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City dwellers in the suburbs: A pandemic story

With work-from-home flexibility now a mainstay of the Covid-19 pandemic, one question arises immediately...

Have people been fleeing cities, now freed from their daily urban commutes and the soaring inner-city rent prices? Or have they instead continued their decades-long exodus out of towns and into the city? Building on the work of The Economist, WES dives deep into urban-rural migration patterns during the Covid-19 crisis. It turns out that the pandemic-heightened appeal of suburbia may be the long-awaited answer to the world's major urban problems - from rent crises to gentrification.

Urbanisation in the time of Covid: Are cities really all the rage?

The work of urban and geo economists has long been to attest the unrivalled efficiency of cities. In fact, dense urban areas have long been lauded by economists for incomparable access to economies of scale - not only in terms of shared supply chains and physical or infrastructural resources, but also of shared knowledge and fostered innovation.

Beyond this cliché consensus, cast your attention to the cosmopolitan school of free marketeers, for whom urbanisation and the exodus out of rural areas into cities is an inevitable consequence of globalisation (and thus an inherently positive phenomenon). It is this second school, which views urbanisation in lieu of globalisation, that has been plagued with uncertainty in the face of increasingly localised supply chains and shuttered international travel since March 2020.

The true gravitas of the Covid-19 pandemic became unavoidably clear to the world. With this came hot debate regarding the net movement of urban workers. Are they continuing to flock into cities, as before? Are they staying put? Or are they leaving cities for ‘greener’ rural pastures?

Hot take from The Economist: Cities are emptying

These are the questions which The new economics of global cities, published by The Economist in September 2021, is chiefly concerned with. It seeks to demonstrate that the reverse phenomenon has been true during the pandemic: urban dwellers, and in particular white collar high-earning city slickers, have flocked to the suburbs and more rural locales for fear of catching coronavirus - and in effort to avoid high urban rent prices as work from home becomes normalised.

Even more controversially, the article asserts that this reversed trend persisted even as economies reopened and health concerns subsided in the second and (especially) third quarters of 2021. This would suggest that reversed urbanisation may persist even as the health-related concerns in the pandemic fade - instead indicating an underlying paradigm shift.

Drawing this kind of conclusion - deemed long-term in any post-pandemic sense - has become nigh impossible with the late November discovery of the new strain of SARS-CoV-2 in South Africa. However, it remains that the brief global interlude in new cases might offer some insight into how the future - after the surge of Covid-19 cases finally subsides - will look.

One thing that urban economists and other theorists agree upon, is the overwhelming trend documented in pre-pandemic data. Workers, especially younger ones, increasingly took up employment and residence in cities. All over the world, they earned more than those based in city outskirts, suburbs, villages and rural areas , achieving comparatively higher employment and job vacancy rates for over two decades.

The Economist writers subscribe to this popular consensus: “in 2000 the total daily salary bill for everyone working in inner London was twice what it was in the outer boroughs; by 2019 it was three times as high”. Various other international examples of the same phenomenon are offered throughout the article, where cities offer people higher pay and spur urbanisation.

After effectively demonstrating the prevalence of this pre-pandemic monodirectional trajectory, the writers at The Economist detail their own tool: the “exodus index”. This compares relative mobility since the onset of the pandemic in large cities with the average mobility data in their respective countries. With this, they argue that mobility and general (retail, transport, hospitality, events, and in-office working based) activity has been lower in cities than elsewhere throughout 2021: “in America, Britain, France and Japan activity remains substantially lower in cities than it does nationally”.

However, this difference is not itself the indicator of mass relocation from urban to the rural that the article presumes. Instead, it could just as plausibly indicate that government restrictions and safety measures tend to be stricter - or at least more strictly enforced - in cities than elsewhere. It could equally indicate that people in cities are more reluctant to return to their pre-pandemic levels of activity - whether this is because they are more cautious given the greater risk posed to public health in a pandemic in more densely populated areas, or more perhaps because they have found themselves comparatively more productive while staying at home.

Using the select data from the article and The Economist’s exodus index alone, it is unclear what the cause is for this locational discrepancy in activity. In fact, opinion remains markedly split on the matter of whether city dwellers are leaving for the suburbs, or further afield, or not at all.

On the call of suburbia, and optimism for the urban future

In his article Are People Really Moving Out of Cities Due to the Pandemic? Eric Martel of Forbes argues on the contrary, that people are actually continuing to move into cities. He writes that purported mass migration out of big cities has primarily been evidenced by falling rent prices in city centres - but that this is not an accurate causal measure of migration. Instead, Martel uses the U-Haul Migration Index, based on data from one-way truck hires, to show that migration rates out of major cities fell in 2020 compared with 2018. While his data looks mainly at the US, it presents a niche, yet compelling picture of rising urbanisation both during the pandemic, and during the interlude of mid-2021.

Another The Economist article claims that “the invisible elastic that binds people to big cities has weakened rather than broken,” and that people are leaving inner-city areas merely for city outskirts. This offers a more nuanced but not incompatible view, relative to Martel. People aren't leaving cities altogether, they are simply moving into outer-city suburbs.

As such, The Economist’s The new economics of global cities does not show that workers have become altogether disenchanted with cities, or that any migration out of cities is indicative of a longer-term extra-pandemic shift in real estate trends.

What it does with great compulsion, however, is make the argument that “mayors are shifting their focus from attracting firms to attracting residents, and thus the property and consumption taxes they bring, by improving quality of life”.

When coupled with the growing normalcy of work-from-home and abandonment of full-time in-office work: the greater dispersion of urban dwellers across the entirety of cities and their paired suburbs can be a cause for celebration. Now that people are leaving city centres, the soaring rent prices in business and midtown districts may finally slow their rise - or even start to drop. Local councils may at last focus on bettering the standard of living in their cities, investing for instance in parks or social schemes, to prevent these districts from being emptied.

The many urban housing issues that plagued cities before the pandemic - from towering and growing rent prices, to rampant gentrification - could even be addressed by the pandemic. The newfound flexibility of mainstream work-from-home patterns has opened the floodgates to a new normal, in which commute times are less important than family and lifestyle centred issues when choosing where to live. In fact, Covid-19 might just be the answer to cries that we have long heard for more liveable and affordable cities.


Written by Ingrid Bahnemann



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