City v Suburbs

John Walkup

Talking Manhattan on
There's been a lot of media attention to people leaving the city for the suburbs, but not a lot of data/thought.

- The point of moving to the burbs is more space/schools with easy access to the city for work
- If work is remote, why commute?
- If the city is contagious, why be near it and why pay higher taxes to do it?
- Moreover, why pay a housing premium for the closer commuting towns?
- If a buyer is considering the burbs b/c they now work remote and want space, wouldn't they rather escape the NYC wealth bubble in general?
- Or if larger units in the city see lower prices + ultra-low rates, would that be a draw?
- Is the flight to the burbs is best described as a flight to the exurbs?
- What data sets would be the best to look at to see real-time action - supply, pending sales...?

Let's get it on!

David Goldsmith

All Powerful Moderator
Staff member

Should you flee your city? Almost 40% have considered it during the pandemic

Recent reports indicate that the pandemic may continue at least two to three years. Now urbanites with the means to move are avidly discussing where to live, how to live, and how to educate and care for children—and they’re serious: 43% have recently browsed real estate websites, according to the same poll.

A small but significant number have already moved, intending temporary relocation, and are now debating what’s next. Others are simply moving a few miles away to the suburbs, in search of daily outdoors access without risk of accidental infection by a heavy-breathing neighbor. As the New York Times reported in March, the ultra-wealthy have already fled.
Given that relocating often involves thousands of dollars in moving costs, lost work, broken leases, and temporary payments on two homes, urban flight is only a viable option for wealthier households with remote employment options. If city dwellers do pull the trigger, the exit of upper-income urbanites could further decimate the city restaurant, arts, and social life cultures that depend on their patronage. A similarly large-scale urban flight took place in New York City in 50 years ago, leaving Manhattan gritty and underfunded in the 1970s.
The Harris Poll surveys approximately 2,000 Americans each week on a variety of coronavirus-related topics. The poll indicates that urbanites may also be under more financial pressure due to the pandemic: 40% say they have sought new forms of income, as opposed to 30% of suburban and rural residents.

David Goldsmith

All Powerful Moderator
Staff member
I think a lot will depend on retail. One of the big differences of city vs suburbs is proximity to it. But if retail - especially restaurants - don't reopen then you lose one of the biggest positives of city living (David Chang was quoted as saying 90% of restaurants will be gone). And right now, New York City retail is looking pretty bleak.

Noah Rosenblatt

Talking Manhattan on
Staff member
yeah retail is a big part of it. Im torn on this issue. On one hand the deflationary forces, what do jobs look like, what does commercial look like, retail, etc etc, all those negatives and on the other hand, this city always seems to come back from adveristy & add in $6+ trln in stimulus....ltcm, dot com, 9/11, credit crisis, now this..granted this is unprecendented, but so is the actions taken by fed and govt. I wonder if there is a bottom to this, a put, that gives us a floor to the destruction. We could have investors back in this market in no time after the worst of this passes. Will there be a newer, younger generation coming to nyc? Will there be another group that fills the void of those that flee?

Also, David this line you say "If city dwellers do pull the trigger, the exit of upper-income urbanites could further decimate the city restaurant, arts, and social life cultures that depend on their patronage. " - yea, this is concerning to me as well and I wonder what these sectors look like post covid anyway in a deflationary environment, with many saving and not spending. I know many are itching and there is pent up demand, but it will be slow to come back to full capacity..could take year or more, need a vaccine.

David Goldsmith

All Powerful Moderator
Staff member
If you follow Ray Dalio I think we are at the point in the long term cycle where we need to see a fairly large write down on debt to correct the situation. One of the things that this would do is cut the costs of operating the retail spaces and allow for lower rents or more creative solutions between operators and owners.

Also, if you look at Cuomo's 4 phase reopening plan:
1) Construction and manufacturing operations along with select retail companies using curbside pickup
2) Professional services, real estate, and financial services
3) Restaurants and hotels
4) Arts, entertainment and recreation.

Phase 3 seems unlikely to be this year from what I understand.

