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The True Costs of Working From Home - CityLab

Remote workers spend more on rent and housing costs than those who stay in the office — a gap that might add up to $15 billion or more if commuters don’t return.

A Craigslist search for one-bedroom apartments in San Francisco pulls up a post for a work-from-home special: a NoPa flat for $1,200 a month. But the sunny studio unit is “day-use only” — the target tenant is someone doing remote jobs from home who wants a whole other apartment dedicated to teleworking. And who’s willing to pay for it.

As some employers consider remote-forever policies, there have been a few attempts to quantify the economic impacts of this digital turn away from the office. The focus tends to be on what the move might cost (or save) employers, in terms of productivity or salaries. Other research has delved into the savings, in gas, time and carbon emissions, from Covid-altered commuting regimes.

But a new working paper distributed by the National Bureau of Economic Research looks at another, hidden cost: Employees who find themselves without an office tend to increase their own spending — on more room. Or, more rooms. About 0.3 to 0.4 more rooms, to be exact.

Between 2013 and 2017, households with at least one adult who worked from home spent more money on housing, on average, than ones that all worked outside of the house, the study found: Remote renters spent between 6.5 % and 7.4% more of their income a month, and homeowners who worked remotely had mortgage and property taxes that were 8.4% to 9.8% greater than non-remote households.

The study is a snapshot of the pre-coronavirus world, when only about 3% of U.S. employees did their jobs from home. By February 2020, that number had swelled by some estimates to 8%. And by May, that share had exploded, with about 35% of U.S. workers who once commuted going remote. How many will ultimately return to the office remains a subject of discussion, with employers announcing their commitment to hybrid, or flex, or immediate, or never-again office returns. According to a Pew Research Center survey, more than half of workers who can do their jobs remotely say they will want to continue doing so after the pandemic ends. A December survey from Upwork predicted that 27% of workers in the U.S. would still be largely remote by the end of 2021.

Up and down the income ladder, remote workers kept paying more for housing.

The study authors anticipate a more modest shift to remote work post-pandemic, with 10% of previously in-office workers adopting a permanent home-office lifestyle. Such a transition, the study estimates, would translate into $15 billion in additional housing costs annually. That doesn’t count all the non-housing expenses that remote workers might rack up, for new equipment, no-longer-free snacks, desks and ergonomic gaming chairs, which the study did not include in their analysis.


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