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Guest Commentary The Return of Center City?

Pedestrian volumes are at 73 percent of pre-pandemic numbers. Here, Center City District’s CEO on what that means — and what is still needed

Guest Commentary The Return of Center City?

Pedestrian volumes are at 73 percent of pre-pandemic numbers. Here, Center City District’s CEO on what that means — and what is still needed

In November 2022, pedestrian volumes in Center City from Vine Street to South Street, river to river, based on anonymized Placer.AI cell phone data, put tourists, visitors to cultural institutions, convention attendees, and those who come to shop, dine and access services at 73 percent of November 2019 levels.

With more people living here than three years ago, residents registered at 126 percent. Workers logged in at 55 percent of 2019 volumes. The average of all three suggests a 73.5 percent recovery rate.

Center City District (CCD) also deploys sidewalks sensors at 11 locations within the dense commercial core: 8th to 19th Street, John F. Kennedy Boulevard to Walnut Street. These show a recovery rate of just over 80 percent. Three pairs of sensors, positioned in the office district (1700 block of JFK Boulevard, 1800 block of Market Street and 1600 block of Market) recorded volumes up 115 percent from January 2022, peaking on Tuesdays, Wednesdays and Thursdays.

Most agree that offices remain the best setting for collaboration, innovation and mentoring; but how frequently? How much office space do we need downtown?

Talk with major employers and some speculate, often with resignation, that things may have reached a plateau. They offer anecdotes about wandering through empty offices on Mondays and Fridays. Brokers report many lease renewals taking 20 percent to 30 percent less space. Formal vacancy counts are up from 12 percent in 2019 to 18.4 percent in Q3 2022, even as life sciences expand and small new firms move in.

As good as it gets?

Technology now enables viable alternatives to convene staff from diverse locations, eliminating travel time and the need to dress for success. Quick to draw conclusions, some journalists proclaim the office is dead, while speculating that a new algorithm will digitally simulate serendipity at the water cooler.

No doubt, there are repetitive and routine functions that can be performed from anywhere, as in call centers where everyone sticks to the script. Zoom, Webex and Teams are far less effective in picking up unspoken cues of body language or replicating random conversations in the corridor or on sidewalks that free you from the digital box, disrupt routine and spark new ideas. Most agree that offices remain the best setting for collaboration, innovation and mentoring; but how frequently? How much office space do we need downtown?

A surging cottage industry of research on work from home and return to office comes with its own abbreviations (WFH) and (RTO). The most quoted is a Stanford University team conducting national and international surveys. Their findings from October 2022, across all industries, provide a helpful corrective to one-off news stories. Only 13.6 percent of full-time, wage and salaried employees, they conclude, are completely remote; 57 percent are onsite; 29.4 percent occupy the middle ground of hybrid.

Some professions that tend to cluster in downtowns more easily lend themselves to remote: information technology employees average 2.5 days per week WFH; finance and insurance, 2.18 days; professional and business services, 1.99 days. Employees on site at least four days per week are in manufacturing, retail, hospitality and food services, transportation, warehousing and personal services — suggesting a bifurcation in work experience by sector and educational level.

An Economic Innovation Group study finds patterns of remote work across the United States are far from uniform, shaped by two major variables: the structure of local industry, and the length of pre-pandemic commutes. The greater the local concentration of occupations that lend themselves to remote work — primarily tech and some financial services — the higher the WFH quotient. Amazon occupies 20 percent of office space in downtown Seattle; tech firms consume 38 percent of San Francisco’s downtown office space. Comcast occupies just under 6 percent of Center City’s inventory. Contrary to type, they are a high visibility leader in promoting RTO.

The more time workers spent commuting in 2019. the more motivation to stay home in 2022. Whatever our complaints about the Schuylkill Expressway and I-95, auto commutes here were far shorter than places like Los Angeles and Washington, D.C. In a national survey, Philadelphia was far down the list in nineteenth position, with 23 percent WFH. A large downtown residential population and good regional transit infrastructure surely helps.