Noah Rosenblatt

Talking Manhattan on
Staff member
interesting..havent read much Ray Ray in a while, but I certainly do respect the legend. Seems like that is whats gonna happen, with fed backstopping a system collapse or major credit event

David Goldsmith

All Powerful Moderator
Staff member
If this article is right and Uber/Lyft/ride-sharing as well public transportation are going to severely decline, coupled with NYC War on Vehicles, how are people going to get around to work, eat, play, shop, etc? It's already gotten close to impossible to street park in large swaths of Manhattan and people aren't going to pay $80 for 4 half-hour garage spots to visit 4 different stores (as opposed to $4 for metered parking). And most people physically can't do that on a bicycle no matter what Transportation Alternatives tries to claim.
(I'm not going to post all the articles but I read a few today siting studies from IBM and others claiming people are shifting back to their own private vehicles and eschewing not only ride-sharing apps but also public transportation and anything else they might have to share the space with others, even if time shifted)

The Results Are In for the Sharing Economy. They Are Ugly.
Lyft, Uber and Airbnb depend on travel, vacations and gatherings. That’s a problem when much of the world is staying home.

OAKLAND, Calif. — The coronavirus pandemic has gutted the so-called sharing economy. Its most valuable companies, which started the year by promising that they would soon become profitable, now say consumer demand has all but vanished.

It is not likely to return anytime soon.

In earnings reports this week, Uber and Lyft disclosed the depth of the financial damage. The companies said their ride-hailing businesses all but collapsed in March, the last month of the first quarter, as shelter-in-place orders spread through Europe and the United States.

The red ink extends beyond ride hailing. The home-sharing company Airbnb, which investors valued at $31 billion, had planned to go public this year. Instead, the company has slashed costs and raised emergency funding, and on Tuesday it laid off 1,900 employees, about 25 percent of its staff. It also reduced its revenue forecast for this year to half of what it brought in last year.

“While we know Airbnb’s business will fully recover, the changes it will undergo are not temporary or short-lived,” Brian Chesky, Airbnb’s chief executive, wrote in a memo to employees.

they behave for years to come. Thirty percent of gig-economy revenue could disappear over the next one to two years, with a portion of it unlikely to return, said Daniel Ives, managing director of equity research at Wedbush Securities.

“Based on our analysis of the gig economy and the overall pie of consumers, unfortunately, there’s a slice that — until there’s a vaccine — will not get in a ride-sharing vehicle or use an Airbnb,” Mr. Ives said.

On Tuesday, there was another threat to Uber and Lyft: California’s attorney general sued the companies, claiming that they misclassified their drivers as independent contractors. If the lawsuit is successful, the companies could have to pay hundreds of millions of dollars in civil penalties and back wages for drivers.
Airbnb faces a different challenge. How will hosts — most of them offering rentals as a side business — deal with virus safety? In an effort to bolster confidence in its listings, the company announced a set of new cleaning standards for its rentals in April. Guests can also opt for a 72- or 24-hour vacancy period before they enter.

There is not much to look forward to in the current quarter for the companies, according to financial analysts. Mr. Ives said he expected Uber’s revenue to contract 69 percent and Lyft’s 66 percent during the period, which covers April through June.

Lyft said rides on its service fell nearly 80 percent in late March and remained down 75 percent in mid-April. In May, passengers began to return cautiously to Lyft, but rides were still down 70 percent, Lyft executives said on a Wednesday earnings call with financial analysts.

If passengers continued to stay away from the service at similar rates, Lyft predicted it would lose nearly $360 million on an adjusted basis, which excludes stock-based compensation and other expenses, during the current quarter. Its adjusted loss in the first quarter was $97.4 million.

“These are the hard truths we’re facing,” Logan Green, Lyft’s chief executive, said on Wednesday. In late April, Lyft laid off 17 percent of its employees. Executives took a 30 percent pay cut and employee pay was trimmed 10 percent.

On Thursday, Uber said revenue in the first quarter grew 14 percent from the same quarter last year, but the company’s losses ballooned 190 percent to $2.9 billion. That deficit was largely driven by a $2.1 billion loss caused by its investments in international ride-hailing businesses, like Grab and Didi, that are also experiencing low demand because of the virus.

