What Will Happen to Cities in 2021

The post-pandemic world approaches. According to some projections, up to half of all Americans could be vaccinated by June, and another 30 percent may have acquired natural immunity through infection over the previous year.

Next summer could be surprisingly unburdened by the pandemic, which is not the same as saying it will be normal. The world that emerges from our year of plague will be altered, in subtle and dramatic ways. No one should be overconfident about exactly how the pandemic will change lives in the long run. But there are little augurs everywhere—headlines, data points, and statistics that portend shifts in the way we work, the look of urban streetscapes, the state of the economy, and the future of media.

The Future of Work

The portent: Cities are already looking to slash their public-transit budgets.

The prediction: Cities will feel weird for a while—and the return to downtown offices will be delayed.

City transit authorities are facing a nightmarish next few years. New York City is discussing “doomsday cuts” to its public transit. Projecting up to $50 billion in losses, the city is exploring plans that would require layoffs in the thousands, along with an unthinkable 40 percent cut to bus and subway services by 2022. Facing its own deficit, Washington, D.C., is planning to slash bus services, close 19 train stations, and slow metro service to run every half hour across the network. Boston is also preparing to decrease the frequency of its service and eliminate several stops.

These cuts are a reminder that although the biological stage of the pandemic might come to an end in 2021, the infrastructural aftershocks will be with us for a while. Without reliable public transit, a modern city simply cannot function properly. Students can’t get to school, the majority of employees who can’t do their job from home can’t get to work, and retailers in central business districts are left hawking their merchandise along empty streets.

The future of transit also has important implications for the future of work. If workers and bosses acknowledge that getting to the office in major cities is going to be a horror show through 2021, this will reinforce the way they think about the benefits of remote work. Imagine being a boss in July 2021 and demanding that your employees suddenly switch from avoiding crowds for 18 months to waiting on a crowded subway platform every day of the week. There is no worse way to reintroduce the notion of a congenial commuting and office experience.

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The majority of Americans drive to work, rather than rely on urban transit. But the cities that depend on urban transit often contain the headquarters or major hubs of companies whose decisions will help shape the future of work. For that reason, these changes could have an outsized effect on the labor market, over all. The decimation of urban transit could delay the downtown office’s official comeback and prolong the remote-work experiment. This could be a self-reinforcing cycle, in which transit cuts lead to increased remote work among white-collar employees, whose avoidance of rush-hour subways and buses leads to a lower baseline of transit revenue.

The Future of Cities

The portent: Seems like everybody really loved all that outdoor dining space in the streets, huh?

The prediction: The rise of the “15-minute city.”

The decimation of transit might initially seem like good news for cars. After all, if you need to get from Point A to Point B in a city, and bus service is pinched, and the subway is running only every half hour, that sounds like an ideal scenario for Uber or Lyft.

But while the pandemic is squashing subways and buses, it’s also squeezing cars out of downtown areas. Over the summer, many cities shut down vehicle access on streets to give more outdoor space to restaurants. Janette Sadik-Khan, the former commissioner of the New York City Department of Transportation, is urging cities to make these changes permanent. “Transportation planning used to be stuck in its ways, and nothing changed for years and years,” she told Chicago’s Daily Herald. “Now, things are changing overnight." Sadik-Khan currently chairs the National Association of City Transportation Officials, which released a June report calling on cities to restrict the presence of cars in downtown areas, with narrowed vehicle lanes, fewer curbside parking spots, and more open space for pedestrians. “Today, people-focused streets are a proven global best practice,” she wrote in the report, “from Berlin to Brussels to Bogotá and from Minneapolis to Mexico City to Milan.”

The modern city was designed, or redesigned, to accommodate the automobile in the 20th century. But the latest trend in urban-planning circles is the dream of the “15-minute city,” an effort to redesign urban neighborhoods as micro-cities, where all of our needs (living, working, shopping, entertainment) exist within a 15-minute trip by foot or bike. In many places, this would require booting cars out of neighborhoods to clear space for parks, outdoor restaurants, and pedestrian thoroughfares.

Visions of the 15-minute city are also influencing architects and developers. Scott Meyer, the chief investment officer at PTM Partners, says new multifamily-building projects are looking at incorporating larger fitness centers, co-working spaces, expanded outdoor areas, and even nighttime options, such as ground-floor speakeasies. The goal of some 15-minute city projects is to surround residents with work and leisure options, so that they never have to leave the block.

Depending on how you look at it, this is either the height of convenience or income segregation; after all, it’s easy to imagine all-inclusive projects excluding low-income city residents from once publicly accessible amenities. But either way, it suggests that although the pandemic might end in six months, it could reshape urban planning for years to come.

The Future of the Economy

The portent: Savings are historically high, and the housing market is on fire.

The prediction: The 2021 economy could be an absolute juggernaut.

This year has featured the strangest economy ever. GDP has cratered, millions of people have lost their jobs, and small businesses have closed in large numbers. But total income has increased (thanks to government stimulus), the stock market is setting records, home-buying is on fire, and the national savings rate is at a 45-year high.

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The last two stats are particularly noteworthy. In almost every recession since the 1970s, national wealth has taken a beating and the housing market has stumbled —or collapsed, as it did in 2007 and 2008. But today, home prices are setting records across the country while households have lots of money to spend. The national personal-savings rate is an average that conceals a lot of underlying diversity; for example, upper-middle-class families might have invested the money they would have spent on a winter vacation, whereas many lower-income families get by from week to week on unemployment insurance.

But any way you look at it, the combination of a strong housing market and record-high savings is just about the most ideal starting point for a recovery you can hope for. Demand for new homes should stimulate a phalanx of real-estate-adjacent industries, including construction and furniture sales, while the beleaguered leisure and hospitality sector should expect record annual growth as Americans flock back to hotels, bars, and restaurants—provided those establishments can hold on until next year. Meanwhile low interest rates and a slew of family-forming Millennials should provide a strong tailwind to the recovery, as this cohort looks to buy new space for its growing families.

The likely economic bounce back of 2021 will be good news for everybody. But it should be great news for low-income workers, who will benefit from a retightened labor market. From 2015 to 2019, income growth among the 25 percent of Americans with the lowest household income exceeded every other cohort for four straight years, something that hadn’t happened since the 1990s. This was thanks to both higher minimum-wage laws and a low unemployment rate that pushed up wages at the bottom. This holiday season, pray that 2020’s upper-middle-class savings become 2021’s lower-middle-class raises.

The future of the economy, like the future of cities and work, is not some destination toward which we have been helplessly hurled by the pandemic. The story of 2021 is still being written by 2020’s policy makers. In one version, Washington does just about nothing. State and local governments get no relief, the unemployed don’t get extra income, households don’t get new checks, businesses don’t receive additional support, and next year’s recovery struggles to achieve escape velocity, held back by myopic and penny-pinching legislators. In this scenario, next year’s economy would still snap back, but the pandemic’s shadow would extend for months or years over transit, work, downtown restaurants, and more. That uncertain future is a choice.

Another option is available—if the federal government passes a stimulus that includes the measures listed above. In crowded restaurants and bars, in movie theaters and gyms, in homes and schools and offices and subways, Americans could resume their interrupted routines and collectively propel the economy to a historic recovery that makes the beginning of the 2020s much more like the end of the 2010s than many people think possible. In other words, next year could feel astonishingly normal. But, like uncertainty, normal is a choice.