No, it hallows them out. Cities' input are people, their output are a network effect of collaboration/creativity/productivity.
The remote work and allowing out of cities should bring price balance to real estate markets, allows for diversity with affordable housing, and allows for more flexibility for its former residents that immigrate to suburbs and smaller towns. But if the output of cities or towns or villages are network effect of collaboration/creativity/productivity, then cities as entities suffer.
But also sadly, there is probably not enough network created in smaller towns to create a vibrant collaboration over the long-term as infrastructure and suburban/urban design takes many years to implement. Vibrant towns are not just created overnight, they need to be developed. These towns might get more expensive as well, more crowded - I'm thinking Lake Tahoe as an example - and thus less rewarding to live. Arguably this has happened already in many places within driving distance of larger urban cities.
I think there are a few American examples of cities that are shells of themselves from the 1900s. St. Louis, Detroit, and Cleveland come to mind. They might be rebounding now, 50-100 years later, but can we argue that large populations leaving these cities was anything but bad for the cities wholistically?
Really interesting comments here. I agree with your point about collectives making more value. However, in a digital-first world, do those connections need to be in person or in the exact same geography? I understand time zone and cultural differences can hinder collaboration, but what about someone living downtown while someone else lives on the outskirts, and a third living in the countryside an hour and a half away from the city? Would that not create a network effect?
Similarly, would that network effect not help on an individual level in small towns?
Yes-ish? I think it's early to tell. If the positive effects are going to happen, they are going to happen over a long period of time, through accumulation of national+local policies and personal choices.
It's about choices, really, both at the political and personal level. And about trade-offs. I've been living in Milan, Italy for the past 10 years, but, like most of the people living in Milan, I grew up in a countryside village.
Came for the job, stayed for the job, but now, like many, I'm reconsidering my choices.
It's not straightforward though. As much as I long for lower rents, green hills, milder summers, Milan is a quintessential business-centric city. Money is here. Big fish clients are here. Also: the city visibly improved during the past few years. I don't own a car in Milan, and that's a big plus in terms of quality of life — coming from a village in the middle of nowhere, I know what does it mean to need a car to go anywhere.
As and independent consultant, I can twist and turn the way I do business to adapt to smaller clients who don't care if I work remotely, allowing me to expand to international clients too. But that's not for everybody, I would argue that there's a very tiny percentage of people that could even think about the choices and opportunities I could think about.
For most people coming from countryside villages or smaller cities, "living in the big city" is the peak of their life, they are not going to leave. I know a lot of people that wouldn't leave Milan even if it was burning down.
So I think it will be a good thing for some specific aspects of the city life (less load on the public transportation system on peak hours, more investments on micromobility, more walkable areas) even in the short terms, but I don't expect drastic changes on the big stuff (I don't believe rents will lower significantly, unless there a political intervention, which I doubt will ever happen — historically, at least in Milan, landlords prefer keeping a house empty to lowering the rent).
Really interesting analysis here, Davide. I see what you mean about coming from a small town (same here) and moving to a big city for the lifestyle side (same here).
I wonder if there's room for smaller cities that still have some of the key amenities you mentioned (name recognition, walkability, etc.) versus only comparing big cities to rural villages. I don't know the Italian ecosystem well, but in my native Canada there are multiple smaller towns and cities (~10,000 - 50,000 people) where you could still get some of the city amenities but not quite have to deal with the "big city". That said, if you really want to be car-less, you need a big city - even small cities require a car sometimes
I also went from Milan to Lodi (population ~50.000), for a few years, and then back to Milan. Switching from Milan to Lodi was traumatic, to say the least (I'm definitely not a party-goer but a city of 50.000 in Italy is dead in terms of lifestyle options...).
Yes, rent was twice as cheaper than Milan and the office was a 5 minutes bike-ride away, but nothing ever happened after work or during the weekend.
In Italy you need a city of about 150.000 people to find a sort of "sweet spot": slightly bigger and you get the same "big city" problems, slightly smaller and you want to kill yourself because there's nothing else to do other than working.
There are not a lot of 150.000 people cities in Italy and that's why of the polarization "big city vs. rural village" (I grew up and spent 27 years of my life in a rural village of about 5.000 people).
Also, in Italy there is a huge divide — economical, cultural, sociological — between the North and the South, so if you are from the North like me it's really difficult to think about moving South – despite it being cheaper, better weather, seaside places and so on.
But for people from the South who moved to the North, it's would be a dream.
The term "southworking" popped up during these months, because a lot of the Southern people working and living in the North moved back temporarily to their Southern hometowns, and some started to claim the right to continue their remote work from there (newspaper titles were like "Living in Palermo while working in Milan").