“I won’t sugarcoat it. Covid-19 has had a dramatic impact on rides,” Dara Khosrowshahi, Uber’s chief executive, said on Thursday in a call with investors. Use of Uber’s ride service was down 80 percent in April, he said. But Uber saw a bright spot in its food delivery, which grew 89 percent since the previous year, excluding India.

Although Uber has not yet given a new date by which it expects to become profitable, Mr. Khosrowshahi said the pandemic “will impact our timeline by quarters, not years.” Before the outbreak, Uber said it would be profitable, excluding some costs, by the end of this year.

Uber laid off 14 percent of its employees on Wednesday as it cut 3,700 people from its recruiting and customer service organizations.

Mr. Khosrowshahi will not take a salary for the rest of the year. He said in an email to remaining employees, seen by The New York Times, that the company continued to look for ways to cut costs and may eliminate more jobs over the next two weeks.

While Uber Eats, the food delivery service, has experienced increased demand and restaurant sign-ups in some markets, the company also shut down Uber Eats in several international markets where it had been burning cash and laid off 50 employees from that division.

Its bike and scooter business is another weak point, and Uber invested $85 million in a competing service, Lime, that would allow it to offload its bikes and scooters while still offering Lime’s fleet in its app.

About 500 employees who work on Uber’s bike and scooter offerings could lose their jobs.

“Lime has indicated that they plan to offer interview opportunities to a few members of our team, while others will receive severance packages,” Dennis Cinelli, the head of Uber’s micromobility team, said in an email to employees that was seen by The Times.

Financial analysts expect the companies to begin to recover as consumers return to work. They are still sitting on a lot of money. Uber has $9 billion, and Lyft has more than $2 billion. Before the virus, Airbnb had $3 billion in cash on its balance sheet; since then, it has raised $1 billion in funding and secured a $1 billion term loan.

Despite the downturn in business, Lyft’s stock was up more than 20 percent on Thursday as it exceeded investors’ expectations for revenue in the first quarter and reassured them with its layoffs last month that it would cut costs. Uber’s stock was up more than 8 percent in after-hours trading on Thursday.

But investors still question the companies’ claims that they will become profitable as they tap the $1.2 trillion that Americans spend each year on transportation costs like car ownership and maintenance.

Although Uber and Lyft said they provided a preferable transportation option over public transit, some analysts worried that consumers would choose to drive themselves rather than share a car with a ride-hail driver and risk spreading the virus.

“All investors are trying to figure out industries that the pandemic will permanently transform for the better or permanently transform for the worse,” said Tom White, a senior research analyst with the financial firm D.A. Davidson.

David Goldsmith

All Powerful Moderator
Staff member

Coronavirus Has New Yorkers Fleeing The City And Hunting For Second Homes

Speaking with an artist friend the other day, she mentioned that the stores in her neighborhood were well-stocked with food—meat, fish, fruits and vegetables, a veritable cornucopia of plenty. She lives in one of the densest areas of New York City—the Upper East Side of Manhattan, which is chock-a-block full of high-rise apartment buildings. What did she think accounted for her good fortune?

“It seems that half the neighborhood fled for the Hamptons.”

Such is Life In the Time of the Coronavirus—or put another way, a slice of life from the annals of pandemic real estate.

My friend didn’t mention a few other destinations for New York City refugees. NYC broker Wendy Maitland did a deal in March in upstate New York. She had a client who lived on Fifth Avenue and was pregnant, due in June. The Covid-19 scourge was beginning to overwhelm city hospitals and delivering a baby in one of them looked dicey. What was the client to do? Maitland found her a vacant, unfurnished second home to buy in Rhinebeck, New York for under $1 million. And get this: She never physically showed the house. She sent the client on her own and gave her access through a code to a lockbox on the outside of the house. The house closed 2 weeks ago and the baby will be delivered at Northern Dutchess Hospital in Rhinebeck.

