Urban growth will continue | City newspaper
TTwo decades ago, Nobel Prize winning economist Robert Lucas observed: “Why can people pay rent in Manhattan or downtown Chicago, if not to be near others? people?” This statement was true 20 years ago – and, despite Covid-19, it will be true 20 years from now, too. The same fundamental principles will continue to drive urban growth.
It is useful to remember that Covid-19 is not a one-off event. The Spanish flu of 1918-1919, much more deadly than Covid, did not stop the exodus from the countryside to the cities, then in full swing in countries undergoing industrialization. Before the medical advances of the twentieth century, cities were deadlier than the countryside, hotbeds of infection and disease. Yet rural people are flocking to cities in America, Europe and elsewhere. Such was (and remains) the power of what economists call agglomeration. Write in the American Economic Review in 2002, Donald Davis and David Weinstein, two American economists, showed how Hiroshima and Nagasaki, after being crushed by the atomic bomb, resumed their growth path 20 years later, powerful proof of the resilience of cities. If the atomic bomb failed to stop their growth, why would a transient, even destructive, pandemic do so?
The glue that binds information-rich industries to cities can be summed up in one word: met. The need to meet will return. Businessmen and women in a hurry will once again run from meeting to meeting, iPhones glued to their ears. The business lunch will return, much to the relief of the owners of downtown restaurants and bars. This optimistic prediction, I believe, is of little comfort to those who have suffered the brunt of the urban lockdowns, which have turned many city centers into vacant lots. But it will happen, I believe.
But hasn’t Covid shown that transactions previously requiring physical presence can be replaced by electronic communications? Won’t city centers be less necessary? We’ve been here before too. With each new technology, experts predict a major change – think Frances Cairncross’ bestseller in 1997, The death of distance. However, distance is not dead with the Internet. Instead, the concentration of knowledge-rich jobs in big cities has accelerated. Over a century ago, the arrival of the telephone and other improvements in communications did not slow urban growth either.
The reason: electronic communications and face-to-face meetings are complements and not substitutes, which explains the apparent paradox of the parallel growth of business travel and electronic communications. Each new communication technology has generated a new demand for meetings. Electronic communication is almost always an accompaniment – a prelude or a follow-up to reality. If Covid has taught us anything, it’s that videoconferencing, despite technological advances – Skype, Zoom – is rarely a satisfactory substitute for face-to-face meetings.
The continued need for physical presence tells us that the long-term impact on office demand will, in most locations, be minimal. The decrease in floor space per worker was already underway in North America before Covid, but it has had little visible effect on the long-term growth in overall office demand. Ultimately, the primary driver of floor space demand remains the structural shift of economies towards increasingly meeting-intensive activities. Office industries will continue to create more jobs than other industries, while generating a demand for floor space in neighboring restaurants, hotels and convention centers. In addition, we can expect Covid to encourage demand for more spacious and airy meeting spaces, outdoor patios, elevators and ventilation systems, countering the decrease in floor space per worker. The design of the post-Covid office will likely change, but not its basic economic rationale.
Remote working is definitely here to stay, to a large extent. But studies in the United States and Canada suggest that the proportion of workers in occupations that lend themselves to telecommuting is around 40%, with knowledge-rich occupations evidently at the top of the list and hospitality, the construction and manufacturing downstairs. Before Covid, telecommuting was still an option for a small minority. The pandemic has of course changed that, with telecommuting approaching and even exceeding 50% in many cities (for those who are still lucky enough to be employed). Surveys suggest that the majority of people forced to work from home would like to continue to do so. But for the vast majority of these teleworkers, the link with the office will remain strong. Survey data suggests that a hybrid work schedule will emerge, with a varying mix of days at home and in the office. The umbilical link with the workplace and the city will not disappear.
Arguably the most important change Covid will bring is in the perception of the home. If I have to spend many hours working at home, I want a house (or apartment) where I can work comfortably and a neighborhood where, ideally, I can easily find the amenities of everyday life: restaurants, gyms, grocery stores. . Telecommuting means creating or adding room for a home office, with an emphasis on space but also on gardens, porches and balconies, which, added to the convenience of less commuting, will favor customers. suburbs, in many cases. The memory of the house arrest and foreclosure can lead many homeowners and tenants to take a second look at their homes and ask, “Is this where I want to be when the next pandemic strikes?”
The post-Covid city – where the home has gained renewed importance and households, especially in the upper income brackets, will enjoy greater freedom to choose where to live – has a dark side. A basic rule of the urban economy is that improvements in communications and transportation allow cities to thrive. The streetcar and later the car facilitated the growth of suburbs, giving those who could take advantage of new modes of transportation a greater choice of housing, but also facilitated the growth of socially (and racially) segregated neighborhoods.
The same rule applies to teleworking. Then again, there is a technology that allows those who want (and can) to self-segregate. It is too early to conclusively predict the social geography that this new technology will produce. But we have no reason to believe that teleworkers will not largely replicate the pre-existing social geography of a region, with demand being concentrated in high-end markets.
Many teleworkers, depending on the city, will use their cars for periodic visits to the office, classroom or laboratory. Whatever work schedule they adopt, the result will be a decrease in daily commuting, a reduction in congestion – a good thing – but also an incentive to use their car. The net result of daily commuting is impossible to predict, depending on the city context; but congestion could increase on the long term. Car use in general, in my opinion, will regain favor in the post-Covid city, with telecommuting being only part of the story. In most cities, those who continued to commute during the pandemic knowingly avoided public transport for fear of contagion, returning to the car when possible. It is impossible to predict how long remembering the pandemic will reduce the demand for public transit.
Here, we have to distinguish between cities like New York, Montreal, and San Francisco, with well-established transit systems and dense central business districts, and other metropolitan areas, like Atlanta and Houston, where public transport represents less than 5% of daily trips. In cities with a high density of public transit, I am convinced that ridership will eventually return. This may sound overly optimistic, given the cataclysmic collapse in ridership, and the funding needs are truly astronomical. But for cities like New York and Montreal, governments will have little choice but to move forward. Manhattan cannot survive without a functioning public transit system; the basic economy will stimulate political will.
For cities with already weak urban transit systems, that will be a different story. Funding public transit will become even more of a political tough sell at the local level. In retrospect, the first two decades of the 21st century may have been the last chance to establish functioning public transport systems in many cities – that is, before the inevitable shift to electric vehicles and clean technologies. , depriving environmentalists of a powerful argument against car use. Covid will have dealt the final blow.
You don’t have to have a graduate degree in social psychology to understand that driving alone and working from home is not conducive to social interaction. This is where Covid’s potentially most troubling urban legacy resides. The rediscovered focus on the home can re-energize anti-development forces in cities, especially when it comes to building new housing. With a new impetus for public health arguments, they will push density even further.
Additionally, Covid will add a new layer to the technological ability of city dwellers to create and inhabit their own cultural silos. Laptops and smartphones can be great liberators, but they also allow users to “select” their own information universe, to which Covid will now have added a residential dimension. In a post-Covid world, promoting greater social cohesion – whether through housing, zoning changes, public transport or inter-municipal tax cooperation – won’t be easier.
Robert Lucas was right: cities exist because people want to be “close to others”. Behind this obvious statement hides another: the no less natural impulse to choose who you want to be close to. The post-Covid city will likely be more selective, both in terms of residence and social interaction.