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Urban economics in the time of Covid-19: What happens when the thing that makes cities great also makes them dangerous?

By ucfuap3, on 1 April 2020

Part of our Post COVID-19 Urban Futures series.

Many of the world’s most iconic cities are in lock-down. Bustling public places have emptied overnight. As the images below show, Times Square (New York) is eerily quiet, traffic disappeared from the streets of Shanghai. Even the pigeons are staying away from St. Mark’s (Venice).

Image sources: New York Magazine, Reuters, and thejournal.ie

This physical distancing is a vital response to Covid-19. To reduce the human cost of the crisis, we must ‘flatten the curve’ and slow the speed of the spread of infection to a rate that will not overwhelm our health services.

Yet physical proximity is also what makes cities great. As urban economists love to say, it makes cities ‘engines of economic growth’. The theory is that density boosts productivity through three forms of ‘agglomeration economies’: ideas and new technologies spread much more quickly (learning); workers and companies have more choice, so they are more likely to do things they are good at (matching); and we can use resources more efficiently (sharing).

So, what happens to cities when it is dangerous for people to be close to one another?  In what follows I’ve set out some ideas and questions. These are not predictions, just thoughts that I hope can stimulate a productive conversation. Please share your experiences from where you are in the world.

 

Paris, Madrid, Washington and Rome: Urban Change begins at Home?

Imagine how many people in London are currently sitting at home, deliberately avoiding each other. Covid-19 has caused millions, no, billions, of people to alter their behaviour in unprecedented ways. The closest parallel is the Second World War; although, as memes like the one below jokingly remind us, we may want to keep the level of sacrifice demanded in perspective.

The last weeks, however, have felt more like sprint up a steep technological learning curve than a break on the couch.  Along with my colleagues, I’ve had to pivot to deliver teaching, research, and pastoral responsibilities from home. And we are not alone: universities across the world have gone virtual; companies of all sizes have introduced remote working; and even hospitals have shifted some functions online.

Will this change the way we work in the long-term? We may rush back to the office once the crisis is over. After all, predictions in the 1980s and 1990s that technology would transform our economic geography largely failed to materialize. Even as it became technically possible to live and work in different places, demand for face-to-face contact remained.

Yet things may be different this time. The technology we’re scrambling to adopt has existed for a while. The big change is that we’ve been forced learn how it works. As a recent randomized control trail found, the benefits of remote working can come as a surprise to companies and employees, something we can only realise if we try it out.

Perhaps even more importantly, we are doing this together.  After all, there is no point in getting to grips with new technology if you can’t convince others to learn it with you. It also means that the number of people thinking seriously about the downsides of remote working and looking for ways to mitigate them is expanding as well. Managers are trialling measures to keep teams connected and ideas flowing, and there has been a proliferation of advice on mental health (mostly serious, some hilarious).

In short, while I don’t think I’m alone in saying (to my surprise) that I miss the office, I can also imagine reaching for remote working tools more easily once this is over. If that’s true for many, or if companies demand it, other changes could follow. People may not abandon the city just because they started working from home 3 days a week, but they may reevaluate where they want to live within cities. If commuting times become less important, the persistent global trend of sky-rocketing downtown rents could start to reverse.

 

Bowling alone: will the appeal of cities change?

In the opening line of a seminal paper, Edward Glaeser and others state that the “future of the city depends on demand for density”.  This demand, the authors argue, does not only come from jobs. People are also attracted to the range of goods – commercial, aesthetic, public – that cities can provide.

Will Covid-19 change this? Fear of mass outbreaks could impact our leisure choices. One of the great benefits of cities – that you can find enough kindred spirits to make your favourite hobby viable, whether it’s theatre or a specialist yoga class – may disappear. If physical contact with strangers is scary, the draw of big city lights may start to dim.

We may also start to pay more attention to our neighbours. Anonymity is one of the hallmarks of big cities: we move through our day without acknowledging most of the people around us. Ironically, however, the current quarantine underlines that do not actually live in isolation; we are connected, for good and for bad.