Compass broker Trish Goff also had a story to tell. In the beginning of April, she had clients who were looking for a pandemic evacuation plan. At that point, Goff was living in her second home in Ancram, New York, about two hours north of Manhattan in Columbia County. By this time, New York Governor Andrew Cuomo had shut the state down and real estate brokers were not allowed to show. Goff said the rentals near her were scarce, and she suggested that buying a modest home might be the best thing to do. Goff sent her husband to video a charming historic house in the area that had just come back on the market. It had two-bedrooms, one-bathroom, a wood-burning stove, and a wraparound deck. The house sat on five wooded acres with a barn and was asking $300,000. The clients negotiated a deal for $270,000 in cash without ever stepping foot in the house and closed within weeks. They moved in on April 22.

Then there was a family with five kids in private school and living in a Manhattan loft. With the schools and parks shuttered, their home was thrown into chaos. They decided to try a suburban experiment, and then called Emily Chen of Olshan Realty (the firm I founded and own). Chen sent them rental listings on websites that covered New York, New Jersey and Connecticut. Many of the ideal rental properties were taken—the Hamptons rental market, for example, was moving very quickly at exorbitant prices. They set their sights on an 8,500-square-foot, unfurnished house with a pool in Bedford, New York, a pastoral community that is about one hour north of Manhattan with famous residents such as Martha Stewart and Ralph Lauren. The house had been on the market for exactly one day. The clients offered to pay the full price without ever visiting, but within 48 hours, seven potential renters swooped in, including one offer that was almost 50% above the ask. The owner of the house stuck with the family with the five kids because they raised their offer and committed to a two-year lease that starts on May 24.

Oh, one more thing: The listing broker was Muffin Dowdle of Ginnel Real Estate in Bedford. She sealed the deal by cell phone while—wait for it—riding her pony through the Pound Ridge Reservation.

David Goldsmith

All Powerful Moderator
Staff member

Will the coronavirus kill downtowns?
Brookings Institution researchers don’t expect a reversal of investment and growth

Residential development in downtowns has accelerated over the last 30 years, in part to meet demand from decamping suburbanites attracted to better amenities and proximity to jobs. Yet the defining quality of downtowns — high population density — places them at higher risk of becoming hotspots for infectious disease.
Could the coronavirus pandemic reverse the decades-long trend of population growth and investment in downtowns? It’s not likely, according to a recent report from the Brookings Institution, a nonpartisan Washington-based think tank.

Brookings researchers examined the populations of central business districts and surrounding neighborhoods in cities with more than 500,000 residents over time.
Broadly, they found that downtowns in metro areas with more than 1 million residents gained the most momentum in the 1990s and have sustained that momentum through the 2010s. In Chicago, for example, the downtown population ballooned from about 18,000 in 1980 to more than 110,000 in 2018, even though the surrounding area has lost population since the turn of the century.


The report’s authors don’t anticipate a drop in migration to downtowns because of the pandemic. “While diseases will come and go, we can always retrofit our cities to make us feel safe while still delivering the proximity we crave,” they write.

In fact, the researchers say these long-term trends signal that real estate markets and city governments should more actively pursue downtown development to meet demand.
The authors suggest that demand for new real estate might outpace new supply, incentivizing adaptive reuse of office buildings. Some real estate experts anticipate a growth in the popularity of office-to-residential conversions as companies learn they can work from home without major hits to productivity.

The Brookings Institution researchers’ optimism is far from universal. Sam Chandan, dean of the Schack Institute of Real Estate, told The Real Deal that density might fall out of favor given the pandemic, presenting a major challenge to downtowns nationwide.

David Goldsmith

All Powerful Moderator
Staff member

David Goldsmith

All Powerful Moderator
Staff member

The Richest Neighborhoods Emptied Out Most as Coronavirus Hit New York City

Hundreds of thousands of New York City residents, in particular those from the city’s wealthiest neighborhoods, left as the coronavirus pandemic hit, an analysis of multiple sources of aggregated smartphone location data has found.

