City Risk after Covid 19
Thanks for joining me. Over the last 100 years, urban populations around the world have exploded almost continuously. It was estimated in the 1950s around 30 percent of the global population was living in cities. And today that ratio is closer to 50 percent and projected to rise even further in the next coming decades. Cities are on fire and urban life is where it all happens only in the United States, which had an unusual obsession for the suburbs for many decades and a problem with white flight.
Did urban populations experience some sort of setback or stagnation? It is not uncommon to hear terms like urban, this megacity or superstar city being thrown around the conversations and on TV and in the media cities seem to have something for everybody, for every person and every walk of life. And various people from various backgrounds have begun to embody their hopes and dreams into city life, physicists and network scientists, some cities to find out how they can improve humanity, how our lives can be better, and to find out how networks work.
Environmentalists love cities because they think they are more efficient and they can provide more efficient ways of living and reduce waste and pollution. Businessmen see cities as the nexus of wealth and power and places to grow their connections and improve their business prospects. Younger people are moving to cities because it’s more exciting and it’s potentially easier to meet a partner or husband or wife. And above all, everyone loves cities because they have better culture and better nightlife and better fun usually.
But now the world has changed. covid-19 arrive over a year ago and has changed city life probably forever. And the risks of cities is acute until the final end of covid-19 cities will have numerous risks they’re going to face. The first major risk cities are facing is stagnating population or even permanent population loss. And this is occurring for a variety of reasons. The telecommunications revolution brought to you by Zoom and Microsoft teams and various others is changing the entire makeup of the world.
No longer do we have to be crowded into office offices to talk to each other face to face all day. When you factor in the cost and expense of living in the city and the ability to perhaps work remotely, a lot of people are choosing to leave cities until at least covid it gets over with and then figure out that they need to come back. At the moment, it certainly appears cheaper for a lot of people to be working at home or working in their office than being in a major city.
Unfortunately, what happens when your city clears out or loses population, your tax base tends to collapse and this is a self reinforcing process. Local businesses can close taxes for everything in order to survive, may grow up. So that’s a second reason to be worried about cities. The third reason the cities might be in jeopardy is they need to completely redo living spaces throughout cities. And the reason this is is obvious before. If you’re working from an office and now you’re working at home, you may require more space.
You may not be able to live in a one bedroom or two bedroom condo. And this may necessitate changing all sorts of properties around the city to better retrofit for a new future. The fourth risk as the demise of downtown areas in major cities, you no longer have as many office clients, people coming to work in the office. Those areas become vacant, deserted wastelands, and they contribute to crime and poverty and blight. The last major risk is declining real estate values all across the board.
For instance, if you’re in a place like Chicago, it appears that so far values haven’t traded down too much. But you can’t possibly have a marketplace with rentals that they’re trading with too much rent or three months rent or half a month’s rent. And expect the value of your condos, your single family homes, not to be reflected in lower cash flow, decreasing values. So those are just some of the major risks facing our cities in the near future, the telecommunications revolution that we are experiencing right now is not going away.
Maybe it falls back a little bit. Maybe there’s some more interaction in the office, but it’s going to be hard to deny the fact that it’s here, it’s here permanently, and it’s hard to deny the fact that all these technologies could get even better in the future. So this will have a major ramification and how cities are structured and what the risks are going forward. They have the potential to change whole neighborhoods overnight and permanently. And that means a potential loss of local business, lower real estate values or more crime or more property that could come with abandonment of the city.
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