Remote work in the Capital Region - Implications for the region and an inclusive recovery Prepared for the Greater Washington Partnership ...
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Remote work in the Capital Region Implications for the region and an inclusive recovery Prepared for the Greater Washington Partnership February 2021
Limitations and restrictions
The services performed by Ernst & Young LLP (EY US) in preparing this report for the Greater Washington Partnership (the Partnership) were advisory in nature. Our
scope of work was determined by the Partnership and agreed to by EY US pursuant to the terms of our engagement agreement. Certain analyses and findings in this
report are based on estimates and/or assumptions about future events that were provided by the Partnership. There will usually be differences between estimated
and actual results because future events and circumstances frequently do not occur as expected, and those differences may be material. We make no representation
of, nor do we take any responsibility over, the achievement of estimated or projected results. The findings and analyses contained in the report are based on data and
information made available to EY US through the date hereof. Should additional relevant data or information become available subsequent to the date of the report, such
data or information may have a material impact on the findings in the report. EY US has no future obligation to update the report.
Neither the report nor any of our work constitutes a legal opinion or advice. No representation is made relating to matters of a legal nature, including, without limitation,
matters of title or ownership, legal description, encumbrances, liens, priority, easements and/or land use restrictions, the validity or enforceability of legal documents,
present or future national or local legislation, regulation, ordinance or the like, or legal or equitable defenses.
The report is intended solely for use by the Partnership. While we believe the work performed is responsive to the Partnership’s request pursuant to the scope of work in
the SOW, we make no representation as to the sufficiency of the report and our work for any other purposes. Any third parties reading the report should be aware that
the report is subject to limitations, and the scope of the report was not designed for use or reliance by third parties for investment purposes, or any other purpose. We
assume no duty, obligation or responsibility whatsoever to any third parties that may obtain access to the report.
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CONTENTS
Glossary.................................................................................................. 1
1. Executive summary............................................................................. 2
2. The potential for remote work in the Capital Region ............................. 6
3. Remote work implications on migration ............................................... 12
4. Transport demand and mobility changes .............................................. 18
5. Smaller business impacts .................................................................... 24
6. Essential, frontline, retail, restaurant
and entertainment worker impacts ......................................................... 29
7. Conclusion .......................................................................................... 32
Appendix ................................................................................................ 33
Remote work in the Capital Region | Implications for the region and an inclusive recovery
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Glossary
Downtown/urban core. For ZIP code and cross-regional analysis, neighborhoods
within a five-mile radius of the central business district are classified as the
downtown/urban core. For county-level analysis within the Capital Region, cores
are subregional urban areas as defined by the Metropolitan Washington Council
of Governments.
Dual-person remote-capable households. Workers living in households where all
adult wage earners have the capability to work remotely. These households may
have more opportunities to relocate following a shift to remote work.
Essential workers. Occupations in critical infrastructure sectors as identified by
the US Department of Homeland Security such as public administration, utilities,
transport services, and agriculture and food production.
Frontline workers. A subset of essential workers whose jobs cannot be
performed remotely.
Full remote-work potential. The overall potential of jobs that can be completed at
home without consideration of willingness or desire to work remotely.
Non-remote, non-essential workers. A subset of non-remote-capable employees
who work in industries outside of critical infrastructure sectors as determined by
the US Department of Homeland Security.
People of color. Non-white, non-Hispanic workers.
Remote-capable. Occupations with work activities that can be easily done
anywhere, such as emailing colleagues, writing reports and analyzing data. It
excludes work contexts and activities tied to a worksite and tasks that require a
substantial degree of face-to-face contact.
Smaller business. Businesses with less than 50 employees.
Worksites. Physical work locations such as corporate offices, stores, factories and
facilities that are tied to an employer.
Remote work in the Capital Region | Implications for the region and an inclusive recovery
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1. Executive summary
The COVID-19 pandemic has accelerated the adoption of remote work across industries
and occupations, allowing remote-capable employees to work from the comfort and
safety of their homes. While the COVID-19-era prevalence of remote work will likely
not be maintained once the pandemic has subsided, data collected through external
surveys as well as the Greater Washington Partnership (the Partnership) and EY Capital
COVID-19 Snapshot shows greater levels of remote working will continue even after
herd immunity is reached, relative to pre-COVID-19 levels.1 2 3 4
If a quarter of the employees capable of working remotely approaches that put equity at the center and promote an
continue to do so after the pandemic, the impact of this inclusive economic recovery.
shift will be felt beyond just those working remotely.
Ernst & Young LLP (EY US) conducted this study at the
This new way of working may impact migration trends
request of the Partnership to assess the population and
throughout the region, commuting and transit patterns,
makeup of remote-capable jobs in the Capital Region,
the demand for goods and services provided by smaller
the degree to which employees in these positions might
businesses, and employment and career opportunities for
work remotely and the potential impacts of sustained
both remote and non-remote workers. To address these
remote work scenarios on the region’s transportation
changes, policymakers and community leaders need to
system, smaller businesses and non-remote workers. For
understand the potential for sustained remote work in the
the purposes of this study, the Capital Region is defined
Capital Region as well as the benefits and challenges it
as the Baltimore-Columbia-Towson, MD; Richmond,
will present.
