Will Covid Be the Death of Cities? …Not So Fast… But There Will Be Changes

Cities thrive on opportunities for work and play and on the endless access to a variety of goods and services and experiences, to see and do so much in close proximity to each other, in (usually) a cool and energetic environment. It is like a menu at a restaurant that has 30 entrees and most if not all of them are great dishes to choose from and there is one thing Americans and humans love is… choice and options. The accessibility of what cities have to offer… museums, art galleries, educational institutions, sporting events, music, theater, and all sorts of varied entertainment experiences, and also a dizzying variety of food and beverage options galore.

This, along with career and job opportunities have been a siren song the last couple of decades for many (mostly younger) humans seeking variety, friendship, connections and opportunities. Putting thousands, if not millions, of people together in close proximity allows them to spark off one another, not only in helping productivity, innovation and economic growth, but also avails its citizens opportunities for fun, creativity, and yes, often times, romance.

Many former decaying and stagnating cities have been on a roll and a rebirth over the last couple decades, seeing consistent in-migration, job creation, investment and development. And then because of this growth and success, some challenges have ensued for many cities, such as gentrification, congestion, inequity and unaffordability.

Covid Will Slow The City Renaissance… But It Was Already Happening

Posited and Hailed in Richard Florida’s ground breaking book in 2001, “Rise of the Creative Class”, this 40-million strong class demographic of knowledge workers coming of age at the turn of the century sought these tighter work and living arrangements in order to collaborate, foster and grow new ideas, develop new approaches to problems, as well as to create products, experiences and services which are often complex and multi-faceted, and need inputs of various viewpoints, skills and “teams”.

Not adhering to the traditional 9-5 sort of work parameter and being “always on”, iconoclastic, often outdoorsy, independent, diverse, mostly single, somewhat bohemian, tolerant and playing as hard as they work, this dubbed and now tired term, the Creative Class, found fertile ground in cities that were slowly becoming safer, energetic, fun, accommodating, tolerant and accepting at the turn of the 21st century. Additionally, cities had huge cultural, social and physical existing infrastructure that was the canvas for the many diversions and “options” mentioned above. Combine this with a variety of eclectic and often attractive vintage stock of housing, as well as gleaming, newer, hipper rental housing and work-spaces ready for this non-traditional wave of workers, and many cites were a good match for this demographic shift.

As often happens, one small wave of relocation builds upon itself creating momentum of interest and investment. As always, industry and companies follow proximity to their biggest inputs… its potential labor pool which is more crucial than ever where a good programmer, engineer, thinker, manager is worth more than a $1 million piece of equipment. This has “repacked” many American cities we all know, including us here in Portland. Cities over 500,000 in population have gained more than 20 million new citizens since 2000 and moribund cities that were the butt of jokes for decades, like Detroit, Cleveland and Oakland, have seen billions of dollars of investment, tons of new residents, and are now the “places to be”.

As this original creative class ages and Covid has taken hold, the reasons for this migration back to cities over the last 20 years has now turned the desire and need to be in close proximity in urban areas on its head.

The thinking is that the renaissance of cities is over and a good chunk of urban dwellers will seek more and safer space outside of the urban core of cities turning the tide back on this 25+ year wave of movement. Is it temporary and a minor blip, or part of a larger reshuffling once again of where we live, work and play?

Many have felt that over the last few years the success and growth of many cities has come to the point of where we are “eating our own young” – namely many cities have become too congested, expensive, cramped and stressful, and it was evident even pre-Covid that there was a trickle already headed to the outer edges of cities or smaller surrounding suburbs and towns.

That original millennial class is getting older, getting married and having kids and the “city thing” was losing its luster a bit where working 60 hours and checking out the latest band, restaurant, or bar is not top of the list quite as much. Combine this with the fact many suburbs have co-opted much of the “coolness” and amenities of their urban core cousins with city centers. Add in walkability, bike lanes, better food and beverage options, combined with better schools and greenspaces, to where it is now not a sellout to move into these neighborhoods.

Covid may be an accelerant for this movement to find less dense and more spread out accommodations especially if commuting with remote or hybrid work models are here to stay. You name it Twitter, Facebook, Google and more have announced that employees can work remotely “indefinitely” A recent survey of 100 firms across Europe and U.S revealed that executives believe 50% of their employees will work remotely for the next 10 years. The same amount in the survey said that they will most likely reduce their current workspace needs over the same time. Much of this space is in larger cities. REI, the revered outdoor retailer, built a 400,000sqft gleaming new campus in Seattle but sold it this year before everyone moved in and is disseminating employees into multiple smaller office spaces throughout the Puget Sound Area.

“The events of 2020 have made us think and reexamine how we work and interact with each other. We want to create maximum flexibility and how our employees use physical space in a way that works best for them,” said the REI CEO.

That is not some sort of temporary move.

I have probably read 20 articles and opinion pieces where developers, social scientists, economists, politicians and more give their viewpoints on how cities will weather this recent health crisis and will remain vibrant and relevant, and of course there are lots of conflicting views.

Urbanist, Richard Florida said “Great cities will survive the coronavirus and will again prosper. There is just too much well established opportunity and economic and cultural infrastructure and we – and especially younger creatives – need and want that human connection and interaction to be happy and productive.”

The chairman of the Vulcan Development Company in Seattle said much of the same.

“We believe in cities. There is too much invested in cities in the way of transportation, culture, entertainment, services and more, for them to wither in any major long-term respect. We believe in the resiliency of cities to continue to attract the best and brightest.”

