How cities might be changed by coronavirus : Planet Money : The Indicator from Planet Money Big American cities might never look the same again, post coronavirus. And that could be the making of them.

The Post Pandemic City

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UNIDENTIFIED PERSON, BYLINE: NPR.

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CARDIFF GARCIA, HOST:

On Monday New York City started the first phase of reopening its economy after months of shutdown. Construction crews can start working again, factories can start making goods, and retail stores can offer curbside pickup.

STACEY VANEK SMITH, HOST:

It'll be a while before we know how much of New York's old economy will return and how quickly. The same goes, of course, for other big cities throughout the U.S. But one thing is clear right now. The coronavirus pandemic has accelerated some of the trends that were already eroding the benefits of living in a big city.

GARCIA: Even before coronavirus, the country's biggest cities were already losing people. And even the slightly smaller cities that were still growing, they're growing more slowly than the suburbs are now. And the virus is still out there, preying on the very thing that makes a city flourish - its density, its ability to crowd people and businesses together. I'm Cardiff Garcia.

VANEK SMITH: And I'm Stacey Vanek Smith. This is THE INDICATOR FROM PLANET MONEY. Today on the show, why tough times could be ahead for big American cities but also why those tough times themselves might also put in place the conditions for American cities to renew themselves in the future just like they have before.

The economic reopening in a lot of cities is still in its early stages right now. In New York, it just started yesterday. But it is still possible to discern a few big trends.

GARCIA: One of the most important trends - the world retail stores might be changed forever. The simple reason is that people have shifted to buying things online just incredibly fast in this crisis. They've had to. They haven't been able to actually walk into stores.

VANEK SMITH: And a lot of retail companies, the ones that tend to sell their goods in a physical location the old-fashioned way - they are going to struggle to reopen at all. Clothing stores, big department stores were already in trouble because of e-commerce. Derek Thompson is a writer for The Atlantic magazine, and he just published an article about the future of cities. He says there are a lot of those kinds of stores.

DEREK THOMPSON: The U.S. in general is dramatically over-stored, over-retailed. We have approximately 10 times more retail space per capita than Germany, about five times more retail space per capita than the U.K. And that means that if a lot of economic activity goes online, a lot of the stores are going to have to be shut.

GARCIA: In a city, these stores are often clustered together in certain neighborhoods. So if they start closing up in big numbers, people are going to notice the difference. There's going to be a lot of boarded-up windows.

VANEK SMITH: Of course, this isn't going to happen to every business. Some businesses, Derek likes to say, are un-Amazonable (ph), which means you cannot buy online what these businesses are selling, like working out in a gym or eating inside of a restaurant or a bar. In cities, those businesses were already taking up more of the retail space before the pandemic. But there is a problem.

THOMPSON: Both restaurants and fitness centers create conditions that, based on our current understanding of COVID-19, are just about the worst possible conditions that you can be in for transmissibility of this disease. It's inside spaces that often aren't well-ventilated where people are packed together, and they're also - they're often talking or sweating.

GARCIA: So the kinds of indoor businesses that were already in trouble before the pandemic - retail stores, department stores - are in even more trouble now while the kinds of places with a good chance of thriving in the long run, like gyms and bars and restaurants, are exactly those places that will continue to be most threatened by the virus in the short run, at least until there's a vaccine or some other solution.

VANEK SMITH: And, says Derek, there is another trend that is changing what cities look like. He calls it the chainification (ph) of cities. So before the pandemic, big national chains of restaurants and retail stores had been replacing some of the smaller, independent, quirky, kind of weird businesses that often will make a city interesting.

THOMPSON: Between 2008 and 2018, New York City added a new Dunkin' Donuts franchise approximately every 12 days - every 12 days, a new Dunkin' Donuts in New York City for 10 straight years.

VANEK SMITH: Small, independent businesses have less access to raising money than big companies do, so they are more at risk of closing down if they start running out of cash to pay their bills. Tens of thousands of small businesses have already closed down for good because of the pandemic, and that is going to give big chains even more of a foothold in cities.