VA; and Washington-Arlington-Alexandria, DC-VA-MD-
The increased prevalence of remote work is expected to WV metropolitan statistical areas, which, at this scale,
disproportionately impact the region’s most vulnerable represent the third-largest economy in the US and seventh-
and underserved communities. Better understanding the largest in the world with more than 10 million residents,
differential impacts of these shifts on distinct communities 188,000 employers and 5 million workers.
will allow leaders to develop targeted policies and
Remote work in the Capital Region | Implications for the region and an inclusive recovery
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Executive summary
Remote work scenarios
This study considers two potential remote work scenarios following recovery from the COVID–19 pandemic, with different
shares and frequencies of workers performing their duties remotely. The two scenarios are built on surveys gauging the
likelihood of sustained remote work. The degree and speed at which remote workers return to physical worksites in the coming
years will depend on other factors outside of this study’s bounds (e.g., pace of vaccinations, community transmission rates,
advances in technology).
“Substantial shift” scenario “Moderate shift” scenario
The first scenario assumes a substantial shift to remote work The second scenario anticipates 24% of the region’s remote-
where 28% of the region’s remote-capable workers work capable workers work remotely at least once a week and 15%
remotely at least once a week and 17% live in dual-person live in dual-person remote-capable households. Fourteen
remote-capable households, meaning all primary income percent of the region’s employees work remotely 3-5 days
earners may work remotely at least some of the time. This per week. This scenario represents nearly three times the
scenario is a five-fold increase from before the pandemic, number of workers spending most of their time working
with the possibility of 18% of the region’s workforce, or more remotely compared with before the pandemic.
than a million people, working remotely 3-5 days per week.
Remote work in the Capital Region | Implications for the region and an inclusive recovery
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Executive summary
KEY FINDINGS The EY team analyzed the potential implications of sustained remote work in
the Capital Region on the population of potential remote-capable workers, the
spread of remote-capable jobs across the region, changes to transportation
demand, and the impacts to smaller businesses and essential, frontline and
workers from other sectors who are not capable of working remotely in the
region. These issues were analyzed for two remote work scenarios. Key
findings from the study are summarized below.
Potential for remote work in the Capital Region Transport demand and mobility changes
• Compared with its peer regions, the Capital Region has • Trips taken for non-commute purposes represent the
the nation’s second-largest pool of potential remote vast majority (over 75%) of trips taken in the region.
workers, behind the San Francisco Bay Area.5 The These are unlikely to change in the near term under
number of remote workers in the region may increase five- a future remote working scenario, meaning high-level
fold from levels experienced before the pandemic, with the mobility patterns in a post-COVID–19 scenario are likely to
possibility of more than a million workers (18% of the total be broadly similar to the pre-COVID–19 baseline.
workforce) spending 3-5 days per week off-site. • The region’s residents use transit more for commuting
• New hybrid ways of working are more likely to emerge than other modes, such as driving. For example, while
than a shift to full-time remote work. For remote-capable over 40% of transit riders are commuters, only 25% of
employees, it is unlikely that all will work remotely full-time. driving trips are commute trips. This means that a shift
Rather, these employees may work some of the time at toward remote work may have a disproportionate impact
worksites, with the remaining time spent working remotely. on key commuting modes such as rail, subway and bus.
These shifts to distributed worksites may have significant • Fewer commute trips could have significant, lasting
implications for the Capital Region, including talent implications for existing state and transit agency
recruitment and retention, office space demand, housing revenues. Remote work in the Capital Region is likely
costs, transport plans and investments, and urban and to cause a shift toward non-commute trips, potentially
suburban vitality. leading to a significant reduction in farebox revenues
for transit operators. Analysis of potential remote work
Remote work implications on migration scenarios suggests transit providers in the Capital Region
• The future of remote work is unlikely to be uniformly could experience a significant reduction in fare revenues,
experienced across the region. For example, the District’s translating to a reduction of up to 5% of total revenues.
downtown/urban core and surrounding neighborhoods Revenue sources linked to vehicle miles traveled – notably,
have the highest share of remote-capable residents, while motor fuel taxes – would also be vulnerable to a decline
Baltimore and Richmond have a larger concentration of given a structural shift toward remote work.
remote-capable residents in suburban communities.
• Existing data does not reveal large-scale migration from
the Capital Region but suggests potential shifts within
the region. While new home inventories have declined in
the region overall, a 2% decline in home listing prices in the
District core as opposed to a slight increase in downtown/
urban core Baltimore and Richmond points to a potential
reallocation of workers within the region.
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Executive summary
Smaller business impacts Essential, frontline, retail, restaurant and
• Smaller businesses in downtowns/urban cores will likely
entertainment workers impact6
suffer from changes in consumer foot traffic under both • Increased remote work may exacerbate existing
remote work scenarios. An increase in flexible working inequalities along educational divides. Frontline workers
arrangements and more days spent at home will decrease generally have lower levels of educational attainment,
spending on meals, shopping and entertainment around with 39% holding a bachelor’s degree or above compared
the workplace. This could disproportionately impact smaller with 46% of the overall workforce. This disparity is more
businesses around workplaces, particularly in dining, pronounced for restaurant and retail workers, of which
entertainment and retail, that rely on revenue generated 16% have a college degree. Given the association between
from the increased daytime population of the downtown/ remote work potential and educational attainment, non-
urban core. remote workers are less likely to have the skills necessary
to transition to remote-capable occupations without
• Smaller businesses in residential districts may benefit
additional training.
from a shift in consumer spending, but to a lesser
degree. Work from home is not likely to result in a dollar- • People of color are disproportionately impacted
for-dollar shift of consumer spending to residential by changes to employment opportunities for non-
districts. For example, remote workers may shift to eating remote workers in industries not deemed “essential”.
self-prepared meals when working at home rather than Unemployment remains high for workers in these
purchasing meals near an office. occupations. People of color account for 61% of non-
essential, non-remote workers compared with 46% of the
• Smaller businesses owned by people of color may
overall workforce.
be more negatively impacted due to changes in
consumption demand. Nearly half of all Latinx-owned and
almost 60% of Black-owned small businesses nationally
were found to have liquidity concerns in 2019 by the
Federal Reserve Bank of Atlanta, as compared with only
31% of all small businesses reporting similar levels of
financial distress.
