I can see a future where office work is so rare that it's considered to be a major benefit only afforded by large corporations.
If everything is remote work, you hire the same worker, and pay them Jakarta rates (you can sub Jakarta for any very-low COL city).
Companies that are good about integrating foreign workers into their existing teams are already reaping the benefits of this. Fortunately for Western tech workers, the majority of companies are terrible at integrating their offshore workers and have very outdated concepts of "outsourcing" where trusted local workers send robotic tasks to offshore teams being paid ridiculously low salaries. This model will continue to fail and should slow the enthusiasm for offshoring for a lot of companies.
Without the commute suburbs or smaller cities offer much bigger and better spaces for less. Why pay $4.5k for that one bedroom in SOMA when you can get a 4 bedroom home in Sacramento for the same price.
It's too early too say if the historic value of cities will be replaced by the internet, IMO. YC makes each batch move to SV for a reason.