In 1914, Ford Motor Company first offered workers $5 for an eight-hour workday, doubling the average factory pay at the time and creating broad societal reverberations that are often credited with
creating the middle class.
Now, Dave Dubensky, chairman and CEO of Ford Land, is anticipating that Ford may have a similarly massive impact again with its recent announcement that it would offer 30,000 employees the
chance to work from home permanently.
"If you think about the flexibility that this affords, maybe it's not at the same level as the $5 workday," Dubensky says. "But at some point, if you can spend more time with your family if you don't have to commute and we're giving you that freedom to set your own schedule, it could have a significant impact on employees' lives."
Similarly, last year Stellantis (formerly Fiat Chrysler Automobiles) announced plans for a "
new era of agility" involving increased remote work both during and after the pandemic, while General Motors has simply directed employees to "
work appropriately."
And the Big Three aren't the only ones. Numerous Metro Detroit employers have announced or are currently considering plans to preserve at least some remote work post-COVID-19, and that shift is likely to have significant and varied effects on the area. More than just increasing the likelihood that you'll continue taking Zoom meetings from your kitchen table, the change will affect everything from traffic to real estate to housing.
"There's no endgame because we really don't know what that endgame is going to be," says Glenn Stevens, executive director of Detroit-based automotive industry association
MICHauto. "I think it's an evolution with different phases and people trying things out, but there's no question that there's going to be a shift."
Quieter commutes
One of the most immediate changes that's likely to result from the shift to more flexible work models in Metro Detroit is an easier commute. The Michigan Department of Transportation reported that there were about
18% fewer people on the road last year than in 2019, and that shift was especially visible in high-traffic areas like Metro Detroit. Traffic has rebounded as people have returned to work, but in many places, it still hasn't gotten back to pre-pandemic levels – and perhaps never will.
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Photo by David Lewinski
"We could very well see some shaving of the peak travel volumes and congestion easing up," says Richard Murphy, program manager at the
Michigan Municipal League.
However, less commuting may not mean fewer overall trips or fewer vehicles on the road. Carolyn Loh, associate professor of urban studies and planning at Wayne State University, says people who have flexible or remote work models may choose to make more trips in the middle of the day.
"It might not reduce trips overall, but it might spread them out over a distance of time so they're not concentrated at rush hour," she says.
Loh and Murphy both predict that reduced commuting will also prompt some workers to choose to live farther from work. If they only have to commute three days a week, for example, many will be willing to accept a longer commute in exchange for cheaper or more spacious housing.
Loh notes that this is all likely to make public transit planning more complicated. Rush-hour service is a major priority for transit systems, but schedules may be more difficult to plan when riders' activity is more spread out through the day. And the possibility of more people living farther from work adds more challenges for the area's public transit providers, which already serve a sprawling metro area.
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"Trying to create a public transit system that serves that spread-out of an area is pretty tough and pretty cost-ineffective," Loh says. "So I think the better strategy ... is probably to try to focus development around transit nodes ... and allow for more housing along bus lines and train lines, if we ever build train lines. I think it's just really, really hard to adequately serve that spread-out of a population with buses."
The auto industry seems unconcerned with a likely reduction in commuting. Stevens says there's "no question" that the changing nature of work will impact traffic flows, but the new vehicle market has largely
rebounded since an early-pandemic crash – and used car sales have
boomed during the pandemic. Stevens predicts that interest in electric vehicles will continue to rise thanks in part to the Biden administration's emphasis on them, and
mobility-as-a-service businesses will continue to grow – especially in parts of Detroit where public transit doesn't reach.
"The trends that were in place [before the pandemic] are probably only going to accelerate," he says.
Rethinking parking
Another potential outcome of fewer people flocking into Detroit, Ann Arbor, Troy, and other major employment centers is the need for less parking in those areas. Loh says she thinks there's "a lot of momentum" behind the idea of imposing parking space maximums, rather than minimums, for new developments, a practice that has been adopted in London and other European cities.
That may seem counterintuitive to those who are well-accustomed to the commuting lifestyle and the struggle to find parking. But Loh notes that the cost of building and maintaining parking ends up getting passed on to individuals in other ways, like housing costs. Like many others – including the city of Berkeley, Calif., which recently eliminated parking minimums for new developments – Murphy sees potential to spur more development.
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"Parking is one of those things that sometimes get in the way of conversations about new development," he says. "It's like, 'Where are those people going to park?' But if we're flattening off that peak [parking] demand a little bit ... maybe it's easier to do new development without adding parking, or parking at the same rates as we used to."