While these key findings reference the Capital Region as a whole, the EY team recognizes that the
region is not homogeneous. Therefore, the benefits and challenges of remote work scenarios may be
experienced differently across the region. When possible, the report draws distinctions between the
three metro areas as well as downtowns/urban cores and suburban areas.
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2. The potential for remote
work in the Capital Region
Within several weeks, the COVID-19 pandemic transformed the landscape of remote
work for millions of residents in the Capital Region. Nearly all workers who could
feasibly work remotely did so at the start of the pandemic in spring 2020, with many
continuing to work remotely in 2021. This section examines the extent to which that
trend may continue.
Few individuals had experience with working government and tech workers in the Capital Region
remotely prior to the pandemic. composed a larger share of the remote workforce than the
country overall (5% of government workers and 10% of
Prior to the initial shutdown of non-essential businesses in
computer and math occupations in the region, compared
March 2020, only 5% of the region’s residents worked from
with 2% and 7%, respectively, nationwide).
home full-time.7 The few individuals who regularly worked
from home were concentrated in higher-skilled industries
and jobs. These workers have been disproportionately
The pandemic increased the number of
white (68% of full-time remote workers were white, employees temporarily working at home
compared with 54% of the region’s overall workforce). sevenfold across the country.
More than a quarter of these employees worked in Nationally, the Bureau of Labor Statistics (BLS) found
professional, scientific and technical services, with workers more than 35% of all employed workers worked at home
in management, business and financial operations, and due to the pandemic in May 2020 compared with 5%
computer and math representing more than half of all in February, a sevenfold increase. Yet, the shift toward
remote jobs. remote work was not uniform across occupations and
industries. More than 60% of employees in finance,
The composition of the Capital Region’s professional services and IT worked from home in May
remote workers closely mirrored 2020. The largest gains in remote work were in education,
national averages. where the sudden shift toward distance learning resulted in
more than 76% working at home, compared with 3% before
While different industries and occupations had varying
the pandemic.
degrees of remote work prior to the pandemic, the starting
point across the region and nation was low. However,
Remote work in the Capital Region | Implications for the region and an inclusive recovery
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Potential for remote work
The share of employees
working remotely has National shift in remote work from May to November 2020
decreased nationally
since May 2020 but November vs. May 2020
remains elevated. National (overall) 22% 35%
As lockdowns eased, many Finance and insurance 50% 67%
workers started to return to the Professional, scientific, technical services 50% 64%
office. However, nationally, there
Information 43% 61%
remained more than four times
Educational services 40% 76%
as many people working remotely
as of November 2020 compared Public administration 34% 45%
with prior to the pandemic, as Utilities 27% 37%
illustrated in the chart to the right. Mining, quarrying, oil and gas extraction 22% 32%
While nearly all industries saw a
Real estate, rental and leasing 22% 42%
precipitous rise in remote workers,
the opportunity to work remotely Wholesale trade 20% 31%
has been clustered in industries with Manufacturing 20% 30%
higher wages. Arts, entertainment, recreation 18% 38%
Health care and social assistance 17% 25%
The Capital Region saw a Retail trade 9% 17%
similar sudden rise in the
Transportation and warehousing 8% 12%
number of remote workers.
Construction 8% 15%
According to the Partnership’s
Accommodation and food services 5% 8%
Capital COVID-19 Snapshot, the
Agriculture, forestry, 4% 7%
number of remote workers in the fishing, hunting
region increased to 59% in August Source: EY analysis, Bureau of Labor Statistics Current Population Survey – Supplemental data measuring the
2020. By December 2020, 79% effects of the coronavirus (COVID–19) pandemic on the labor market.
of workers were spending at least
some time at home with 58%
working remotely full-time.8
Substantial shift to remote work scenario
Share of working population
The Capital Region has the
second highest share of Estimated remote work by days per week
remote working potential
among major metro area Capital Region 21% 10% 18% 49%
peers, with 49% of jobs
National average 18% 8% 12% 38%
considered remote-capable.
Compared with the region’s peers, Boston 21% 10% 17% 48%
only the San Francisco Bay Area
has a slightly higher proportion of
Los Angeles 18% 9% 13% 40%
remote-capable jobs (50%). These New York 21% 9% 15% 45%
estimates likely reflect the unique
compositions of talent across Greater San 50%
Francisco
20% 10% 20%
different metro areas, with larger
shares of tech jobs in Greater San Less than 1 day 1—2 days 3—5 days
Francisco and Boston than Los
Source: EY analysis, 2014-2018 American Community Survey 5-year Public Use Microdata Sample,
Angeles and New York. Occupation Information Network (O*NET).
