Global Citizens Are Poised to Reap the Rewards of the Urban Revival

The post-pandemic ‘death of the city’ is the urban myth that refuses to die. Whether the setting is London, New York, San Francisco, Chicago, or Toronto, the story is roughly the same — remote work, coupled with high housing prices, has triggered an urban exodus, leaving abandoned offices and soaring crime in its wake. One of the most prominent New York-to-Palm Beach transplants recently assailed his former home’s “unprecedented crime wave” — a feeling shared by many who believe the era of urban supremacy is over, regardless of the facts.

But the facts are these. Remote work is slowly subsiding rather than accelerating. Net outflows of residents are reversing, thanks largely to immigration. Office vacancies are indeed at all-time highs in city-after-city, pressuring their owners and lenders to explore new uses. And most violent crimes in Manhattan and elsewhere are declining once again (the protestations of former President Donald Trump notwithstanding). Together, they point toward an impending urban renaissance rather than catastrophe — and few are better poised to reap the benefits than global citizens.

Resurrecting cities

During and immediately following the pandemic, global mayors raced to address pressing needs for more public and personal space — first to stem infections, and then to stem the exodus of residents. Their tools included the ‘15-minute city’ and converting offices to housing, which, respectively, aim to replace cars with foot traffic and silent towers with vibrant neighborhoods. While today’s Wall Street, Chicago Loop, or Square Mile may feel eerily empty on Fridays, they’re primed to become tomorrow’s hottest urban destinations, complete with thousands of new luxury residences where cubicles once stood.

In Paris, Mayor Anne Hidalgo has staked her legacy on the capital’s greatest transformation since the 19^th century by restraining cars, planting trees, and installing bicycle lanes as part of the 15-minute city, which has also been adopted to varying degrees by peer cities such as Barcelona, Berlin, Madrid, and Milan. While her critics complain Paris has become impassable, Hidalgo insists she has made it more livable, despite (of because of) the 75,000 or so residents who left the city on her watch prior to the pandemic. “Paris is not emptying”, she told the Financial Times last month. “Paris was very dense. We’re de-densifying the city.”

Rich pickings for global investors

Foreign buyers have stepped into that gap, driving prices for prime Parisian real estate to record highs on the back of a strong US dollar. They can look forward to the Champs-Élysées’ metamorphosis from an eight-lane boulevard to a car-free “extraordinary garden”, in Hidalgo’s words. The EUR 250 million makeover aims to “re-enchant” some of the city’s most iconic and valuable real estate, which is nonetheless loathed by Parisians as a tourist trap. Their loss is global citizens’ gain.

Across the Atlantic, America’s big cities are finally coming to grips with the fact that their skyscrapers may never achieve more than half of their pre-pandemic occupancy. The solution? Retrofit office blocks into flats. New York City Mayor Eric Adams has vowed to do just that, promising developers tax incentives and slashed red tape to create as many as 20,000 units over the next decade. Chicago’s goals are even more modest — a paltry 1,000 units carved from a trio of landmarked high-rises.

Although such schemes are unlikely to solve New York’s or San Francisco’s crippling housing unaffordability, they will create opportunities for discerning foreign buyers and investors. The intractably high costs of conversions invariably leads to properties positioned at the upper end of the market, such as 1 Wall St. — a USD 1.5 billion gut renovation of an Art Deco skyscraper into just 566 luxury condominiums ranging between USD 1.1 million and USD 10.5 million. In return, residents receive panoramic views of the harbor from a rooftop members-only club, along with other amenities better suited to cosmopolitan metropolitans than median homeowners.

Innovative financing solutions are key to reviving cities

Cities will need to be creative to raise the eye-watering sums required. In Chicago, for instance, the developers chosen to rethink the Loop have collectively asked for USD 188 million in tax-increment financing to offset conversion costs. Residence by investment initiatives such as the US EB-5 Immigrant Investor Program will be essential in attracting the funds and residents to repopulate the world’s financial districts.

The pandemic may have shattered our naïve beliefs in the necessity of the office and inevitability of globalization, but the triumph of the city remains secure. Having seen the value of global citizens proven conclusively by their absence, it is incumbent on cities to invite them to participate in their remaking. The death of the city is dead. Long may they live.