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Innovation Economy

Will big cities bounce back, or fade away?

“You could see tech workers relocating to the Berkshires or Maine, and some modest moving to places in the Heartland,” one researcher said of the Boston-area workforce

The Boston skyline is seen from Boston Harbor.
The Boston skyline is seen from Boston Harbor.Lane Turner/Globe Staff

There is a debate brewing about the future of cities, fueled by the coronavirus pandemic. On one side is the “quick rebound” crew, and on the other, the “rise of the rest” adherents.

The first group suggests we are going to see a temporary dip in urban vitality, followed by a rebound once the pandemic abates. The second believes that business shutdowns and the growing prevalence of work-from-home policies could gut cities like Boston, New York, and San Francisco, giving people an opportunity to decamp for places that are cheaper, cleaner, quieter — and perhaps with better schools, to boot.

That could spur what investor Steve Case, the cofounder of AOL, has dubbed the “rise of the rest,” a reinvigoration of smaller cities that haven’t seen spinning studios, latte dispensaries, and Google campuses spring up over the last decade.

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And the anecdotes are starting to accumulate: People who have become unmoored from their urban offices are opting to relocate. They’re trading Bay Village in Boston for woodsy Norfolk; Hoboken, N.J., for Cape Cod; San Francisco for Denver.

But Richard Florida, a professor at the University of Toronto, and author of the book “The New Urban Crisis,” says there isn’t yet data that shows any sort of “mass abandonment” of cities like Boston and New York. A small percentage of New Yorkers started forwarding their mail this spring, Florida notes — but many were wealthy folks relocating to their second homes upstate, in Miami, or in the Hamptons. And the real estate site Zillow observed that New Yorkers and Bostonians were about 5 percent more likely than last year to be searching for new homes outside of their cities — but cities like San Jose and Detroit saw far bigger jumps (10 percent and 15 percent, respectively).

Florida says that the anecdotes about pandemic-triggered moves among your social circle “are 100 percent correct,” but that they may largely be an acceleration of the kind of city-to-suburb relocations that often happen when young people start to have families.

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“There’s nothing new about this,” he says. “It’s as age-old as post-war America. People in the family-formation years are very nervous right now — and for good reason. The pandemic may be sending people to buy houses in the suburbs, just like it sent people to buy cars because they were scared of public transit.”

And Florida points out that many of the people with the ability to consider relocating are white-collar workers whose jobs can be done via Zoom and Google Docs. “The front-line workers and the middle class can’t go anywhere,” he says.

Mark Muro, a senior fellow at the Brookings Institution, says that over the last decade, he has tracked the data about where innovation and startup activity happens across the United States. His research group noted that five cities — Boston, San Francisco, San Jose, Seattle, and San Diego — were where most of the innovation-related jobs were being created. They called these cities the “superstar hubs.” In contrast, 90 percent of the rest of the country was actually declining, when you looked at the concentration of industries driven by scientific and technological breakthroughs, and the jobs they generated.

“The COVID moment,” Muro says, coupled with an increased adoption of videoconferencing, could lead to some decentralization. Still, he writes via e-mail, “I don’t see any dire depopulation of the Hub, nor do I see an explosive ‘rise of the rest.’ But I think you could see tech workers relocating to the Berkshires or Maine, and some modest moving to places in the Heartland.”

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That might be a good thing for everyone, to the extent that real estate prices in those superstar hubs “calm down a little,” he adds. Florida agrees that an “affordability reset” would be a good thing for many US cities. He predicts that some empty office space will get converted to residential housing, and that cities could become younger as older people move out because of health concerns.

And if the pandemic stretches on for another year or more, cities that are warmer — and support meetings and lunches in outdoor settings — could see an influx, Florida suggests.

When it comes to housing prices, Boston isn’t yet seeing a slump that would suggest people are abandoning the city en masse. In fact, median sale prices for single-family homes in Greater Boston increased by 6.9 percent in July compared to last year, while condo prices rose 2.2 percent, according to the most recent report from the Greater Boston Association of Realtors. But rents for September are down about 3 percent compared to last year, according to data from Apartment List.

Over time, housing prices and rents in big cities will be a key indicator of whether we’re seeing a true sea change. So will the kind of migration data that LinkedIn collects when a member of the social network changes the location on their profile. The latest data LinkedIn has released on migration shows that people have been leaving college towns like State College, Penn.; College Station, Texas; and Champaign-Urbana, Ill. Warmer and less-expensive places like Austin, Texas; Charlotte, N.C.; and Tampa, Florida have been gaining workers.

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Another data point to watch: Are venture capitalists becoming more willing to fund startup companies outside of the superstar hubs? Again, there’s anecdotal evidence over the spring and summer of VCs getting more comfortable making investments in companies via videoconference, without having met the founders in person. Brad Feld, a Boulder, Colo.-based venture capitalist, is a fervent believer that the “local bias” that VCs have long had, about investing in startups located in the cities where they are based, is rapidly ending.

But data from the National Venture Capital Association, at the mid-point of 2020, shows that Boston and San Francisco’s share of overall VC dollars being invested has been growing this year. And the share of “other” places getting venture capital — outside of big cities like Seattle, Chicago, and Philadelphia — is down so far in 2020 compared with 2019. Still, it’s early.

Florida points out that “this is the third time just in the past couple of decades that people have predicted the death of New York and the end of cities. The first was after 9/11. The second was after the financial crisis.” Each time, he says, “cities came back stronger than anyone — including me — expected.” (Though metropolitan budget deficits, he concedes, will be a big challenge going forward.)

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As the late business theorist Clayton Christensen often pointed out, data is only available about the past, not the future. And we’re all living through an intense experiment in working from home, schooling our kids from home, and trying to care for elderly family members from a distance, that could spark some major decisions about where we want to live come winter — or later, if we’re still trundling through 2021 without major changes in the public health situation.

The impact of those decisions on the future of cities will be tracked over years, not the five-and-a-half months of pandemic times we’ve lived through so far.

Muro, for one, says he hasn’t seen enough data to convince him that anything truly dramatic will happen as a result of COVID: “We just don’t really know how this is fully going to play out.”


Scott Kirsner can be reached at kirsner@pobox.com. Follow him on Twitter @ScottKirsner.