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Share of employees who can work remotely in the Capital Region
by industry
Pre-pandemic remote-work Substantial shift to remote-work scenario Full remote-work potential
Professional, scientific, 11%
58%
technical services 85%
7%
Finance and insurance 56%
83%
Management of 6%
companies and 50%
enterprises 80%
9%
Information 45%
67%
2%
Public administration 42%
68%
Real estate, rental 11%
34%
and leasing 62%
7%
Wholesale trade 32%
64%
2%
Utilities 24%
41%
7%
Arts, entertainment, 24%
recreation 44%
6%
Other services 24%
46%
5%
Manufacturing 23%
40%
3%
Mining, quarrying, 22%
oil and gas extraction 36%
3%
Educational services 22%
81%
6%
Administrative support, 17%
waste management services 30%
Health care and social 4%
17%
assistance 34%
13%
Agriculture, forestry, 5%
fishing, hunting9 10%
3%
Transportation and 10%
warehousing 20%
4%
Construction 9%
17%
3%
Retail trade 8%
15%
1%
Accommodation and 4%
food services 8%
Source: EY analysis, 2014-2018 American Community Survey 5-year Public Use Microdata Sample, Occupation
Information Network (O*NET). Industries sorted by share of workers who are remote-capable under the substantial
shift scenario.
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Remote work opportunities are clustered in Government and STEM professionals will
higher-wage and higher-skill industries. likely see large gains in the opportunities to
These occupations include IT, business, finance, law and work remotely.
management, where workers spend a large amount of time Some of the largest gains in remote work opportunities
interacting electronically with coworkers and clients and compared with before the pandemic will likely be clustered in
can work remotely without losing productivity or efficiency. government and STEM jobs. Two in five federal government
Industries that require more generic skills — as proxied by the workers may spend some time at home, with smaller shares
share of workers without a college education — have fewer of state and local public-sector professionals working
opportunities for remote work (as shown in the figure below). remotely. STEM workers, in particular, may see a considerable
shift to remote work, with nearly three in four workers
spending the occasional day working remotely.10
Correlation of remote work potential and educational attainment in the Capital Region
Professional,
Remote work potential Management of scientific, technical
100% companies and enterprises services
less more
Size = potential Finance and insurance
workers affected
Remote work potential (% of workers)
(thousands)
75%
Real estate, rental Educational
600 and leasing services
Wholesale trade Information
400 Public administration
Other services
200 50%
Manufacturing Arts, entertainment, recreation
Administrative support,
waste management services Utilities Health care and
social assistance
25% Transportation and warehousing Mining, quarrying, oil
and gas extraction
Construction
Retail trade
Accommodation Agriculture, forestry,
and food services fishing, hunting
0% 20% 40% 60% 80%
Educational attainment — bachelor’s degree and above (% of workers)
Source: EY analysis, 2014-2018 American Community Survey 5-year Public Use Microdata Sample, Bureau of Labor Statistics Occupational Employment
Statistics, Occupational Information Network (O*NET).
Remote work in the Capital Region | Implications for the region and an inclusive recovery
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Remote work potential for the Capital Region’s public- Remote work opportunities for
sector professionals STEM workers
74++P
Working remotely 3—5 days per week of these workers
Pre-pandemic could benefit
Government employees
full-time
remote work
Moderate shift
scenario
Substantial shift
scenario 74% from remote work
opportunities under
Federal government 3% 25% 30% the substantial
shift scenario
State government 2% 11% 19%
Local government 4% 6% 8% times greater than the
Source: EY analysis, 2014-2018 American Community Survey 5-year Public Use Microdata Sample.
10½ 7% of these employees
working remotely prior
to the pandemic
The importance of collaboration may ultimately dictate how
frequently remote-capable employees work on-site. Remote-capable workers in
Accounting for the importance of collaboration in remote-capable jobs, we estimate the Capital Region can save
two scenarios where some remote-capable workers split their time between remote up to 11 days per year in
locations and worksites. Specifically, we anticipate that individuals in remote- commuting time on average.
capable jobs that require a high degree of interpersonal activity (e.g., team building, Under both the moderate and
interaction with others and face-to-face contact with external customers) may want substantial shift scenarios, remote-
to spend more time in offices following the end of the pandemic, compared with capable workers would experience
jobs where collaboration is less important. time savings by avoiding the daily
commute. Collectively, the Capital
Over the long run, the number of remote working days will vary Region would save nearly 30
across industries and occupations. million days per year in commute
time under the substantial shift
Once health concerns subside, certain industries will likely see a faster return
scenario, allowing for improved
to worksites due to the social dimension of their jobs. A desire to confront
work-life balance and a reduction in
employee isolation may encourage remote-capable workers to spend fewer days
carbon emissions.11
at home. This is particularly true for jobs that prioritize in-person communication,
knowledge-sharing and a high-degree of collaboration. For example, it is expected
that primary and secondary school teachers will not continue to work remotely in
large numbers.
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Remote work opportunities are
The remote-capable divide in the Capital Region under the distributed inequitably across
substantial shift scenario
demographic and socioeconomic
Remote work opportunity by ethnicity
backgrounds in the Capital Region.
Remote work has rapidly advanced across
Percentage of current workers within demographic groups who can
the region, but the opportunities to work
56++P 41++P 56++P 28++P
work remotely
remotely disproportionately disadvantage
people of color in the workforce. Black
and Latinx workers will be less likely to
56% 41% 56% 28% work from home under the substantial
shift scenario (41% of Black workers and
28% of Latinx workers compared with 56%
White Black Asian Latinx of white workers). The lack of diversity in
remote work opportunities may pose new
Characteristics of remote-capable workers challenges for people of color as companies
Percentage of remote- and non-remote-capable workers by demographic and prioritize new working arrangements in
socioeconomic characteristics favor of higher-skilled, remote-capable
Of all workers who are ... workers, who are predominately white
and Asian.
Remote-capable Non-remote-capable
People of color
38% 52% Black and Latinx communities may
confront a skills gap in the shift
Women
52% 46% toward remote work.
Remote work requires specialized and
Education (bachelor’s
degree and above) 67% 31% technical skills, as demonstrated by the
fact that 67% of remote-capable workers
Below 200% of federal
poverty line 6% 19% have a bachelor’s degree and above.