On the good side, we’ve seen mutual aid groups spring up all over the world. On the bad, the realization that our safety is in other people’s hands (or at least hand washing, as well as where they go and who they interact with) can lead to fear and suspicion. At its most ignorant and extreme, this manifests as violent xenophobic attacks.

How might these changes affect city life? Fear may lead communities to find ways to stop strangers moving in, whether in the form of promoting people they know or discrimination against ‘outsiders’. These shifts could accelerate socio-spatial inequality, since, as Raj Chetty and others show, neighbourhood quality is central to life opportunities in cities.

Hopefully the future is brighter, and a rise in contagious diseases is not the new normal. Yet important shifts may nonetheless be occurring. Online shopping through companies like Amazon is booming as high-street shops close. This presents a public policy challenge, since high-street shops anchor public spaces and thus have considerable social value. While some are optimistic that new uses for this land will arise, these are goods with ‘positive externalities’, which markets notoriously underprovide.

To end on a note of optimism, one factor working in favour of cities is that more remote working could lead to improvements in urban air quality.  In the current crisis, carbon monoxide indicators in New York are down 50 percent. Since air pollution is a major ‘cost’ of living in cities, improvements may help make urban areas more attractive places to live.

 

How will the situation differ for cities in the Global South?

The WHO recently warned that Covid-19 will hit the world’s most vulnerable hardest. Since the mortality rate of the virus cannot be separated from health and social protection infrastructure, it seems devastatingly inevitable that the impact will be severe in the Global South.  It is too soon to reflect on the long-term outlook. Yet given the trends discussed above, divergence seems likely.

In cities like Dar es Salaam (Tanzania), where my recent research has been based, most households live in one or two rooms that they rent from a live-in landlord. They may share their toilet with 13 or 14 other people.  Work is largely informal and social support, such as sick-pay or unemployment benefits, are rare. Social distancing may be unfeasible. Remote work will be an option for only a minority.

Instead, those who can may well leave the city. Although we still know too little about urban mobility trends in the Global South, one insight from the 2014/5 Ebola crisis in West Africa was increased movement between urban and rural areas. Yet as with Ebola, this may further spread the virus.

As such, movement may not translate into a longer-term shift in urbanisation trends.  Life in cities in the Global South can be tough, but as long as is wages and urban amenities are higher than in rural areas, people will continue to be drawn to them despite a precipitous decline in living conditions. This, combined with a global recession that now looks inevitable, means that we must urgently look ahead and anticipate the new ways that urban, national, and international policymakers can support people and livelihoods.

8 Responses to “Urban economics in the time of Covid-19: What happens when the thing that makes cities great also makes them dangerous?”

  • 1
    Frederic Saliez wrote on 1 April 2020:

    Thank you Alexandra for sharing your thought and outlining these points.

    I agree with your observation on the accelarated and forced adoption of remote-working technology. We all knew it was possible but many colleagues had not much experience of it, beyond a few video meetings. We now realize that it really works (although not fully user-friendly yet) and are fast learning how to behave in a remote-working environment.

    My teenagers have had distant school for two weeks now, and they actually love it. It gives them more independance and I can already anticipate that the experience will have radically changed the nature of the teacher-student relationship.

    One aspect that you do not mention is the use of mass surveillance technology, which is being deployed in some countries as part of the covid19 response. I understand that in some places, it has already materialized in a new discrimination based on the citizens track geolocalisation recorded through a mobile App and other technologies. While this is raising critical ethical issues, we can anticipate that such systems won’t disappear once the outbreak is over.

    What seems more difficult to predict are the changes in our perception of public space. Will confinement make us collectively realize the value of public space and support the idea that increased resource and attention shall dedicated to it? Or will it on the contrary encourage poeple to invest in their private retreat, home, perhaps outside the city boundaries, therefore fueling urban sprawl or questionning the current urban/territorial organization?

