Daily insights for city builders, delivered every morning at 6 AM ET. I’m Brandon Donnelly — a Toronto-based real estate developer and founder of Globizen. I’ve been writing here since 2013.
One way to describe cities is to call them labor markets. Historically, people have chosen to live in cities because they have provided economic opportunities (among, of course, many other things). That’s why the data is very clear: wages are higher in larger cities.
But what we have also seen over the last few years — and what is causing a lot of dislocation in real estate markets — is an untethering of work. More people are working from home and from locations that offer greater lifestyle benefits (or greater tax benefits).
We spoke recently about what this divide between in-person and remote work might mean, but regardless of this outcome, I think there’s an important truth here: Lots of people would like to live somewhere else. (In my case, my daydreams take me to Paris.)
And for the first time ever, really, it is possible for more people to do this and stay connected to work somewhere else. Earlier innovations, such as the streetcar or car, also compressed geographies and empowered people to travel greater distances. But now the catchment area has seemingly expanded to the world.
I’m not saying anything particularly novel here, but I do think it’s important to point out that this desire exists in many of us. Because this tension between “I do work here” but “I really want to live over there” seems like it’s only increasing.
On Monday morning, I flew on Delta from Salt Lake City to Toronto, which in this direction takes just over 3 hours. And it was my first time ever experiencing reasonably reliable wi-fi on a flight. Maybe this is already common for the people who fly in the front of planes, but for me, I’ve never had the wi-fi work so well.
Usually it goes like this: I try and connect, everything is painfully slow, and so I get frustrated and move on. But this time around, I was able to check all of my emails, download fairly large PDFs, mark them up on my iPad, and write yesterday’s blog post. It was pretty great, and it allowed me to land in Toronto with far less anxiety around my work backlog.
But it also got me thinking about what this means for travel and work. If you’re a regular reader of this blog, you’ll know that I greatly prefer working in an office with my team. I think proximity matters.
At the same time, I recognize that technology is empowering new kinds of remote work, that we are all becoming more globally connected, and that, in the future, most of us are likely to travel more, rather than less. This will be for both work and for fun.
While solid in-flight wi-fi may not seem like that big of a deal, in my mind it’s a game changer. People will become more mobile if they can sit on flights and actually be productive (and maybe Apple Vision Pro helps with this). It is another step in what feels like an ongoing untethering of work.
During the pandemic, there was a lot of erroneous talk about the death of cities. Much like when the consumer internet first came around, the thinking was that technology would make geography irrelevant. I was and am vehemently against this idea, but it’s hard to not feel like technology is doing something. But what exactly? According to Richard Florida, Vladislav Boutenko, Antoine Vetrano, and Sara Saloo, it is creating something called the Meta City:
The various communities that make up the Meta City may be in different time zones and noncontiguous locations, but they function together as a coherent network with a distinct structure and logic. The Meta City combines physical and virtual agglomeration, in seeming defiance of the laws of physics, making it possible to occupy more than one space at the same time. As a result, urban areas within the Meta City network can share economic and social functions.
The narrative is compelling. Cities have always responded to and been a product of new mobility technologies. Streetcars, subways, and the car have all reshaped the geography of our cities. Some would argue for the worse. What the Meta City proposes is that technology today is not a disruptor of cities, it is simply another mobility shift. Rather than make cities irrelevant, it actually makes them more important by expanding their reach:
The pandemic-era shift to remote work is yet another technology stretching the boundaries of the city into a new and larger geographic unit. But instead of doing so physically, it does so by enabling virtual expansion. The share of American workers engaged in remote work tripled from roughly 6% in 2019 to almost 18% in 2021. Remote workers can access significant quality of life at far more affordable prices in smaller cities, suburbs, and rural areas.
Some specific examples:
Many of these rising places are critically connected to established cities. As we will see, Austin’s rise is best understood as a satellite of San Francisco’s long-established tech hub. Miami is enmeshed in New York City’s finance and real estate complex. The rise of the Meta City informs a counterintuitive logic: Leading superstar cities are seeing their role as economic hub expand, even as some talent and some industry disperse to satellite centers.
Finally, here’s their ranking:
If you believe this to be true, then it should be good news for the real estate located in the cities listed above. But it also means that we are now facing a new kind of hub-and-spoke model of urbanism. London and New York remain at the center, but tech is only strengthening their reach and influence. This is a new way of thinking about the flow of human capital around the world, and I’m sure it will have impacts on how we plan and build our cities.
Here’s an interesting paper from WFH Research that looks at, “the evolution of working from home.” Not surprisingly, remote work tends to vary by industry, with tech being the most likely to work from home and with hospitality & food services the least likely.
By extension, WFH prevalence also appears to correlate with population density. This largely has to do with the kinds of jobs that center themselves in big and dense cities. This is interesting because one conventional way to think about cities is that they are places where businesses and people cluster to accumulate wealth. That clustering is still happening, but work is evolving.
And that is always the case.
Overall, the authors conclude that about 40% of US employees are now working at least one day a week at home, and that just over 11% are fully remote. They also argue that fully remote work lowers average productivity by about 10-20%, but that hybrid work is closer to flat. Interestingly enough, opinions on productivity differ whether you ask employees or managers.
One common way to measure affordability is to look at the cost of things relative to local incomes. But the world is getting increasingly more complicated than this. Here, for example, is an interesting article talking about the “nomadification” of cities such as Medellín.
