Ricky Adam, from the series ‘Don't You Forget About Me,’ 2020
Ricky Adam, from the series ‘Don’t You Forget About Me,’ 2020
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The Office Space Apocalypse

The era of massive densely packed urban office towers is over for good. What will take its place?

by
Joel Kotkin
November 09, 2020
Ricky Adam, from the series ‘Don't You Forget About Me,’ 2020
Ricky Adam, from the series ‘Don't You Forget About Me,’ 2020

“We shall never deal with the complex problems of large units and differentiated groups unless at the same time we rebuild and revitalize the small unit. We must begin at the beginning; it is here where all life, even in big communities and organizations, starts.”
— Lewis Mumford

What if they reopened the office and nobody came? This scenario is not as far-fetched as many believe. The office may not be dead, but its post-COVID future, particularly in big cities, may look more like a medieval-style arrangement than the buzzing, super dense science fiction vision from The Jetsons.

In the coming months, particularly after Trump likely loses the White House, there will be a massive campaign—already starting from office owners like Related—to force people back into their cubicles. Billions in real estate are at stake for the creator of New York’s Hudson Yards, which received $6 billion in city subsidies and tax breaks. Besides being a hideous monstrosity, the development now could prove itself a giant white elephant. Wall Street financiers, many of whom have invested in ultra-expensive city residential and office properties, also are desperate to get the peasants back tilling the postindustrial fields. With even the iconic Empire State Building losing money hand over fist, some landlords are so panicked that they are offering tenants free rent to lure them back. Meanwhile, in San Francisco some tech firms are canceling their leases.

COVID has been especially severe in cities due to what the demographer Wendell Cox labels “exposure density” brought on by insufficiently ventilated places like crowded housing, subways, elevators, and the office environment. The virus’s fatality rate has been between three and six times higher in dense urban areas than in the suburbs or the countryside. No surprise then that among current remote workers—who tend to be clustered in cities where a higher percentage of occupations can be done remotely—roughly 60%, notes Gallup, want to stay at home or close to home. Even fewer still are likely to want to take public transit, which has been widely linked to high infection and fatality rates in the pandemic.

Going back to pre-COVID work arrangements seems all but impossible. As the Gallup poll shows, most people now working from home want to keep it that way for the foreseeable future. In New York City, barely 10% of workers have returned to offices. While in London companies report 15% have returned. Many companies, including banks and leading tech firms such as Facebook, Salesforce, and Twitter, are expecting a large portion of their workforce to continue to work remotely after the pandemic. The transition has been less jarring for tech companies since dispersed work is now the norm for the vast majority of startups, as a recent survey of venture capitalists shows. Stanford economist Nicholas Bloom projects that ultimately, we will see telecommuting increase from 5% of the workforce before the pandemic to something closer to 20%.

These current trends toward remote work and greater concern about “density exposure” and related risks of urban living contradict many of the bold predictions made over the last quarter century. We are a far cry from a decade ago when developers like Sam Zell were boldly predicting rapid densification, with many people choosing to crowd into micro-units in a process tied to widespread claims about “the end of suburbia.” This was always a gross exaggeration: Throughout the last few decades the suburbs have retained their demographic and economic predominance. As a Harvard study recently confirmed, suburbia has actually been gaining ground over the past 40 years.

Even before the pandemic, big cities like New York, Los Angeles, and Chicago were losing population, as migration patterns had shifted to suburbs, lower-cost metro areas and less expensive states in what the real estate company Zillow calls a “a great reshuffling.” New York, Los Angeles, and Chicago have been losing people for years, and can expect to lose still more now. In just the past six months, according to demographer Wendell Cox, New York lost almost as many residents as it gained since 1950. And a recent study by the American Enterprise Institute found that the percentage of Americans saying they want to live in cities dropped 55% in just two years, down to barely 13%. For the first time in over a decade even non-metro areas are beginning to gain population.

Adding to the preexisting concerns about city life, over the past few months many of the biggest job losses have been concentrated in the New York, San Francisco, Los Angeles, and Boston metro areas. Nor does it look like these losses will be offset anytime soon—a new survey by Site Selectors guild suggests that only 10% of companies are looking to expand in large cities, one-sixth as many as choose suburbs, and one-third as many as those who favor rural areas.