An August 2022 Gallup survey of what employees want speaks of an endowment effect created by WFH. Mandates in 2020 and 2021 inadvertently extended a perk to employees that employers now struggle to withdraw. Americans, raised in a culture of individual as king, don’t easily give back what they’ve acquired: the convenience of dressing only from the waist up or saving on clothing altogether. There were also substantial benefits and challenges, like juggling work with childcare.

On the other hand, a KPMG report in October 2022 that focused on employer perspectives suggests as economic conditions grow uncertain, half of CEOs are considering workforce reductions — with remote workers likely the first to go. One journalist offered this takeaway: “A caveat for people who like working from home: remote workers may find it in their best interest to show their faces in the office as their job security becomes more uncertain.” Whether this reflects impending workplace realities or employers just venting frustrations about the purported great resignation, it’s the focal point for tension, redefinition and negotiation between employers and employees.

More is in our control than we think

If there is a great resignation out there, it may best describe the passivity and fatalism of those who feel powerless against trends beyond their control. To be sure, the pandemic had profound consequences beyond impacts on health and economic vitality. It shook confidence that we are masters of our fate. Initially, we feared crowds and density, distrusted strangers and didn’t even know what we could touch. Suddenly the bubonic plague, yellow fever and influenza epidemics jumped from history books onto the front page, the evening news and social media feeds.

But consider how quickly the disease was diagnosed, vaccines tested and widely distributed. The bubonic plague of the 14th century is estimated to have killed 50 percent of Europe’s population. Yellow fever killed 10 percent of residents in this city in 1793. In 1918-19, 16,000 people, 1 percent of Philadelphia’s population, died from the Spanish flu. Currently, our death rate from Covid is just 0.33 percent. A terrible price, unevenly distributed, but helpful to view in historical context.

Just because we don’t control everything, doesn’t mean we’re powerless to master anything. The studies above suggest that conditions vary dramatically by place and that shaping a response based on local conditions is essential. In business, as in politics, leadership matters. CEOs who issued disembodied edicts by email got predictable reactions, as did those who simply gave up. Leaders who engaged staff in discussions of corporate mission and RTO planning, addressed substantive employee needs, showed some flexibility and adapted the office to be more worker friendly, tended to get employees back in larger numbers. No surprise, smaller and medium-sized firms often had greater success than large, multi-location businesses.

Poorly governed cities, places not rebuilding and rethinking interconnected approaches to public safety, social services and economic development, run the risk of a downward spiral in tax revenues, urban amenities, workers and residents.

Two recent studies from the Brookings Institution highlight what’s at stake. A September 2022 international survey concluded WFH gained popularity because it offers greater flexibility in time management, expands personal freedom and saves on time and the costs of commuting and grooming. Yet, this view is far from universal. Some dislike remote work and miss daily interactions with coworkers.

Over time, Brookings researchers suggest, those who seek a more collaborative work experience may gravitate to organizations that more closely offer pre-pandemic working arrangements. More significantly, Brookings underscores how younger workers lose out on valuable mentoring, networking and on-the-job learning.

The implications for cities, they caution, are more worrisome. WFH has already reduced the tax base in dense urban areas, though this is currently masked by American Rescue Plan funds. On the hopeful front, the authors see a motivation for local governments to recalibrate an attractive mix of taxes and public services. Cities that respond with efficient management and sound policies will benefit since the deck has been reshuffled nationally in the competition for talent and firms. But poorly governed cities, places not rebuilding and rethinking interconnected approaches to public safety, social services and economic development, run the risk of a downward spiral in tax revenues, urban amenities, workers and residents.

Two-handed approach to public safety

For CCD, 2020-2022 has been about back to basics, back to our reason for forming in 1990. In the spring of 2020, I told staff that it was like 1990 all over again, before realizing that a third of them weren’t even born then.

We increased cleaning and graffiti removal teams to more than 110 staff. We doubled the size of our public safety teams, adding to our 40 uniformed, unarmed Community Services Representatives (CSRs) who work in partnership with police, a new 40-person public safety bike patrol, compensating for the shortage of Philadelphia police, who are simultaneously returning to the principles of community policing, working in partnership with residents and businesses. Our staff helped organize a public safety collaboration among 20 local and federal agencies and with the security forces of major private employers and building managers.

