Three huge impacts on city life because of the coronavirus/pandemic

I haven't written a big takeout on what I think will happen going forward with cities given the coronavirus.  Yes, some people are leaving cities for suburban and rural areas.  But it's not clear that being/living in a city per se increases your risk.

Plenty of cities, even megacities, in the countries that have successfully managed their response, are doing fine relatively speaking, even if US cities are not.  The real problem is the abject failure of the federal government in particular the executive leadership to properly respond to the crisis, abetted by many state governments.

Cities are caught in the crossfire and become collateral damage.

Yes, metropolitan areas have higher numbers of deaths and death rate, and while this is a function of density, and crowded conditions in some places, it's also a function of a preponderance of congregate care centers being located in metropolitan areas.

It's unclear if using transit is a big risk factor.  But yes, recirculating air ventilation systems are a factor.

But clearly there are at least three big changes that make a difference, two impact residential choice and one impacts center cities as office districts and employment centers.

Florida spring break.  Photo: Saul Martinez for the New York Times.

Decline of indoor nightlife and "third places."  A major attraction to visit or live in cities is for nightlife and entertainment, coffee shops and other places.

And those kinds of places--restaurants, bars, clubs, concert halls, stadiums, arenas--are the worst places in terms of increasing the risk of infection

Even with a vaccine, people's--at least rational ones--willingness to patronize such establishments are likely to diminish for a long time.  I don't see how the sector can survive.

And if there isn't nightlife ("The city that never sleeps is losing its nightlife," Politico), then people become less willing to pay a premium to live in the city ("New York, L.A. Nightlife Lockdowns Sending Renters to Suburbs," Bloomberg).

A refocusing on outdoor space.  Cities are often built up places, with limited "free form" space as parks or otherwise flexible space.  At least in temperate months to support more active life in the face of pandemic, there will need to be more outdoor space.  Cities shifting street space to such activities is a step in this direction ("From more space to socially distance to a systematic program for pedestrian districts (Park City (Utah) Main Street Car Free on Sundays)").

Fabian Lake, with the Wasatch Mountains in the background.  Sugar House Park, Salt Lake City.

As an interested resident, recently I sent a bunch of unsolicited comments to Sugar House Park about how they could improve activation, in response to a proposal out there for adding a cafe.  I think adding such space there would be great.  But to my way of thinking, the particular proposal has a number of problems.

Will outdoor spaces need to stay open later as a result of this shift?

But during intemperate months, indoor activities will seriously decline.  People tend to spend more money during better weather, with the exception of holiday-induced spending like Christmas.  As long as coronavirus is around, without effective vaccines, economic activity is likely to become significantly more seasonal.

As it is, traditional retail generates most of its profits during the holidays.  Restaurants and entertainment is more balanced.  This is likely to change.

Retail/restaurants decline as a viable activation device for neighborhoods/commercial districts.  The other thing is retail and restaurants as an element of urban life, enlivening neighborhoods, strengthening placemaking qualities, etc.

Carmel, Indiana.  (But this is a modern day construction of a city center, different from a traditional urban commercial district in a city, outside of a downtown.)

This is a major change.  A huge number of businesses have failed as a result of coronavirus shutdowns, and as this Washington Post article suggests, "If a business is still closed at this point in the crisis, it’s probably permanent," they won't be reopening.

Except for convenience retail (food, hardware, etc.), most of the businesses in local commercial districts are services and prepared food (restaurants, etc.).  With consumption down as a result of stay at home orders and unemployment, the reality is that a lot of consumption is discretionary.

If people aren't buying, businesses can't be selling.  And neighborhood commercial districts, lacking grocery stores and other necessary convenience retail, are going to have a hard time drawing patrons so long as people aren't going out to eat.

What about mixed use?  On the pro-urb list there is a spirited discussion that mixed use retail will be able to withstand the effect of the coronavirus, because it's a more robust property type.  I disagree.

