

In Boise, Idaho, the commercial real estate price index now sits at 94 while residential has climbed to 127—relative to a 2019 baseline of 100 for both. Five years ago, the two moved in tight tandem. Today they diverge by more than thirty points, and the gap is widening.

This is the number that matters most in the remote work debate, though it rarely appears in discussions of labor market flexibility or productivity metrics. What we are witnessing is not a collapse of office demand—that narrative, while dramatic, obscures the more interesting transfer occurring beneath it. Downtown commercial real estate in mid-sized cities is quietly losing value while residential property in the same metro areas, and particularly in high-amenity alternatives, appreciates at a sustained pace. The wealth is moving, not disappearing.

Consider the mechanics. When a knowledge worker relocates from San Francisco to Bozeman, their income continues to flow through payroll taxes to California and federal coffers, but their consumption—housing, retail, services—redirects entirely to Montana. The commercial square footage they once occupied in a downtown tower sits vacant or underpriced, its underlying asset value declining. The residential home they purchase in Bozeman appreciates not merely because demand has risen, but because the supply constraint is severe and the buyer pool now includes remote workers earning coastal salaries. The tax base shifts with them, though with a lag that most municipal budgets have not yet incorporated.

The second-order effects are only beginning to register. Local sales tax revenues in Bozeman and similar destinations have outpaced projections, but commercial property tax assessments—tied to downtown office valuations—are declining. School districts funded primarily by property taxes face asymmetry: residential values rise while commercial bases erode. Transit authorities dependent on downtown commuter ridership confront declining fare revenue precisely as their cost structures remain fixed. The wealth transfer is real, measurable, and structurally advantaged to residential holders in ways that commercial landlords cannot easily arbitrage. The data is clear. The implications are not yet fully appreciated.