The Age of the Mega-City is Over

 From The American Conservative:

By May 2020, The New York Times reported that 420,000 residents had fled America’s largest city, not a few of them permanently (my literary agent among them, whose pre-virus life revolved around eating lunch with editors every day). The wealthiest neighborhoods were the biggest losers—and they were the city’s leading taxpayers. Of course, the initial impetus for flight was fear of catching Covid-19 in an environment densely packed with people. But as corporate offices shuttered, many of these refugees performed their work duties at home over the Internet, and it dawned on the corporations that perhaps it was a waste to lease expensive, high-status headquarters in Manhattan. The iconic Time-Life Building at 1271 Sixth Avenue had accommodated 8,000 workers before Covid-19. In mid-summer 2020, 500 people were showing up there. 

Meanwhile, as politicians forced lockdowns, the city’s restaurants and shops went dark, along with theaters, museums, stadiums, and the other organisms that made up the city’s rich ecosystem of daily life. The prospect of midtown perhaps permanently abandoned by office workers made an eventual return to normality even less plausible. After four months of virus, the June riots and looting that followed the horrific death of George Floyd sealed the deal, with the luxury stores on Fifth Avenue smashed up and burgled. Who would reopen such a business when riots and looting could break out over a fresh pretext at any time?

All of that completely changed the business model for the owners of skyscrapers—whole floors going empty and now the ground-floor businesses shut down, too. These buildings, with their massive maintenance costs, no longer produced enough revenue to operate them. Overnight, they were transformed from assets to liabilities. The situation also harmed the condominium model for residential towers. Without the ground-floor rents, the homeowner’s associations would have to steeply raise the monthly maintenance fees for each apartment owner, while significantly lowering each unit’s resale value if the owner had to move out. All of this would thunder through the banks and REITs (real estate investment trusts) which owned and managed many of these properties, and ultimately through the city’s dwindling treasury coffers.

Many like to believe that office towers can be easily converted to apartments. That’s just not true. Apart from purely physical issues, like the layout of plumbing stacks, the coming scarcity of capital will obviate these ventures, and, anyway, tower apartments only exist because they’re companions to office towers, which may now be permanently obsolete. The age of giantism is over. Cities are certainly about the concentration of life and work, but it doesn’t have to be at the colossal scale. For many centuries it wasn’t. (Read more.)

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