  • 2
    Alexandra Panman wrote on 2 April 2020:

    Thank you for your comment, Frederic. It is an important point you raise about data surveillance, with many potentially far reaching implications – including if applied specifically to vulnerable groups such as refugees in cities, who are already subject to harmful narratives as a source of ‘threat’ to the local population and in some cases may rely on a degree of ‘invisibility’ for livelihoods.

  • 3
    Dina Khalaf wrote on 6 April 2020:

    Thank you Alexandra for sharing these useful points and thoughts and I would like to share my thoughts as well.

    As an Egyptian, being a citizen in a developing world whose governments over the years did not invest enough in health care and education have back fired during this past month. Despite that the efforts of the government fighting against the novel Coronavirus has been praised, the Egyptian low income groups has been suffering the most.

    Living in highly dense areas, lacking good quality education and awareness, and not having the luxury of choosing to stay home, they have no option but to go out to earn money for their families. Yet these unprivileged groups has been the most appreciating to public spaces for the past ten years since the real estate and housing sector have started to plant the ideas of social isolation of the privileged in gated communities where luxurious, full-serviced open spaces are safe for them, as they like to market.

    I think that public spaces of the city will be the same regarding people’s interest, specifically talking about low and average income groups but lacking the needed maintenance and care from the authorities side as well as the investment in people’s awareness as a top priority.

  • 4
    Martin Kitilla wrote on 6 April 2020:

    Alexandra P Panman for the mind searching article.
    I am an civil engineer/urban planner by profession and live in Dar es Salaam Tanzania.
    Despite the fear of the covid19 every one has, but it is not easy for each one to implement social distancing. Think of the many residents who live in densely populated unplanned settlements! In some of such areas, four to five families may be living in one rented house which have corresponding number of rooms. Such families may be using one toilet and one bathroom. A family can have three to four people who live in one such room. How can social distancing be possible??

    Also in many families in such areas live from hand to mouth! So the bread earner is compelled to go out and “work” on whatever activity that gives some cash which, when he/she goes home, enables to the family to buy the daily household needs. You can see that it becomes very difficult to “lockdown” such members of the community. Not that they don’t the danger of covid19 but there nothing they can do otherwise they are going to be killed by hunger instead of covid19. This thus brings to the point that despite the outbreak of covid19, public spaces like markets, transportation terminals, etc will continue even after the end of covid19.
    On the part of students and workers, currently they cannot work at home here. This due the fact that technological advancement is still relatively low: unreliable power supply slow internet facilities and inadequate computer/phone gadgets!!

  • 5
    Alexandra Panman wrote on 7 April 2020:

    Thank you, Dina, for your interesting reflections on the case in Egypt. I agree with you that socio-spatial dynamics are an important element of how the crisis is playing out in cities. Although data is currently limited, it will be important to understand patterns in how the neighbourhood you live in (and type of housing within that) affects your capacity to self-isolate, the transmission of knowledge (and infrastructure to support) measures such as handwashing, as well as differences in underlying health conditions. Initial analysis from the USA may capture this to some extent, in that it shows much higher rates of Covid-19 among African American communities (see for example, this report in the BBC https://www.bbc.com/news/world-us-canada-52194018). Moreover, as you mention, where lower-income groups rely more on public spaces (and have lower quality housing), we will also see very unequal effects of lock-down policies on mental health and well-being that policy responses will need to consider.

  • 6
    Alexandra Panman wrote on 7 April 2020:

    Martin, thank you very much for your comments and input from Dar es Salaam. I share your concerns about what the consequences of applying measures that have been successful in other places will be, if they are not adapted to reflect the very different underlying conditions of cities like Dar es Salaam. Early reflections on the consequences of the lock-down on low-income urban residents that rely on daily earnings to survive in India are alarming – for example, Arundhati Roy’s article in the Financial Times (free to read https://www.ft.com/content/10d8f5e8-74eb-11ea-95fe-fcd274e920ca) which includes testimonies of people forced to leave the cities. In addition to this, the different profile of work also points to the need for different policy responses in terms of recovery and support during the pandemic. One possible area for optimism may be approaches being trialled in Kenya of providing support through M-Pesa (given that mobile phone ownership rates are high in cities), but whether these approaches can be comprehensive remains to be seen.

