The desire to continue working from home (WFH) or to land a remote position is still strong among current employees and potential job candidates. At the same time, we’ve seen a hard line by a number of business owners mandating a return to the office. The tug of war between the two factions is often painted as a lack of trust by employers, while business owners say productivity is higher when employees are in the office.
But the desire to have workers return to the office could also be related to softness in the commercial real estate market, according to an article in The National Observer: Real Estate Edition. The article written by editor Ashley Fahey hypothesized that reduced rents in office buildings with lower occupancy rates is creating a rise in property tax bills for U.S. homeowners. The average tax on single-family homes increased 4.1% in 2023, to $4,062, according to Attom, a leading curator of land, property and real estate data.
The National Observer article said there are many reasons for property tax increases, and these vary throughout the nation. Increases often support expenses for local government operations, salaries for public school employees, the building of new schools and government facilities, and to combat inflation.
With fewer people visiting the office, many in commercial real estate are challenging the assessed value of these buildings and often lowering their property tax bill in the process. This in turn is creating more reliance on monies from residential properties as shifts in the local tax base create fluctuations in residential levies, according to the article.
“In the foreseeable future, governing bodies may encounter challenges in constraining property tax hikes for homeowners, particularly in areas grappling with substantial vacancies in shopping districts or underutilized office spaces, depending on location,” said Rob Barber, CEO, Attom.
It’s understandable that many job seekers prioritize flexibility, including the option to work from home. This trend has been increasingly prominent, especially in recent years. However, it’s important to note that while remote work offers benefits like increased flexibility and potentially improved work-life balance, there are also considerations regarding professional development, team collaboration, and company culture that some individuals may value differently. And now with the other information that WFH could indirectly be causing residential property tax increases, the cons may finally outweigh the pros.