Roughly 5 percent of residents — or about 420,000 people — left the city between March 1 and May 1. In the city’s very wealthiest blocks, in neighborhoods like the Upper East Side, the West Village, SoHo and Brooklyn Heights, residential population decreased by 40 percent or more, while the rest of the city saw comparably modest changes.

Some of these areas are typically home to lots of students, many of whom left as colleges and universities closed; other residents might have left to care for friends or family members across the country. But, on average, income is a strong simple predictor of a neighborhood’s change: The higher-earning a neighborhood is, the more likely it is to have emptied out.

Relatively few residents from blocks with median household incomes of about $90,000 or less (in the 80th percentile or lower) left New York. This migration out of the city began in mid-March, and accelerated in the days after March 15, when Mayor Bill de Blasio announced that he was closing the city’s schools.

The highest-earning neighborhoods emptied first.

Income percentiles reflect those in New York’s five boroughs, by census tract
“There is a way that these crises fall with a different weight on people based on social class,” said Kim Phillips-Fein, a history professor at New York University and author of a book about how New York changed during the fiscal crisis of the 1970s. “Even though there’s a strong rhetoric of ‘We’re all in it together,’ that’s not really the case.”

These estimates are based on data provided by Descartes Labs, a geospatial analysis company.

Descartes Labs used anonymized smartphone location data to find a large sample of New York City residents — not commuters or tourists — based on where they lived during a two-week period in February. They then analyzed their aggregate movements as the pandemic hit and whether they had left the city. The sample was about 140,000 residents, including residents from nearly every populated census tract in the city.

Smartphone location data is imperfect. It misses people who don’t own a smartphone. It requires guesses about who is a resident rather than a visitor or commuter. It relies on the kinds of apps that track and transmit a user’s precise location. And it is unlikely to be perfectly representative of the general population.

But it can be more useful than other methods to measure quick changes in population on a large scale.

There is already evidence that many New Yorkers have left town. There are reported accounts of New Yorkers fleeing to second homes and vacation towns. The weight of household trash is down in affluent neighborhoods. But to find more precise estimates, location data may be the best choice.

Descartes Labs was the biggest contributor of the data for the estimates in this article, but its findings are consistent with two separate estimates based on other providers of location data.

The first of these two estimates is from a working paper by Arpit Gupta and Joshua Coven of New York University, who used smartphone location data to measure disparities and mobility patterns among New York City residents from March 2 to March 27. The second is from Teralytics, a company that uses data from cellular phone towers to measure migration patterns. Cellular towers interact with users of any kind of cellular device from a provider — not just smartphones with location-transmitting third-party applications — which means they capture a larger and wider range of residents.

Together, these three estimates differ in some ways — in how they define exactly who is a New York City resident; in the period they observed movement; and in exactly how they registered whether a resident moved away rather than visited a place. But they all point to the same conclusion: The city’s population decreased by 4 percent to 5 percent, and the residents who left were overwhelmingly from the city’s wealthiest neighborhoods, chiefly in Manhattan.

The neighborhoods driving the city’s exodus do not resemble the city as a whole.

The residents from these places are mostly white in a city that’s mostly not. Residents from these places are more than twice as likely to have a college degree. These places have higher rents and lower poverty rates. People who live there are more likely to be able to walk or bike to work, or to work from home.

And the incomes of residents there are considerably higher: More than half of these neighborhoods’ residents have household incomes of more than $100,000; nearly one in three earn more than $200,000.

The divergence between these groups is particularly striking at a time when New Yorkers have a heightened awareness of inequality in their interactions with “essential workers”: not just medical personnel, but also cooks, food deliverers, janitors, mail carriers, truck drivers and transit workers — people who can neither do their jobs from the safety of home, nor leave the city.

“Everybody is really aware of the uneven distribution of risk, and the unfairness of having to work to provide services to people who are wealthy enough to avoid providing services for themselves,” said Peter Bearman, a sociologist at Columbia University who wrote a book about New York City doormen and their relationship with the tenants they serve.