Since 2018, CCD has also partnered CSRs with homeless outreach workers from Project Home, with mental health professionals and with crisis intervention-trained Philadelphia police officers in a two handed-approach. So far this year, they have helped 161 people leave the street, transported by our staff to service and shelter with no arrests or citations. This model establishes police and social workers as partners, not adversaries. SEPTA is doing something similar on their system, partnering police with drug and alcohol outreach teams.

Technology may enable those who can work remotely to choose to do so, but that erodes the foundation for inclusive growth and disrupts the economic ecosystem downtown.

Compare the first nine months of 2022 to the first nine months of 2019: The number of homeless individuals on sidewalks within the CCD is down 24 percent. It may not seem this way since panhandling and homelessness may be more visible with fewer people on the street, but the progress is real.

So far this year Part 1 (serious crimes) in CCD are 8.7 percent below 2019 levels. It may not feel that way because headlines are focused on other stories and other major challenges like retail theft and a citywide epidemic of gun violence that remains appallingly high. But these, too, are problems within our control — amenable to a two-handed approach that brings law enforcement together with social services and job opportunities. In the case of gun violence, this must be augmented with community leaders, local clergy and those with special peer credibility: the mothers of young men who were killed and men returning from prison. Other cities have success with this approach, termed focused deterrence, and expanded efforts are underway here that can live beyond the transition from mayor to mayor.

This does not mean we ignore or excuse crime. We need to simultaneously establish consequences for committing crime with alternatives to incarceration, while also providing counseling, drug treatment, resources and job opportunities to reduce the conditions that generate crime.

The consequences of inaction.

After 30 years of rebuilding, there were more than 311,000 jobs in Center City in 2019 — 63 percent of those jobs required less than a college degree and 33 percent required only a high school diploma. The economy of Center City provided opportunity not only for highly-educated, high-wage workers, but also 200,000 jobs for those without college degrees at the convention center and in hotels, health care institutions, retail establishments and in maintenance and security roles in office buildings and on college campuses — opportunities for neighborhood residents who relied on SEPTA to get here.

Technology may enable those who can work remotely to choose to do so, but that erodes the foundation for inclusive growth and disrupts the economic ecosystem downtown. When higher-wage earners stay home, the demand drops downtown for service jobs, for retail jobs, for building maintenance jobs, for janitorial jobs and security jobs. In an interconnected ecosystem, the decisions we make impact others and can reduce municipal tax revenues that support services and schools. Tending to public safety and quality of life challenges is thus essential to full recovery and economic inclusion.

A second Brookings study suggests this is much larger than an employer/ employee negotiation or a challenge to local government. In a national review of job clusters in 100 U.S. metros, they find a clear and positive relationship between the density of jobs and economic productivity, measured by gross metropolitan product (GMP) per worker. The benefits of face-to-face collaboration within firms, networking and teaching things that are hard to explain on Zoom or by email, are further enhanced by the physical proximity of workers employed by different, even competitive firms.

The density, diversity and interaction — the unexpected conversations on sidewalks and in cafes — afforded by vibrant, walkable, live-work downtowns pays dividends to employers with an increased volume, quality and originality of output by their employees. The more we come together, the more productive we are. This simultaneously creates more opportunities for workers to choose between firms. Vibrant downtowns and campuses remain the incubators for innovation and creation of new firms.

The last three years were profoundly disruptive as people have reconsidered where they live and work, while firms rethink the role and purpose of the office. From this comes new opportunities, a reshuffling the deck nationally in the competition for talent and firms.

To stay competitive, it’s best to proceed on two tracks simultaneously: maximizing return to office, fostering and attracting new firms to fill vacant space, while also rethinking the amenities and land use in the office district, building on our 20 years of success fashioning a diverse, inclusive, live-work downtown.


Paul Levy is the president and CEO of the Center City District.

The Citizen welcomes guest commentary from community members who stipulate to the best of their ability that it is fact-based and non-defamatory.

This is from the Center City District’s December newsletter.

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