Telework Moved the Real Estate Market. Cities Are Still Figuring Out What That Means.
The relationship between where people work and where they live has been recalibrated. The GAO’s 2026 telework report synthesizes evidence from empirical studies and metropolitan planning organizations to map the real estate consequences — and they run in opposite directions depending on where you look.
In central business districts, the picture is one of contraction. Office vacancy rates climbed as hybrid schedules hollowed out weekday occupancy. A prior GAO report documented that between August 2022 and January 2024, prices fell across all commercial property types — office, multi-family, retail, lodging — with the single exception of industrial properties. Office properties in downtown cores were hit hardest. By September 2023, office prices outside six major metropolitan central business districts had surpassed prices within them. The six were Boston, Chicago, Los Angeles, New York, San Francisco, and Washington, D.C.
The San Francisco case carries an unexpected secondary effect. Representatives from the region’s MPO told GAO that high office vacancy rates have created openings for small businesses and nonprofits that could not previously afford downtown space. The pandemic and its aftermath effectively reset the entry price for central city real estate — an unintended redistribution of access that would have been inconceivable in 2019.
Outside downtown cores, the direction reverses. Four empirical studies reviewed by GAO found that increases in telework were correlated with increases in home prices outside central business districts, with the relationship holding for rental prices in at least one case. The mechanism is straightforward: workers with telework flexibility extended their geographic search radius. If a two-day commute replaces a five-day commute, a 90-minute drive from the office becomes viable. Communities that previously sat outside realistic commuting range saw demand arrive and prices rise accordingly.
MPOs described this pattern in concrete terms. One told GAO their region experienced a population surge from a nearby larger metro, attributable to teleworkers willing to commute longer distances less frequently. The National Association of Realtors’ 2024 survey data confirmed the pattern: both the distances people moved from their previous homes and their stated willingness to commute long distances increased during the pandemic and have not fully receded.
Policy responses at the MPO level include zoning revisions to encourage housing development, incentives for adaptive reuse of vacant commercial buildings, and broadband infrastructure investment to attract and retain remote workers. Thirty-nine percent of MPOs reported taking action to incentivize conversion of underutilized commercial buildings. Denver’s regional MPO cited a pilot program that assigned dedicated project coordinators to expedite permitting for office-to-residential conversions. The logic is the same across these efforts: office demand has structurally contracted, housing demand has shifted outward, and the built environment is adjusting slowly.
The mismatch between where housing supply exists and where demand has migrated is a planning problem as much as a market one. Transportation investment that was calibrated to move workers from suburban residences to downtown offices is now serving a population whose daily geography is more dispersed and less predictable.