Soaring housing costs drive American workers farther from offices
NEW YORK, UNITED STATES — As companies push for more in-office days following the pandemic remote work era, employees who relocated to cheaper areas are now grappling with grueling commutes.
According to a Stanford University and Gusto study, the average distance from work for employees hired in 2023 is now 35 miles, up from just 10 miles in 2019.
“Americans are moving away from the office,” Nick Bloom, a Stanford economics professor and remote work expert, posted on X.
“So firms now are hiring in a much bigger area, which is why RTOs [return-to-office] are now so hard. Folks don’t live near the office anymore.”
Americans are moving away from the office. Employees hired in 2023 now live 35 miles from office, up from 10 miles in 2019.
So firms now are hiring in a much bigger area.
Which is why RTOs are now so hard – folks don't live near the office anymore.
https://t.co/RgwnKklk4p pic.twitter.com/FV8zZkEIWn— Nick Bloom (@I_Am_NickBloom) March 5, 2024
The driving force behind this exodus is skyrocketing housing costs in major metropolitan areas. According to the National Association of Realtors, home prices rose in over 85% of U.S. cities in late 2023, pricing out many workers.
“The suburbs came back into vogue during the pandemic while cities fell out of favor—largely due to the shift to remote work and the housing affordability crisis,” a Redfin study stated.
The surge in remote work across has also led to significant office vacancies, raising concerns about potential losses on property loans and subsequent pressure on smaller banks.
Companies like IWG, which provides hybrid workspace solutions, have identified the rise of “commuter towns” on the outskirts of big cities where housing remains affordable. IWG projects office worker populations in these areas could surge by up to 175% in the United Kingdom and 60% in the U.S. as businesses adopt hybrid models.
However, the RTO mandates have been a tough adjustment for many who relocated during remote work. Dan Schawbel, a future of work expert, said RTO causes “massive life disruption” and sparks resentment among employees as many relocated, purchased homes, and invested in home offices during the pandemic, expecting continued flexibility, especially millennials.
For LynnAnn Brewer of McLean & Company, “Leaders must practice empathy and flexibility…to mitigate the risks of losing talent.” A separate survey reported that mandated office returns led to surging attrition rates.
