07 September 2020

The coming decline of the cities

Urbanization has been increasing for centuries, but that trend may be about to go into reverse.  I believe core cities as we know them are doomed to decline, for two major reasons -- one general, the other specific to the US.

1.  Working from home is the new normal, and this will remain true even after the pandemic is over.  Globally, 76% of office workers want to continue working from home even after the pandemic; for the US the figure is 82%.  For the UK it's almost 90%.  This was surely inevitable.  Working from home, you don't need to waste half an hour each way plowing through traffic (or even longer on a bus or train).  You save a lot of money on gas and parking.  You don't need to worry about bullshit like office dress codes.  You don't need to worry about catching the flu or whatever from some idiot who decided to come to work despite being sick.  You're at home with all your own stuff -- if you want to eat something, you've got what you like instead of having to choose from vending machines full of junk food or an expensive eatery.  I've been working from home now since mid-March and I can't imagine ever going back to the way it was.  In the future, companies that don't offer work-from-home -- at least for most days of the week -- are going to be dead in the water when competing for the best employees.

Work-from-home also benefits employers -- in many cases it improves worker productivity and morale.  Fujitsu plans to reduce its office space by half, which will save a ton of money, and companies worldwide will soon realize they can achieve massive savings the same way, with most employees working from home most of the time.

The problem for the cities is that a lot of downtown businesses are dependent on all those office workers for revenue.  Owners of office buildings, likewise, will see their rental income plummet as companies reduce the space they use.  The British government is already launching a campaign to encourage workers to return to offices, fearing that core cities will become "ghost towns" otherwise.  That's hopeless.  No amount of exhortation can overcome such powerful incentives for both employees and employers.  The fact is, the old model of dragging everybody into a central location to do jobs that can be mostly done over the internet has been obsolete for a decade.  I always thought that a transition to working from home as the norm would require a generational turnover of corporate leadership -- but the pandemic has sped things up, forcing change now that would have happened in another ten years or so anyway.

2.  American core cities are becoming unsafe and the authorities lack the will to do anything about it.

A few months ago gangs of armed thugs descended on the centers of Lansing MI and Salem OR, in a blatant effort to intimidate state leaders into lifting covid-19-related restrictions.  No serious action was taken to clear away these threatening displays.  The mobs stayed in the city centers, displaying guns like an encampment of occupying barbarians, until they left of their own accord.

Early in June a similar armed gang seized control of several square blocks of Seattle, establishing a so-called "autonomous zone" which persisted for almost a month before being cleared away.  Even after several shootings and "a rape, assault, burglary, arson and property destruction", the authorities fiddle-faddled around, "negotiating" with the thugs instead of moving in to provide the protection the residents of the "zone", like everyone else, pay taxes for.

For months now several cities -- notably my own city of Portland -- have been scenes of mob violence including vandalism, looting, arson, vicious assaults which have required the victims to be hospitalized, and incidents of "protesters" blocking streets pulling guns on peaceful drivers trying to get through.  Mobs have repeatedly attacked police with projectiles capable of causing serious injury.  Police have brutally attacked protesters, including people who clearly were not committing violence.  In some cases police have shot and killed or seriously injured people -- provoking more protests and violence.  In Portland, during a period a few weeks ago, men in unmarked uniforms were abducting people in vans without clear reason, in a clear attempt to spread fear.

In the most recent escalation, a Trump supporter was shot and killed in Portland, apparently by an Antifa fanatic, while a Trumpanzee in Kenosha WI shot three people during a protest, killing two of them.

In effect, we now have rival armed gangs fighting it out in the centers of our cities, with signs of more to come, and no sign of any meaningful action from the authorities to put a stop to it.  I must emphasize that, in relation to the point I am making here, it does not matter who is committing the violence, be it Antifa, pro-Trump militias, "peaceful protesters", infiltrating provocateurs, police, or whoever else.  The point is that as long as this situation continues, no sane person would want to go anywhere near the places where it is happening or might happen -- the city centers.  In the Portland area, several companies have re-opened offices in the suburbs, but will not re-open their downtown offices until they feel conditions are safe.

Again, the point here is not who is committing the violence, nor whether someone believes it to be justified or not.  The point is the decisions that business owners are likely to make, given these circumstances.  How many will judge it not worthwhile to re-open downtown, even after the pandemic is over?

o o o o o

Small businesses in downtown areas face a double threat.  Not only will the work-from-home trend take away many of their customers, but there is the ever-present threat of being looted and destroyed whenever another police shooting, anywhere in the country, provokes another wave of urban violence.  Don't be surprised if many end up relocating to suburban shopping areas or the mini-downtowns of smaller satellite cities.