Where New Yorkers Went
The phone data shows New Yorkers primarily went to surrounding counties — east into Long Island’s Nassau and Suffolk counties, west to Monroe County in Pennsylvania, south to Monmouth County in New Jersey, north to Westchester County, northeast to Fairfield County in Connecticut and farther afield in all directions. Palm Beach County, in South Florida, was among the top locations for displaced New Yorkers.

Fleeing a city during a time of crisis is an instinctive reaction for many of us, said Andy Horowitz, a professor at Tulane University who studies disasters and wrote a book about the impact of Hurricane Katrina.

This applies not just to pandemics, but also to hurricanes, nuclear accidents, invading armies, agricultural disasters and other such events.

“This is a tried-and-true human strategy — that when you encounter trouble, run away,” he said.
(See linked article for charts
Well, since I spend a significant chunk of time on parenting boards, this topic gets discussed A LOT. One of the defining factors for those parents will be, "where is there going to be school?" We're already not going to have a "normal" summer in terms of camps being cancelled. But not only do working paretns need childcare, the children also need socialization. (Punting the whole idea of whether the children need education). No one wants to send their kids off to get sick, but if there are less-dense suburbs where it seems like the kids can go to school, people will move there.

Balancing that, there are a number of "die-hard" New Yorkers for whom the density of the city is its attraction. I have *nearly* everything I need on the Upper West Side; I have groceries, I have pharmacies, I have office support systems like copy shops, I have take-out, I have parks, I have friends. Why do I want to move to a suburb where I have less of each of these things?

Thirdly (I know I'm in danger of raising three points at once) if one is the kind of privileged person that the newspapers want to talk about, one can set up a 1980s-rich-person life where one lives in the dense city but then runs to the exurbs on weekends. For that, New Yorkers who don't currently have cars (*raises hand*) will need them. I can stay in Manhattan forever, but I no longer feel good about taking Metro-North or LIRR or the subway to get in some beach time or some hiking time. Most of my clients are so wealthy they can get out of the city and stay out, but the layer of clients behind that won't necessarily flee the city, but they will need cars to get to the Poconos or the Catskills or wherever they want to go. Where are they going to park them?

John Walkup

Talking Manhattan on
Great points!

"... if there are less-dense suburbs where it seems like the kids can go to school, people will move there."
--> I think the kids angle for suburbs looks like a slam dunk for most but in places with "great" schools the taxes are almost the same as private school in the city (granted you pay once not per child) and the home prices are >$1M (I imagine there will be a price pop in the short term as there is an inventory crunch). So far so good, but would you commute via LIRR or MetroNorth? If not, would you drive? That's easily an additional 2 hours out of your day. Many will move to arbitrage remote work against city income, but I highly doubt remote workers in finance or other fields will keep their high salaries if they are not needed to cover higher city living costs. To me that's more a case for the exurbs where you can take a salary hit but you are outside the wealth bubble of the city so costs scale down. But then you're in the exurbs. Lovely but not for everyone.

"Why do I want to move to a suburb where I have less of each of these things?"
--> I suppose amazon can fill most of the gaps here, but driving 20 min each way to anything gets old really fast. And I love to drive.

"...where one lives in the dense city but then runs to the exurbs on weekends"
--> exactly and I think the exurbs will be the net winner here. I think the city will lose some, but not on a mass scale, the commuter suburbs will some but not tons, but and there will be a renaissance in the Catskills and other undervalued upstate locales where the space and price determine value vs beach access. In the end, work is still based in the city, but having a footprint outside will be the new black.

David Goldsmith

All Powerful Moderator
Staff member
People are going to be sorry they allowed the war on cars to take the city as far as it has already.

David Goldsmith

All Powerful Moderator
Staff member
It's going to be very difficult to reopen already challenged retail areas like 14th St, Koreatown, etc.

David Goldsmith

All Powerful Moderator
Staff member

Small businesses in high-rent cities face disaster. If they go under, urban life will change.

