Bi-Weekly Discussion - The Urban Doom Loop & Housing Crisis

This is going to be an online meetup using Zoom. If you've never used Zoom before, don't worry — it's easy to use and free to join.

Click on the Zoom link below at the scheduled date/time to log in...
https://us02web.zoom.us/j/83851514090?pwd=uWuCNO9j9wQmu7QLDwlvtNMinsVaae.1

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THE POST-COVID "URBAN DOOM LOOP" & THE AFFORDABLE HOUSING CRISIS

INTRODUCTION:

In this meetup, we'll discuss two problems that are plaguing many cities in the post-COVID era. The first problem is the so-called "urban doom loop" (a term coined by Columbia professor Stijn Van Nieuwerburgh) where a shift to remote work & online shopping have left many commercial office & retail spaces vacant, leading to a fall in commercial property taxes. The concern is this will lead cities to raise taxes in other ways (like increasing residential property taxes, income taxes or sales taxes) and/or to cut the budgets of various public services (e.g. transit, police, education), which in turn will make the city less attractive to some residents who will then move away, which erodes the city's tax base even more. Concerns about rising crime amid botched policing reforms may exacerbate this process in some cities.

The second problem - paradoxically - is an affordable housing shortage which predated the COVID pandemic. It's linked to the gentrification of many cities during the 2000s & 2010s in which young professionals flocked to certain trendy cities (e.g. NYC, LA, DC, San Francisco, Boston, Seattle, Miami). Since the housing supply didn't expand fast enough to meet demand, this led to soaring home prices & rising rents that hurt lower-wage service workers.

For many people, it's difficult to understand how we could be facing both of these problems at the same time... It almost reminds you of Yogi Berra's paradoxical quote: "No one goes there anymore, it's too crowded". In this discussion, we'll try to untangle what's really going on and how city planners & public officials might respond.

RELEVANT MATERIALS FROM PAST MEETUPS:

Way back in Aug. 2019, we had a meetup entitled "The Urban Housing Crises" where we discussed whether housing should be considered a human right, the economics of the housing market and the problem of NIMBY-ism (not in my backyard), the sociology of neighborhoods & forces driving residential segregation, and the political factions pushing for more or less housing.

Back in May 2022, we had a meetup entitled "Is the Managerial Class Hurting America?" and in the 1st section we briefly discussed the various urban problems discussed in Joel Kotkin's book "The Human City" (2016), as well as Richard Florida's book "The New Urban Crisis" (2017) and Michael Shellenberger's "San Fransicko" (2021).

DIRECTIONS ON HOW TO PREPARE FOR OUR DISCUSSION:

The articles you see linked below are intended to give you a basic overview of some of the topics. As usual, I certainly don't expect you to read all the articles prior to attending our discussion. You can browse and look at whichever ones you want, but don't worry - we'll cover the stuff you missed in our discussion.

In terms of the discussion format, my general idea is that we'll address the topics in the order presented here. As you can see. I've added some questions under each section to stimulate discussion. We'll do our best to address most of them, as well as other questions our members raise
I figure we'll spend about an hour on each section.

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I. THE POST-COVID "URBAN DOOM LOOP":

• Did pandemic-era fear of diseases and lockdowns permanently change many people's preferences for living in cities vs suburbs, or are these concerns fading and allowing cities to lure many former residents back?
• To what extent are we seeing a broader pattern of migration from the Northeast & West Coast to cities in the "Sun Belt"? Will this be blunted by problems associated with climate change and/or political polarization that makes Red States less attractive to college-educated professionals?
• Has the 2020 crime spike persisted in some cities, or has it faded enough to make fears about crime a neglible factor in why people are leaving cities?
• As some urban employers issue "return to work" orders for their remote workers, will this boost urban populations, or are too many employers permanently shifting to remote work or moving offices to the suburbs?
• To what extent has the shift to online shopping hollowed out malls & retail shopping districts in cities?
• What sort of reforms can cities enact to make them attractive places to live in an era of remote work & online shopping when many white-collar workers can choose to live almost anywhere?
• Why are some journalists now saying the concerns about the "urban doom loop" are overblown? Have enough businesses & commuters returned to most cities by 2024 that it no longer looks like a major problem - or are they being premature in their celebration?

- Kim Parker, et al., "Americans Are Less Likely Than Before COVID-19 To Want To Live in Cities, More Likely To Prefer Suburbs" (Pew Research)

- Alex Lees Matthews & Rachel Wilson, "Crime isn’t the full story: What else is affecting retailers in urban areas, in 4 charts" (CNN)

- Olga Khazan, "Why People Won’t Stop Moving to the Sun Belt"

- John Keller, "Is Boston’s Economy Doomed?" (Boston Mag)

- Rogé Karma, "Whatever Happened to the Urban Doom Loop?" (Atlantic)

- Dror Poleg, "The Urban Doom Loop Could Still Happen" (Atlantic)

- Kristina Koppeser, "Downtowns Rebound: The Data-Driven Path to Recovery" (Center City District)

II. THE POST-COVID AFFORDABLE HOUSING SHORTAGE:

• Did zoning problems & various forms of NIMBY-ism (e.g. historic preservation, environmental concerns) lead to the pre-pandemic affordable housing crisis by restricting the housing supply well below demand? Or did any attempt to increase housing supply & lower prices lead to increased demand, which in turn drove prices back up, much as we see with attempts to lower traffic congestion by widening roads?
• Why are many of the cities that have experienced a downturn in commercial real estate and an expdus of remote workers still plagued by a shortage of affordable housing?
• To what extent have remote workers caused a rise in home prices & rents in certain attractive suburban areas & resort towns?
• Have institutional investors like BlackRock played a major role in driving up housing prices recently, or is that overstated?
• Will the flexibility created by remote work eventually lead housing prices to drop, as it becomes easier to leave ateas that become too pricy, or will blue collar workers inevitably be stuck?
• Why don't most economists favor rent control as a solution to the affordable housing shortage?
• Why do some economists see a Georgist-style tax on unimproved land value as a possible solution?
• Could the housing shortage be alleviated by converting vacant office buildings and shoppong malls into apartments? What sorts of hurdles stand in the way?

- Jennifer Ludden, "Housing is now unaffordable for a record half of all U.S. renters, study finds" (NPR)

- Eleni X. Karageorge, "Remote work to blame for rise in housing prices" (BLS)

- James Rodriguez, "The rise of 'Zoomtowns' is going to make home prices and rents cheaper for everyone" (Business Insider)

- Jerusalem Demsas, "Wall Street isn’t to blame for the chaotic housing market" (Vox)

- Brian Potter, "Is Land-Use Regulation Holding Back Construction Productivity?" (Construction Physics)

- Kent Clark Center, "National Rent Caps" and "Land Value Tax" (polls of economists)

- Anna Bahney, "Can we turn all those empty office buildings into housing?" (CNN)