People who live in city centers will likely think the same.  Why continue paying sky-high rent if there's no longer any advantage to living close to your job?  Even non-core areas of cities may start losing population.  I've long planned to leave Portland when I retire (which, if all goes well, could be as soon as two years from now).  But I've been doing my job from home perfectly well since March, and the company has signaled a willingness to let me continue doing so, most of the week, after the pandemic is over.  I'm now seriously considering trying to negotiate continuing to work from home all days of the week after the pandemic, so I can relocate then instead of waiting for retirement.  It's a lot easier renting an apartment when you're still on salary rather than on (considerably lower) Social Security.

There will be some advantages to a more dispersed and mobile population.  The elimination of most commuting will reduce pollution and demands for fossil fuel.  Dispersion of people from blue cities to red small towns will help break down the cultural and ideological homogeneity and insularity of the latter.  Mass migration away from expensive areas will create a powerful downward pressure on rents and house prices, making housing in general more affordable.

But cities will have to find new reasons for being and things to offer -- or, perhaps, find themselves on the road to becoming obsolete.


Blogger Mike said...

In the old days, you couldn't work from home. All the records you needed were at the office. Now all the records are online. Mostly anyway. The home office will be a data center with other support staff. The only people that will fight work at home will be the control freaks. The people that have to berate subordinates in person.

As far as how this will all play out? Well, I've been through it in the 90's. I worked for regulated Southwestern Bell, originally controlled by AT&T. Then unregulated Southwestern Bell a separate company thanks to divestiture. Then unregulated AT&T after most of the Bell system was put back together unregulated. A lot of people got dumped with each deregulation and each remerger. That was their way to raise the stock price, dump people. It takes a while for a company to start falling apart as the greed takes over. But it's happening.

Working from home will be contingent on your internet service. You won't be able to get too far away from a city and still be able to have decent high-speed service. The suburbs may become the new downtown. And suburban density will drive access to higher speeds. Right now in the St. Louis area, the high-density areas are getting the AT&T 1gig service. I live next to two suburban cities that have it. The city I live in is less dense and we are not even on the list for a future service upgrade.

We need to ask the people of Enron how they are doing now. It could be our future.

07 September, 2020 22:50  
Blogger RO said...

I love, love, love working from home for all the reasons you mention, particularly being able to eat what I want. It's great to have the flexibility to work the hours I need to, which frees me up for Netflix and other stuff I probably shouldn't be doing(lol) Hugs and hope you are well1 RO

08 September, 2020 03:36  
Blogger Sixpence Notthewiser said...

I may be in the minority, but I like big cities. I cannot wait until the pandemic is under control so I can go back to going to Chicago over the weekend to go to a play, or a concert, or a museum, or my favorite restaurants. I don't work in the city, but I would like to live in the city. I don't because I live and work now in the suburbs.

I hear you when you say that we're saving tons of money in road tolls and gas (absolutely true) and three hours on 355 four days a week, but I will most probably go back to that because I literally work WITH people. I don't know when it'll be safe, but I will probably have to do it.

I find it irritating that policing, that joy white supremacists seem to enjoy to no end, is linked to them NOT being policed. As you mention, hordes of white people armed to the teeth invaded downtown areas in many cities and the Fuzz did nothing. Kindred spirits, I guess.

I am sorry for small businesses that have always depended on the people who work in cities for survival. That's going to be a tragedy. The army of people who depended on us working in offices is going to suffer. As if what they've been going through since March is not enough...


08 September, 2020 03:41  
Blogger bluzdude said...

Before the 'Rona, I worked in a shiny glass 20+ floor office building in downtown Baltimore. I've been working from home since mid-March and I don't plan to go back until they drag me kicking and screaming.

I consider this year a "proof of concept" test, that I can do my 99% of my job from home. So far, the company has been leaning toward flexibility in the future. I used to work from home 2 days out of 5, but can see going to 4 out of 5, or maybe even once a month.

My company is big on "collaboration," but I don't have a collaborative job. A phone call or two with my boss every week is more than sufficient. Our "open office" environment is nothing but a conduit to spread airborne pathogens. (Sitting in one place, breathing, for 8 hours at a time.)

I love working from home for all the reasons you list... no commute, wear whatever, eat out of the fridge, private bathroom, (wait, I think you missed that one.) I miss some of my co-workers, but in general, I certainly don't miss people looking over my shoulder, chattering in the aisles, loud phone calls...

If you multiply my experience by all the others working from home, I don't see how downtown areas or the traditional working environment ever goes back to what it was. There's just no more need. And employers are going to realize the cost savings of folding up their large offices into a smaller hub with the majority of employees WFH.

08 September, 2020 05:16  
Blogger Infidel753 said...

Mike: Of course companies self-destructing through excessive layoffs to save money has been around for a long time (I was once at a company where that happened). I don't see why working from home would cause any more of that than in the past, especially since companies will be saving money in other ways.

That's a point about lack of good internet access in certain areas. I'm hoping that if the Democrats take power, we'll eventually get an upgrade of the nationwide internet infrastructure.

RO: Yes -- and it also frees up more time for blogging.....

Sixpence: It's true that some jobs can't be done from home, or some people simply won't want to work that way. They'll benefit somewhat, though -- less crowded commutes, less competition for parking, etc.