A Harvard economist on a panel went the other way.

“This is a permanent shift on how people live, work and play. With how many firms and organizations have made remote working very productive, and the reasons people were attracted to cities – such as food /beverage, entertainment, the arts and more – now diminished for some time, and the costs still high, many will find the safety, space and livability out into suburban neighborhoods and second- and third-tier cities.”

Portland Will Survive But Changes Are Afoot

Ok, where do we stand?

First, cities are pretty resilient and have been counted down and out many times before, as health crises, and even pandemics worse than this (Spanish Flu of 1918), made cities more prosperous and attractive once the health storm blew over.

But there was no internet then and the ability to be “on” and connected anywhere was not part of the conversation. Even with a vaccine, or Trump’s assertion that this pandemic will just “disappear”, I think this last year and longer will be imprinted into people’s psyche – where masks may be still common a couple years, and many people not feeling completely safe in many core dense locales.

It will provide an opportunity for cities like Portland to “reset”. Fear of density, transit and other close city interactions may pull some to the suburbs or smaller-tier cities – especially couples and families, and the most vulnerable.

However, the forces that spurred this urban migration into cities – such as the energy, entrepreneurship and variety of social and cultural options – will largely prevail. Ambitious and seeking young people will continue to flock to cities like Portland for professional and personal opportunities (even if remote work and less in-office work prevails), but there will be changes.

The crisis, I think, may provide a good opportunity for cities to really re-think their policies and investments to remain relevant and desirable places to live and work.

One tidbit I read: The “flee to the suburbs” narrative is somewhat temporary and was prompted by the virus hitting cities hardest and first, but that has turned around to now rural and smaller towns are suffering more or to the same extent now. Data from several sources – with one being Apartment.list – showed interest and “hits” for searching for housing in cities actually increasing in the third quarter. Strange.

Here are a few of my observations, facts and opinions, but again, it is very dependent on how long this wacky bat-virus lasts, and how well, and to what extent, it is defeated, and how that plays into people’s longer-term thinking of where they want to live, work and play. It is a social science sort of evolving experiment.

• Downtown city cores will suffer in the short term (1-3 years) from firms and organizations looking to downsize or change their spaces from aggregated high rises – or looking to leave completely – or move certain teams of their employees remotely. This will be driven by costs and health/safety concerns and employees’ desire for more dispersed work environments, and of course to the success of remote working. We in Portland have another negative besides Covid, which is our long-sustained riots and social unrest. While mostly over, it will remain imprinted on firms, employees and businesses downtown, and is a real longer term PR problem for Portland and our downtown. A recent Portland Business Journal article gave a good data-driven and negative view of downtown and core vacant office space. It was not pretty… just drive through downtown and it hits you pretty hard and easily. This will make the road for downtown more bumpy to get back to normal than most other cities.
• The rise of “Clusters and Nodes”. This is a good thing for cites where they may be able to capture much of any core migration of businesses into established commercial areas that are walk- and bike-friendly and have attractive services and less density. This viewpoint is substantiated by the aforementioned REI’s big decision. Portland will do well here, as both our close suburban cities, as well as our neighborhoods, have developed this infrastructure and attractiveness to accommodate these smaller clusters. Some will be in Portland, but many of these nodes will be places like Beaverton, Hillsboro, Tualatin, Vancouver, Milwaukie etc. so it will stay in the Portland SMSA.
• There will be movement by city dwellers to smaller second- and third-tier cities that are cheaper, less dense, have good internet access, have access to outdoor amenities and still have quality places to shop, eat, access to outdoors, drink and more. Oregon may well do well here, as those cities such as New York, Chicago and SF that may see more permanent moves (which in many cases was already happening pre-virus) – and they are not moving to a farm in Iowa – but want what they love in those larger cities on a smaller scale and cheaper. Portland fits the bill as a smaller and more manageable city. Plus, riots aside, Portland is educated, walk- and bike-able, has good air, amazing access to outdoor pursuits, is tolerant (sometimes too tolerant) a temperate climate and somewhat cheaper housing than many larger west coast cities. Also I think our strong brand of being natural, organic, having healthy, locally sourced food, relatively clean air and water, being outdoorsy, earthy and sustainable, though often made fun by many (late night show hosts and shows on TV- Portlandia) may be attractive to a cadre of potential migrators. On a smaller scale, in the west cities like Boise, Salt Lake City, Colorado Springs, Reno, Tucson and even smaller cities in Montana and Colorado will also see fleeing city refugees looking for digs especially if they want to buy a house.

Cities, along with property owners, will, and are, adjusting to rethink how to make buildings and dense core neighborhoods much more healthy, catering to companies’ new work rules and environments. Rents will need to “adjust” to provide more affordability and help will be needed for those small businesses like restaurants, breweries, shops, entertainment venues, and cultural institutions to regain their footing as they are attractions for firms and their employees in urban centers.

Again, Covid will influence and impact cities in differing ways and timelines, depending on a vaccine, and how people perceive the safety out there in both the short and long term. Generally cities should be able to rebound but the extent of comeback will be split unevenly based upon how each city handled the virus; perceived future job opportunities; how cities address livability, transportation, support the small businesses and cultural resources that make living in cities so special. The question is how, and to what extent, this coming social science experiment will unfold, but there is just too much invested and desirable about many cities and urban environments for them to stay down for long. But definitely Covid has reshaped how we view cities’ abilities to attract and retain talent and citizens, and remain powerhouses of economic, educational and cultural activity.