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Opinion: Will the Recent Supreme Court Decision on Vaccination Requirements Impact Office Leasing?

San Francisco, Seattle, Oakland, Silicon Valley, Los Angeles, Orange County, San Diego, Inland Empire office leasing
Photo by Vladimir Kudinov on Unsplash

By Vladimir Bosanac

Say what you will about liberty in the United States, but as someone who is vaccinated, boosted and taking all the precautions to keep my family safe, I can’t say that I feel any more liberated than I did in December of 2019. We may think that it is our birthright as American citizens to have freedom of thought, expression and non-vaccination, but the sad truth is that we seem to be regressing in our battle against the virus that really doesn’t give a hoot about our liberty. It continues to evolve and infect, and sadly, the commercial real estate industry will likely see a prolonged negative impact of that.

The most recent decision by the United States Supreme Court to strike down President Biden’s initiative from enforcing its vaccine-or-test requirement for large private companies will likely negatively and indirectly impact office leasing. It may have been a Pyrrhic victory for some in corporate America, but I see the consequences of this decision likely play out in the following way.

If you are vaccinated and have done your civic duty of not only protecting yourself and your family but also your neighbors and people with whom you interact, you will feel pretty peeved that some members of your community feel that it is their freedom of choice whether they will vaccinate or not. Google Novak Djokovic and what happened to him in Australia in early January of 2022, and you’ll see what I mean. Australians have endured a lot over the last two years. Some have been stranded overseas, unable to re-enter their country because of tough COVID shutdown rules. Most of them took it on the chin, grinned and bore it, got vaxxed, and here comes this tennis star (my countryman no less), waltzing in post-COVID infection, lying about his whereabouts and travels, organizing press conferences while infected and likely infecting others along the way. Let’s just say it didn’t sit well with the general populace down under. This will happen in offices, as well – likely with ensuing drama, too. By refusing to implement some form of vaccine-or-test mandate, employers will have little to say when employees start leaving or refusing to return to the office. 

In addition to protecting themselves and their loved ones, those who vaccinate may have a number of reasons why working with unvaxxed co-workers is not going to be an option. Some of those workers may have kids who are too young to get vaccinated, and a breakthrough infection can affect the little ones if sickness is brought home from work. Some will have parents living with them. Some may be obese or immunocompromised. There could be thousands of scenarios why exposure to the virus may be bad for them.

They’ll look for a new job, and replacing those employees will be harder and harder. Companies’ businesses may suffer, staffing will get even more expensive, and the need for office space may actually be reduced even further. Hey, if you can’t keep an employee in the office, but she or he will work from home, why are you spending money for office space? For the unvaxxed to congregate? Is there a CFO who’s not doing that math already?

Forbes recently highlighted this disconnect between employers and employees and concluded that employers need to take a reality check if they think their people want to come back to the office as much as they do. The business magazine highlighted a global study from the Future Forum, which uncovered some staggering findings:

  • 76% of employees do not want to return to full-time office work
  • 76% of employees want flexibility where they work
  • 93% want flexibility when they work

These figures were drawn from interviews with 10,569 knowledge workers in U.S., Australia, France, Germany, Japan and the U.K. between July 28 and August 10, 2021. This was conduced pre-Omicron, and as new variants emerge – they will – our willingness to congregate in large spaces with strangers who would like to exercise their vaxx freedom will very likely decrease.
And there you have it. Every action has a reaction, or externality, and we know the unintended ones are the ones you really gotta worry about.
Is this alarmism, maybe, but there’s a non-zero chance of this occurring at some employers. But let’s take this to the audience, tell me below what you think of this, and if you agree that this decision may have the unintended consequence of hurting the commercial real estate leasing activity even further.