Urban economics in the time of Covid-19: What happens when the thing that makes cities great also makes them dangerous?Alexandra PPanman1 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).
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.