The Platform

Aerial view of New York City.

Back in September 2020, I published an article entitled, “New Urbanism is Dead: What Just Killed It?” In that article, I observed, “people who lived and worked in places like Chicago, Portland, Seattle, New York City, and other urban areas, were confronted with a lot of stress created by the pandemic shutdown as well as uncontrolled rioting and looting that destroyed many downtown businesses.”

Also, I pointed out that new technologies like Zoom started to give people broad flexibility to work-from-home as well as in other remote locations. There was no need to make a daily commute to a downtown office building. Group and team meetings could be conducted from home.

Companies also found out that their workforces which worked remotely were also more productive. Due to the pandemic, they could measure the productivity of their remote workforce. Instead of losing productivity as they thought they would, companies saw an increase of 20-26%. That is the equivalent of having everyone come in and work on Saturdays – for free! This changed the minds of executives at many companies whether to bring that workforce back to the office as well as re-evaluating their need for as much office space as they had been leasing.

In a real corporate example, the focus has been to cut down their corporate leasing footprint by 20% in 2021 and then cut back another 40% in 2022. Let’s do the math for a typical large company: 100,000 square feet – cut by 20% = 80,000 square feet. Cut it another 40% and you are down to 48,000 square feet. That is over a 50% reduction from the original square footage leased.

Multiply that by many companies and you can see why occupancy rates are tumbling down in downtown areas. In March of 2021, it was reported by the Chicago Tribune that the vacancies in downtown office space would be able to fill up five Willis (Sears) Towers. Since then, the vacancy rate has gotten worse.

It is to the point where I define the tsunami of vacancies as a reverse of musical chairs. In this case, you have more and more buildings going vacant and needing to capture a new tenant while there are fewer and fewer tenants to choose a building to move into. If buildings are not offering the latest in intelligent amenities, they will remain vacant.

Cities haven’t recovered the commuters (and their daily spending) coming into the city on a daily basis. Initial numbers from Chicago’s Metra Commuter Service said their ridership in 2020 was down 90%. Today, they are still a far cry from regaining all that ridership. They never will. If half come back, they would be fortunate. The question becomes, for the Metra leadership, are they creating an alternative plan to consider the permanent shrinkage in revenue that they will realize in 2022 and beyond? I doubt it.

The big question becomes, when are the leaders of these cities going to realize they will never be getting back to business-as-usual? The aftermath of the rioting that happened in 2020 following George Floyd’s murder in a few large cities caused some stores to board up. As 2021 unfolded, some retailers decided to take a loss and close permanently.

In San Francisco, some Walgreens were getting hit so much that the company decided to shut down 22 stores. Where do you go to get your prescriptions out there now? The New Urbanism promotion for the convenience of “living in the city” has turned into a nightmare for some. However, it must be stressed that services like Amazon are making brick-and-mortar shops obsolete.

Hammering the lid shut in 2022

When looking at these major cities today, not much has gotten better. To be politically accurate, things have gotten worse, and some city leaders fail to see what is happening around them.

The pandemic took its toll in shutting down businesses but since then, other issues like crime have also made city-living a non-desirable option. It also doesn’t help when the school systems have been sabotaged by unions demanding they only have remote classes. That’s not what parents want to see.

Who wants to live in a crime-ridden area where you cannot get your children a decent education because the teachers want to milk a crisis for as much as they can?

People are not buying off on fluffy euphemisms anymore that try to sugarcoat reality while they are paying high taxes for systemic failure across the board from law and order to education. They are also seeing other individuals and organizations moving out of cities.

In Chicago, the Chicago Bears are looking at a suburban stadium. For whatever their reasons are, seeing them looking at moving to the suburbs is not a vote of confidence for Chicago. New Urbanism? Looks like the momentum is in the other direction.

Proponents of New Urbanism and the idea of getting people to move back into a city better open up their eyes to the new reality—cities are not the places to raise a family and for some businesses, not a place to make a profit. The U-Haul trucks are being used to get out of the city and into the country or away to another state. That is the new reality for 2022.

James Carlini is a strategist for mission critical networks, technology, and intelligent infrastructure. Since 1986, he has been president of Carlini and Associates. Besides being an author, keynote speaker, and strategic consultant on large mission critical networks including the planning and design for the Chicago 911 center, the Chicago Mercantile Exchange trading floor networks, and the international network for GLOBEX, he has served as an adjunct faculty member at Northwestern University.