Recent media reports have highlighted the financial challenges faced by Geelong retailers and hospitality providers as a large percentage of CBD based office workers remain working from home.
These city workers were the lifeblood of our city centre’s cafes, restaurants and shops prior to the pandemic. But everything changed when the government mandated those “who could work from home, must work from home.” Overnight, our large commercial, not for profit and government organisations implemented technology to ensure that thousands of workers could continue being productive from the safety of their homes.
As a result, several trends that were already occurring in our working world were accelerated to be the norm. It has raised a range of issues, which need to be both understood and addressed urgently as a community.
The following trends and data provide food for thought:
- More people are predicted to continue to work from home than prior to the pandemic. International data predicts that over twenty per cent of office workers will continue to work from home in some capacity. Prior to the pandemic, this figure was five per cent.
- As less people commute to CBDs, office space demand is predicted to decline. While office spaces are currently reinventing floor plans to ensure that social distancing is complied with and the need for private offices brought back into focus, the demand for office space will lessen.
- Consumer spending in the CBD will decrease with some research stating the decline to be somewhere between five and ten per cent against pre-pandemic levels.
CBDs are vital parts of our community and perform value-added roles including agglomeration, entertainment, cultural experiences, and larger-scale social interaction. But now we need to re-vision our CBDs to be designed for people to live, work and play in healthy, sustainable environments. There will be a need for mixed use spaces, co-working in cafes and hubs, spaces with fresh air and room to walk outside, and more green spaces.
Further, local employers will be faced with a talent crisis if these trends are not understood as workers will select organisations who offer flexibility. In Geelong, we are already seeing an influx of Melbourne people buying homes in our region while still being employed by Melbourne-based organisations. These people will have the best of both worlds with well-paid roles, lower housing costs, less dense living, and the flexibility to not have to commute Monday-Friday. This trend is putting pressure on our housing affordability and housing stocks. It is also putting pressure on access to skilled workers with the double-whammy of skilled migration levels in dramatic decline due to our international border closures.
As Richard Florida states: “Going forward, cities need to be intentional about how these business districts evolve: Left to their own devices, they will be remade in a way that benefits the already advantaged and deepens existing economic, social and racial divides. Instead of only providing incentives to landlords to convert fallow office towers into high-end residences, urban policymakers must ensure they’re also converted into much-needed affordable housing.” (Source: “The Death and Life of the Central Business District” Richard Florida, 14 May 2021, Bloomberg Lab.)
Re-purposing office spaces to shared spaces, co-working and potentially affordable housing and accommodation is something we need to consider. Government policy and incentives is one option, but it’s also something local property owners can plan for as we move through significant change as global community.
The Committee for Geelong is conducting a series of member briefings on “The Future of Central Geelong” as we await the release of the Victorian Government’s Central Geelong Framework Plan.
Jennifer Cromarty, CEO Committee for Geelong