Opinion | How a 'Golden Era for Large Cities' Might Be Turning Into an 'Urban Doom Loop... - 0 views
www.nytimes.com/...id-pandemic-cities-future.html
cities doom loop fiscal suburban flight crisis culture
shared by Javier E on 30 Nov 22
- No Cached
-
Scholars are increasingly voicing concern that the shift to working from home, spurred by the coronavirus pandemic, will bring the three-decade renaissance of major cities to a halt, setting off an era of urban decline.
-
They cite an exodus of the affluent, a surge in vacant offices and storefronts and the prospect of declining property taxes and public transit revenues.
-
Insofar as fear of urban crime grows, as the number of homeless people increases, and as the fiscal ability of government to address these problems shrinks, the amenities of city life are very likely to diminish.
- ...27 more annotations...
-
With respect to crime, poverty and homelessness, Brown argued,One thing that may occur is that disinvestment in city downtowns will alter the spatial distribution of these elements in cities — i.e. in which neighborhoods or areas of a city is crime more likely, and homelessness more visible. Urban downtowns are often policed such that these visible elements of poverty are pushed to other parts of the city where they will not interfere with commercial activities. But absent these activities, there may be less political pressure to maintain these areas. This is not to say that the overall crime rate or homelessness levels will necessarily increase, but their spatial redistribution may further alter the trajectory of commercial downtowns — and the perception of city crime in the broader public.
-
“The more dramatic effects on urban geography,” Brown continued,may be how this changes cities in terms of economic and racial segregation. One urban trend from the last couple of decades is young white middle- and upper-class people living in cities at higher rates than previous generations. But if these groups become less likely to live in cities, leaving a poorer, more disproportionately minority population, this will make metropolitan regions more polarized by race/class.
-
the damage that even the perception of rising crime can inflict on Democrats in a Nov. 27 article, “Meet the Voters Who Fueled New York’s Seismic Tilt Toward the G.O.P.”: “From Long Island to the Lower Hudson Valley, Republicans running predominantly on crime swept five of six suburban congressional seats, including three that President Biden won handily that encompass some of the nation’s most affluent, well-educated commuter towns.
-
In big cities like New York and San Francisco we estimate large drops in retail spending because office workers are now coming into city centers typically 2.5 rather than 5 days a week. This is reducing business activity by billions of dollars — less lunches, drinks, dinners and shopping by office workers. This will reduce city hall tax revenues.
-
Public transit systems are facing massive permanent shortfalls as the surge in working from home cuts their revenues but has little impact on costs (as subway systems are mostly a fixed cost. This is leading to a permanent 30 percent drop in transit revenues on the New York Subway, San Francisco Bart, etc.
-
These difficulties for cities will not go away anytime soon. Bloom provided data showing strong economic incentives for both corporations and their employees to continue the work-from-home revolution if their jobs allow it:
-
First, “Saved commute time working from home averages about 70 minutes a day, of which about 40 percent (30 minutes) goes into extra work.” Second, “Research finds hybrid working from home increases average productivity around 5 percent and this is growing.” And third, “Employees also really value hybrid working from home, at about the same as an 8 percent pay increase on average.
-
three other experts in real estate economics, Arpit Gupta, of N.Y.U.’s Stern School of Business, Vrinda Mittal, both of the Columbia Business School, and Van Nieuwerburgh. They anticipate disaster in their September 2022 paper, “Work From Home and the Office Real Estate Apocalypse.”
-
“Our research,” Gupta wrote by email,emphasizes the possibility of an ‘urban doom loop’ by which decline of work in the center business district results in less foot traffic and consumption, which adversely affects the urban core in a variety of ways (less eyes on the street, so more crime; less consumption; less commuting) thereby lowering municipal revenues, and also making it more challenging to provide public goods and services absent tax increases. These challenges will predominantly hit blue cities in the coming years.
-
the three authors “revalue the stock of New York City commercial office buildings taking into account pandemic-induced cash flow and discount rate effects. We find a 45 percent decline in office values in 2020 and 39 percent in the longer run, the latter representing a $453 billion value destruction.”
-
Extrapolating to all properties in the United States, Gupta, Mittal and Van Nieuwerburgh write, the “total decline in commercial office valuation might be around $518.71 billion in the short-run and $453.64 billion in the long-run.”
-
the share of real estate taxes in N.Y.C.’s budget was 53 percent in 2020, 24 percent of which comes from office and retail property taxes. Given budget balance requirements, the fiscal hole left by declining central business district office and retail tax revenues would need to be plugged by raising tax rates or cutting government spending.
