Are Cities Dead?

This is an article that has a United States focus but it could apply to most major countries in the world.

Over the last century, we saw a massive move towards cities. The shift to urbanization was driven by a shift away from an economy based upon agriculture to one that was industrialized.

After decades of this, there are two primary reasons why people do this:

  • Cities were where the jobs were
  • The culture in cities tend to more vibrant

For these, there was a cost incurred. Real estate prices in major cities is a lot more than elsewhere in the country. At the same time, all other services came at a premium. For cities such as New York and San Francisco, this is a massive difference.

Now, we are starting to see the shift in the opposite direction. Since the emergence of COVID-19, many took the opportunity to move out of these two cities.

A new CNBC report shows that 300,000 New Yorkers have bailed on the Big Apple since the beginning of the lockdowns.

The figure is based on change-of-address requests and likely masks the full picture. Many households include more than one person, and an address only registers in the report when 11 or more forwarding requests are made to a particular county.

Source

It is possible that the exodus could be more than 500K people have left New York City in the last 9 months. That is an enormous exodus.

Of course, this has a major impact on the economics of the area. Not only are private businesses crushed, tax revenue plummets.

This is something that San Francisco is realizing.


Source

Here is a chart that really shows the impact on the city. This is further evidenced by the fact that tax revenue from online deliveries, i.e. Amazon, is lagging other cities in California. This is leading many to believe that people are simply leaving the city.

Of course, cities tend to try to solve this problem by raising taxes on the remaining citizens. History shows this is not the solution since it does not produce growth.

Many are now debating whether cities are starting a long-term decline. It is worthy to note that within a few years, any point on the planet will be able to access the Internet. With the work from home idea proving itself, people will be able to do many jobs from anywhere in the world. This means being a part of a city for the first reason, proximity to work, is negated.

As for the culture, with people leaving, it is going to be impacted. We also could see technology providing another option. We are moving into the virtual world where "culture", at least to a degree, can be acquired in other means.

The longer lock downs occur, the less desirability there is for cities. The cost factor alone is enough to make people to flee to other areas. If 20% of the population does end up working from home, that will have an enormous impact on the major cities of the world.

Many believe that a city like New York will bounce back because, after all, it always did. However, my view is this time things are truly different. In a technological age, the old rules do not apply.

Our efforts in cryptoucurrency on a platform like Leofinance show how this change is taking place. As it grows, we will see more people getting at least a portion of their incomes from doing their online activities. With an Internet connection, this can be done anywhere in the world.

Will this spread out to hundreds of millions of people over the next few years as more platforms take shape?

If it does, it will put a further crimp in future prospects of cities.


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Bang, I did it again... I just rehived your post!
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The city offers work but how much stress!

the birth of organic farming and the consumption of zero km food is reversing the trend and young people prefer a job in the countryside, especially in this period.

Myself, if I had the possibility to change jobs, I would immediately move out of town, losing some comforts to which we have now become slaves

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What comforts would you have to give up?

Just out of curiosity.

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the convenience of finding any business, office or school a few meters from home.

Furthermore, in some areas there is no internet connection and the mobile network does not yet cover the whole territory

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The later makes things very tough in this era.

We will see that problem solved in the next few years, hopefully.

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A massive expansion of the network is underway in Italy and the territory should be fully covered by 2025.

I am convinced that the internet will no longer be a problem in the coming years.

It is essential for a farm to have its own e-commerce to be connected with the world

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I've been watching Linea Verde on Rai Uno for years now and it's amazing how you Italians care for km 0 products. This is helping local consumption and economy a lot. I wish we had that type of mindset here in Romania. Unfortunately when the budget is tight, people are forced to buy what they can afford. However I hope people will finally understand buying local can make a huge impact.

Also I was mentioning earlier in a comment here, how Italy tries to repopulate deserted villages by selling properties for 1€.

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unfortunately industrial food is fast and cheap and easily available in large distribution chains.

Local food has a higher cost, although it is of higher quality, but people don't always care.

among other things, if wages are low compared to the rest of my life, I myself sometimes choose industrial food

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That is understandable, feeding your family comes first and making ends meet is difficult these days.

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In Finland, the capital city of Helsinki used to be among the most desirable localities when people were asked if they were moving and where. Helsinki was never #1 but it was in the top 10.

Not any more. It has completely fallen off the list. The second largest municipality in the Helsinki Urban Area, Espoo, has grown fast in the past few decades. There average income is relatively high because there are lot of tech jobs and other high paying jobs there. That one, too, has lost popularity during the pandemic and the reason is the high cost of living.