Milan's mayor immediately stated that it wouldn't be right for someone living in Palermo to earn as much as someone living in Milan — Exposing the well-known vicious circle for which in a city in the North you are paid more just because life is more expensive (and life is more expensive because you are paid more...I guess, nothing to do with the value of your work, apparently).
Again, for those who are formally employed by companies it's gonna be really hard to leave the big cities, because of a series of vicious cycles that make you cling to them, and that's why I think that only strong individual choices matter right now unless there is some kind of local and national support for those kind of choices.
"Are people fleeing the cities for greener suburban pastures? Some faint signals may have emerged in certain places, but by and large, the data show that suburban housing markets have not strengthened at a disproportionately rapid pace compared to urban markets. Both region types appear to be hot sellers’ markets right now – while many suburban areas have seen strong improvement in housing activity in recent months, so, too, have many urban areas."
Would you consider leaving the city for a country life if you could work remotely?
- 100%. Think there's still a big business opportunity to enable this.
Would you consider moving into the city to take advantage of plummeting rents and city amenities?
- Yes, the market will do its thing and there will be more demand for cities
It's a touchy subject, but one thing I think about is the potential to find a mate. If you are happily set with a partner, moving away from density is less of a concern. If you're single, however, this central part of life suddenly proves much more challenging.
I think yes and no. I think we'll see some people start to leave the cities for more affordable housing which will cause city prices to go down as you no longer need to live close to a specific location. I think we will also see some impacts around transportation and the environment as well as there may be less traffic and people commuting into the city. However, I think we will see an impact on smaller businesses and restaurants that have come to rely on pedestrian traffic from people on lunch breaks, etc...
I mean the more savvy ones will shift to an online/in-person model. For example, the spa I frequent created an online storefront for products and have recent launched a Patron site where they are uploading content, tutorials and other "perks" for patrons. I think some will simply shut down which is sad. I'd be curious to know how a lot of the stores/restaurants in the path are doing. Outside the 9-5 that place is a ghost town, now that there is no one at those buildings I'm sure they have suffered.
Great point - the PATH in Toronto and any "underground cities" underneath major financial centres are likely to suffer massively. Hopefully they end up going online though - at least in Canada there are programs like Digital Main Street to help them set up Shopify stores
I think that it will be a good thing for smaller or somewhat economically depressed cities. Lower living costs will help them lure remote workers and increase opportunities for business and consumption locally.
You make a really interesting point. Would you say it's because the smaller cities are also more likely to have "just enough" that a big city dweller would want (transit, restaurants, wifi, etc.) -- or do you think that the cheaper living costs are enough in and of themselves?
Also, do you have any predictions for which cities might be the winners versus losers in the remote work movement?
I think that the big city exodus will be short-lived, and that to your point now is an excellent opportunity to take adv of cheaper rent as an individual or a business. What I'm particularly interested in is how the future of remote work transforms travel and tourism, the rise of the youth nomad, and views on home ownership (while it may become more attainable if condo/ house prices drop in the future, it may also become less desirable).
You make a really interesting point about the price of houses versus the desirability of owning a home. Even if buying in the city becomes within reach, I wonder how much people will want to have that versus go for cheaper rents and be a bit more nomadic (particularly as some countries / regions focus on high speed internet as their only core investment, knowing that it's so fundamental to attracting remote workers).
In Canada, I know that the province of Nova Scotia is investing heavily not into building huge cities but into getting fiber internet to all inhabitants (https://developns.ca/projects/high-speed-internet/). Rural, ocean-front internet (where houses cost ~$200k CAD) is faster than downtown Toronto internet for nearly the same price
I think I'm right there with you tbh! I live in a city that's quite large and spread out, so the core isn't very walkable. But I like having the freedom (during non-pandemic times) to go out and about as I want to. I'm not much of a country liver myself, but it's nice that that is an option for people who want to get out of the city.
Oh that's a good point that some cities may not be quite as walkable as others. But I feel you on non-pandemic time freedom to just move around, whereas the country may have the natural beauty but doesn't always provide that same mobility without a car
Definitely! I think city life kind of extends to more suburban areas around the general core of the city as well, and that's definitely not very walkable (as much as I wish it was!). You can definitely find similar problems in the country if you don't have a car too.
No, it hallows them out. Cities' input are people, their output are a network effect of collaboration/creativity/productivity.
The remote work and allowing out of cities should bring price balance to real estate markets, allows for diversity with affordable housing, and allows for more flexibility for its former residents that immigrate to suburbs and smaller towns. But if the output of cities or towns or villages are network effect of collaboration/creativity/productivity, then cities as entities suffer.