These jobs are generally associated with
44 40
higher wages and lower levels of poverty.
Median age
Only 6% of remote-capable workers are
below 200% of the federal poverty line
Source: EY analysis, 2014-2018 American Community Survey 5-year Public Use Microdata Sample.
compared with 19% of non-remote-capable
workers. The skills needed for remote
Women appear to have equitable remote work opportunities, work may pose challenges for the Capital
but disparities are seen at the industry and occupation levels. Region’s Black and Latinx workers, where
two-thirds of Black employees and three-
For example, women are more likely to be in health care and social assistance
fourths of Latinx employees do not have a
as well as educational services compared with men. These industries have
college degree.
smaller percentages of sustained remote work potential.
Remote work in the Capital Region | Implications for the region and an inclusive recovery
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on migration
Remote work has great potential to impact daily life and migration patterns of
households for those who formerly commuted to an office or physical workplace on a
regular basis. Moreover, remote-capable workers reside in certain neighborhoods of the
Capital Region. This clustering of remote-capable households means that the changes in
daily life, commuting, housing needs and consumption may not be evenly distributed.
This section analyzes the distribution of remote-capable workers across the Capital
Region and potential implications on migration.
Remote-capable individuals may seek out The future of remote work is unlikely
more affordable housing options farther away to be uniformly experienced across the
from their worksites. Capital Region.
The highest share of remote-capable workers in the Remote-capable workers in Baltimore and Richmond
Washington metro area live in or near the District’s are more likely to reside in suburban areas instead of
downtown/urban core, Northwest DC, northern Arlington neighborhoods near the metros’ central business districts.
County, and the Bethesda and Potomac areas of In Baltimore, the highest shares of remote-capable
Montgomery County. While these areas offer convenient households are in the suburban communities of Howard
access to work and urban amenities, properties are and Anne Arundel Counties, where 22% of workers live
generally smaller, accompanied by higher rent burdens. in remote-capable households. In Richmond, there is
Within DC’s downtown/urban core, nearly 30% of similarly a higher share of remote-capable households in
residents are in households where all adults can work the Tuckahoe, Short Pump and Wyndham neighborhoods
remotely under the substantial shift scenario. Some in Henrico County, with 32% of workers living in remote-
of these households may prefer more space and less- capable households under the substantial shift scenario.
expensive neighborhoods. While it remains to be seen whether remote work will
cause large-scale migrations both from and within the
Capital Region, the variation in clustering of where
remote workers live across the three metros will likely
lead to different mobility trends throughout the region.
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Demographic and socioeconomic characteristics of the Capital Region’s workforce by
0+0+332225
residential neighborhood
Baltimore metro area Median gross rent Median annual income
Downtown/urban core
(5-mile radius) Baltimore metro area $1,383 $49.9k
Central Business District
Downtown/urban core $1,283 $44.6k
Top three remote-
capable neighborhoods
$1,788 $65.8k
Education (bachelor’s degree and above)
42++P 41
42 41++P 57
57++P
Share of remote-
capable workers
20%—30% 42% 41% 57%
31%—40%
41%—50%
51%—60% Baltimore Downtown/ Top three remote-capable
metro area urban core neighborhoods
61%—70%
Outside of
Baltimore
Ethnicity
metro area Black Latinx White
Neighborhoods with
highest shares of remote-
capable workers*
Baltimore metro area 26% 6% 61%
Elkridge Downtown/urban core 39% 5% 49%
Ellicott City
Top three remote-
Columbia capable neighborhoods 21% 7% 56%
0+0+373328
*The three highest remote-capable neighborhoods are in suburbs of Howard and Anne Arundel County.
Richmond metro area
Median gross rent Median annual income
Share of remote-capable workers
20%—30% Richmond metro area $1,190 $55k
31%—40% Downtown/urban core
41%—50% (5-mile radius) Downtown/urban core $1,158 $66k
51%—60%
Central Business District Top three remote-
61%—70%
capable neighborhoods
$1,303 $75k
Outside of Richmond
metro area
Neighborhoods with highest shares Education (bachelor’s degree and above)
37++P 44
37 44++P 46
46++P
of remote-capable workers*
Wyndham
37% 44% 46%
Richmond Downtown/ Top three remote-capable
metro area urban core neighborhoods
Ethnicity
Black Latinx White
Richmond metro area 28% 5% 60%
Bandermill and Woodlake
Downtown/urban core 39% 6% 50%
Short Pump
Top three remote-
capable neighborhoods
13% 5% 74%
Tuckahoe
*The three highest remote-capable neighborhoods are Tuckahoe, Short Pump and Wyndham in Henrico County; Bandermill and Woodlake in Chesterfield County.
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0+0+373328
Washington, DC metro area Median gross rent Median annual income
Share of remote-capable workers
20%—30% Washington metro area $1,923 $55.4k
Downtown/urban core
31%—40% (5-mile radius)
41%—50% Downtown/urban core $1,986 $66.5k
51%—60% Central Business District
Top three remote-
61%—70%
capable neighborhoods
$2,005 $74.5k
Education (bachelor’s degree and above)
51++P 68
51 68++P 72
51%
72++P
Washington
metro area
68%
Downtown/
urban core
72%
Top three remote-capable
neighborhoods
Ethnicity
Neighborhoods with highest Black Latinx White
shares of remote-capable workers* Washington metro area 23% 14% 50%
Northern Arlington County
Downtown/urban core 26% 13% 52%
Georgetown and Northwest DC
Top three remote-
Downtown District, Dupont Circle,
capable neighborhoods
22% 9% 58%
Adams Morgan
*The three highest remote-capable neighborhoods are in central and western wards of the District along with northern Arlington County and the Bethesda and
Potomac neighborhoods of Montgomery County.