A lot of people are clearly looking into buying a home further away from the urban centers because their money goes a lot further there and if remote working is becoming more common than before an extra room or a couple is a requirement.

I can fully understand that as someone who lives in a relatively cheap locality and in a house much larger than what we'd otherwise be able to buy.

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Thanks for giving a perspective from your side of the pond. It appears that it is the same across the developed world. I understand that London is following the same path.

It appears that, simply put, most are finding that cities are not worth it anymore. Obviously cost is a large piece of the puzzle but there are likely other factors.

Do you see this as temporary in Finland or a permanent trend?

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(Edited)

Thanks for giving a perspective from your side of the pond. It appears that it is the same across the developed world. I understand that London is following the same path.

When I visited London three years ago, I read in a paper about professionals moving out of Greater London because of the high cost of living. The average price of a home in the metropolitan area was £500,000 at the time. According to the article, professionals were moving to smaller cities like Oxford and Cambridge (universities, lots of academic and tech jobs), smaller cities around London like Milton Keynes and cities much further away from the region like even Bristol hundreds of miles away. London was still growing but immigration was a huge factor in that.

Greater Helsinki is about seven times smaller than Greater London (10 million) but many professional couples that I know move out when they have kids. Immigration is also a large factor in the population growth in the capital of Finland as well.

It appears that, simply put, most are finding that cities are not worth it anymore. Obviously cost is a large piece of the puzzle but there are likely other factors.

Aside from cost, there is also the fact that segregation along socio-economic and ethnic lines is growing in significance. Many people have the impression than Helsinki is no longer as safe as it used to be but I don't know how true that really is because I don't have any statistics at hand. Comparatively speaking, the magnitude of the problem is much smaller than in large cities in Britain or the US.

Do you see this as temporary in Finland or a permanent trend?

Too early to tell. Before the financial crisis of 2008, there was a clear trend for the middle class to move to the outer suburbs or exurbs and pay the price of a longer commute for the comfort of a larger home. The financial crisis seemed to trigger a reversal that may have been brewing for some time. Average household size has been getting smaller for a long time. If the middle class decides to head back to the suburbs, the tide will turn and perhaps for a permanently as commuting daily will no longer be a necessity for an increasing number of people.

I live 60 to 75 minutes from central Helsinki depending on traffic conditions. It's mostly an easy drive on a motorway that is almost never congested. How bad the traffic is in Helsinki depends on the time of day. I can tell you that I'd really hate to have to drive or take the train to Helsinki and back every day. 2500 people living here do that.

But if I had to drive there only once or twice a week, that would be different. In fact, I'd probably like that because I would be able to do shopping, run other errands or engage in my hobbies in Helsinki before driving back home.

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Thanks for the thorough update.

Many people have the impression than Helsinki is no longer as safe as it used to be but I don't know how true that really is because I don't have any statistics at hand.

Perception makes it reality. If people do not view areas as safe, for whatever reason, they will leave or not visit an area.

I imagine what you are seeing is going on globally. It might be too early to tell but the next few years will reveal what most are looking for. If technology advances to the point where jobs are online (remote), then I think the cities have a major issue.

It will be interesting to watch the numbers over the next couple of years.

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That's what happened in Romania as well. Part of the middle class moved out of big cities, choosing the countryside for a better life. As cities grow, life becomes more and more expensive and not everyone can keep up.

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What is amazing is the countryside towns in Japan were dying out with everyone moving to cities and the massive decline in their population.

COVID-19 has caused a shift of people in Tokyo moving out to the countryside. I don't think it is enough to "kill" Tokyo as it is the largest city on the planet but it has done enough to hopefully save the entire country of Japan.

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Covid19 won't cause a big enough migration to kill Tokyo, the high living costs will in time.

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Japan has a problem that is entirely different from most other developed nations. The fact their population aged ahead of everyone else caused it some unique problems.

This was the cause of the deflationary spiral in that economy.

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In some countries, migration to rural areas started a few years ago for various reasons, obviously not for a pandemic. The number of these migrants hasn't been that high though.

As you say, covid19 contributing heavily to this migration.

I know Italy had or still has a project of repopulating deserted villages, selling properties for as much as 1€, but there are strings attached. You don't pay taxes for 8 years but you're obliged to restore the property and keep it in good conditions. This is done to reverse the damage industrialization made years ago, when people left to work in cities.

In a way covid19 will or already does, make people re-evaluate their life and maybe push them out of big cities. Having a homestead helps you survive or live better as well, not just get away of the source of infection.