Loh notes that while people's cars technically "live" at their homes, those cars also take up "a huge amount of space" in numerous other places in the form of parking spaces.
"Your car doesn't actually deserve to have places reserved for it every place you might go during the day," she says. "But it's going to be a real mindset shift because people are, in many places, used to just having a parking space waiting for them wherever they want to go."
Empty offices
Along with parking space, office space is likely to empty out across Metro Detroit as a result of the shift to more flexible work models. Consulting firm McKinsey
surveyed 278 executives nationwide in August 2020 and found that they planned to reduce their office space by an average of 30%. Steve Morris, a lecturer at the University of Michigan Ross School of Business and managing principal at Farmington Hills-based real estate services firm
Axis Advisors, says many companies are recognizing a way to reduce the second-highest cost of business after payroll: rent.
"There's the challenge of companies realizing that this remote scenario has been working pretty well," he says. "There's not too many complaints. Zoom helps an awful lot. Technology helps an awful lot."
For example, Ford is already
redesigning and consolidating its offices, moving towards a model that emphasizes "collaboration centers" in major new hubs like Michigan Central Station, set to open in 2022, and a new Dearborn central campus, set to open in 2023.
Dubensky says the pandemic has made those two projects even more important to the company's future and prompted a shift to focus on communal rather than individual space. He says that while the company previously reserved about 60% of its office space for private desks and offices, with the remaining 40% going towards collaborative spaces like meeting rooms, that will shift dramatically in the future to 25-30% private space and 70-75% collaborative.
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"The way we build out the facility will be more orientated toward coming in, dropping in, working with teams, maybe doing a little touch-down work, and sitting by yourself," he says. "But for the most part, we're looking for people to come into that space for a very specific purpose and then take off and go back home."
Dubensky adds that it's too early to estimate the overall impact on Ford's broader real estate portfolio, but "we probably won't need all the capacity we have for offices today." That mirrors a widespread trend away from traditional office space and towards collaborative spaces. The
Metro Detroit Black Business Alliance (MDBBA) will reflect that trend in the Black business resource center it's building at 1234 Washington Blvd. in Detroit, which will include a coworking space.
"I don't know what the future holds, but I do know that flexibility is going to be key," says Charity Dean, president, and CEO of MDBBA. "So we want to make sure that we have a space for our business owners that can be an office space."
Murphy agrees that non-traditional workspaces will become more important.
"Folks who are working from home don't necessarily want to be in their house all day every day," he says. "There's the traditional stereotype of remote workers working from coffee shops because they want to be around other people. So if we do have a lot more people spending a lot more time not at the office doing their work, I think we will see more demand for some of those third spaces, whether it's the cafes or whether it's formal coworking spaces."
So what will happen to old-fashioned office buildings? Murphy hopes to see some of them converted to residential space. Morris thinks that's unlikely given the locations of many office buildings and the investment required to convert them into living spaces. But, given the number of office buildings that were foreclosed upon during the Great Recession, Morris thinks most commercial landlords aren't particularly worried.
"Many [suburban office buildings] may not be 100% leased for some time," he says. "But they will be fine because [the owners] bought them in foreclosure for cents on the dollar."
Long-term impacts
Although the shift towards remote work is already having significant impacts on Metro Detroit, the full effects of the COVID-prompted change will likely be playing out for many years to come.
Stevens notes that the shift towards new models of work is an opportunity for Michigan to push back against some significant demographic "headwinds." He notes the state's large
aging population, recent
record-low birth rates, and
low net migration as major challenges. He sees the shift towards flexible work models as a new way for Michigan companies to compete, attract talent, and potentially turn some of those statistics around in the long run.
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Photo by David Lewinski
Other changes may be comparatively shorter-term, but will still take a few years to fully materialize. For instance, Morris notes, there's a healthy sublease market for office space right now, as companies vacate their space and turn over the remainder of their current lease terms. We won't fully know how office space vacancies have changed until all those leases are up in another three to four years.
The biggest question mark, though, is just how many people choose to work on-site or at home. A
2012 Gallup poll found that 39% of the U.S. workforce was working remotely at least part-time. That number rose to 43% in 2016, and 62% last year. With flexible work models like Ford's now in play, future fluctuations in that percentage are in workers' hands.
"The past year made a lot of people have to think differently about how they work and what their daily routines look like, and also made a lot of people hunger to get back to quote-unquote 'normal life' and the office," Murphy says. "So we'll see, once we get a little ways back into normal work, where people start to settle out."