The Remote Work Challenge & How Dallas is Adapting: The Latest Report from Pew

The Pew Charitable Trusts published a major new report this spring studying how five U.S. cities have adapted to the shift in urban life, due to remote work. Dallas is one of those five cities. 

Seismic Shift in Occupancy 

The COVID-19 pandemic witnessed the rise in remote work and the legacy cities confronted following and the possibility that fewer people would choose to live and work in urban areas.  Office vacancy rates surged and continued to reach new highs into 2025. For cities that depend on commercial property taxes to fund schools, services, and infrastructure, budgets are hit directly. For residents in lower-income neighborhoods, budget pressure on cities may mean cuts to the services they rely on most.

What is the “Doom Loop” 

Researchers raised the alarming possibility of an urban "doom loop" where declining office building values would reduce local tax revenue; less tax revenue would force cities to cut services or raise taxes; and, as a result, cities would be even less appealing places to live, thus less people would move there. Tax revenues have proven resilient, in part because of strength in tax streams unaffected by remote work; high housing prices, for instance, have boosted residential property taxes. However the risk remains present.

Because reduced office values only gradually affect commercial property tax revenue, cities do not know the full impact yet. Dallas faces an additional pressure: a 2019 state law means Dallas and other cities cannot increase the property tax levy by more than 3.5% year over year without voter approval. That limits the city's ability to compensate if commercial values continue to fall. Pew also notes that 20 of the 25 most populous cities in the U.S., including Dallas, have faced budget deficits recently or project them for the future.

Challenges in Dallas Right Now 

As of the second quarter of 2025, Dallas' office vacancy rate was 21.5%, higher than the U.S. rate and that of some East Coast cities such as New York, Philadelphia, and Washington, D.C. The issue predates the pandemic. In 1986, oil prices crashed, falling by more than 50%. The local economy recovered, demand has not filled the offices.  The geography of distress within Dallas is uneven with Downtown Dallas in more distress than uptown. 

Dallas Advantage 

Dallas has been finding ways to repurpose empty buildings for decades,  and that experience is significant. Dallas has a long-standing office vacancy problem and history of converting these offices. The city has a proven playbook for reusing unneeded office space. From 2005 to 2020, the city repurposed 40 downtown buildings. Conversions helped change the character of downtown. In 2000, a few hundred people lived in the central business district. Today, about 15,000 do. The First National Bank Tower reopened in 2020 with apartments, a hotel, office space, restaurants, and retail. The historic Statler hotel, which had closed in 2001, reopened in 2017 as a hotel, apartments, and retail space. Developers converted a 1920s Sears distribution center into affordable apartments.

Development In Practice 

Dallas expanded the borders of the Downtown Connection TIF District in 2022 and increased the funding available to developers. Tax increment financing redirects property tax growth from designated districts back into those same areas to fund redevelopment,  a mechanism Dallas has used for decades. Initiatives to unlock federal funding with city leaders proposing to expand the boundaries of downtown's historic district, a move that would allow conversion projects to receive federal historic rehabilitation credits even if the buildings are not at least 50 years old. State legislation also creates avenues for development.  Laws signed in 2025 require cities to allow multifamily residential buildings in any area where commercial buildings are allowed, and reduce cities' ability to regulate office-to-residential conversions. 

The Housing Opportunity 

Pew is clear that the single most effective response to struggling downtowns is not luring back office workers, it is creating places where people live. City officials think the best way to solve the problems of obsolete downtowns is to transform them from 9-to-5 business districts to more complete neighborhoods,  building parks, event venues, and other public spaces that attract visitors, nurturing retailers and restaurants, but most of all, making sure far more people can live downtown.  

Office-to-residential conversions are central to that vision, and the economics are shifting in their favor. One expert told Pew researchers: "There used to be the sense that there are all these office buildings that you can't really convert. It's too complicated. They're too big. The floor plates are too deep. It's too hard to bring light and air into the interior. I've completely changed my mind on this. My new view is that every office building can be converted. The only question is: How much does it cost?" 

There is also a more affordable conversion model gaining traction nationally where office-to-dorm-style conversions can cost 25% to 35% less per square foot than traditional office-to-residential conversions, while the number of units produced is roughly triple.

DCH Work 

The Pew report offers a measured conclusion: the best reason for optimism is that cities have adapted before. In earlier generations, many cities overcame the loss of factories or downtown retailers. Dallas has already demonstrated that more than most. One question now is whether the next wave of conversions and downtown investment will be designed with affordability at its core.  That question is exactly what drives the work we do at DCH. 

Dallas can meet this moment, and we intend to be part of the next iteration of this city.