It's also possible that after the pandemic, when it's an option again, the youngest employees will prefer to work in offices. Won't the talent drive their choice ultimately?
I think people are asking the wrong questions. We know that people moving back in with their parents is up about 3 million due to COVID [1]. It would follow that studio apartments are the mostly likely to be rented by those same young people, thus the demand has dried up.
The question we aren't asking is, what happens when the economy recovers and these people move out of their parent's homes? Will they go back to the "destination" cities or will newer, smaller cities be the target? Will they crave experiences or space more?