Source: EY analysis, 2014-2018 American Community Survey 5-year Public Use Microdata Sample.
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Housing inventory data may suggest migration At the metro level, there is only a weak
within the Capital Region rather than outward association between remote work capability and
migration from the region. increased housing supply.
In the initial months following the onset of the pandemic in Remote work has increased opportunities to move away
spring 2020, single-family home inventories declined across from larger metros, but there has so far been only a
the Capital Region and among the region’s peers. However, moderate correlation between the share of remote workers
since July 2020, new housing supply has diverged between and increased inventories. San Francisco and New York are
cities. Among the region’s peers, San Francisco and New York notable exceptions, yet, within the Capital Region, differences
have seen steep rises in inventories, with a more than 100% are apparent. Like other large metros, inventory drops have
growth in supply in San Francisco year over year in August. been slower in DC (down 24% in December 2020 compared
There have been more moderate increases in new supply in with the previous year) than in Baltimore (-47%) and
Los Angeles and Boston, but new supply in the Capital Region Richmond (-60%), which suggests that migration patterns
continues to decline, with 44% less inventory in December after March 2020 are not uniform across the region.12
2020 compared with the previous year. The charts below
show inventories have shrunk overall following the pandemic,
suggesting that the Capital Region is not experiencing a
large-scale shift away from the region.
Change in home inventories
February—December 2020 (year-over-year growth)
The Capital Region and peer metro areas Metro areas within the Capital Region
120% 0%
100%
-10%
80%
-20%
60%
40% -30%
20% -40%
0%
-50%
-20%
-60%
-40%
-60% -70%
Feb Dec Feb Dec
San Francisco New York Los Angeles Washington, DC Largest metros* Smaller metros*
Boston Capital Region Baltimore Richmond
Source: EY analysis, Redfin.com
* Largest metros include the 25 most populous metro areas nationally. Smaller metros include the remaining 100 most populous metro areas nationally.
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Housing costs may provide an early indicator
of the impacts of remote work-driven migration Rental price index in downtowns/urban cores
across the region. (year-over-year growth)
Since February 2020, growth in rental prices in Washington, Percentage point difference
DC’s downtown/urban core has fallen 2.3% year over year February—November 2020
compared with stable prices in Baltimore’s downtown/urban Baltimore Richmond Washington, DC
core and a 1% increase in Richmond’s downtown/urban core.
This suggests a more complicated story than a large-scale 0.03% 1.0%
migration from densely populated neighborhoods. Compared
-2.3%
with the region’s peers, rental prices are not decelerating
at a similar rate, with considerable declines in rents in the
downtowns/urban cores of San Francisco (-28.7%) and New
York (-8.9%) compared with a more moderate deceleration in
Boston (-3.7%) and Los Angeles (-1.6%). Source: EY analysis, Zillow Observed Rent Index (ZORI).
Washington, DC area home listing prices show
an increased preference for distant suburbs
and a decreased preference for downtown/ Median home listing price
urban core homes. (year-over-year growth)
Within the downtown/urban core of the District, median Percentage point difference
listing prices fell by 2.2% year over year from February to February—November 2020
November 2020, compared with a 1.1% decline for homes
Baltimore Richmond Washington, DC
within 20 miles and a 0.1% increase for homes in outer
suburbs (20-49 miles from the business district).13 This 2.1% 2.1%
divergence between the District’s downtown/urban core
and suburban communities broadly corresponds with the 0.4%
0.1% 0.1%
locations where remote workers reside in the DC metro area.
-0.6%
-1.0% -1.1%
By contrast, downtown Baltimore and Richmond
have seen growth in their median listing prices -2.2%
since the start of the pandemic.
Downtown/urban core Near suburbs Outer suburbs
In Baltimore, we see slowing growth rates in home listing Source: EY analysis, Redfin.com.
prices in suburban areas where remote workers reside and
a modest acceleration in prices in downtown Baltimore.
In Richmond, year-over-year growth rates have seen a 2%
increase from February 2020, which suggests increased
demand for more affordable areas throughout the region.
The varying growth rates in median listing prices between
urban and suburban areas throughout the Capital Region
adds further evidence for a reallocation of residents within
the region, rather than an outward migration.
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A substantial shift in remote working may
Online real estate search interest increase relocation within the Capital Region.
(year-over-year growth)
Online search interest in real estate listings may be a
Percentage point difference meaningful proxy for future interest in moving under the
February—November 2020
remote work scenarios.14 ZIP codes in the downtown/urban
Baltimore Richmond Washington, DC core of Washington, DC saw a 11.9% decrease in search
16.6%
interest from February to November 2020 compared with a
10.8% 1% decrease in the near suburbs and a 1.4% appreciation in
8.1% the outer suburbs. Search interest reveals a larger interest
1.3% 1.5% 0.7% 1.4% within Baltimore City and its outer suburbs but only slightly
increased interest in downtown/urban core Richmond and its
-1.0%
outer suburbs.
-11.9%
A structural shift in remote working provides
Downtown/urban core Near suburbs Outer suburbs
new residence location options for about
Source: EY analysis, Realtor.com market hotness index
a quarter of dual-person remote-capable
households in the District’s downtown/
urban core.
It is estimated that 24%–27% of individuals living in the
District’s downtown/urban core live in households where
all working adults are in remote-capable jobs. The added
flexibility of remote work provides these households
with increased opportunities to seek different housing
options throughout the Capital Region for various reasons,
including affordability.