But also sadly, there is probably not enough network created in smaller towns to create a vibrant collaboration over the long-term as infrastructure and suburban/urban design takes many years to implement. Vibrant towns are not just created overnight, they need to be developed. These towns might get more expensive as well, more crowded - I'm thinking Lake Tahoe as an example - and thus less rewarding to live. Arguably this has happened already in many places within driving distance of larger urban cities.
I think there are a few American examples of cities that are shells of themselves from the 1900s. St. Louis, Detroit, and Cleveland come to mind. They might be rebounding now, 50-100 years later, but can we argue that large populations leaving these cities was anything but bad for the cities wholistically?
Really interesting comments here. I agree with your point about collectives making more value. However, in a digital-first world, do those connections need to be in person or in the exact same geography? I understand time zone and cultural differences can hinder collaboration, but what about someone living downtown while someone else lives on the outskirts, and a third living in the countryside an hour and a half away from the city? Would that not create a network effect?
Similarly, would that network effect not help on an individual level in small towns?
Yes-ish? I think it's early to tell. If the positive effects are going to happen, they are going to happen over a long period of time, through accumulation of national+local policies and personal choices.
It's about choices, really, both at the political and personal level. And about trade-offs. I've been living in Milan, Italy for the past 10 years, but, like most of the people living in Milan, I grew up in a countryside village.
Came for the job, stayed for the job, but now, like many, I'm reconsidering my choices.
It's not straightforward though. As much as I long for lower rents, green hills, milder summers, Milan is a quintessential business-centric city. Money is here. Big fish clients are here. Also: the city visibly improved during the past few years. I don't own a car in Milan, and that's a big plus in terms of quality of life — coming from a village in the middle of nowhere, I know what does it mean to need a car to go anywhere.
As and independent consultant, I can twist and turn the way I do business to adapt to smaller clients who don't care if I work remotely, allowing me to expand to international clients too. But that's not for everybody, I would argue that there's a very tiny percentage of people that could even think about the choices and opportunities I could think about.
For most people coming from countryside villages or smaller cities, "living in the big city" is the peak of their life, they are not going to leave. I know a lot of people that wouldn't leave Milan even if it was burning down.
So I think it will be a good thing for some specific aspects of the city life (less load on the public transportation system on peak hours, more investments on micromobility, more walkable areas) even in the short terms, but I don't expect drastic changes on the big stuff (I don't believe rents will lower significantly, unless there a political intervention, which I doubt will ever happen — historically, at least in Milan, landlords prefer keeping a house empty to lowering the rent).
Really interesting analysis here, Davide. I see what you mean about coming from a small town (same here) and moving to a big city for the lifestyle side (same here).
I wonder if there's room for smaller cities that still have some of the key amenities you mentioned (name recognition, walkability, etc.) versus only comparing big cities to rural villages. I don't know the Italian ecosystem well, but in my native Canada there are multiple smaller towns and cities (~10,000 - 50,000 people) where you could still get some of the city amenities but not quite have to deal with the "big city". That said, if you really want to be car-less, you need a big city - even small cities require a car sometimes
I also went from Milan to Lodi (population ~50.000), for a few years, and then back to Milan. Switching from Milan to Lodi was traumatic, to say the least (I'm definitely not a party-goer but a city of 50.000 in Italy is dead in terms of lifestyle options...).
Yes, rent was twice as cheaper than Milan and the office was a 5 minutes bike-ride away, but nothing ever happened after work or during the weekend.
In Italy you need a city of about 150.000 people to find a sort of "sweet spot": slightly bigger and you get the same "big city" problems, slightly smaller and you want to kill yourself because there's nothing else to do other than working.
There are not a lot of 150.000 people cities in Italy and that's why of the polarization "big city vs. rural village" (I grew up and spent 27 years of my life in a rural village of about 5.000 people).
Also, in Italy there is a huge divide — economical, cultural, sociological — between the North and the South, so if you are from the North like me it's really difficult to think about moving South – despite it being cheaper, better weather, seaside places and so on.
But for people from the South who moved to the North, it's would be a dream.
The term "southworking" popped up during these months, because a lot of the Southern people working and living in the North moved back temporarily to their Southern hometowns, and some started to claim the right to continue their remote work from there (newspaper titles were like "Living in Palermo while working in Milan").
Milan's mayor immediately stated that it wouldn't be right for someone living in Palermo to earn as much as someone living in Milan — Exposing the well-known vicious circle for which in a city in the North you are paid more just because life is more expensive (and life is more expensive because you are paid more...I guess, nothing to do with the value of your work, apparently).