The result of this economic contraction and ongoing wave of dedensification is that across America’s major cities, once coveted office districts have stopped being bustling business centers and started to resemble the fallout zones from a zombie apocalypse. You can see it on the streets. Half the storefronts of San Francisco are being abandoned. New York City is experiencing a 40% surge in bankruptcies this year, a trend likely to worsen in the coming months. As many as half of all the city’s restaurants could close permanently. Even in Manhattan, the hottest real estate category is warehouses, driven in large part by the same e-commerce trend that has accelerated under the lockdowns.

The future city will be shaped by new technologies that are accelerating a process one British writer has termed “counter-urbanization.” This does not mean the end of the urban core but its transformation into something other than the default center of economic life. In many ways the harsh conditions in core cities could make them more attractive to young people, artists, singles, and the bargain-hunting ultrarich, who may be part-time urbanites. A reduction in tourists and commuters could make these areas far more pleasant, allowing them to reinvent themselves as what H.G. Wells called “places of concourse and rendezvous;” in other words, playgrounds for the young and childless well-to-do. They would be, he waggishly predicted, “places of elegant extinction.”

The successful core city can thrive only by downsizing and learning to like it. Cities, as is often noted, have survived but also been reshaped by plagues. Past pandemics led to the rise of “sewer socialism,” a vast improvement in sanitation, health as well as to a process of dedensification. New York’s Lower East Side, then among the most crowded places on earth, was repeatedly devastated by pandemics leading to the Spanish flu. In the ensuing decades Manhattan, home to 2.3 million people in 1910, shrank to 1.5 million, due to migration to the outer boroughs and surrounding suburbs.

Great cities are not just about magnificent buildings, art performances or concentrated economic power: They rely on providing residents a better way of life. The pandemic provides a unique opportunity to migrate away from what British novelist Will Self describes as “the Wizard of Oz hollowness” of modern cities that “belittle us” with their mass and scale. Future cities may not look like what you see often in science fiction movies. Instead in some ways, they may more resemble the city of the European Enlightenment, when economic activity was centered around the home and spread out in less-crowded neighborhoods.

Numerous progressive publications—The Guardian, In These Times, The San Francisco Chronicle, and The Atlantic—see the departure of wealthy residents as “a good thing” allowing a more just and accessible city to be “reborn.” Certainly declining rents in place like San Francisco and Manhattan could lure young talent, artists, and entrepreneurs back to the city. Yet this also seems wishful thinking, since it does not address the causes of inequality. Nor does it grapple with the reality that talented people, particularly as they get married and have children, will not likely want to remain in places with poor schools, high levels of exposure to diseases, and rising urban crime. The real problem facing cities has long been the same—not a surfeit of rich people, but a loss of opportunity. American cities have largely surrendered their historic role in enabling movement “up the employment ladder,” as a recent MIT report demonstrates. Today, our core cities suffer a level of inequality that is far, far worse than in the American countryside or suburbs and more closely resembles social conditions in Mexico.

The artiste revival would be welcome, but more avocado toast and galleries won’t address the critical issue of providing economic and social opportunities for the poor and modestly skilled populations that lack the social and financial capital to leave the urban core. We need to look into how we can forge 21st century versions of the artisanal industries that once flourished in places like Brooklyn, northern Queens, off San Francisco’s Mission Street, or East Los Angeles.

Contrary to the claims of urban boosters, real estate speculators, and planners, the urban future is not assured. American cities—indeed cities everywhere—have usually done best by establishing neighborhoods, those “urban villages” within the greater metropolis, each with its own distinctive character. It may not appeal to the mega-developers and their bigger-dollar backers, but it’s the key to remaking the city so it can once again provide the chance at a better life for normal people and serve as the engine of America’s democratic experiment.

Joel Kotkin is the Presidential Fellow in Urban Futures at Chapman University and executive director of the Urban Reform Institute. His new book, The Coming of Neo-Feudalism, is now out from Encounter. You can follow him on Twitter @joelkotkin.

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