Cities do have a lot to offer culturally. I suppose that will keep them going to an extent, even when far fewer people are working there.

Bluzdude: That's the thought that led me to write this. Hundreds of millions of people all over the world are making the same kind of calculation. It may turn out to be the biggest effect of the pandemic in the long run.

08 September, 2020 05:40  
Anonymous Kwark said...

Well, I remain skeptical about the businesses leaving downtowns part. In my workplace, many years pre-covid, we gradually moved to a mostly work from home setting justified mostly by cost savings and a nod to worker bee satisfaction. Until new management moved in and decided the cost savings were largely illusory and yada, yada, yada. No synergy ya know. So the cost savings need to be substantial, management has to be willing to loose some control and, in my cynical perspective, personally benefit from the change.

08 September, 2020 16:34  
Blogger Infidel753 said...

We'll see. The cost savings will be considerable, and being able to compete for good employees is going to be a real issue. Market forces do exist and companies that don't get with the program are going to run afoul of them.

09 September, 2020 01:48  
Anonymous Anonymous said...

Will work from home (WFH) expand? Undoubtedly.

I figure about 20 to 30% change. Fact is there are reasons WFH hasn't worked out and these issues have not been addressed:

The single biggest reason is that people really like compartmentalizing their lives. The trip to work is a mental change in who you are and how you behave. I mentally put on my mask and armor, make sure my weapons are sharp, and prepare to do battle. Hard to get into that mindset with the cat rubbing your leg and a kid having a tantrum ten feet away.

Fact is a whole lot of people like getting out of the house. Getting away from kids and the wife. Even people who love their homes, kids and wife enjoy getting away from them.

A lot of bosses really like playing the part of battlefield general and assembling the troops. Harder to do, and far less impressive and effective, online.

Doing it all in a central location physically does help focus you on why you're there and confirms that everybody is in the same headspace.

These are just the top few. The fact is the centralized workplace is an adaptive structure and, even as everyone loves to hate on it, it does serve the functional and deep rooted (often denied) psychological needs of both employer and employee.

It also has to be pointed out that the death of the central office has been announced many times before. A not untypical case has people shifting to WFH and crowing about how great it is. Less than a year later they are back at the office.

09 September, 2020 11:56  
Blogger Infidel753 said...

But the actual data (surveys I linked early in the post, and there have been many more) show that overwhelming majorities of people do want to keep working at home, after six or seven months doing so. And articles on the subject I've seen have said that in most cases productivity is better, not worse. I can certainly focus far better at home than in an office full of noise and distractions.

The centralized workplace is no longer adaptive, not with modern technology. Workplaces will evolve to fit the new conditions.

If "the death of the central office has been announced many times before", I haven't noticed. Certainly nothing like the present mass move to work-from-home due to the pandemic has ever happened before, and that's what has opened people up to the possibilities.

09 September, 2020 15:03  
Blogger Mary Kirkland said...

I think there will be a lot of people working from home where they can but others won't be so lucky.

09 September, 2020 17:01  
Blogger Tim said...

Residential real estate is still booming in some cities like Seattle and Atlanta. I used to live in major cities but got out because I'm getting too old for that much stimulation. I was in midtown Atlanta last week. The core is still full of young people doing their thing. I have a feeling it will continue.

11 September, 2020 13:43  
Blogger Infidel753 said...

Mary K: Some jobs can't be done from home, unfortunately. But these days the majority can.

Tim: I hope young people keep going to the cities to "do their thing" -- it will help some of those downtown businesses. As to real-estate prices, it will take time for the effects I'm talking about to ripple through to that.

11 September, 2020 15:53  
Blogger Paul W said...

I must argue there are several reasons why cities will persist:

1) They are cultural centers, places of art, music, activity. Much of New York City is museums and theaters and straight up CULTURE, as is Austin, L.A., Seattle, Atlanta, Boston, Chicago...
2) Cities can become if not already places of learning, with many a city maintaining at least a decent university. One of the reasons why Pittsburgh survived the loss of steel manufacturing was because their University of Pittsburgh stayed around as a source of employment and expanded into a large engineering learning center (along with support of medical/health care and other high-education endeavors).
3) Sports teams. Go Bucs/Bolts/Rays!!!

What has to happen from here on for cities to survive as all that requires political will to dismantle some - cough corrupt police forces cough - of the institutions resistant to change. They need to redesign their roads into pedestrian and bike paths, they need to upgrade their local transit systems, they need to improve low and middle-income housing (changing out empty office buildings for more affordable homes, hopefully).

11 September, 2020 15:55  
Blogger Infidel753 said...

I hope cities continue to be centers of culture and learning -- it's a big part of why they're valuable. It's hard to see those things offsetting the economic losses as business and work migrate out, though.

I like the idea of converting office buildings to affordable housing -- They'd need a lot of added plumbing, bu I suppose that could be worked out.

12 September, 2020 02:18  

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