Urban Doom loop in the U.S.
According to the New York Times, a doom loop is “when one negative event triggers another, which in turn triggers a new bad event or worsens the first.” An urban doom loop is characterized as a closed, self-reinforcing cycle that can describe the interconnected challenges that many modern cities face.
Major American cities, such as New York and San Francisco are undergoing an urban doom loop. Economists say that New York office buildings could lose 40% of their value. New York’s office vacancy rate has risen over 70% since 2019 and around 96 million square feet of office real estate is available for lease in the city. The value of New York’s office buildings could fall $50 billion in coming years. As for San Francisco, CNN stated that “this past June, the investment firm behind the Hilton San Francisco Union Square and the nearby Parc 55 hotels have announced that they are stopping payments on a $725 million loan and surrendering the remaining debt to its lender.” But, what are the sources of this cycle?
Covid-19 has had a big impact on the vicious cycle the big cities are experiencing, as people are leaving cities due to working remotely. This has led to the abandonment of high-end housing or offices that used to be in high demand from young professionals, as it is not what they are seeking anymore. Cities have to adjust to the declining amount of residents and make changes in order to survive without these people. As more people move into the suburbs and leave the city, the development of that city declines, along with its revenue stream and property tax. The “doom” comes from the loss of revenue a city faces.
The “loop” represents the cycle that is nearly impossible to stop. When the city generates losses in tax revenue, it responds by raising taxes for the remaining people and cutting back on the maintenance of certain services. The city or state then has to make some decisions on where to spend the little money they receive, and where to hold back, as their budget is decreasing. This leads to new residents avoiding moving into cities, as some consequences of the urban doom loop consist of a lack of funds for public school, neglect of open spaces, and rise of fare for public transportation. This drives people away from cities, as they pay more, but receive less.
For example, Tech companies such as Red Hat and the SF Bay Area’s own Meta recently took the decision to cancel their 2024 conferences in San Francisco due to their concerns over safety and the cleanliness of downtown streets.
However, the urban doom loop does not only affect residents; political leaders are also impacted as they have to adjust their campaign strategies and policies, in order to ensure the city remains stable and keeps growing. They have to adapt their original plans to those that prioritize short-term gains over long-term planning. This can also jeopardize sustainability objectives as they may be overlooked in the pursuit of economic growth.
To conclude, experts say that a solution to the urban doom loop would be investing in public spaces and car-free transportation networks. This would push people to move back into cities, therefore, participating in the city’s economy and stability. Another idea was to empty office buildings in order to turn commercial real estate in downtown areas into housing. This, however, is a controversial idea, as some people could defend the fact that the problem is not the lack of housing, but rather the lack of people coming into the cities. Though, having more housing space could possibly attract new people as they would have a bigger selection of housing.