  • 7
    Son Le wrote on 7 April 2020:

    Thank you Alexandra Panman for your thoughts and sharings.

    What I find insightful from your writing is that it was also Glaeser who many times gave us the caution that ‘if two people are close enough to give each other an idea face to face, they are also close enough to give each other contagious disease’ and himself once argued communication is complementary, or not a strong substitute yet, for direct human interaction – and so the demand for physical face to face exchange might be irreplaceble. The covid-19 period has shown us how such demand can shift and it’s interesting to see the post-covid19 changes in cities.

    Perhaps it’s early to applaud O’brien “the end of geography” but it’s true that technology is the biggest winner out of covid-19. I work in research for the public sector in Vietnam and have worked from home since 01 April. My colleagues and I have found that our usage of skype, viber for meetings and updates have skyrocketed. I share your views that while the technology has been around for so long, only until covid-19 do we have the chance to “try” it full-time, altogether, like a whole social experiment all of a sudden: everyone’s doing it, your colleagues, your seniors, your partners. Personally, I do find that it’s convenient enough to get deadlines done, but there’s something missing like the air you share with your colleagues in office (not the air we breathe but the knowledge/ideas air if you know what I mean) that cant be felt in your own room. For the short-term, to get things done, isolation and working-from-home is the safest thing to do for your community but in the longer-term how it affects your well-being is questionable.

    I live in Hanoi, Vietnam. Effectively, since 01 April the government has issued a social distancing measure where people are only allowed to go out if absolutely necessary; firms and businesses are encouraged to work-from-home if possible and no public assemble of more than 10 people. Although there is no official quarantine, no lock-downs, the attitude taken by Vietnamese government has been “speak softly but carry a big stick” – you will be fined if you cant provide a suitable reason why you are outside on the street – which I think is working very well as people are actively choosing to stay at home. By observation, it is noticeable that there’s an increase in the number of delivery men – or shippers as we call them. People are buying many things online now which is very different pre-covid19 – the culture here has been cash-based, direct transaction for long long (even my elderly parents now figure out how to do transaction online!). Once again, the winner here is technology. Obviously, current technology makes us reliant on human couriers to finish our transaction. Air quality is definitely much better and that’s another positive note.

    Touchwood, if the next pandemic occurs when drones and flying robots have become the norms, then we probably will witness the true death of distance. But so far, I reckon cities wont be decentralised anytime soon in a post-covid19 future. I cant say for other developing economies, but for the Vietnamese case, efforts and attention are being prepped by the government to revitalise the major urban hubs, like Hanoi and Ho Chi Minh city, immediately once the pandemic is over. In developing countries like Vietnam, cities play too important of a role as engines of growth. Yet, Im hopeful that governments, here and elsewhere, will have looked back at the lessons learnt today to better look forward.

  • 8
    Alexandra Panman wrote on 9 April 2020:

    Thank you, Son Le, for these thoughtful reflections and insights from your current experience in Vietnam.

    It is interesting to hear how your research department has managed to successfully adapt to working from home. One test of the longevity of these changes, I suppose, will be once people are able to interact in the office again – will those working from home feel they are missing out from conversations occurring around the proverbial water cooler, or will we have adapted to build up other informal channels of communication that make up for this?

    I’d be hugely interested to hear more about plans to revistalise urban hubs like Hanoi and Ho Chi Min City after the crisis, if and when there is information that can be shared on this. Also, if you have a sense of whether these plans look at how the crisis will have impacted neighbourhoods of different socio-economic standing, I would expect that there is a lot of room to share and build knowledge with cities in other countries (and in particular across the Global South) that could be very fruitful.

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