Comment by ldenoue

One is near retail and footfall, coffeeshops, restaurants etc. But it's the government that cares about that and I don't think there are many place where gov has meaningfully intervened in private company policy

I don't see how real estate companies can influence companies/tenants, they don't hold much power here since everyone is shrinking or cancelling their leases

Where I work, RTO is partially Finance driven, bean counters just don't like seeing seats they paid for go empty

Because the real estates as well as all of the other business services that manage, maintain and cater to the office spaces and the commuters are owned by the same mega corporations that own a large stake in your business.

You buy land, buildings, out have a contract for these types of things. When there nobody at these locations it makes it appear that these were bad decisions rather than the fact that there was a black swan event that caused a paradigm shift. Some walnut will try to say that the writing was on the walls about covid or about the benefits of remote work but that's mostly contingent on post hoc analysis rather than is situ. And as they say: hindsight is 20/20...

Tldr: fear of looking bad because metrics are more important than actual results

Some responses approached the reason, but they are essentially the behemoth financial interests of the various pension funds of essentially all the state governments and corporations, high net worth family funds, institutional money like university endowments and REITs/IRA/401ks, even many foreign sovereign and pension funds like the Scandinavians, Dutch, Germans, etc.

As you may be surmising, this not only carries rather major domestic risks if pension and other domestic funds start crumbling, but it also has massive implications for foreign countries’ domestic financiers and social stability, but it also has geopolitical implications from it.

During the post housing fraud period, a rather understated change was implemented to encourage accounting to not mark real estate to market value, i.e., record what the market is willing to pay, but rather keep real estate on the books for whatever value one would like to keep it at by various methods and practices.

What that essentially affected was a cooking of the books to prevent on book from showing losses. It is essentially still going on, but especially in commercial real estate since the COVID happenings.

You now still have massive buildings essentially still totally empty, all still valued at full occupation valuation even though they are, e.g., only taking in barely enough to cover operating costs in a freeze state, i.e., minimal services.

This is where things like property taxes come in, as the properties are still assessed at fabricated values, and property taxes are used to fund the local governments, everyone with financial interests in commercial real estate (many, because it was considered very safe) are now crying for mom. It gets a bit off topic here, but I think you get the gist.

To keep property prices high across the board. If one part breaks, the whole front collapses. Meaning that the banks who own the government and own the population will loose their grip on power.

Lots of property tax

Totally. A lot of corps are ruled by management and sales people. Those often really enjoy talking and connecting, and it is a form of control for them. Of lot of these people think they can't do their job well if the quiet people (IT, devs) disappear into their homes. And they often genuinely think the workforce needs to have meetings and show up to be accountable. They don't really think about what IT people actually need, or they do sometimes but it won't be a decisive factor in the end.

I've worked in places where sales people were seated next to programmers, and the sales people were shouting through their phones continuously. The programmers complained endlessly about all the noise - without effect. First lockdown we had showed an increase of at least 300% productivity - hard and reliable numbers because all output was tracked voluntarily by the team (management never asked for this). Number of builds, commits, releases...everything was way up. It was quite shocking.

As soon as lockdowns were lifted managers began talking about being in the office fulltime, because it was so good to talk to each other and align your work. I remember working in a team that did 1 day a week at the office, that day we couldn't get anything done because everybody was just chit chatting all the time. Even if you wanted to - it was just impossible to focus.

Our security officer (CISO) remarked how the lockdown enabled him to think seriously about a security issue for the first time in almost two years. Isn't that tragic?

Companies are as rational as consumer behavior. You can't make this stuff up. Never attribute to malice that which is adequately explained by stupidity.

The one thing I’ve seen are where companies have tax incentives tied to butts in seats. Usually like 0 property tax, with the government assumption that they’ll make it up in sales tax (lunch, gas, etc.) and taxes from employees that move to the town.

But honestly, I think a lot of companies are just doing this instead of layoffs or in addition to small “don’t raise eyebrows” layoffs. Raise the pain to get attrition.

If I have to choose between "the owning class colludes" and "the owning class is acting irrationally, and just coincidentally happen to act in accordance with the interests of other members of the owning class", Occam's razor points me toward the first.

Companies like Amazon literally own billions in office space. Making that space valuable again with RTO policies, especially if you create an RTO trend, a way of enabling them to sell at their previous values.

It is not bullshit, though it does not apply universally either. In many cases it may just be managers who need to justify having spent all that money on their office spaces.

That being said:

Deflating a real estate bubble is painful, just ask China. By artificially keeping up demand for office spaces through unnecessary RTO, banks and governments avoid having to go through that, at least for the time being.

And yes, with (partially government-guaranteed) mortgage-backed securities and all that, large-scale devaluation of commercial real estate is going to be a huge pain.

In NYC where the vacancy situation is particularly dire, politicians have been banging the RTO drum for a while.

https://www.bloomberg.com/news/articles/2023-03-30/wall-stre...

‘Be careful what you wish for’ - if remote work is the norm, there is all the sudden massive downward competitive pressure on salaries, as now people can work from much lower cost of living areas. Or even lower cost of living countries.

Either officially, or unofficially.

What globalization did to manufacturing, remote work is going to do to knowledge work.

And in most cases, if the bosses give up on RTO, they’re going to be explicit about this. Because why not?

[dead]

Exactly this all those pension funds are coming due