The Real Reason Amazon Just Called Everyone Back to the Office — you won’t believe how scary it is.

With its recent demand that employees come back to the office (BTO), Amazon just tipped its hand and showed how bad the brewing real estate catastrophe is about to get — and it’s worse than you could imagine.

They didn’t share any real data on productivity, or offer a reasonable business explanation — but CEO, Andy Jassy, did tie the move to supporting the local community: “this shift will provide a boost for the thousands of businesses located around our urban headquarter(s)”

So why did Amazon execs take this incredibly unpopular position, telling their employees that they were going to have to give up their cozy pants, time with their family, self-styled work environments, and jump back into the commute, the grind, and spend many more hours, and thousands of dollars more than they currently do, to get the same job done?

Why are they forcing workers to use an expensive resource they clearly don’t want? I don’t buy that they have a heart of gold and are going to sit on billions in capital, millions in operating expense, and make employees unhappy just to save the corner deli.

Maybe Andy Jassy and Jeff Bezos saw something coming, something potentially existential to our economy and to Amazon itself, that the general public is blissfully unaware of?

If Amazon embraced remote work and flooded the market with 10 million square feet of office space in Seattle — a greater concentration than any other company in any US city — it’s unlikely they would find a buyer today. They would write them off as losses as Brookfield has done in LA and a large part of Seattle would go dark. Vacant buildings are not attractive — and other companies would follow suit. Tax revenues would drop and services would get cut, triggering an exodus from an expensive city with declining services. A few cycles of this and it might start to look like systemic collapse in Seattle.

But this isn’t just about an empty downtown. It’s about the value of every home that has been propped up by its geographic access to high paying jobs and a bustling city. The real issue is what happens when home prices get reset. And the question is how low would they go?

If prices were reset to the beginning of the current boom, 2012, homes would lose half their value. But 10 years ago there were still high paying jobs in Seattle. Now with workers able to live anywhere, you’re competing with houses in the country, small towns, and other states, and even other hemispheres. You’re competing with homes that don’t have the overhead of being in Seattle. The cut could be deep.

And if this happened in Seattle, why not San Francisco? Austin, Chicago, Boston, Nashville, and every city that relied on businesses that are now remote? We might have dozens of cities that look like Detroit with its abandoned urban core. Even with their more diverse economies, this could extend to New York and LA — Mayor Adams is already taking defensive measures against a wave of empty office buildings hitting the market.

So if Amazon embraced remote work, closed its offices, and this cascaded across the country, on top of Commercial Office losses — enough on its own to set off a panic — there could be a much bigger impact on the 43 trillion dollar residential market. We’ve seen this before on a much smaller scale in 2009 — underwater home values, life savings wiped out, loan defaults, lenders and financial institutions collapse. An economy and consumer base left shell shocked.

BTO isn’t about productivity or morale, or the local community as Jassy says. It’s about trying to stave off a massive blow to the consumer base that could be life-threatening to Amazon’s retail business.

But Amazon can’t hold off history for long. It’s clear that the Internet is providing a viable alternative to the office building in terms of work and collaboration. It’s as simple as a new model emerging, making the old one obsolete. What actually is happening is the decentralized cities of the Internet are disrupting centralized cities of 20th century America. Software is eating the world and cities are next.

There is hope. These decentralized cities could be more beautiful, and more humane than cities of the past ever could. Now that you no longer have to live where you work, we are seeing a new wave of hybrid-cities and virtual neighborhoods connected by the Internet, and spread across geographies. These communities are fluid, and have the benefit of being physically present anywhere that suits them, with a lighter footprint than their predecessors. Not based on scarcity or gated access, they can be more inclusive and foster tighter knit communities. Self-sufficient, self governed, and situated in natural environments, they can be more sustainable, transparent, and equitable. Kift, the community we started, is one of these, using funds raised on the internet to build networks of properties for creative urban expats looking for more than housing — a new way to live.

It will not be an easy transition to make. There will be a tremendous amount of pain and grief. To those invested in centralized cities, and whose businesses rely on the wealth built up around them, this is an existential crisis. To those looking to make change, especially climate and social, it’s an opportunity. This scenario could play out over the next couple of years in a slow bleed, but for the CEO of Amazon to make such a quick and unpopular move with employees, it looks like the dominoes are already starting to fall.

Here is a collection of references for those interested in digging in.