GARCIA: And that's not all. Along with these huge changes to the retail landscape of cities, think about two other trends that have also been accelerated by the crisis. First, more people are working from home now, which means fewer people are otherwise going to corporate offices like the ones often headquartered in big cities.

VANEK SMITH: And second of all, population growth in cities is lagging behind suburbs. In fact, the populations of New York and Chicago actually fell last year. When you add it all up, it means that in the near future, whole parts of big, dense cities like New York could be quiet and a lot emptier than they were before.

GARCIA: And we haven't even mentioned movie theaters, museums, playhouses, concert and sporting venues - the places that often provide cities with so much of their kinetic energy. But these are also the kinds of places that are expected to be the last to open. Derek Thompson says you take all these trends together, and it shows how the pandemic is acting as a kind of tax on crowdedness.

THOMPSON: That means it's a tax on what makes cities cities. I love cities because of their diversity, because of their bustle, because of that thrum of people. And this is going to punish that thing.

GARCIA: So yeah, could be rough times ahead for cities. Does that mean that cities are doomed? Of course not. Derek doesn't think so, and neither does Jenny Schuetz. Jenny is a fellow at the Metropolitan Policy Program at the Brookings Institution, a think tank. Jenny says first of all, the main reason that the biggest cities have been struggling to grow is not because people have stopped wanting to live in them. It's actually because of housing. That's what has to be fixed.

JENNY SCHUETZ: The problem is that most of the big, expensive metros haven't been building enough housing for a long time. So although they have well-paid jobs and people want to work there, they're also expensive places to live, and they've become more expensive over time.

VANEK SMITH: And also, Jenny suspects that a lot of the people who have left cities during the pandemic will come back. They chose to live in cities in the first place, a lot of times because of city life - the socializing, the job opportunities, the bars, the urban parks. It is how they prefer to live.

SCHUETZ: So one way to think about this is that where people choose to live is really the overlap between their lifestyle preferences and housing prices. It's not clear yet how much the coronavirus is going to change either one of those. Does this really shift people's preferences so they don't want to live in dense, urban places in a small apartment? And what does this do to housing prices?

VANEK SMITH: Plus, Jenny says, one reason to be optimistic for the future of cities is that they have suffered through many, many crises before. In fact, they went through one during the financial crisis about a decade ago.

SCHUETZ: The commercial real estate markets took a huge hit during the Great Recession. Lots of small businesses went out of business. There were lots of vacant storefronts. There were half-finished apartment buildings sitting around empty. You know, there were a couple of years where downtown areas were pretty depressing and pretty dead, but they came back. They - you know, eventually the economy recovered. A lot of the vacant storefronts actually turned into things like pop-up stores and pop-up restaurants, which then became a whole new trend.

VANEK SMITH: And Derek Thompson adds that if cities become a little emptier in the short run and rent for both apartments and businesses becomes cheaper, that could also make it possible for new people to move in there.

THOMPSON: Then a new kind of city dweller can come in to New York and Boston and San Francisco - a middle-class person that might not have been able to afford the city in, you know, circa 2018. You might have, you know, more immigrants coming into these cities and starting new kinds of restaurants that can thrive with lower rents. And you might have retail entrepreneurs come in and start new kind of antique shops and chess shops that couldn't have succeeded, couldn't have been profitable with 2019-era rents.

GARCIA: So, yes, cities might struggle for the next few years to escape a pandemic that seems almost perfectly designed to rip away everything that's good about them. But the funny thing about cities in a crisis - businesses can close and people might leave, but often, the spaces they leave behind look attractive to newcomers. And so the decline of a city ends up sowing the seeds of its own reinvention.

This episode of THE INDICATOR was produced by Camille Petersen and fact-checked by Brittany Cronin. THE INDICATOR is edited by Paddy Hirsch, and it is a production of NPR.

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