Reimagining Cities with Rebecca Rockey and Chris Leinberger
Moody's Talks - Inside Economics
Deep Dive
What is the 'urban doom loop' and how has its perceived threat evolved?
The urban doom loop refers to a supply-demand imbalance in cities, particularly in the office market, caused by the pandemic. Initially seen as a major macroeconomic threat, it has since faded from public consciousness, though challenges remain. The study suggests it is more episodic than structural, with signs of recovery in some markets.
Why are downtowns particularly vulnerable to the urban doom loop?
Downtowns are vulnerable because they are over-officed, with 70% of their real estate dedicated to office use. This imbalance violates portfolio theory, making them less resilient to shifts in demand, such as remote work trends.
What is the optimal mix of work, live, and play in urban areas according to the study?
The optimal mix is 42% work, 32% live, and 26% play. Downtowns, which are currently 70% work, need to shift towards more live and play components to become more balanced and attractive.
How does the study suggest rebalancing downtowns with too much office space?
The study suggests converting underutilized office space into residential or other uses, incentivizing developers with tax breaks, and focusing on strategic redevelopment of highly vacant buildings. This could unlock up to 450,000 housing units nationally.
What role do walkable urban places play in city economies?
Walkable urban places, which make up just 3% of a city's landmass, contribute 57% of its GDP. They are critical to the economic and tax base of cities, but many downtowns are over-officed and need to diversify their uses.
How has migration within cities changed post-pandemic?
Post-pandemic, young adults (18-34) are returning to cities for amenities and lifestyle, while other age groups continue to migrate out. This shift supports the need for more 'play' components in urban areas to attract and retain residents.
What is the significance of the experience economy in urban areas?
The experience economy, which includes attractions like museums, sports, and restaurants, is crucial for urban vitality. Studies show that 70% of foot traffic in walkable urban places comes from visitors, highlighting the importance of 'play' in driving economic activity.
What challenges do cities face in converting office space to residential use?
Converting office space to residential use is costly and complex, requiring structural changes and compliance with fire codes. However, with the right incentives and strategic focus on highly vacant buildings, significant progress can be made.
How does the study propose managing urban real estate portfolios?
The study advocates for managing urban real estate as an integrated portfolio, breaking silos between property types. This approach optimizes both real estate valuations and GDP, ensuring a balanced mix of work, live, and play in urban areas.
What is the role of business improvement districts (BIDs) in urban revitalization?
BIDs, funded by property owners, play a crucial role in managing and revitalizing urban areas. They focus on safety, cleanliness, and economic development, such as converting office buildings to residential use and creating vibrant public spaces.
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