Again, for those who are formally employed by companies it's gonna be really hard to leave the big cities, because of a series of vicious cycles that make you cling to them, and that's why I think that only strong individual choices matter right now unless there is some kind of local and national support for those kind of choices.
Will the exodus from cities continue or is it just a pandemic thing?
- Arguably, it's not really happening, at least in the U.S. A major shift is more likely to occur gradually over time, not in weeks/months.
https://www.zillow.com/research/2020-urb-suburb-market-report-27712/
"Are people fleeing the cities for greener suburban pastures? Some faint signals may have emerged in certain places, but by and large, the data show that suburban housing markets have not strengthened at a disproportionately rapid pace compared to urban markets. Both region types appear to be hot sellers’ markets right now – while many suburban areas have seen strong improvement in housing activity in recent months, so, too, have many urban areas."
Would you consider leaving the city for a country life if you could work remotely?
- 100%. Think there's still a big business opportunity to enable this.
Would you consider moving into the city to take advantage of plummeting rents and city amenities?
- Yes, the market will do its thing and there will be more demand for cities
Interesting Zillow article! It sounds almost like juuust enough people are moving to strengthen the suburbs, but not enough to weaken the cities
It's a touchy subject, but one thing I think about is the potential to find a mate. If you are happily set with a partner, moving away from density is less of a concern. If you're single, however, this central part of life suddenly proves much more challenging.
You're totally right. I hadn't thought of this angle before, but you bring up an excellent point
I think yes and no. I think we'll see some people start to leave the cities for more affordable housing which will cause city prices to go down as you no longer need to live close to a specific location. I think we will also see some impacts around transportation and the environment as well as there may be less traffic and people commuting into the city. However, I think we will see an impact on smaller businesses and restaurants that have come to rely on pedestrian traffic from people on lunch breaks, etc...
Oh good point about smaller businesses missing out on pedestrian traffic. What do you think these entrepreneurs will do in response to this shift?
I mean the more savvy ones will shift to an online/in-person model. For example, the spa I frequent created an online storefront for products and have recent launched a Patron site where they are uploading content, tutorials and other "perks" for patrons. I think some will simply shut down which is sad. I'd be curious to know how a lot of the stores/restaurants in the path are doing. Outside the 9-5 that place is a ghost town, now that there is no one at those buildings I'm sure they have suffered.
Great point - the PATH in Toronto and any "underground cities" underneath major financial centres are likely to suffer massively. Hopefully they end up going online though - at least in Canada there are programs like Digital Main Street to help them set up Shopify stores
I think that it will be a good thing for smaller or somewhat economically depressed cities. Lower living costs will help them lure remote workers and increase opportunities for business and consumption locally.
You make a really interesting point. Would you say it's because the smaller cities are also more likely to have "just enough" that a big city dweller would want (transit, restaurants, wifi, etc.) -- or do you think that the cheaper living costs are enough in and of themselves?
Also, do you have any predictions for which cities might be the winners versus losers in the remote work movement?
I think that the big city exodus will be short-lived, and that to your point now is an excellent opportunity to take adv of cheaper rent as an individual or a business. What I'm particularly interested in is how the future of remote work transforms travel and tourism, the rise of the youth nomad, and views on home ownership (while it may become more attainable if condo/ house prices drop in the future, it may also become less desirable).
You make a really interesting point about the price of houses versus the desirability of owning a home. Even if buying in the city becomes within reach, I wonder how much people will want to have that versus go for cheaper rents and be a bit more nomadic (particularly as some countries / regions focus on high speed internet as their only core investment, knowing that it's so fundamental to attracting remote workers).
In Canada, I know that the province of Nova Scotia is investing heavily not into building huge cities but into getting fiber internet to all inhabitants (https://developns.ca/projects/high-speed-internet/). Rural, ocean-front internet (where houses cost ~$200k CAD) is faster than downtown Toronto internet for nearly the same price
I think I'm right there with you tbh! I live in a city that's quite large and spread out, so the core isn't very walkable. But I like having the freedom (during non-pandemic times) to go out and about as I want to. I'm not much of a country liver myself, but it's nice that that is an option for people who want to get out of the city.
Oh that's a good point that some cities may not be quite as walkable as others. But I feel you on non-pandemic time freedom to just move around, whereas the country may have the natural beauty but doesn't always provide that same mobility without a car
Definitely! I think city life kind of extends to more suburban areas around the general core of the city as well, and that's definitely not very walkable (as much as I wish it was!). You can definitely find similar problems in the country if you don't have a car too.
Absolutely. Do you have any predictions of which cities are most likely to win (can be any city in the world)?