that office demand will likely not return to pre-COVID-19 levels. Consider the fact that when COVID-19 hit, the major city centers saw depressed sales tax receipts as businesses catering to office workers shuttered in response to necessary closures. 

As the concentration of office workers decreases and workers relocate outside major city centers, businesses once reliant on this aggregation of customers will need to expand their clientele to offset the decline of the typical office worker. As such, a successful suburban model of growth must focus on revitalization that offers place amenities typically found in major cities and increase mixed uses in central areas to create a new customer base in order to support business growth. Bringing new people to suburban city centers that have experienced ongoing decline will ensure a new source of long-term economic vitality. Suburbs with parks, restaurants, and high walkability will stand out amongst their peer cities as they recreate a version of the typical, dynamic urban environment while also offering the benefits of decentralized living to a new group of suburbanites.