Surprise: The move to remote work isn’t great for Center City’s post-pandemic recovery

In the 1990s, Philadelphia tech business was all happening in the suburbs. Today, the city has taken the lead in energy, and it’s a trend seen across the nation. But can Philadelphia’s momentum last?

Technical.ly wrote those words a decade ago, when the question was centered on whether the city’s downtown could become a hub for local tech. Back then, it was notable when a startup laid roots in Center City, period.

Center City’s relevance for the tech community, and business leaders overall, has evolved drastically since then, as startups and tech giants alike expanded their downtown footprints beyond the aughts to the 2010s all the way until 2020.

Now, we’re asking: How does Philly’s post-pandemic downtown recovery compare to other cities in the United States?

Center City District (CCD), the business improvement organization for Center City Philadelphia, sought to answer the question when working on its latest report, “Downtowns Rebound: The Data Driven Path to Recovery,” which compared the rate of recovery for downtown areas in 26 cities across the country.

Read the report

Paul Levy, CCD’s outgoing president and CEO, told Technical.ly the organization’s researchers have been tracking recovery in Philadelphia for the last two years. The goal of this new report was to create a benchmark for where Philadelphia is doing well compared to other cities’ downtown recovery, and where it can improve.

CCD used data from Placer.ai to look at how many visitors, workers and residents are in certain locations at certain times in these cities. For this report, they compared data from the second quarter of 2019 to the second quarter of 2023.

The org found that cities with the highest rate of recovery have large tourism, entertainment and hospitality industries in their downtowns. On the other end of the spectrum, cities with the lowest rates of recovery had large information technology industries, which is a sector that has long been amenable to remote work.

Philadelphia happens to have a mix of both industries in its downtown and ranked #5 in overall recovery of all types of people, he said, including visitors, workers and residents.

The tech industry, especially, allows more people to work remotely — to their own detriment, Levy might say.

For industries like tech that have allowed more people to work remotely, Levy might say: to their own detriment.

“One of the things that we really stress here,” he said, “is as much as becoming untethered from the workplace by cell phone, by virtual meetings, is an advantage, there are huge advantages for face-to-face interaction in brainstorming and developing new ideas, in mentoring younger staff.”

Levy said the life sciences industry is an especially strong asset for the city because it is growing in the region, often requires workers to come in person to an office or laboratory, and provides the opportunity for people to have high-paying jobs without college degrees.

One data point about Philly’s success in the life sciences: Commercial real estate firm JLL’s annual life sciences and real estate report ranked Philadelphia as #9 in the top life sciences clusters in the country.

“Life sciences is really the driver, supplementing eds and meds, and supplementing what we’re doing well in the office sector and what we’re doing well in information technology,” he said.

The organization also found that the length of people’s commute for work also matters: Areas that have a lot of residents close to or actually living downtown had higher rates of recovery. Philadelphia had the highest concentration of people who live and work downtown, specifically the most people who live within a two-mile radius of downtown.

Levy said the CCD continues helping downtown recovery by helping keep the area clean and hosting events to welcome people back, specifically collaborating with big companies such as Comcast which recently brought its employees back to the office four days per week after initially requiring just three days in 2022.

“We’re right in the middle in terms of that balanced economy in that one chart of what jobs can be performed remotely, what jobs can only be performed in person,” he said. “Philadelphia in many ways has found the sweet spot, we just need to do better with more competitive tax policy so we grow and keep more jobs.”

What question will we be asking a decade from now?

Sarah Huffman is a 2022-2024 corps member for Report for America, an initiative of The Groundtruth Project that pairs young journalists with local newsrooms. This position is supported by the Lenfest Institute for Journalism.