Is It the End of Big Cities?
How the pandemic has affected big cities and what future awaits them.
I read the other day this article by James Altucher:
In it, he claims that New York is dead forever and that unlike in the past, this time it won’t bounce back.
I like reading news about the US and in my opinion, COVID-19 has only been the catalyst of the exodus. It has been caused by these reasons as well:
- In the past, there were few alternatives to working in New York. Technology has changed that completely.
- High tax compared to other states. That’s why some banks or financial firms have established large hubs in other states like Florida or Texas.
- The anti-business sentiment that scares off companies.
Is the exodus happening in other big cities? Absolutely, but on a smaller scale.
At the time of writing this article, I’m living in London and we’ve been in lockdown since March. It has been eased but I haven’t used the underground nor trains since then.
I live just opposite the train station, I can see that most people aren’t using it. Even in what used to be rush hour and packed trains, now what you find are empty trains running at just 10% of their capacity.
I don’t know exactly how many people have left London, since I barely go out and I don’t venture beyond my neighbourhood, but I did a quick search and found these two articles among many others:
In my building, there’s a flat with a terrace that would have normally been rented right away but has been empty for at least 3 months. Their tenants left a few weeks after the lockdown was imposed.
When walking around my neighbourhood I can see more properties are for sale or for let than usual. I also checked prices online in sites like Zoopla or Rightmove and prices have gone down, although not a lot yet (probably agents are trying to keep prices up as much as possible).
So yes, people are definitely making life choices about whether or not is still worth it to stay in London.
Stay or leave?
Many people, especially if they can work from home, are pondering whether or not is worth staying in a big city when nothing is going on.
People choose to live in big cities not just because of work opportunities, but also for everything they offer: lots of events, theatres, a lot of options for dining out, etc. If you remove that from the equation, you are left with little entertainment options but paying a hefty price just to live in a premium location.
That’s why more and more people are now shifting their priorities and prioritising living in affordable places with more outdoor space.
Will people return to big cities?
If this change becomes permanent that’s something that no one knows. In the past, cities have had pandemics, like the Great Plague that killed 70,000 Londoners. But eventually, people would always return to the big city, because that’s where opportunities were.
This time though might be different. The Internet has allowed many people to work remotely and companies, including big ones, have seen the benefits of allowing people to work from home, not just in productivity terms but also in savings. I’ve had interviews with companies recently and they told me that they have decided to go full remote or at least reduce their offices to the minimum, just to have some meetings from time to time.
Pros and cons of a “new normal”
If this trend becomes permanent, there are some pros and cons:
Pros:
- People who can work from home will enjoy a better work-life balance.
- Companies will be able to reduce their costs drastically and their employees will be more productive.
- Cities won’t be that overcrowded.
- Wealth will be spread around the country, not just focused on big cities.
Cons:
- Not everyone can work from home.
- Some businesses that depended on office workers will probably close.
- If you work remotely, there’s the risk that your employer might decide to replace you with a cheaper worker overseas.
- The culture sector will probably suffer. Fewer people in cities mean less cultural options.
We will see if things return to a more normal once the pandemic is over, but there are clear signals now of some long-lasting changes.
In my opinion, though, cities will still be the epicentre of the economy and culture, but they will integrate with other regions and help create new opportunities where there weren’t before.
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