What this is referring to is digital nomads who might work for and draw a salary from a company in say the US, but who work fully remotely in places like Medellín, Buenos Aires, and Mexico City. It’s like working from home all the time, except home is some exciting city in Latin America.
The appeal of this work arrangement is obvious. You get to both live in an exciting city and you get to arbitrage between a US or other similarly high salary and a place where the cost of living is significantly less.
But the point of the above article is that this can distort a local economy and make locals feel like they’re getting priced out. When you take enough software developers making $150k a year and you drop them into a place where the minimum wage is $350 per month, that additional income starts to have an impact.
Though, many countries seem to think it’s a positive one. Last year, both Portugal and Colombia introduced new digital nomad visas, which presumably means they want more of them. And I certainly think that we will see more and not less of this kind of working.
But in a way, isn’t this really just an extreme form of tourism? I mean, unless these nomadic cities are collecting additional income taxes (or deriving some other benefits), aren’t we just talking about foreigners renting Airbnbs and spending money that is earned and taxed elsewhere?
I’m not sure how much you can actually glean from this Australian Bureau of Statistics data (taken from this recent New Geography article):
The data was collected on August 20, 2021 and, at that time, there were still a number of pandemic lockdowns in place. But consider the fact that during the last census (2016), Sydney’s “work @ home” share was only 4.9% and that its transit share was 26.2%.
Where Sydney is sitting today is obviously somewhere between where it was in 2016 and where it was in 2021. Who knows where exactly things stabilize — that is largely unknowable — but at least I got to use “Sydneysider” in a blog post title.
I have been fortunate to be able to travel a fair bit this year. But the vast majority of that travel has been me working remotely. In my mind, that means a few things: (1) I remain committed to staying on top of and clearing out my inbox each day; (2) I still take all meetings as if I were 100% in the office (which is my preferred way to work); and (3) I don’t put on an out-of-office reply. That’s the signal that you should expect a response. Today, however, is not one of those days. I just finished putting on my out-of-office reply and that is me capitulating against the looming email torrent.
On past vacations I have done things like turn this blog into more of a photoblog. I will probably do a bit of that, but my plan this time around is to concoct some combination of a photoblog, travel blog, and foreign city building blog. Travel is a great way to learn from other cities, and I will endeavor to share some of what I find in France and Sicily. (Sicily is in Italy, but not really, right?) Some of you seem to get a little grouchy when I stray from our regularly scheduled programming on this free and personal blog. So if this doesn’t sound all that appealing, you may want to check back in October.
At the end of August, our office closed for two weeks so that we could shuffle a bunch of desks around. During that time, we all worked remotely. I spent one week working from home and one week working from Utah. Being in Utah in the summer was, of course, a great treat. Everybody appreciates having more rather than less flexibility in how they structure their workday.
But at the same time, being away from the office reminded me just how much I hate working from home. I hate the onslaught of calls and zooms that ensue when you’re not proximate to the people you work with. I hate being distracted by the thought that I should probably do a load of laundry. And importantly, I also find that I have less energy.
One of the ways that extroverts and introverts are often defined is according to where they derive their energy from. The former is said to derive more of their energy from being around other people and the latter is said to derive their energy from being by themselves. Introverts need time to recharge. Of course, most people probably need both of these things. I certainly do.
But I think this is an important consideration as we all debate work-from-home policies. I enjoy being in the office. And I can tell you that our team overwhelmingly does as well. People were starting to get antsy during our two week hiatus. But not everybody feels the same way, which is why I wasn’t expecting this (the above) Twitter poll result.
At the time of writing this post there were fewer than 200 responses. But even with limited data points, I was expecting more of a bell curve, with the majority of people doing some sort of hybrid thing. That is not the case here. The results were fairly equal with 5 days a week having a slight edge. My sense is that WFH is continuing to wane.
But I don’t know, you tell me: What is your work routine right now and what would you consider optimal?
Our week of working remotely in the mountains of Utah has come to an end. Being on mountain time meant early mornings every day. But it also meant being able to enjoy the evenings, including sunsets like the one shown here at the top of Ensign Peak. This was my first time really experiencing the Salt Lake City area in the summer, and I’m grateful for the opportunity. It is a beautiful place, and one that still feels under the radar once you exclude its global draw as a ski and snowboard destination. I also had a great time capturing it on my camera. So I’m excited to share my latest NFT photography collection — Utah. All of the photos were taken on my Fujifilm X-T3 (35mm) and can be viewed and purchased over here on Foundation.
Today’s post is a question for all of you: What would you say are the coolest and most remarkable boutique hotels in the world right now?
What is clear to me is that travel (and flexible work) will continue to be a growing market and that there is demand for a variety of different hospitality offerings.
Sometimes people might want to stay in an Airbnb (which is usually a property owned by an individual or individuals).
Sometimes people might want to stay in a branded and/or membership-based rental such as a Sonder or a Wander (which, in the case of Wander, is a collection of properties owned by the same company).
And sometimes people might want to stay in a tried-and-true hotel.
I think that all of these offerings serve different needs. And at the end of the day, I don’t believe that Airbnbs, or whatever permutation they take, will ever replace the best hotels. There are things you can get in a hotel that you can’t get elsewhere.
So today I am hoping to crowdsource some of the best examples from all of you. Thanks in advance for any ideas you might send over.
