The work-from-home economy is the next threat Philadelphia faces

Philadelphia stands to lose a staggering amount of tax revenue if office workers don’t return to Center City’s towers.

Love Park is empty during the coronavirus lockdown. (Mark Henninger/Imagic Digital)

Love Park is empty during the coronavirus lockdown. (Mark Henninger/Imagic Digital)

Pandemic life has changed all of us — and it has changed our city and its prospects for the future too.

The virus promises to upend daily life not only in small ways — the death of handshakes — but also in large ones — like the drastic expansion of “working from home.” Both within the city and throughout the rest of the nation, office workers have rather seamlessly transitioned into at-home offices. Remote work promises to save companies immense amounts of money on real estate costs, and innovative technologies have already begun to spring up that make the set up more efficient and less frustrating for employers and employees alike.

The amount of tax revenue lost could be staggering if those workers don’t return to the city. If businesses move out of office towers and into the cloud, they will stop paying city real estate taxes. Suburban workers who used to commute into the city will no longer be paying the city’s highest-in-the-nation wage tax. They will not be filling Chinatown restaurants at lunch or standing in line for Sweetgreen salads.

Again, we don’t know exactly what the full extent of tax revenue depletion will be, but it promises to be substantial.

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The Mayor’s Office, City Council, and other civic, political, and business leaders must begin to think creatively about how to cope with the possibility of major, sustained revenue loss. One idea is to get businesses and property owners to donate resources  — real estate, money or other assets — to the city on the way out. Think of it as a “going away” gift. A city that battles poverty has provided these businesses with a wealth of creative workers, a terrific location, and close access to leading universities for years. As corporate leaders voice support for diversity, inclusion, and racial justice, city leaders should pressure them to put their money where their mouth is, literally. You cannot frame your business as a co-warrior in the fight against racism and inequality if you flee a city struggling with persistent poverty and a large racial wealth gap without so much as a “thank you.”

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This could be an opportunity for the city to work with partners to create new community hubs or job-training sites where Philadelphians can go to learn critical, 21st-century job skills. Think creatively, and act fast. We have to plan now in order to not be swallowed whole by the capital flight that could plague Philadelphia in the coming months and years.

But leveraging the help of critical community partners and businesses who are here to stay is not the only way this could work at a time when Philadelphia can’t afford any new costs.

Is it wild to think the Eagles, Phillies, Sixers, and Flyers could help contribute to these efforts in various ways? Connor Barwin, a former Eagles defensive end and current special assistant with the Eagles, seems ready to make a difference. His nonprofit, Make the World Better, is committed to revitalizing parks and public spaces in underserved communities.

Perhaps City Council could get to work this summer and skip their normal summer recess. These are extraordinary times. At least call in Barwin and other nonprofit leaders to begin discussing and creating a plan for effectively dealing with the coming capital flight brought on by the expansion of working from home.

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City Council must continue to combat the crises of COVID-19 and racial injustice and part of that is thinking about how we can recover from the next storm of capital flight.

Thomas Koenig is a recent graduate of Princeton University from Oreland, PA. He will be attending Harvard Law School in the fall of 2021.

Broke in PhillyWHYY is one of over 20 news organizations producing Broke in Philly, a collaborative reporting project on solutions to poverty and the city’s push towards economic justice. Follow us at @BrokeInPhilly.

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