After the pandemic, many expected remote work to empty large cities, leave offices vacant and break city budgets. This article draws on data from the United States, Europe and Asia and shows that the real picture is much narrower than expected.
The Change Stayed, but the Crisis Proved Narrow
Working from home has not gone away. In the United States, about a quarter of workdays have been done from home since 2022, and companies’ mandatory returns to the office have barely changed this figure. Office vacancy is at a historic high of about 20 percent. Yet the damage has fallen mainly on older downtown buildings, while the best buildings remain full.
The forecast that cities would go bankrupt has not come true so far. In New York and Boston, property tax revenue keeps growing because the law spreads changes in assessed values over several years. Still, someone paid the price: in Chicago, the burden of falling office values shifted to homeowners. Public transport was hit fastest, and what it lost was not the city but the morning commute.
Why This Is an American Story, Not a Universal One
Only 1.5 percent of office space is empty in Tokyo, about 4 percent in Seoul and 9 percent in London, compared with 18 to 21 percent in the United States. Two things explain the gap. The first is work culture, since people in Asia and Europe work from home far less. The second is the American building boom: new offices reached the market just as the pandemic began and interest rates rose.
The same logic applies to housing. Austin, the symbol of the remote work boom, built a great deal, and its rents grew almost half as fast as the national average. San Francisco could not build, and its rents are now rising faster than anywhere else in the country. Prices are set by supply, not by remote work itself.
What This Means for Employers and Cities
Research shows that hybrid work, where people work from home two days a week, does not harm productivity and cuts quitting by a third. Mandatory returns to the office did not improve results and increased departures among experienced staff. The highest price is paid by junior employees, who learn less when working remotely and by the downtown districts that lost service jobs.
This article was prepared by the academic team of the Business and Technology University (BTU) together with BTUAI and draws on publicly available research and official data. The full report, with all charts and sources, is available at this Link.
Citation: Business and Technology University (BTU) & BTUAI. (2026). Remote Work and the Economics of Cities. Tbilisi, Georgia.