Trailing national trend, Seattle workers in no rush to get back to work

This spring, many Seattle-area businesses began reopening their offices and enticing workers back with promises of pizza, spontaneous joviality at work, and other nearly forgotten pleasures of in-person employment.

Which many office workers seem to have said “meh” to – much to the dismay of those worried about Seattle’s recovery.

Offices in the Seattle metro area were only about a third full last week – an improvement from early January, but well below what some US metros are seeing, according to Kastle Systems, which tracks the occupation desks.

Kastle, a Washington, DC office security company, displays weekly occupancy rates for 10 US subways using data from key card systems in thousands of commercial buildings.

Seattle is not on Kastle’s list, but company officials say San Francisco and San Jose, Calif., which Kastle tracks and which have similar demographics to Seattle, are good substitutes for Emerald City.

Based on that, Seattle office occupancy last week would have been around 33% — at the bottom of Kastle’s 10 metros (which also include Austin, Texas; Chicago; Dallas; Houston; Los Angeles; New York ; Philadelphia ; and Washington, DC).

(For context, this indirect figure echoes the Downtown Seattle Association’s own occupancy tracker, which showed downtown occupancy in late March at 33% of pre-pandemic levels.)

Seattle isn’t the only outlier when it comes to occupancy (Chicago was 37.8% and New York was 37.1%); but we’re nearly 10 points below the Kastle 10-city average — and not even on the same planet as Houston (55.5%) or Austin (what pandemic?) at 63%.

Why are cities like Seattle and San Jose so lagging behind?

This is partly due to differing political and community attitudes towards COVID, says Mark Ein, president of Kastle Systems.

Red state subways have often experienced less strict lockdowns and reopened earlier than many blue state counterparts. Texas’ mask mandate ended in March 2021, a year before King County’s.

But the COVID policy is only part of the story.

Metros that were hit by COVID earlier and more severely, like New York and Seattle, have lagging office occupancy rates, Ein says.

Ditto for metros with beg tech sectors. Tech companies have transitioned more easily to remote work, Ein says. And because tech employers will do almost anything to avoid turnover, tech workers have above-average leverage to stay home.

Another factor: Many subways that relied heavily on transit before COVID, like Seattle, New York, and San Francisco, have lower occupancy rates than subways where transit is marginal, like Houston and Dallas.

Many workers “are more comfortable in their own car than on a subway or bus,” Ein says. This may help explain why, according to data from the American Public Transportation Association, public transit ridership nationwide is still only 62% of pre-pandemic levels.

Kastle’s numbers and analysis resonate with Seattle-area watchers, though they often point to additional factors fueling low occupancy rates.

Margaret O’Mara, a University of Washington historian who writes about tech hubs, thinks that “store closures and inner-city boarding…during and after the 2020 protests” were likely psychological barriers for some returning workers.

Ongoing public safety concerns also played a role. “If the workers… had seen more [public safety improvements] by the end of 2021, these hurdles would not be as great as they were in 2022,” says Jon Scholes, president and CEO of the Downtown Seattle Association.

All of this has implications for how quickly cities have rebounded from the pandemic.

Fewer office workers means fewer dollars for already struggling restaurants, stores, theaters and other businesses in downtowns and commercial districts. An April 2021 study from Stanford University’s Hoover Institution finds that if occupancy remains at even 20%, spending in commercial areas will drop by as much as 10%.

Low office occupancy could also lower commercial property valuations and with them tax revenue – by up to 6%, according to a November study by the City University of New York and the University of Illinois-Chicago for the Institute on Taxation and Economic Policy which examined in Atlanta, Austin, Charlotte, Chicago, Los Angeles, Miami, New York and San Francisco.

Such dire scenarios are highly speculative, of course. Most experts say returning to the office will likely take years, meaning even latecomers like Seattle could see a much higher final occupancy rate.

DSA’s Scholes expects the return of downtown offices to accelerate in the coming months as the weather warms and the city gets a grip on public safety. David Schroedel, executive director of the Downtown Tacoma Partnership, said office occupancy could reach 70% by June.

Hart Hodges, an economist and co-director of the Center for Economic & Business Research at Western Washington University, thinks overall office occupancy will eventually reach 70%.

But there are caveats. New variants of coronavirus could slow that pace. Factors such as rising gas prices are already making some remote workers even less eager to resume commuting.

Equally important, many workers seem to be getting less and less excited about the office month over month. A February 2022 Pew survey found that 60% of workers in remote jobs want to be out of the office most or all of the time, up from 54% in 2020.

Many workers feel they’ve been just as productive at home, making it hard for “a manager to say, ‘OK, I know you all did your job…but come back to the office,'” Hodges says.

Indeed, remote working, and the freedom it brings from travel and other office aggravations, is widely seen as a real perk that workers see no reason to give up.

For these reasons, Hodges expects “a lot of pushback [by workers] for the next six months at least, this will keep the occupancy rate at just over 60%.”

And while that may leave cities like Seattle with a lot of economic uncertainty, it’s a problem workers themselves may feel little pressure to address.

Instead, Hodges says, many will wonder why they should be required to return to the office “other than to support the Columbia Center food court — and that’s not my job.”

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