Fiscal Impacts of Work-from-Home on Commercial Property Values in the United States

The widespread adoption of remote and hybrid work in the aftermath of the COVID-19 pandemic has triggered disruptions in US commercial real estate markets with fiscal consequences for cities. Downtown office properties, pillars of urban tax bases, have been experiencing declines in occupancy, leasing demand, and asset values. National estimates suggest cumulative losses of 20 to 45% in office valuations since 2019, with some properties in major markets such as San Francisco, Boston, and New York, facing declines exceeding 50%. Because property taxes remain the single most important revenue source for municipalities—often accounting for a third or more of local budgets—these valuation shifts present cascading risks for public finance, threatening not only property tax collections but also related revenues from sales activity, transit fares, and service fees tied to office-centered economies. The impacts are uneven across cities and metro areas, however. Office-dependent metros with concentrations in finance, technology, and professional services are most exposed, while mid-sized and industrially diverse cities face comparatively smaller shocks. Still, fiscal stress can be expected across jurisdictions, amplified by state-level constraints on taxing powers.

Policy responses fall along two trajectories. In the short term, cities are deploying stabilization tools, such as tax-rate adjustments and targeted incentives, to support office reactivation. In the longer term, strategies emphasize structural adaptation: zoning reforms to enable mixed-use conversions, revenue diversification, and infrastructure investment for hybrid economies. The permanence of some level of remote work necessitates a rethinking of downtowns, urban fiscal structures, and governance models to build resilience in an era of shifting economic geographies.