The right way to rebuild cities for post-pandemic work

Since the Covid-19 pandemic forced millions of workers out of their offices, questions have loomed about the rise of remote work and what it means for cities large and small. Some cities have focused their economic development efforts on trying to attract potentially newly remote workers to move to their area.

The nature of work is indeed changing, and some workers will indeed move to new locales. But with little evidence that workers will relocate en masse, migration shouldn't be the focus of cities' efforts. Instead of luring remote workers during a period in which U.S. migration has remained historically low, city leaders should strive to make their regional economy and recovery work for the people and businesses already there, including by dismantling the local practices and norms that have stifled the economic potential of so many Black and Latino or Hispanic workers and entrepreneurs.

Below are four structural considerations that public and private sector leaders should keep in mind as they rebuild their post-Covid-19 city better than before.

The knowledge economy demands density, so embrace it

Over the past decade, the vast majority of job growth in innovation fields like R&D services and high-tech manufacturing happened in just five coastal U.S. metro areas, according to a Brookings analysis. These places have a few things in common that make them particularly hospitable to the digital economy: dense concentrations of talent, university research, the capacity to convert ideas into start-ups, and dynamic places in which people can interact.

But job concentration also plays out within metro areas. Our 2019 analysis found that knowledge-based jobs have clustered the most in core urban counties and denser surrounding suburbs. This benefits urban core counties the most, followed by well-developed suburbs ("mature suburbs"), as the chart below shows.

Updated analysis by my Brookings colleagues Joanne Kim and Tracy Hadden Loh found that the concentration of jobs in a few metro areas intensified right up to the pandemic. This trend was driven by the fast-growing information and professional services/management sectors, which have only accelerated during the pandemic. Growth in these sectors also attracts new jobs in retail and other local-serving occupations.

In other words, there is market demand for innovation districts, retail districts and districts that blend knowledge services jobs with residences, food and arts in vibrant, walkable places. The increase in job density also occurred at a time when telework was on the rise, signaling that these two trends may go hand-in-hand. Even rural areas benefit from density, and it is also good for the environment, creating more efficiency in land and energy use. Local and regional leaders can take advantage of the market demand for human-scaled proximity and interaction to spur inclusive economic growth.

Proximity could reinvent the office market

The primary implication of widespread remote work is not that workers will move to other cities, but that the existing stock of office space and office districts will need to decamp from obsolete structures and far-flung sites. This is not a new problem: Prior to Covid-19, portions of the office market sat empty due to their isolated suburban locations or dated floor plans. Downtowns were not immune to the market mismatch; Brookings analysis has found downtowns in Greater Los Angeles, Miami and Dallas-Fort Worth — plus car-dependent suburban sub-markets in the Washington, D.C., and Chicago areas — were saddled with high-double-digit office vacancy rates at the close of 2019.

The pandemic economy has accelerated the much-needed reinvention of the office market, with growing interest for future office buildings and business districts to facilitate human interaction and collaboration. To be sure, some corporations are dumping excess office space. However, high-tech companies such as Amazon and Google are expanding theirs, often in high-quality, dense, walkable locations. Downtowns — many of which were already adding residential units — may now further mix living, work and meeting spaces in the same buildings.

Furthermore, as more employers offer work-from-home options to employees, local leaders should prepare to provide workers with options outside their homes to do their jobs. As vaccination rates increase and public health risks become more manageable, workers may enjoy the flexibility to work in coffee shops, libraries, public parks, or in rented flex spaces. More importantly, leaders ought not succumb to more sprawl as workers commute to the office less. Rather, they should create downtowns and mixed-use corridors that provide workers with attractive public and private gathering places as well as accessible transit and residences that define the new hubs of the knowledge economy.

The post-pandemic city must work for all workers — not just those who can work from home

Remote work's potential effect on cities should not overshadow the mandate to make the post-pandemic city work for all workers. As the chart below shows, most of the nation's highest-income workers (62%) are able to work from home. Everybody else: not so much. A higher share of Black and Latino or Hispanic workers must report to a workplace to do their jobs; many of them are essential workers employed in retail, logistics and the care industry. 

These frontline workers face particularly acute housing and transportation challenges that any recovery plans aimed at the workforce must focus on. They often come home to unsafe and overcrowded conditions. People of color are also twice as likely as white households to not own a car, and are therefore more reliant on the public transit systems that Covid-19 has devastated. The American Rescue Plan relief package will help transit agencies stay solvent in the near term. But in the long term, more expansive action will be required, including more housing construction in existing neighborhoods and particularly near transit stops, and better public bus, train, and commuter rail routes between residential and economic centers.

Majority-Black neighborhoods are still under-resourced and undervalued

Covid-19 has also had a devastating impact on small businesses, particularly those that serve their local communities, such as restaurants, shop, and salons. These are the types of businesses that make commercial districts dynamic, hyperlocal and a source of wealth for local entrepreneurs. According to Brookings's Metro Recovery Index, one-third of all small businesses in the New York, Washington, D.C., and Houston metro areas have closed since January 2020.

Historically, this kind of economic shock disproportionately hurts disadvantaged business owners and neighborhoods. For instance, women- and Black-owned businesses were least likely to survive the Great Recession, undercutting family wealth and key commercial corridors in the neighborhoods where those businesses were anchored. Furthermore, analysis by the Economic Innovation Group showed that five years after the Great Recession, more than half of the nation's small business recovery took place in prosperous ZIP codes.

Black-majority neighborhoods were already under-retailed going into Covid-19. Retail establishments are less likely to locate in predominantly Black communities — even those with high incomes.

Small business investors and retailers are overlooking major market opportunities because of bias. As my colleague Andre Perry has consistently found, appraisers and consumers value homes and businesses in Black-majority neighborhoods less than similar homes and businesses in other neighborhoods. This systemic discrimination has robbed hard-working households from earning wealth that could be reinvested in education, home renovations or a new business.

The future city is not a prediction game — it's a choice.

The post-Covid-19 city must address these structural trends to emerge more prosperous and inclusive. This is not charity or social policy — there is market demand to rebuild better and promote density, walkability, reimagined office districts, easier commutes, and new retail and commercial corridors across all neighborhoods. To meet this demand requires creative financing vehicles, new real estate products, land use reforms and multi-sector partnerships.

The future city is not a competition between downtowns, neighborhood districts and suburban corridors. Rather, leaders should strive to rebuild regions as a network of dense, vibrant activity centers and communities that improve wealth and opportunities by race and place, and are connected by multiple travel options and short commutes that ease our impact on the environment.

Our window to respond to the nation's racial reckoning, improve worker opportunities and address climate change is closing fast. The future city is not a prediction game — it's a choice.

Amy Liu is Vice President and Director of the Brookings Metropolitan Policy Program and the Adeline M. and Alfred I. Johnson Chair in Urban and Metropolitan Policy.

Disclaimer: This article first appeared on bloomberg.com, and is published by special syndication arrangement.