More Philly office workers will come back in-person on multiple days, downtown boosters predict

Downtown stakeholders in Philadelphia argue that the post-pandemic return to office norms are not yet settled.

In a new report, the Center City District found that the number of nonresident workers in core areas of Center City on an average weekday was 14% higher in April 2023 than in April 2022. The office district around West Market Street and John F. Kennedy Boulevard saw a higher average workday population of nonresident workers on any given week of 2023 than it has since March 2020.

“I am by no means persuaded that we’ve hit a wall,” said Paul Levy, the head of Center City District, which represents business interests downtown. “We’re seeing a slow but steady recovery that’s caused people to think we’ve hit an equilibrium. But we have a steady upward trend that’s going on.”

The report comes as policymakers, business leaders, office landlords, and institutions such as SEPTA are struggling to adapt to a post-pandemic world where remote work is far more prevalent than before the pandemic.

Levy’s positive spin comports with research from the Brookings Institution showing downtown recovery across the country continuing to inch up across a number of metrics, even if 2019 baselines are still far off. Tracy Hadden Loh of the Brooking Institute told Governing magazine that travel data from cell phones, transit ridership data, and office swipe-ins showed that nationally, “we’re not at a plateau.”

But The Inquirer reported that in April, office space for lease was at an all-time high, above even the previous record set during the Great Recession. Kastle Systems data that track how many people are swiping into office buildings found that the Philadelphia metropolitan region office occupancy is still less than half what it was in 2019.

The recovery is also taking its time on SEPTA’s regional rail ridership, which as of April is at just 54% of the pre-pandemic benchmark. In Center City District’s latest report, downtown’s average daily population in April is 100,000 below what it was at the same time in 2019, with most of the gap composed of nonresident workers and visitors (although weekend tourists and day trippers are back to 90% of pre-pandemic levels).

“It’s in the eye of the beholder, but to me things have plateaued,” said Stijn Van Nieuwerburgh, professor of real estate with Columbia University’s business school, who helped write an influential paper about the challenges facing commercial real estate in urban centers. “It’s hard to argue that we’re very much in the rebound here. I think the data are not consistent with that.”

Center City District’s report includes the results of a hybrid work survey with responses from 64 employers in Center City and University City. It found that 44% of the respondent employers had workers in the office three days a week on average, 23% were back full time, and 5% were back one day a week.

No one reported allowing fully remote work, although that may reveal a bias in the respondent group. The Survey of Working Arrangements and Attitudes shows a substantial minority of jobs are still fully remote (with people in their 50s and 60s more likely to hold them than other age groups).

A quarter of the firms surveyed reported trying to create a more social environment in their offices and specifically that they are proactively trying to create mentorship opportunities.

Critics of fully remote work have worried about the effect on people just starting out in their careers, some of whom may have a harder time learning in a fully virtual setting. It can also be difficult to create team cohesion remotely, critics say, and workers who have moved to a new city may find it harder to socialize or feel part of a team without in-person work.

“People who are seasoned can work at home [more], but they also need to be around to train the young people and the new people in their organization,” said Rich Gottlieb, president of the Keystone Development + Investment (which owns the building The Inquirer’s offices are in). “Without a place, it’s hard to have culture and collaboration. Zoom is nice, but it’s hard to have a normal conversation.”

Employers are still adjusting their in-office requirements for employees, with the Morgan Lewis & Bockius law firm recently increasing the required days to three a week. (The Inquirer required employees to come back to the office beginning in January for at least one day a week.) But CCD’s survey found that 56% of respondents considered their new work arrangements to be the “new normal.”

CCD’s survey found that the two most cited reasons for employers not having more in-office days were that employees have simply become used to hybrid offerings and that it would be too hard to attract talent without a remote work option.

The third most cited reason was that workers said that they did not feel safe on the streets of Center City — which is one of the safest parts of Philadelphia — or on SEPTA, where riders have complained about an increase in antisocial behavior since the pandemic.

Levy said that even though Center City is, in fact, quite safe, addressing perceptions is important and the office-heavy parts of downtown would feel safer by having more people on the street.

That’s why CCD is starting a series of 4 p.m. events on office plazas — concerts, happy hours, and non-drinking-related social events — to create a more vibrant atmosphere around the office buildings.

“If we can simply reinforce vitality on the street, we can help build the culture that supports return to work,” said Levy. “Part of our message is that these are not immutable trends. We can’t simply sit on our rear and do nothing and hope that the world will change.”