The Age of the Mega-City is Over
In just a few months, New York City became the poster-child for what’s shaping up to be a staggering transformation of the American urban scene. Our giant metroplex cities are set to contract and go broke in the years ahead. The trend was already clear before Covid-19 came on the scene, but the virus accelerated the complex dynamics behind it. Of course, most of our cities occupy important geographic sites, so something will remain; but they will be smaller and increasingly troubled places as the agonizing process plays out. And eventually, they may be better places, in a different way.
The short version of the story is that our biggest cities have exceeded the viable scale of their operation as we enter an era of resource and capital scarcities that will inescapably shrink economies. Their infrastructure is too complex and costly to maintain. The skyscrapers and megastructures that were built to accommodate a particular way of organizing work have very suddenly gone obsolete. The cities face default on their ruinous debt obligations and pension promises. Social and ethnic conflict has turned ugly, and both life and property are at risk as public order founders.
By May 2020, The New York Times reported that 420,000 residents had fled America’s largest city, not a few of them permanently (my literary agent among them, whose pre-virus life revolved around eating lunch with editors every day). The wealthiest neighborhoods were the biggest losers—and they were the city’s leading taxpayers. Of course, the initial impetus for flight was fear of catching Covid-19 in an environment densely packed with people. But as corporate offices shuttered, many of these refugees performed their work duties at home over the Internet, and it dawned on the corporations that perhaps it was a waste to lease expensive, high-status headquarters in Manhattan. The iconic Time-Life Building at 1271 Sixth Avenue had accommodated 8,000 workers before Covid-19. In mid-summer 2020, 500 people were showing up there.
Meanwhile, as politicians forced lockdowns, the city’s restaurants and shops went dark, along with theaters, museums, stadiums, and the other organisms that made up the city’s rich ecosystem of daily life. The prospect of midtown perhaps permanently abandoned by office workers made an eventual return to normality even less plausible. After four months of virus, the June riots and looting that followed the horrific death of George Floyd sealed the deal, with the luxury stores on Fifth Avenue smashed up and burgled. Who would reopen such a business when riots and looting could break out over a fresh pretext at any time?
All of that completely changed the business model for the owners of skyscrapers—whole floors going empty and now the ground-floor businesses shut down, too. These buildings, with their massive maintenance costs, no longer produced enough revenue to operate them. Overnight, they were transformed from assets to liabilities. The situation also harmed the condominium model for residential towers. Without the ground-floor rents, the homeowner’s associations would have to steeply raise the monthly maintenance fees for each apartment owner, while significantly lowering each unit’s resale value if the owner had to move out. All of this would thunder through the banks and REITs (real estate investment trusts) which owned and managed many of these properties, and ultimately through the city’s dwindling treasury coffers.
Many like to believe that office towers can be easily converted to apartments. That’s just not true. Apart from purely physical issues, like the layout of plumbing stacks, the coming scarcity of capital will obviate these ventures, and, anyway, tower apartments only exist because they’re companions to office towers, which may now be permanently obsolete. The age of giantism is over. Cities are certainly about the concentration of life and work, but it doesn’t have to be at the colossal scale. For many centuries it wasn’t.
The pre-virus 21st century New York was a grandiose product of the financialization of the economy, including the global money-laundering orgy that incentivized the luxury condo tower building boom. That’s over too. With so many other legacy economic activities flickering out, Wall Street was all that remained. All that held up Wall Street’s stock and bond markets was “liquidity” (i.e. money in figment form) prestidigitated by the Federal Reserve. And now even Wall Street had little incentive for maintaining its headquarters on Wall Street, with its wealthy denizens trading and finagling via the Internet from comfortable perches in the Hamptons and the Connecticut hinterlands.
All American cities are not the same, of course, and they will get to downscaling in their own special way, subject to different combinations of forces. For instance, Sunbelt cities like Atlanta, Miami, and Dallas are mostly composed of low-rise buildings. But they owe their stupendous growth since 1950 to the phenomenon of universal air-conditioning and mass motoring, both of which will prove to be extraordinary short-lived luxuries of the cheap fossil fuel age. Los Angeles will be challenged by ethnic friction, water problems, and its extreme car dependency (and you can forget about solving that with electric cars). All the cities will be plagued by an epic loss of tax revenue and the failure of government to maintain essential services.
The foregoing suggests epic demographic shifts. People will be on the move—they already are—as the cities decant. If the current political mood is any index of things to come, those movements will occur against the background of considerable disorder. That has already begun, too, in the summer of 2020 as looting, burning, and anarchy spread from one place to another. For the moment, a lot of former city people are seeking refuge in the suburbs. That will prove to be a bad choice. The suburbs, too, are headed for trouble—and I’ll take that up in next month’s commentary.
James Howard Kunstler is The American Conservative’s New Urbanism Fellow. He is the author of numerous books on urban geography and economics, including his recent work, Living in the Long Emergency: Global Crisis, the Failure of the Futurists, and the Early Adapters Who Are Showing Us the Way Forward. Follow New Urbs on Twitter for a feed dedicated to TAC‘s coverage of cities, urbanism, and place.