Redesigning CITY CENTERs

In May 2020 I wrote a blog about the potential impacts of the coronavirus and telework on urban downtowns. At that time the idea was tentative that telework might force major redesign of city centers. Now comes another article from Matthew Haag of The New York Times about city center conditions to date. Titled “Midtown is Reeling. Should Its Offices Become Apartments?” Haag essentially verifies my conjectures. City centers need a redesign, even in the past-covid era.

Here are some of the events that have occurred in Manhattan since May.

Impacts to date

Office buildings have emptied — and stayed empty. According to Haag:

  • Almost 14% of office space in midtown Manhattan is vacant.
  • The New York real estate industry is seriously considering turning that office space into apartments.
  • Commercial real estate is collapsing for want of customers in those restaurants, bars, and other facilities that supported the people in those now-empty offices.
  • In late October only 100,000, instead of the usual 1 million, office workers were showing up.
  • Commercial property sales have plummeted.
  • Rents are dropping in order to attract those now-remote office workers.

And the forecast by real estate experts is that it will get worse before it gets better. Many employers have found that telework works, their newly remote workforces are doing at least as well as when they were full-time in the central offices. In addition to which, the costly rents the employers had been paying in January now seem to be unnecessary.

While the list above refers to New York, similar data apply to other cities around the world. In the financial center City of London 6% of the commercial real estate stock is vacant, compared with 3.8% at the end of 2016. According to the Financial Times in “City’s proud past gives way to uncertainty” (15 December 2020), 1,150 shops, 300 restaurants and 247 bars and pubs are economically vulnerable as a result.

Now what?

Perhaps, as the vaccines for Covid-19 are widely distributed and take effect, say several months from now, all those office workers will return. Just like old times. But the, according to a number of recent surveys, including those of the Pew Research Center, chances are that a substantial number of the workers will not return, at least full-time. Many of the newly-remote workers prefer that mode of life. So Manhattan, and other cities with previously active urban centers, will have to reinvent itself. At a substantial near-term cost.

It is time for some serious innovation to reinvent the interiors of those many vacant office buildings. New initiatives will spring up from redesign of office space for the workers who come primarily to meet with colleagues face-to-face, to conversion of office to residential space so that people could easily live and work in the same building, to design of spaces for new forms of entertainment and recreation. Combinations of these and other options will surely be tried in the coming months.

The problem for the big cities of course, is that these new versions likely will not bring in the rental income that the old layouts did. Those old functions are moving to other communities. First temporarily, later permanently. The immediate task, then, is to invent forms of financing — and finance new inventions — that will encourage big cities to evolve into their distinctive new post-covid futures instead of becoming collections of empty shells.

We live in interesting times.

One thought on “Redesigning CITY CENTERs”

  1. It would be a great idea to take a building and split it up between offices and residential spaces. One could have a universal key to access the work floors, and a special key for their specific living floor, like Milton did in Devil’s Advocate. No one would complain about spending time in traffic, everyone would arrive in a good mood, ready to work. The state would cut down on pollution since thousands of cars would be taken off the roads, and America’s dependence on gas would drop significantly. The only down side I see is what would happen if the person stopped working for that company? Would s/he have to move?

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