Remote work in the Capital Region | Implications for the region and an inclusive recovery
17 Reliance restricted; prepared solely for the Greater Washington Partnership. Does not constitute assurance or legal advice. Please refer to limitations and restrictions on page I.4. Transport demand and
mobility changes
Public health concerns and increased opportunities to work from home led to a
significant decline in mass transit usage and the driving of personal vehicles early in the
pandemic. While rates of driving have gradually recovered to near pre-pandemic levels,
transit usage is still historically low. Rail ridership is still down by more than 80% and
bus ridership down by more than 50% on Washington’s Metro system as of January
2021, with continued (although slightly less severe) declines for rail and bus systems in
the Baltimore and Richmond networks.15 16 17
As workplaces reopen, people and companies have This section analyzes the degree to which reduced
expressed anxiety over the health readiness of public commuting from increased remote work could lead
transport, creating an additional near-term strain on to reduced overall demand on the transportation
already-stressed transit agency budgets. The fear of infrastructure for the region. The analysis also includes
transit during the pandemic may potentially lead to a a high-level range of estimates for the potential revenue
long-term uptick in car usage. Even in a post-vaccine impacts. Several elements of the region’s mobility baseline
environment in which health concerns on public transit will affect how a shift toward remote work could manifest
are a diminished concern, a long-term shift toward remote and are discussed in the following section.
work could permanently reduce the level of commute trips
in the region.
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Normalized trip trends for the Capital Region
By mode (seasonally adjusted for 2020)
150%
Driving
100%
Walking
50%
Transit
Stay-at-home order
0% MD
DC
VA
Jan Mar May Jul Sep Nov
Sources: Apple Mobility, US Bureau of Transportation Statistics
Normalized vehicle miles traveled
By metro area (seasonally adjusted 2020)
120%
Richmond
metro area
100%
Baltimore
metro area
80%
Washington, DC
60% metro area
40%
Stay-at-home order
MD
DC
VA
Jan Mar May Jul Sep Dec
Source: INRIX
Trip numbers declined substantially across all Vehicle miles traveled for the region remain
modes during the early stages of the pandemic below the seasonally adjusted baseline but have
in April—May 2020. trended toward recovery.
The level of reduction indicates that both commute and non- Vehicle miles traveled reduced significantly relative to their
commute trips were impacted. Transit experienced both the seasonal average, particularly during the April-June period,
steepest and the most persistent decline in trips, likely due and largely remained below the baseline through 2020. A
to safety concerns and to transit’s role as a more commuter- slightly higher recovery in the Richmond metro area may
oriented mode. While the number of trips for driving and reflect the slightly higher average share of non-commute
walking modes saw a recovery and potentially a slight trips as a fraction of all trips in outer suburb areas relative
increase relative to the baseline, this did not mitigate an to inner and core zones, consistent with the lower average
overall decline in seasonally adjusted vehicle miles traveled. density in Richmond’s surrounding areas.
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Non-commute trips are the major mobility driver
for the region. Total commute vs. non-commute trips
Even prior to the pandemic, trips in the region were primarily
76+24+O
Total commute trips (2019)
made for purposes other than commuting, with commute
trips making up only about a quarter of all trips in 2019. 24%
Given that non-commute trips — which are more likely to
be taken by driving rather than transit — are unlikely to be
Non-commute trips (baseline 2019)
affected by a long-term shift toward remote work, these trips
76%
are likely to both recover faster and return to levels closer to
the pre-COVID-19 baseline than commute trips.
Since commuters tend to use different modes than non-
commuters — in particular, commute trips are more likely to Sources: EY analysis, 2014-2018 American Community Survey 5-year
Public Use Microdata Sample, US Bureau of Transportation Statistics
be by transit — this dynamic has important implications for
mode share in potential recovery scenarios.
some environments than others, which in turn has modal
Slightly less than half of the region’s commuters implications: if trip numbers recover faster in the outer
hold positions that could potentially be suburbs — where travelers are overall much more likely to
conducted through remote work. drive, for example — the region would see an overall shift
They represent the maximum proportion of commute toward driving.
trips that could be lost due to a permanent shift
toward teleworking.18 Some modes — particularly subway and rail —
are much more likely to be used for commuting
Where trips originate affects what types of trips than others.
travelers are likely to take. What mode residents rely on depends on what type of trip
Both the proportion of commute trips vs. non-commute they are taking. This means that some modes are used
trips and the proportion of remote-capable jobs vary based primarily for non-commute trips, such as walking or biking,
on where travelers are starting — travelers in the outer while others have a much higher share of commuters.
suburbs, for example, tend to take more non-commute While only about a quarter of car trips are commute trips,
trips than those in the region’s core areas. This implies that 38% of subway/rail trips and 45% of bus trips are made
trips are more likely to recover to pre-COVID-19 levels in by commuters.
Commute (non-remote and remote-capable) and non-commute trips by mode
76+10+14M 62+2612M 55+1629M 84+106M 92+35M
6% 4%
Non-remote 14% 12% 29%
10% 3%
10% 26%
Remote work-
Car Subway/rail Bus Bike Walk
capable
16%
Non-commute
76% 62% 55% 84% 92%
Sources: EY analysis, 2014-2018 American Community Survey 5-year Public Use Microdata Sample, US Bureau of Transportation Statistics.
