{"id":25484,"date":"2020-09-04T05:39:40","date_gmt":"2020-09-04T12:39:40","guid":{"rendered":"https:\/\/www.yardi.com\/blog\/?p=25484"},"modified":"2026-02-22T15:27:51","modified_gmt":"2026-02-22T23:27:51","slug":"end-of-urbanization","status":"publish","type":"post","link":"https:\/\/www.yardi.com\/blog\/end-of-urbanization\/","title":{"rendered":"End of Urbanization?"},"content":{"rendered":"

For years, 24-hour and 18-hour cities, and the live-work-play concept, have been mantras in commercial real estate. Suddenly, however, cities are facing a pandemic-driven exodus. Is this a temporary blip or the start of a long-term trend?<\/p>\n

COVID-19\u2019s impact has been particularly deep in major metropolitan areas such as New York City, Los Angeles, Chicago and San Francisco office space<\/a>, which have also seen sharp drops in apartment occupancy rates and rents as the city centers are largely shut down and residents shelter elsewhere.
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In Manhattan, for example, office buildings that were closed<\/a>\u00a0for months remain mostly empty upon re-opening, as employers avoid putting workers at risk and people avoid public spaces. Midtown streets that are typically teeming with tourists are nearly empty as Broadway and other entertainment venues remain shut. New York City\u2019s story is being played out in city centers across the country. Not only do urban areas temporarily lack the jobs and cultural institutions that drew people there, but the crowds and closeness are suddenly an element to be feared rather than fascinate.<\/p>\n

Few if any saw this coming, as growth has coalesced in cities in recent years. The United Nations has forecast that 75 percent of the global population would live in cities by 2050, doubling their size, and the U.S. seemed to be headed in that direction. A recent study of the largest 30 U.S. metros by the George Washington University School of Business and Smart Growth America in conjunction with Yardi Matrix found that walkable neighborhoods encompassing office, housing, retail and entertainment grew faster and produced higher absorption and rent growth over the last decade than counterparts without that combination. During that time, 70 percent of the jobs created were in the top 50 U.S. metros.<\/p>\n

Corporations have been following the preferences of young, skilled talent into urban areas, not only in primary markets, but in the downtowns of secondary and tertiary metros. The pandemic put a stop to all that. A chorus of voices has quickly begun to proclaim the end of urbanization and argue that growth will be concentrated in the suburbs.<\/p>\n

Urbanization has been declared dead before, such as in the aftermath of the 9\/11 terrorist attacks, when people temporarily avoided cities. Eventually, though, crowds came back because urban areas provided what they wanted from life. The lesson is clear: If there is to be a lasting shift in demographic trends that favors the suburbs, it must be driven by a change in lifestyle preferences that drove urban growth in the first place.<\/p>\n

Lifestyle choices favored urbanization<\/strong><\/p>\n

The pandemic is a serious enough risk to merit significant change. Millions are working from home, wearing masks and avoiding public places. But can the threat of a disease alone change what people want out of life? Let\u2019s examine some of the factors that drove urbanization:<\/p>\n