Working from home or in coworking spaces: which telecommuting practice better contains urban sprawl ?

The widespread adoption of working from home arrangements in the wake of the pandemic has enabled firms to save on office space. However, it has also required additional floor space to support telecommuting activities. These activities can be carried out at home or in coworking spaces, raising questions about the impact of telecommuting in its various forms on urban sprawl. Because of the negative implications of urban sprawl, such as excessive ground artificialization near urban areas, increased travel distances, and negative transportation-related externalities, local authorities have been seeking greater control over city size. In this paper, we use a standard urban economics model to evaluate how urban sprawl can be contained in the context of telecommuting. We compare two scenarios: households telecommuting at home versus in coworking spaces. Our analysis reveals three key findings. First, both scenarios lead to city expansion compared to the reference case without telecommuting. Second, the coworking scenario demonstrates superior urban sprawl containment compared to working from home. Third, the working from home scenario exhibits higher levels of agglomeration economies than the coworking scenario. This may encourage firms to promote working from home, despite its lesser ability to contain urban sprawl.