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The Delicate Downtown Future

City centers have had a rough couple of years. But there is a way forward if they have the fortitude to take it.

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San Francisco. Between 2020 and 2021, the city lost 55,000 residents or 6.3 percent of its population. (David Kidd/Governing)
Remote work, rising crime and other forces have led some to call the future of central cities into question. It’s a legitimate issue. Cities shouldn’t be counted out, but they do face some headwinds that they will need to overcome in order to reset for another growth cycle.

The latest Census estimates have started to put some meat on the bone of the urban population story. While municipal estimates are yet to be released, we do have data for some cities. Between 2020 and 2021, New York City lost over 300,000 people. San Francisco lost 55,000 residents, or about 6.3 percent; Philadelphia, 25,000; and St. Louis, 7,000, dropping that city’s population below 300,000. Indianapolis and Nashville, with city-county mergers, saw the strong population growth that was recorded during the 2010s reverse last year. Nashville’s Davidson County dropped by 11,500 people, despite being in a booming metro region. Indy’s Marion County lost 5,700.

The disruptions caused by the pandemic should caution us to avoid reading too much into snapshot statistics. Some of these losses seem counterintuitive. How could the population of Nashville have fallen? Also, some of the well-publicized urban exodus during the early stages of the pandemic, as validated by data from the post office and other sources, has already reversed, and may further reverse over time.

But these stats shouldn’t be dismissed, either. Yes, the housing market and rents in large urban areas have been very strong. This is a positive. But supply constraints in suburban real estate submarkets mean that there could actually be pent up demand for even more people to leave the city. Also, Generation Z (born 1997 to 2012), now emerging into adulthood, is numerically smaller than millennials. This will reduce the size of the pipeline of potential new young residents eager to move into urban centers.

Then there is remote work. Central business districts essentially shut down during the pandemic. But while tourism and conventions are coming back, office work has remained significantly depressed. Fewer than half of workers are back in the office in many downtown markets, according to Kastle, an office security systems provider. While more firms are bringing workers back to the office now, the share of those who will be allowed to work remotely on a permanent basis appears to have gone up. Airbnb just announced that its workforce will be allowed to perform permanent remote work. Other companies are using a “hybrid” model in which employees are required to be in the office only 2-3 days per week. Two years into the pandemic era, it looks like at least some of the shift in working style will be long term.
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The Flatiron Building in midtown Manhattan. Overall, New York City lost over 300,000 residents between 2020 and 2021. (David Kidd/Governing)
Any permanent reduction in the office worker population threatens the health of downtowns. This is particularly true in cities that pull in significant tax revenue from commuters through local income or sales taxes. But even without that, loss of office workers threatens the long-term sustainability of restaurants, retail, public transit and other amenities needed to keep the visitors and residents satisfied as well. Again, we shouldn’t panic and fear a mass abandonment. But this does represent a negative shift for downtowns that will require a certain level of rebuilding and regearing.

Lastly, rising crime and homelessness levels, along with a lack of political will to seriously grapple with them in many places, will have an impact on business and residential location choices. In Seattle, for example, Amazon moved some workers out of a central city office on account of crime. Aggressive rhetoric from some on the left, such as “defund the police,” could be contributing toward a silent exit from the city by people who think it would be unwise to disagree publicly, but want a more robust approach to crime.

These combined issues all pose challenges for central cities in the next few years. The good news is that urban living continues to appeal to large numbers of people. Unlike downtowns, many residential neighborhoods in urban areas have been very lively. Houses and apartments continue to be built in substantial numbers. There are 9,000 new apartments proposed for Chicago’s West Loop neighborhood, for example. This is a very different environment from the truly existential declines of the 1970s.

But it does mean cities will have to adapt and retool themselves for the near-term reality. Earlier this year, Bruce Katz, one of America’s leading urban thinkers and a huge supporter of downtowns, tweeted that “25 years of downtown revival has been eviscerated in 2 years; federal infrastructure investments won’t mitigate free fall since they don’t address remote work realities.” He calls for cities to invest in reorienting downtowns more heavily toward residences and university campuses. These are excellent suggestions, and should be acted on. Cities have received an unprecedented injection of federal cash and need to make it count. They have to improve governance and make real progress on public safety, homelessness and infrastructure.

This is a big and difficult to do list for cities. But while they may be navigating turbulence in the coming years, I remain optimistic that they can reset themselves for success. There’s no guarantee, but today’s urban challenges are well within the ability of urban leaders to overcome.

Governing's opinion columns reflect the views of their authors and not necessarily those of Governing's editors or management.

An urban analyst, consultant and writer. He can be reached at or on Twitter at @aaron_renn.
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