However, what is important to consider when taking a decision like that is medical care or better yet, the quality of medical care. In countries where the quality of medical care is better in big cities, where you live matters.

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Situations change and so do priorities. But abandoning rural areas has been unsustainable, and so has been the price of city property.

Some of the time.

And correction was due. And always will be. In a natural way, the move out of cities and back to the country has been expected. The triggers are random but the reasons are...well, to me they are like the physical laws of pressure and empty areas to be taken.

In that light, urbanization has been a move that required additional energy in order to be sustained. Now it has become more an individual choice if each of us is to keep spending additional energy.

At what cost? For how long? Why?

By the way, that reminds me to make a certain comparison of the two mega cities at the corners of Europe that I visited in 2019. Istanbul and Barcelona. A lot to ponder on, even based on 2019 observations. In short, one of those cities I now think of as balanced, while the other was kind of...looking for the one word to describe it...bursting.

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Most of our understanding of work- versus leisure time is comming from the industrialization with working shifts in a mill. This is a huge structural pice in our modern world that has shaped cities, architecture and any kind of infrastructure or business. With the working from home movement, we may grow into a situation that may much more resembling the one from feudalism, with no split between work and leizure but only living on the place that produces your income (a farm long time ago and a computer nowadays). This will also have a dramatic impact on infrastructure and the decline of big cities is the first thing we are noticing in this process. Interesting times ahead!

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That is an astute observation. Of course, a lot of the income process, or some, will be automated on the computer and different digital devices. This is where the growth in global wealth comes in. We are seeing the prospect of peoples devices earning a bit of money while one sleeps.

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Financial aspect aside, I love urban life because of no worrying of getting fired or whatsoever but you gotta live in city's with rule of jungle

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My dream is to to leave city's and live in open and nuturel place but first I need to make money in city I think lots of people thought the same

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I don't think this is just a US city thing either. Lots of people with families in London who had to work from home decided to do that permanently as they realise they don't need an office to go to to work in.

Especially with our stamp duty "holiday" (where the tax on property up to £500k), a lot have used the opportunity to move out of the city and into the countryside. I don't have exact figures but there was a lot of news articles about this.

9/10 people say they won't go back to working in an office as technology helps remote working.

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I agree that it is likely happening all over the world. My view is US based obviously, so I can speak from there. But I dont think it is unique.

My assessment is the same as yours, I dont think most will return to an office once they get comfortable with the work from home idea.

There are a lot of advantages to it.

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Yeah definitely! I prefer the 1 metre commute vs 1 hour for a start! Feel like there is less stress with that but there's still plenty of stress that builds up in a working day but at least one less thing to worry about is the commute

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De-urbanisation, which is quite understandable trend from economic and social perspective, is probably going to clash with the agenda of those who, until recently, promoted even more radical urbanisation as a solution of all world's problems. I remember reading plenty of articles hailing big cities as places where people, being torn from the bigotry of petty rural life, become more tolerant, open-minded and progressive. Furthermore, people who live in big cities are easier to be manipulated and controlled.

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This tendency to return to nature and leave the cities has been manifested in Romania for some time. The congestion and pollution in a big city like Bucharest, the cost of living pushes first of all the pensioners to go to the country, for lower costs.
Now, in the pandemic, younger categories of people have begun to want to live outside the cities, in smaller localities, with lower costs and a quieter life. A problem that still prevents this move are children and the need for a good and competitive school, in villages and small towns this is a problem.
Indeed, the expansion of the Internet solves a big problem for many who want to leave cities, I know quite a few who have already done so and work from home.
Certainly this pandemic will leave deep marks not only in the bodies of those who have fallen ill.

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This tendency to return to nature and leave the cities has been manifested in Romania for some time. The congestion and pollution in a big city like Bucharest, the cost of living pushes first of all the pensioners to go to the country, for lower costs.
Now, in the pandemic, younger categories of people have begun to want to live outside the cities, in smaller localities, with lower costs and a quieter life. A problem that still prevents this move are children and the need for a good and competitive school, in villages and small towns this is a problem.
Indeed, the expansion of the Internet solves a big problem for many who want to leave cities, I know quite a few who have already done so and work from home.
Certainly this pandemic will leave deep marks not only in the bodies of those who have fallen ill.

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Definitely I have always believed that this working from home I mean online will have a negative effect on the growth cities standard but the major concern is, I don't see cities recovering from this negative effect Soon

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May I say the younger you are you want
to move in.
Having kids and settle down you flee.
I think it will balance out and due to real estate
things change but it is noticeable long term.

!BEER

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