-
Since March 2020, Manhattan has lost 200,000 households, the most of any county in the U.S. Brooklyn (-88,000) and Queens (-51,000) also appear in the bottom 10. The cities of Chicago (-75,000), San Francisco (-67,000), Los Angeles (-64,000 for the city and -136,000 for the county), Washington DC (-33,000), Seattle (-31,500), Houston (-31,000), and Boston (-25,000) make up the rest of the bottom 10.
-
Prior to the pandemic, these ecosystems were designed to function based on huge surges in their daytime population from commuters and tourists. The shock of the sudden loss of a big chunk of this population caused a big disruption in the ecosystem.
-
Just as the pandemic has caused a surge in telework, Loh wrote, “it also caused a huge surge in unsheltered homelessness because of existing flaws in America’s housing system, the end of federally-funded relief measures, a mental health care crisis, and the failure of policies of isolation and confinement to solve the pre-existing homelessness crisis.”
-
The upshot, Loh continued,is that both the visibility and ratio of people in crisis relative to those engaged in commerce (whether working or shopping) has changed in a lot of U.S. downtowns, which has a big impact on how being downtown ‘feels’ and thus perceptions of downtown.
-
The nation, Glaeser continued, isat an unusual confluence of trends which poses dangers for cities similar to those experienced in the 1970s. Event#1 is the rise of Zoom, which makes relocation easier even if it doesn’t mean that face-to-face is going away. Event#2 is a hunger to deal with past injustices, including police brutality, mass incarceration, high housing costs and limited upward mobility for the children of the poor.
-
Progressive mayors, according to Glaeser,have a natural hunger to deal with these problems at the local level, but if they try to right injustices by imposing costs on businesses and the rich, then those taxpayers will just leave. I certainly remember New York and Detroit in the 1960s and 1970s, where the dreams of progressive mayors like John Lindsay and Jerome Patrick Cavanagh ran into fiscal realities.
-
Richard Florida, a professor of economic analysis and policy at the University of Toronto, stands out as one of the most resolutely optimistic urban scholars. In his August 2022 Bloomberg column, “Why Downtown Won’t Die,”
-
Great downtowns are not reducible to offices. Even if the office were to go the way of the horse-drawn carriage, the neighborhoods we refer to today as downtowns would endure. Downtowns and the cities they anchor are the most adaptive and resilient of human creations; they have survived far worse. Continual works in progress, they have been rebuilt and remade in the aftermaths of all manner of crises and catastrophes — epidemics and plagues; great fires, floods and natural disasters; wars and terrorist attacks. They’ve also adapted to great economic transformations like deindustrialization a half century ago.
-
Florida wrote that many urban central business districts are “relics of the past, the last gasp of the industrial age organization of knowledge work the veritable packing and stacking of knowledge workers in giant office towers, made obsolete and unnecessary by new technologies.”
-
“Downtowns are evolving away from centers for work to actual neighborhoods. Jane Jacobs titled her seminal 1957 essay, which led in fact to ‘The Death and Life of Great American Cities,’ ‘Downtown Is for People’ — sounds about right to me.”
-
Despite his optimism, Florida acknowledged in his email thatAmerican cities are uniquely vulnerable to social disorder — a consequence of our policies toward guns and lack of a social safety net. Compounding this is our longstanding educational dilemma, where urban schools generally lack the quality of suburban schools. American cities are simply much less family-friendly than cities in most other parts of the advanced world. So when people have kids they are more or less forced to move out of America’s cities.
-
What worries me in all of this, in addition to the impact on cities, is the impact on the American economy — on innovation. and competitiveness. Our great cities are home to the great clusters of talent and innovation that power our economy. Remote work has many advantages and even leads to improvements in some kinds of knowledge work productivity. But America’s huge lead in innovation, finances, entertainment and culture industries comes largely from its great cities. Innovation and advance in. these industries come from the clustering of talent, ideas and knowledge. If that gives out, I worry about our longer-run economic future and living standards.
-
The risk that comes with fiscal distress is clear: If city governments face budget shortfalls and begin to cut back on funding for public transit, policing, and street outreach, for the maintenance of parks, playgrounds, community centers, and schools, and for services for homelessness, addiction, and mental illness, then conditions in central cities will begin to deteriorate.
-
There is reason for both apprehension and hope. Cities across time have proven remarkably resilient and have survived infectious diseases from bubonic plague to cholera to smallpox to polio. The world population, which stands today at eight billion people, is 57 percent urban, and because of the productivity, innovation and inventiveness that stems from the creativity of human beings in groups, the urbanization process is quite likely to continue into the foreseeable future. There appears to be no alternative, so we will have to make it work.