That also doesn't work. It costs more to convert an office building to housing than it does to tear it down and build new condos in its place, which in turn costs more than just building new condos in a different location. All the plumbing/HVAC/electrical systems need to be redone, you need ventilation isolation, there are different load capacities, etc.

Plus if remote work really takes off, there's no need to crowd all those people into the downtown cores of a few cities anyway. It'd shift housing demand to cheaper, more naturally desirable locations.

What'll happen is that a few firms with ineffective cost structures will go bankrupt, a few major cities will become hollowed-out wastelands the way NYC was in the 1970s or Boston was in the 1950s, and economic growth will pick up in other areas, with new startups and new desirable hubs.

I'm suggesting that the execs in charge of these decisions are perhaps not approaching the issue rationally.

Yes, but the existence of a fallacy doesn't mean it applies here. If people can be convinced to go back to the office the company won't lose millions of dollars. Is that a sunk cost then?