I think the reality is that where mixed use retail is succeeding now, it's more a function of it being more likely to be located in high income areas.  (You need to be in a high value area to be able to justify the higher cost of creating this kind of development.) And the success is a measure of it being in a high income area, not the property type.

Mixed use is mostly food retail not non-food retail.  Mixed use mostly doesn't have retail, it has food-related business, which I sometimes call eater-tainment. It's gonna take years for that sector to recover. Even in the best circumstances it's a tough business, where most businesses have no more than a month of extra cash (retained earnings/working capital) on hand.

Most of the new mixed use in DC, in particular The Wharf, Navy Yard, those JBG buildings on U Street, have minimal retail. Lots of food-related business--but restaurants do better than selling groceries (which is why the Glen's Garden Market closed there).

The retail ends up not performing well--some exceptions with the JBG stuff because it ends up being regionally serving, and a store like Warby Parker with only a couple locations in the entire metropolitan area is a regional draw.

Navy Yard has a big Harris-Teeter and the baseball stadium and a waterfront. But the big previously announced high end cinema project was dropped even before the pandemic. There's only so much money, so much demand.

The retail underperforms because people go to those places for entertainment, not to buy stuff, but experiences.

And there isn't enough local population to support nonfood convenience retail like hardware stores etc. (e.g., the one that moved to The Wharf that had been in business for 40-50 years previously closed; the new hardware store opened in a mixed use building at 5th and K Street NW closed too). They don't want to carry purchases around with them. Granted it could be shipped, but they'd have to come into the store first.

From the perspective of an independent business owner, the rents are high for retail relative to sales/s.f. And chains are either going out of business or downsizing significantly both in terms of size of store and the number of locations.

And there can be so many restaurants that there isn't enough demand to keep them all in business. E.g., in DC on 14th St. when Le Diplomate opened, previrus with $15MM a year in annual revenue, that seriously diminished the revenue for other restaurants because there's only so much business, not just on 14th St., but on 17th St. and in Dupont Circle too.

My joke about the big real estate companies (I don't have much personal experience with Hines) is that they expect the retailer to pay for the privilege of activating their space.

Rents and property tax revenues will be effected.  Probably the rent/s.f. need to come down significantly going forward, which yes, will change the valuation of retail commercial property. Maybe in mixed use it won't be as big a deal because it can be a small proportion of an overall project. Over time, it will significantly impact local government revenues.

Cities as employment centers.  One thing that the pandemic has done is shift many jobs to telework.  I have always been somewhat down on telework because of the "urbanization" economies that are generated by proximity, exchange and interaction.

Engwicht in Reclaiming Our Cities and Towns: Better Living Through Less Traffic, succinctly delineates why this is important,

"cities exist -- to maximize opportunities for exchange by concentrating people, goods, and facilities within a limited area.

But the pandemic will lead to a sorting effect, comparable to how companies realized that certain types of jobs needed to be in clusters (knowledge-related) while back office jobs like accounting didn't.  You saw this how in the 1980s, finance companies in Manhattan shifted back office (low value) functions to Jersey City, Long Island City, and elsewhere.

A similar shift will likely happen again, and this will reduce the demand for center city office space.  Plus, companies might even be willing to accept a reduction in clustering benefits in return for offloading the cost of space to the now home-based employee.

It will be assuaged somewhat by office users having to reduce the trend of shrinking the amount of space/employee ("The implications of shrinking offices," City Observatory), to provide less crowded, more social distant spaces.

-- "When It's Time to Go Back to the Office, Will It Still Be There," Wall Street Journal
-- "Offices Try to Combat Coronavirus With More Fresh Air," WSJ
-- "Reopening the Coronavirus-Era Office: One-Person Elevators," WSJ

But long term, demand for commercial office space will be reduced.  Prices will drop.  Rents will drop.  And concomitantly, so will the demand for transit.  And property taxes as a source of local government revenues.