[Choi Jun-young's Urban Pilgrimage] With Corona and Changes in the City

Remote Work Normalized by COVID-19, Citizens Move to Affordable and Comfortable Suburbs
Labor Shortages in Major US Cities, Office Returns in UK Drive Downtown Housing Price Rise
Large-Scale Store Vacancies in Some Domestic Areas...Signaling Mid- to Long-Term Changes

It has been nearly two years since COVID-19 spread worldwide. Although the successful development of vaccines led to expectations of overcoming the pandemic soon, the emergence of the Delta variant has made eradication and extinction practically impossible. Various countries are cautiously experimenting with a new era of living alongside COVID-19 in their own ways. It is a time to seek a new order and coexistence, rather than a return to the past or recovery.

The appearance of cities welcoming the 'With COVID' era varies greatly by country and region. In the United States, there are over 10 million jobs nationwide, yet unemployment remains at 8.4 million, creating a paradoxical situation. The cause is population outflow from large cities. As remote work became routine, citizens relieved of commuting burdens moved to affordable and comfortable suburbs and have not returned to the cities, leading to labor shortages in urban areas. Conversely, states with low population density have recently seen population growth and increased employment rates. Some companies have announced the end of remote work and a return to offices, but workers do not readily comply with these decisions. Many choose to change jobs or relocate to other regions, suggesting this phenomenon is likely to continue for some time.

In London, UK, prices of high-end homes in the top 5-10% have risen for two consecutive quarters, signaling a strong move toward normalization of urban activities. Due to the 2014 increases in stamp duty and land tax aimed at stabilizing soaring housing prices, along with uncertainties surrounding Brexit, prices of luxury homes in central London fell by nearly 20% between 2014 and 2018. During this period, the spread of COVID-19 increased preference for spacious suburban homes over cramped city center residences. However, as many companies actively encourage a return to office work, this trend is gradually changing. Recently, there has been a shift from prioritizing parks and green spaces to emphasizing transportation convenience.

In Germany, despite the spread of COVID-19, the previously sustained upward trend in housing prices continues. In the second quarter of 2021, residential real estate prices in Germany rose by an average of 10.9% compared to the same period the previous year, marking the largest increase since the time series survey began in 2000. Amid this nationwide rise, housing prices in the seven major cities including Berlin, Munich, and Hamburg increased even more steeply by 14.7%. This is attributed to low borrowing costs, increased savings due to reduced activities, and a growing number of remote workers seeking larger spaces. Even as office returns proceed, demand far exceeds supply, so this trend is expected to continue.

In Milan, Italy, changes are occurring not in housing prices but in the urban landscape. Previously, balconies of apartment buildings were mostly neglected and rarely decorated with flowerpots. However, due to movement restrictions and lockdowns, people who could not go out began cultivating flowers and various plants on their balconies. The city government has boosted urban vitality by allowing restaurants and bars to occupy roads without additional taxes to maintain social distancing. Meanwhile, fear of using public transportation persists, leading to a preference for short-distance commuting and schooling by bicycle or on foot. In response to these changes, Milan is expanding parks and green spaces and plans to electrify all public transportation by 2030.

How will cities in our country change? Last year, the suspension of overseas travel allowed small and medium-sized cities to benefit from increased tourism. Money that would have been spent abroad was instead used domestically, rapidly advancing the upgrading and diversification of various facilities targeting tourists. Whether these changes will continue remains to be seen.

In large cities, demand for moving to suburbs due to rising housing prices has continued, but unlike other countries, significant population outflow to suburbs has not been prominent. This is because remote work has been limited and there are many commercial spaces, including cafes, that can be used for work. Demand for office buildings has also been maintained, so even in areas with large-scale supply, some vitality remains rather than vacancies. However, due to continued business restrictions, many self-employed business owners have closed, causing large-scale vacancies in some areas. With the rapid transition to a digital economy accelerating, the likelihood of these areas regaining vitality is low. Redevelopment and reconstruction efforts, including changes in land use, are ongoing in these areas, suggesting that the urban landscape will change in the medium to long term.

The shock of COVID-19 continues. But as always, humanity adapts to shocks and creates new changes. How the normalization of food delivery, everyday internet shopping, and the activation of remote work will transform urban spaces and appearances is an intriguing challenge. Coupled with changes in transportation systems and means for the transition to a decarbonized society, cities may surprisingly show new forms rapidly. The 'With COVID' era is not a simple return. Efforts must be made to appropriately transform spaces based on changed perceptions and behaviors developed over the past two years.

Legal Expert, Yulchon LLC

This content was produced with the assistance of AI translation services.