Name: Is this the end of the big city? | CNBC Reports
Uploaded: 2021-03-04T21:35:18.000Z
Duration: 6 min 43 s
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Adverbs of manner

Traditionally crowded with tourists, co-workers grabbing a pint at the pub,

students running to class, day-trippers heading to the West End, you name it.

But that picture of London has changed beyond recognition.

Now the streets are mostly empty, and the usual buzz is gone.

So, is this what the future looks like for big cities?

The Covid-19 pandemic has upended the rhythm of big cities and some of its consequences may be here to stay.

The rise of working from home is one example.

There is an increasing trend towards working from home,

I think our research is telling us historically it's been roughly one

to one and half days a week on average and we predict that will increase

roughly to around about two and half days per week into the future.

Not every industry offers the chance to work remotely, but those who have this option

are getting used to the benefits of not having to commute every day.

At least 16% of American employees want to work from home at least two days per week after the pandemic.

And in the U.K., 39% of the workforce said they want to continue working from home some of the time,

while nearly one in five don't want to return to the office at all.

This will inevitably bring changes to business districts filled with big blocks of offices.

Most of us will be spending less time here, and this means that there's probably no need

for as many restaurants and shops nearby.

How do you think big cities might change as a result of the pandemic?

I think it's right to expect some conversion of commercial into residential,

so to the extent that we see a drop-off in demand for commercial real estate,

I think we're going to see more robust demand for residential real estate.

Some industry experts agree that there will be less demand for retail spaces going forward.

In fact, more than 20,000 U.K stores may have closed in 2020, a far greater number than in previous years.

Once it's safe to be together again, we have seen a long-term trend in urban spaces,

from commercial spaces that sell goods to commercial spaces that sell experiences,

so the coffee shop replaces the toy store. That's, of course, likely to continue.

So, in a post-pandemic world, these shops might be transformed into spas, coffee shops, or even a Pilates studio.

It's not just about having fewer people in business districts. The pivot to online shopping,

another consequence of the pandemic, is also contributing to a different downtown.

If you look at previous pandemics, everyone afterwards went back to shops and restaurants.

But what pandemics and other shocks have done is accelerate changes that were previously underway,

and one of those is, of course, the shift to shopping online.

But will the demand to keep working from home, at least some of the time, lead to fewer offices too?

Over 90% of respondents in a U.K. survey said they expect

firms to scale back their office footprint over the next two years,

with around one in three forecasting a reduction of between 5% and 10%.

However, many employees, especially those with smaller homes,

or roles requiring them to interact with colleagues and clients,

are still keen to return to a space where they can socialize,

meaning that although firms might reduce their total office space, they will still need a physical presence.

The age of face-to-face contact is not over by any stretch of the imagination.

We also find it a great deal more fun to be together than we do alone.

So I believe very much that the office is not dead, although it will evolve, for sure,

but while the office is not dead it is surely more mobile than it has been in the past.

So it is surely, you know, easier to imagine picking up your start-up and moving it

away from Silicon Valley to Austin, Texas because you know that you can connect with

your former collaborators via Zoom, because you know you can connect with venture capitalists via Zoom.

And so this mobility means that all cities are in some sense at risk.

Some cities, especially those with abundant outdoor spaces, might gain from the shift towards working from home

and attract new businesses and citizens. Whereas other big urban areas,

where food and housing have traditionally been pricier, might become less attractive.

London's population is actually expected to decline this year for the first time in the 21st century,

as people look for bigger houses beyond the city limits,

migrants leave the capital, and fewer choose to relocate there.

In the United States, more than half of the 100 largest metropolitan areas

are seeing increased interest for housing in their suburbs, too.

There's also going to be a group of people for whom they don't move out,

but they do work from home, and they facilitate that by extending their current residences,

or building offices in the garden or whatever it might be.

I would expect that, you know, scrappy start-ups will continue to be attracted to dense urban areas.

Which means that the cities will look a little bit more like they did in the 70s.

They will be younger, they will be scruffier, they'll be a little bit more rough around the edges,

but there's still plenty to love about that as well.

Many surveys suggest that young professionals are the keenest to return to the office,

even if they don't want to lose the flexibility of working from home either.

These early career professionals often live in smaller places, with others,

and they value the opportunity of learning from their co-workers as they try to climb the corporate ladder.

So will the pandemic spell the end for big cities?

The way that cities operate and function will, I think, change and that will present challenges,

but I think there is this idea that the pandemic will spell the end of cities.

I think, however, that is overdone, that is probably going to prove to be wrong.

Cities have a way of enduring and adapting if you look through history,

and there's greater economic benefits of connectivity and closeness.

Hi everyone, thank you so much for watching.

The pandemic has been changing the big cities, but how has it changed yours?

Let us know in the comments section, and I will see you soon.