The state of some cities’ downtown areas has been perilous for some time now. This wasn’t helped by the fact that many businesses encouraged or even required their employees to work from home or other remote locations beginning in 2020. The overall trend toward a remote workforce has continued as employers discovered it could save them the cost of leasing expensive office space and contribute to overall worker satisfaction.
One Columbia University professor has dubbed the downward spiral some cities have been seeing as an “urban doom loop.” This decidedly pessimistic term has caught on. The Brookings Institution has described the level of concern over the future of our urban centers as “existential dread.”
Controlling the narrative
Others say the demise of these areas is not a given. One urban planning professional says, “While the notion of the urban doom loop makes good headlines, I don’t see it as something beyond our control…. Cities, towns, and regions control the narrative….”
He notes that the fate of a particular urban area depends in part on whether it can attract people to move and remain there. In some cities, young professionals have found attractive housing options and a vibrant area in which to live and work. If this doesn’t continue, or if they have the option to work at home, they’re more likely to retreat back to suburban and exurban areas.
The role of public transportation
The urban planner says that a solid public transportation system is crucial to keeping businesses in downtown areas so that employees can live anywhere and easily get to work. New York City and Washington, D.C. are good examples of this. He notes that “if commuters trying to get to work in the city can’t reasonably do so, at some point they will stop trying. That is the real urban doom loop.”
So what does this mean for commercial real estate developers and investors? By choosing what kind and mix of properties to develop, they can influence the success or failure of these areas. Having solid legal guidance can help carry out these plans.
