Are cities appeal forever changed?
I dont think cities CBDs are dead like some doomsday sayer preach, but it’ll likely be less appealing. The wfh culture is charging on and here to stay. Big firms post covid are going 1-2 day wfh per week. Autonomous vehicles on its way. Whats the point of living in the city and have 15-20 min commute to work/fun when you can move bit out to the burbs and still have similar commute time? I think cities aint dead but in this next era, cities are going to sprawl outward and get less dense going forward, just like it did post Eisenhower era. Unlike the suburban crave with drive to work back then, this time its going to be a bunch of TODs linking a huge metro area. The model of a DFW is going to be applied to every other cities. DFWs got the set up of the future urban area, bunch of different employment nodes all spread out with an urban core. Also a massive metro area with huge city square footage.Thoughts?
This idea sounds extremely wasteful. Think about the taxes generated in a CBD, and how when kept relatively small, the infrastructure required can easily be maintained via the tax base. Now the idea above would generate an area much larger and with much more infrastructure required, except you have dispersed the tax base and will find it very hard to cover your costs of maintenance.
I doubt that waste could ever come close to the waste of people commuting everyday from their homes to their workplace. In fact if more people worked from home you wouldn’t need as much money to maintain the infrastructure because it utilization would be way lower.
If you have time and it interests you, I recommend reading this https://www.strongtowns.org/journal/2020/5/5/kansas-citys-fateful-subur…
and would be interested to see whether or not your opinion changes.
Exactly the DFW has a massive problem with this. The “desirable” area moves further north every ~5 years and the previous area becomes run down. It leads to a never ending sprawl leaving a trail of dead and decrepit suburbs.
Some cities are giving companies tax breaks to setup headquarters in their city. This works in many cases where lots of jobs are brought into one city, but NIMBYism can prevent improvements in infrastructure or the policies needed to accommodate growth. So those cities are often losing out on tax revenue and at the same time dealing with negative externalities tied to population growth. I can only think of NYC as the only city benefitting the most from what you're talking about. The infrastructure is developed and connected enough to get people into and out of the city, and around it efficiently; lots of tunnels, bridges, ferries, trains, buses etc. Also, New York City has a significantly higher density of people per square mile that can better justify expansion or increased maintenance costs for public infrastructure.
If DFW is the setup of the future I’m leaving America. Currently live in the DFW and it such a sprawling concrete shithole. Traffic is terrible too. Honestly no one enjoys living here and everyone craves a central dense urban lifestyle, but are getting the polar opposite. I think this craving will only increase because more people are going to want to be around the fun and action and other people. Trust me, “sprawl” culture is unsustainable and provides a terrible lifestyle.
Cities aren't going to be completely dead. The ones with the higher costs (NYC, SF) are suffering the most from the current situation and will be probably slowest in getting back to where they were "pre-pandemic". Lots of big companies over the last couple of years were already planning to make moves to lower cost cities/states anyways. I think the pandemic, likely sped this process up, and allowed companies to rethink their workforce by allowing more of them to work from home as talks for lease renewals come up. I do agree that urban sprawl will be the newer trend, as in we'll still be more clustered towards cities, but not as dense as we're projecting. DFW sounds like the centerpiece model that's offering a good combination to a lot of people, affordability, connectivity, and space.
Not sure whether this is true. In 2009 it was big cities that saw the steepest recovery.
Places where people want to live will recover. Large urban areas have a lot of intellectual and social capital, and should be fine. Yes, you could live in Bergen County and work from home - but your local bar will still close at 11, and you'll still have to drive to get there.
I don't mean cities compared to suburbs will be slowest to recover. Cities will always remains major hubs for business and recover faster. I mean high priced cities like SF and NYC will take longer in getting back to "pre-pandemic" prices compared to other lower cost cities like Atlanta or Chicago.
Nope and your recent college grads won't be clamoring to head to DFW after graduation.
Young people still want to live in the big cities and that will never change. When your recent Wharton or Princeton grad prefers to work and live Addison, TX vs Manhattan, please let me know.
Exactly. By god I hate this place lol. If anything young people are absolutely clamoring the hell out of here.
That bad huh? The people I know that live in DFW are in love with it and never stop talking about it.
Addressing your points:
1. WFH impacts only one rationale for living in a CBD - commute time. I don't mean to downplay this, as I'm certain some people live in CBDs purely because of commute time, but it is still only one factor.
2. Autonomous vehicles are near irrelevant to the current era or recent future.
3. Cities contain a wealth of possibilities and a distinct lifestyle versus the suburbs. This is by far the biggest thing.
4. Cities are going to continue to become more dense, not less. Smaller nodes like DFW/Atlanta are definitely a possibility, but each of those nodes will be denser than they currently are, and that depends a lot on geography as well as anything else.
Less than 10% of people living in cities do so for a shorter commute time. As CRE said, there is a major distinction between city and suburb living and it's not centered on commuting.
Sounds like you just have a hard-on for DFW and potentially Fox News as well. The rest of us will enjoy our actual city living.
My hope is that secondary and tertiary cities grow substantially with dispersed work, but I honestly think most companies will return to traditional offices. In many secondary/tertiary cities you can rent a decent-sized, newly renovated townhome for ~$1,200 or less and walk to farmers' markets, restaurants/bars, and other city amenities.
I think this makes sense. I'm guessing that the largest metro areas are going to continue to get more dense, but tertiary cities will also modernize but not feel the urge to become necessarily more dense themselves in the future.
The thing is...WFH is not going to last forever lol. It seems like the "new normal" thought process is that everyone will just WFH and move to the beach or the mountains. That is a pipe dream.
Exactly. People have way too much faith in WFH, it’s not here to stay.
I was a believer man until I got sent back home last week, and management leaked 50% will WFH indefinitely. It’s nuts, but a lot of larger shops are embracing it now
That's crazy, at a BB?
The fear is that if WFH is here to stay, can they train someone in a different country to do these jobs for a fraction of the cost then. I know essential functions will stick, but there are a lot of positions that could go overseas.
Yes, but at ANY rate less than 100% for WFH won't people need to live somewhat close to office?
I think you're pretty wrong here.
People have preferred dense urban areas pretty much since the technology allowed it, it's not going away any time soon and people aren't going to leave for long. Yeah maybe in the next 12 months NYC and SF will see a decline, but I'm 5 years? It'll be back to normal.
Can anyone speak to the state of the rental market in Manhattan/Brooklyn and what it might look like in summer of 2021?
Very submarket dependent. Expensive rentals in Manhattan are getting slaughtered, I hear, but that's nothing new. Outer boroughs are keeping their gross rents about the same, but offering at least an extra month's concession.
Have been accompanying my S.O. in finding a new place to lease and ultimately we ended up choosing LIC as most of the luxury condos were offering like 3-4 months of free rent. Grew up in NYC and I have never heard of incentives for rentals EVER. Hope that sort of giving you some sentiment of the rental market in NYC
We have way more available land here in DFW than most established metro cities. Chicago and NY don’t have the option to increase urban sprawl much. In Chicago for instance, they have to tear down existing multifamily buildings and rebuild an updated version. Being in the residential development industry, I am already seeing our clients wanting to do multifamily deals in DFW, where the builder will build the subdivision and keep the homes to rent out. I had a meeting recently with a top international developer who wants to develop the land and partner with builders and as a joint venture between the two, they share ownership of the rental portfolio.
SFH rental is definitely the next wave development. It will be interesting to see how sustainable it is after 10-15 years when maintenance really starts to add up on SFH.
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