CINCINNATI — Ramon Alfonso thought he picked a high-traffic location when he opened the Latin House restaurant last fall at 823 Main Street.
It’s a three-minute walk to the Hamilton County Courthouse, less than 10 minutes from office buildings that held more than 10,000 daytime workers in 2019, according to U.S. census data. But that was before the pandemic changed where America works.
New census data, released in September, shows the percentage of people primarily working from home tripled to 17.9% between 2019 and 2021. Greater Cincinnati is just below the national average at 17.5%.
Here’s what those numbers mean for Alfonso: He built his authentic Cuban restaurant to handle up to 100 customers a day. He rarely gets more than 25.
“Barely holding on,” Alfonso said. “With all the remote working and downtown pretty much empty every day, we’re barely making ends meet.”
The WCPO 9 I-Team is exploring the impact of remote and hybrid working arrangements on the region’s major job centers, starting with downtown, where some of the region’s biggest employers are based.
“The remote work is killing the small business owner,” Alfonso said. “I waited 'till things started opening back up and the draconian measures were lifted and people were allowed back. So, I said, ‘OK, well, people will want to go back to normality. So, let’s strike while the iron’s hot.’ I didn’t know the iron was lukewarm.”
The city of Cincinnati braced for an impact from remote-working arrangements when it set aside $50 million as a budget reserve last September. In May, the University of Cincinnati’s Economics Center forecasted 1.7% growth in city income tax revenue for the next five years. But it warned that up to 24% of that revenue is “potentially at risk” from refunds that could be sought in the next three years by people working from home.
Greater Cincinnati’s work-from-home rate is higher than Louisville (15.1%) and Cleveland (16.3%), lower than Columbus (22.5%) and Chicago (22.9%), according to Economic Innovation Group, a Washington, D.C. -based research firm. Downtown areas tend to have higher work-from-home rates because they attract headquarters companies, legal and accounting firms. All of them require better educated workers, who are the most likely to secure remote-work arrangements, said EIG Chief Economist Adam Ozimek.
“Remote work is here to stay,” Ozimek said. “I think policy leaders, community leaders, business leaders should consider this to be a permanent part of the way people work.”
The trend could be a blessing as well as a curse for cities with a low cost of living and a willingness to recruit remote workers from other cities.
“In the past, for some occupations at least, you could say, ‘Look, this is where the jobs are. So, if you want these jobs, you have to live here.’ Now, that’s no longer the case,” Ozimek said. “If downtowns can pivot to being more residential and less office, that can help bring back some of that foot traffic.”
Census data from 2019 showed 64,551 workers in the 45202 zip code, which includes the central business district and parts of Over-the-Rhine and Mt Adams. More than half of those workers toil in industries that now have some of the nation’s highest levels of remote work, according to a September report from WFH Research.
For example, workers in finance and insurance told WFH they work from home an average of 2.18 days per week, based on its online survey of 13,622 people conducted between April and July. Downtown had 10,506 finance and insurance employees in 2019, or 16% of its total head count.
But at least two downtown-based companies in that industry segment are not making hybrid-work arrangements widely available.
Western & Southern Financial Group says its roughly 2,000 downtown employees are in the office "with few exceptions."
“While we have adjusted to changing conditions throughout the pandemic to protect health and safety, we know that being together in the office is vital to the sustainment of our corporate culture and the best way to serve our customers,” Western & Southern Spokeswoman Diane Planck said.
Fifth Third Bank called its roughly 2,000 downtown employees back to the office in June 2021, adding corporate events and concierge services to boost the daytime head count.
“There is no hybrid schedule,” Fifth Third Spokesman Ed Loyd said. “Our concierge service saved employees 24,000 hours last year, helping bring balance to their lives by managing a variety of personal tasks, especially for those who are working parents.”
At American Financial Group, about 70% of its 2,300 downtown employees are on a hybrid schedule. But Spokeswoman Diane Weidner couldn’t say how many days workers typically spend in the office.
“We believe a mix of in-office work with work-at-home strikes the right balance to continue our strong and successful culture of being ‘a great place to work.’ We have new hires at all levels within the organization and believe training and mentoring is key to our ongoing success,” Weidner said.
As for downtown’s biggest employers, the Kroger Co. declined to provide details on its remote and hybrid working arrangements.
Procter & Gamble has about 4,000 downtown employees, 50 to 60 percent of whom work from home on any given day, said P&G spokesman Patrick Blair.
“Our offices remain an important way we get work done,” Blair said. “The face-to-face interaction P&G people experience when they come to the office remains important to our relationships, the development of our people and our culture.”
Real estate investors are adapting to downtown’s dwindling head count by converting older office buildings into hotel and residential space. The commercial real estate firm CBRE said downtown had 10.7 million square feet of office space as of June 30, down from 14.4 million at the end of 2019. But there is room for more conversions, with 1.7 million square feet currently vacant and 840,000 square feet available for sublease.
Back at the Latin House, the owner doesn’t care how that space gets filled, as long as it brings more hungry customers to his door.
"I’m trying to be confident and say I’m going to struggle through and hopefully build what my dream was," Alfonso said. "But the way I see this economy and the way I see the COVID being constantly pushed, no. I don’t know if we’re going to make it. I don’t know if half of these businesses are going to make it."
