Will COVID-19 Permanently Reshape Cities?

By Harriet Alida Lye for Berners Bowie Lee

Forget rising cottage prices. The urban exodus could restructure the culture and economy of cities and rural areas for years to come.

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As we look ahead to at least another year of uncertainty in the midst of this global pandemic and economic volley-balling, people have been thinking a lot about where they want to live. For many, location suddenly matters less than space, especially in the sudden rush to create adequate office space in their homes. There’s currently a strong drive to the country, which is being driven not only by the new ability to work from home, but also the fact that COVID-19 cases are much lower outside of dense city centres: with the space to be further apart from one’s neighbours comes greater security and freedom. How will this exodus shift the economies and infrastructure of both cities and the rural areas to which the urbanites are flocking?

“I’ve only ever wanted to live in the city,” a friend says on one of our distanced walks around our neighbourhood in Toronto’s West end, “but now all I want is more room.” She and her girlfriend have both been working from their 600 square foot condo with no access to private outdoor space, a situation in which many city-dwellers have found themselves. They have to schedule their Zoom meetings at different times, otherwise they’re constantly interrupting each other.

A May 2020 Conference Board of Canada survey suggests 30% of employees will be required to continue working remotely on a permanent basis. Many large companies have made the announcement that their employees will be working from home forever: Shopify was the first big Canadian company to announce they will never have office space again, and many American tech companies are going the same way. Toronto saw an 86% increase in vacant office space in the second quarter of 2020, which accounts for the move to remote work as well as businesses closing permanently due to the crisis, said the CBRE Quarterly Statistics Report on office and industrial real estate in major Canadian markets. Ontario’s Health Minister Christine Elliott said in early July that Ontario will remain in Stage 3 until there is a vaccine or treatment for COVID-19, and the Ministry of Finance said that “the advice to work from home or remotely as much as possible still stands.”

But what about the other 70% of workers? They might be retail workers, nurses, TTC operators, Uber drivers, or work in manufacturing, and they’re unable to work remotely. For others, like massage therapists, actors, and people in the restaurant and travel industries, it means they are out of work until something changes.

Researchers have found a strong correlation between the ability to work remotely and high-wage positions. There are also deep divides along race lines, systematically segregating populations: in an American study by the Economic Policy Institute conducted at the beginning of the pandemic, 37% of Asian Americans and 30% of whites said they could work remotely, but only 20% of African Americans and 16% of Hispanics said they had the same ability. Education also plays a role in determining whether a person might be able to telework: among those with a college education or higher, nearly 52% said they could work from home, compared to only 4% for workers with less than a high school diploma. The division is even more stark when analyzing wages: only 9.2% of workers in the lowest quartile of the wage distribution can work remotely, compared with 61.5% of workers in the highest quartile.

StatsCan released a study in June that corroborated much of the above information for Canada, but also examined the economic fallout on young people: “Young people have been hit particularly hard, as the unemployment rate for youth (15 to 24 year-olds) rose from 10.3% in February to a monthly historical high of 29.4% in May. For high school and postsecondary graduates planning on entering the labour market shortly, this could have important repercussions for their earnings, both in the short and long term.” The study states that women are expected to experience greater financial loss than men, though it doesn’t say why. It isn’t too hard to imagine, though.

Alex Baptiste, policy counsel for the nonprofit National Partnership for Women and Families, told TIME Magazine that the remote work gap is just one way the novel coronavirus is casting pre-existing inequalities in the American economy into sharper focus. The pandemic, he says, “definitely is showing how wide the gap is between [people] who have it and people who don’t.”

Who has the privilege of being able to think about leaving the cities and their peripheries because they no longer have to consider a commute? In early March, as the pandemic hit North America, about five per cent of residents in New York City, predominantly from the wealthiest neighbourhoods, left the city for more expansive counties in the State. According to a recent Harris Poll, nearly one-third of Americans are considering moving to less densely populated areas in the wake of the pandemic. Is this the same one-third who are the highest-earners, white, and able to work remotely? Because the data show that it’s not the lowest earners, the recent immigrants, or the people in racialized communities.

A fundamental shift away from cities has the potential to dramatically reshape businesses in ways impossible to predict. Cities are traditionally hubs of economy, innovation, and culture. If cities are decentralized and people with the highest incomes leave for the country, how will this affect city budgets, and their ability to collect money for essential services? What happens to all of the businesses that serviced offices, and to theatres, galleries, restaurants in the downtown core, Ubers and taxis, and more? There are lots of questions to consider.

The effect on rural areas is equally dramatic. Ontario cottages are flooding the real estate market this summer as Americans are off-loading their second homes in areas like Muskoka, Prince Edward County, and Collingwood, where they won’t be able to go for as long as the border between our countries is closed. These places are getting snapped up by wealthy locals who are renting them out on Airbnb, or by city people who are either looking for a change of pace, or are being forced to leave the real estate market in places like Toronto and Vancouver, where, somehow, prices are still going up.

“Space is the new luxury,” Max Hahne, a real estate agent in the Georgian Bay area told Global News. The properties people are buying up around Collingwood cost, for the most part, over $1 million. “It’s been amazing to have all this money flooding into the local economy,” says Catherine, a high school teacher in Huntsville, “but it’s really increasing the feeling of ‘us’ versus ‘them’. There’s never been much of a middle class here and I think that’ll only become more extreme,” she says. The local economy relies on tourism, which means locals make money in seasonal service work.

In Prince Edward County, this divide between long-term residents and newcomers has reached a boiling point. A stunning three quarters of properties available to rent in Wellington are now listed as short-term rentals for tourists, and this is having an enormous impact on the community as housing costs soar. Treat Hull, a real estate agent, told CBC’s The National in late July that “it’s corrosive in terms of potential tensions between newcomers and long-standing residents.” Nursing homes in the area are understaffed because the people who would work there can’t afford to live within commuting distance. If people with money from urban centres move to these communities “it could be good in the long term,” says Robert Quaiff, Mayor of Wellington, but it’s “hard to say” just how they’ll get there.

Cities are generally populations with high diversity, left-leaning politics, and strong LGBTQ+ communities. One Toronto-based writer thinking to leave the city has created a spreadsheet of all the cities and towns ninety minutes from Toronto, and included statistics on diversity, income, and percentage of votes all of the political parties got in the last election. Other than Hamilton, nothing compares to Toronto, so it’s easy to imagine that there could be a clash of culture and ideologies in this kind of rural migration.

We always knew that wealth buys choice, but right now, it’s also buying a different kind of security. If only the wealthiest third of the population are able to safely and comfortably access space outside of cities, this kind of “rural gentrification” could also permanently change the cultural, political, and socioeconomic makeup of both rural and urban areas in ways we can’t predict.

The people who live in a place shape its economy, culture, and community. And when the population changes, the way we do business in those areas has to change too. That might mean changes to the way we engage with people, the types of products that are offered, and new patterns of behaviour that emerge and impact business. Whether business and the community are ready for those changes is another matter entirely.

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We founded BBL to help companies be part of shifts in culture rather than piggyback on them or chase trends like everyone else.

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