Like hundreds of small-business owners in the nation’s capital, Pixie Windsor knows her vintage furniture and home accessories shop is in peril.
Miss Pixie’s Furnishings & Whatnot, a beloved bright-pink fixture in the high-rent corridor along 14th Street NW, has been shut down since March 16 because of the novel coronavirus pandemic ripping through Washington and the world. Windsor has laid off her 10 employees and urged her customers to order her quirky wares online for free delivery. But few are doing so.
The 4,000-square-foot store once teemed with browsers, some fresh off a brunch mimosa (or two), perusing her sofas and scarfing down the chocolate chip cookies Windsor made from Safeway dough. The shuttered store still costs her $19,000 a month in rent and property fees — more than triple what she paid when she moved to the gentrifying neighborhood from Adams Morgan in 2008. And she doesn’t know when she will be allowed to reopen or who will want to come inside once she can.

D.C. Mayor Muriel E. Bowser (D) just extended the city’s stay-at-home order until June 8, ordering nonessential businesses such as Miss Pixie’s to remain closed.
“Every once in a while, I look at the numbers, and it’s very anxiety inducing,” said Windsor, 60. “Even in normal times, it’s pretty tight.”

The pandemic is threatening the survival of independently operated stores, restaurants, bars and other enterprises in cities with vibrant, walkable neighborhoods and soaring commercial rents. In the District alone, there are an estimated 38,000 small businesses, according to the D.C. Policy Center. Some were already being pushed out by corporate chains before the pandemic brought the nation’s economy to a halt.

“I hate to be bleak, but we’re certainly going to see independent small businesses go quickly,” said Amanda Ballantyne, the Seattle-based executive director of Main Street Alliance, an advocacy group for small businesses. “When the economy recovers, it won’t recover with the same level of diversity. We already have these dynamics in cities like Seattle, the Bay Area and D.C., and the virus will only accelerate it — this loss of culture that residents came to know and love about their neighborhoods.”
In the District, thriving commercial corridors from U Street to H Street and from Connecticut Avenue to Maine Avenue could lose some of the businesses that fueled the city’s renaissance and made the surrounding residential communities so appealing.

Last month, the city passed emergency legislation barring evictions of small businesses during the crisis — a temporary reprieve — and offering $33 million in micro-grants to help small-business owners cover rent, operating costs and employee wages. Another newly passed law allows commercial landlords to seek a 90-day deferment of their mortgage payments, while providing “proportional” rent reductions to their tenants.

But Tom Papadopoulous, a D.C. commercial real estate broker for the past 36 years, predicted that 20 percent of Washington’s restaurants and retail stores will close permanently.
Dante Ferrando, co-owner of the Black Cat, the renowned rock club that opened on 14th Street in 1993, said his venue faces the biggest existential threat in its 27-year history.
The Ferrandos founded the club with investments from local musicians, including Dave Grohl, the Nirvana drummer and future Foo Fighter. The venue, which has hosted Fugazi, the Strokes, Sleater-Kinney and Arcade Fire, was at the vanguard of businesses that remade 14th Street, which was scarred by the 1968 race riots and rife with prostitutes, drug dealers and vacant buildings.

Although the family had the foresight to buy its building when it moved to its current space in 2001, Ferrando said he still has a mountain of bills — from insurance policies, various city fees and property taxes — that he must pay just to stay closed. The total monthly cost: about $20,000.

It’s imperative, he said, that commercial property owners be given a reprieve from having to pay their monthly property taxes to the city while they or their tenants are shut down. Then, the city should require those property owners to pass the savings on to tenants. But D.C. officials have dismissed requests for property tax waivers, citing the city government’s need for the tax revenue to pay its bills.
“Even if I wanted to rent my space, who’s going to rent it?” Ferrando asked. “A pop-up store that sells masks?”

And he and his wife, co-owner Catherine Ferrando, don’t want to sell.
“If small businesses like ours close down on 14th Street, the area will slowly slide back to what it once was — empty buildings,” he said. “Developers will buy buildings and sit on them. But we are not desperate enough to sell. This is something that’s important to our city, 14th Street, and our music scene community.”