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Different transportation modes are used by Some modes are more likely than others to
different types of commuters in the region. serve remote-capable commuters, with some
For example, subway ridership is heavily skewed toward variation based on where commuters live.
remote-capable jobs — 68% of subway riders hold jobs that For instance, car commuters in areas outside the suburbs
could be conducted remotely. Buses and cars, on the other are, on average, less likely than car commuters in urban core
hand, are more likely to be used by commuters who cannot areas to be able to conduct their jobs remotely, potentially
conduct their job remotely — only 35% of bus commuters indicating that commute-driven vehicle miles traveled
have remote-capable jobs. This indicates that some types of are likely to recover faster in the outer suburbs. Subways
public transit operators are more likely than others to see a are used predominantly by remote-capable commuters
long-run ridership impact from shifting remote work patterns, across geographies. Bus ridership shows considerably
even in a post-vaccine environment. more variation, with bus commuters in outer suburb areas
significantly more likely to hold remote-capable jobs (63%)
than bus commuters in any other geographies.
Percentage of commuters by area and commute mode who are remote-capable
Of commuters who ...
Travel by ...
Car Subway/rail Bus Bike Walk
Core 44% 69% 34% 69% 54%
Live in ...
Inner suburb 45% 67% 29% 49% 34%
Outer suburb 41% 71% 63% 31% 29%
Other 34% 64% 52% 26% 30%
Percent remote-capable
Data sources: EY analysis, 2014-2018 American Community Survey 5-year Public Use Microdata Sample, Metropolitan Washington Council of Governments
county classifications.
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21 Reliance restricted; prepared solely for the Greater Washington Partnership. Does not constitute assurance or legal advice. Please refer to limitations and restrictions on page I.Transport demand and mobility changes
The region may see a shift
toward non-commute trips Scenario analysis: commute and non-commute trips
as a result of a trend toward
increased remote work.19 Total trips -25% -7% -5%
46.2m 34.4m 43m 43.7m
While safety concerns at the height of
the pandemic appear to have driven a 11.3m -42% -28% -22% Local commute trips
reduction in both commute and non- 8.1m 8.8m
6.5m
commute trips, the largest reduction
34.9m 27.9m 34.9m 34.9m Local non-commute
was in trips to work. Commute trips trips
are also less likely to recover to
pre-pandemic levels if a significant
number of former commuters increase
their remote-work time. The scenario
analysis in the following three charts -20%
refers to the scenarios developed in
section 2. Baseline COVID–19* Substantial shift Moderate shift
to remote work to remote work
from the baseline from the baseline
Travel time reduction
Source: EY analysis, 2014-2018 American Community Survey 5-year Public Use Microdata Sample.
Commuters in the region could see a *Estimates based on May 2020
total travel time savings of up to 30%
as a result of a shift to remote work.
Remote-capable workers would benefit
from these time savings and road
Scenario analysis for total trips by mode, relative to baseline
users could benefit from congestion
Car Subway/rail Bus Bike Walk
relief, although benefits are unlikely
to be evenly distributed among the -2% -2%
region’s residents.
-5% -5%
A shift toward non- -6%
-7%
commute trips would have -8%
a disproportionate impact -10%
on transit. -13%
Fewer commute trips would have
implications for post-COVID-19 mode -17%
share and may mean that some of
Substantial shift to remote work from the baseline Moderate shift to remote work from the baseline
the reduction in transit ridership will
persist even after safety concerns are Source: EY analysis, 2014-2018 American Community Survey 5-year Public Use Microdata Sample, US Bureau of
Transportation Statistics, National Transit Database.
alleviated. Subway and rail ridership,
in particular, has been reliant on
commuters with remote-capable jobs.
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Fewer commute trips could have significant
long-term implications for farebox revenues Estimated range of percent reduction in
across transit providers, even in a post- total sources of transit agency operating
recovery scenario. funds (annual)
Even once the safety concerns of transit riders are addressed, Subway/rail Bus Total
both bus and subway/rail services could experience long-term
-0.5%
ridership reductions as a result of changing mobility patterns. -1%
This would impact transit operators across the region and
across modes, including local subway and bus networks as -3%
-3.5%
well as regional commuter rail systems.20 Overall, subway/
-4%
rail systems in the region could experience a fare revenue
reduction of 13%–17% under the scenarios considered, with -5%
bus systems potentially experiencing reductions of 8%–10%.
Substantial shift to remote work from the baseline
While the portion of total operating funds made up by fare
Moderate shift to remote work from the baseline
revenues varies across the region’s transit systems, on
average the region’s subway and rail systems could see Source: EY analysis, 2014-2018 American Community Survey 5-year
Public Use Microdata Sample, National Transit Database 2019 Agency
reductions of 3%–5% in overall operating funds, potentially Profiles, US Bureau of Transportation Statistics.
requiring additional financial support from federal, state
or local funding sources. Bus operators would likely see
less of an impact on average due to a smaller reduction
in fare revenues and less reliance on farebox sources as a
percentage of total revenues.
The revenue impact of both short- and long-run
VMT (vehicle miles traveled) reductions could
be significant.
It is estimated that the region lost upwards of $250 million
in gas tax revenue in 2020 as a result of VMT reductions,
primarily caused by a decrease in personal driving trips and
associated revenues (e.g., fuel tax, tolls). Similarly, Maryland
estimated a $116 million reduction in motor fuel tax revenue
for their FY 2020, a 14% reduction relative to the state’s pre-
pandemic estimates.21
While a long-term shift toward remote work would likely be
less dramatic than the shift experienced during the initial
months of the pandemic in 2020 — and would likely have less
of an impact on driving than transit in percentage terms — a
structural change in commuter driving trips could lead to
a corresponding structural reduction in long-term VMT-
linked revenues.
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