It's the urban doom loop. You would think this was incredibly obvious but blue politicians live in a dream world where their policies dramatically decrease the desirability of urban living while they pretend that its making cities more attractive. So proud of their lockdowns, vaxx mandates, homeless subsidies and defunding the police and letting criminals go free because they care more. Geezus.
https://ace.mu.nu/
How New York Stopped Fearing the Urban Doom Loop and Learned to Love It[/b]
—Lamont the Big Dummy
John Sexton has written about the "urban doom loop" which may kill all the blue cities.
Covid sends the high-wage workers back to their suburban homes, which kills the restaurant and retail and entertainment industries of the city, which is the entire point of even living in or near a city in the first place, and as those businesses die, people realize there is no reason remaining to be in the city, and begin a mass emigration away that kills the cities.
The Democrats' embrace of violence, crime, and chaos as acceptable substitutes for restaurants, shopping, and entertainment obviously isn't helping. Covid took away all the advantages for living in the city, and then the Summer of St. George unleashed all the disadvantages of living in the city, with a vengeance.
Even the New York Times worries about the "urban doom loop," when they're not doing their level best to accelerate it.
Scholars are increasingly voicing concern that the shift to working from home, spurred by the Covid pandemic, will bring the three-decade renaissance of major cities to a halt, setting off an era of urban decay. They cite an exodus of the affluent, a surge in vacant offices and storefronts, and the prospect of declining property taxes and public transit revenues.
Insofar as fear of urban crime grows, as the number of homeless people increases and as the fiscal ability of government to address these problems shrinks, the amenities of city life are very likely to diminish.
The prospect of an "urban doom loop" was discussed by economists in a paper called, "Work From Home and the Office Real Estate Apocalypse."
One of the authors explained that their paper...
...emphasizes the possibility of an "urban doom loop" by which decline of work in the center business district results in less foot traffic and consumption, which adversely affects the urban core in a variety of ways (less eyes on the street, so more crime; less consumption; less commuting) thereby lowering municipal revenues and also making it more challenging to provide public goods and services absent tax increases. These challenges will predominantly hit blue cities in the coming years.
New York City's real estate values have taken a real hit -- as have all the nation's cities' real estate values.
In their paper, the three authors "revalue the stock of New York City commercial office buildings taking into account pandemic-induced cash flow and discount rate effects. We find a 45 percent decline in office values in 2020 and 39 percent in the longer run, the latter representing a $453 billion value destruction."
Extrapolating to all properties in the United States, Gupta, Mittal and Van Nieuwerburgh write, the "total decline in commercial office valuation might be around $518.71 billion in the short run and $453.64 billion in the long run."
This will provoke a crisis in city's budgets, creating a fiscal doom loop: Everything in cities will cost more and more, and you'll get less and less in return.
For example, the share of real estate taxes in N.Y.C.'s budget was 53 percent in 2020, 24 percent of which comes from office and retail property taxes. Given budget balance requirements, the fiscal hole left by declining central business district office and retail tax revenues would need to be plugged by raising tax rates or cutting government spending.
Both would affect the attractiveness of the city as a place of residence and work. These dynamics risk activating a fiscal doom loop. With more people being able to separate the location of work and home, the migration elasticity to local tax rates and amenities may be larger than in the past.
So: Is that happening?
Why yes. Yes it is.