Liz Winchell doesn’t own the Cleveland Park building where she runs a 17-year-old pottery studio called All Fired Up. Her landlord said she wouldn’t have to pay her entire rent for May and June. But a full payment is expected later, she said she was told.
Winchell, who runs a second studio in Bethesda, prizes her Cleveland Park location. All Fired Up is right on the Metro’s Red Line, surrounded by apartment and condo buildings full of young professionals, and right across the street from a new Orangetheory fitness studio. The neighborhood is also a magnet for well-off families willing to shell out $26 to paint a cereal bowl or $25 for a wavy side dish. Before the pandemic, the place was crammed with weekend birthday parties. On Thursday nights, friends painted and caught up over their own cheese and wine.

But since the city’s shutdown of nonessential businesses, Winchell’s revenue has tanked. She laid off two full-time and 10 part-time employees and has resorted to delivering pottery-and-paint kits to people’s homes.

She’s only netting a fraction of her normal revenue — 10 percent, she estimates. She recently received two Paycheck Protection Program loans through the Small Business Administration for the D.C. and Bethesda studios. But the terms require that 75 percent of the funds go toward paying staff, she said, and that she keep workers on her payroll for eight weeks if she wants the loans forgiven.
Most of her employees are fearful about working in the studio’s somewhat tight space, she said. And she really needs the money for rent, which costs about $5,000 a month in Cleveland Park.
“Rent. That’s what I go to bed at night thinking about and what I wake up thinking about,” she said. Her landlord, she said, has been polite, and she respects his position. “But the undertone is, ‘You’re you, I’m me, and I’ll cut this down a little bit, but money is owed.’ ”
Winchell’s landlord, Zachary Huke of Roma Restaurant, did not respond to text messages and voice mails seeking comment.

David Goldsmith

All Powerful Moderator
Staff member

Work-from-home could empty expensive cities
Survey finds 61% of New York respondents would leave if they could work remotely

Before the coronavirus pandemic, many of the world’s most profitable corporations set up camp in major cities, seeking to draw from the abundant talent residing — or wanting to reside — in urban centers.
But with the coronavirus pandemic heralding a corporate work-from-home revolution, a survey found more than 6 in 10 city dwellers are looking to leave, according to a new survey from online real brokerage Redfin.
The survey, which polled 900 Redfin users, found that more than 50 percent of respondents overall said they’d move elsewhere if they never had to commute to the office.

This flight risk is higher for residents of major cities, though. More than 60 percent of respondents from the New York City metro area said that they would consider moving away if they could work remotely. In Boston, San Francisco and Seattle the share that would move elsewhere was a bit above 50 percent.


To be sure, surveys before the pandemic also found many New Yorkers thinking about moving out of the state. Big city residents’ eagerness to leave is largely related to their cost of living. About 40 percent of New Yorkers and 36 percent San Franciscans said the main reason they’d leave was relief from high housing costs.

These findings could foreshadow a professional exodus from big cities because large shares of their workforces have the option to work from home. Before the coronavirus pandemic, 14 percent of survey respondents were working remotely most of the time. During the shutdowns, the share working from home shot up to 76 percent. In the San Francisco Bay area, that figure is 85 percent.


Additionally, 28 percent of respondents said they would probably keep working from home after the pandemic ended as well. But in bigger cities, such as Seattle, that figure is as high as 44 percent.


Some experts don’t expect to see migration from major metro areas after the pandemic. Researchers from the Brookings Institution found that migration to downtowns has accelerated over the last three decades and predict that trend will continue for the foreseeable future.

Still, jobs attract people to cities. And many profitable tech companies have announced plans to let their employees work from home, either for the rest of 2020 or indefinitely.


For the first time in my life, I am genuinely concerned for NYC and other major cities. The recent announcement from Facebook about shifting more than half their employee base to permanent WFH status is scary because it actually makes sense from an economic standpoint. Even if developers start building WFH friendly apartments with home offices or den, why would anyone want to remain in an expensive city when you can get a house in the suburbs with a nice backyard and driveway for your car? Facebook goes on to say that they will most likely reduce employee compensation along with the shift to permanent WFH, which makes it less economical for people to live in expensive cities. I'm starting to think that 15-20% decline is not enough.