[DongleDongle] New York Turned into a 'Donut'... Why Did New Yorkers Leave the City?

Decrease in Urban Jobs Due to COVID-19
Housing Prices Surge as Population Grows in Suburbs
Transportation Issues Key to Urban Population Recovery
Office Spaces Also Considered for Residential Reuse

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When reading foreign news related to the United States, one can often find negative phenomena explained by comparing them to donuts. At the end of last year, reports mentioned the word "donut" in relation to Wall Street financial firms possibly not paying bonuses due to an economic downturn. Wall Street employees reportedly use the term "donut" to describe the situation where bonuses are not paid because a donut resembles the number zero.

Recently, the term "donut" has been used to describe the phenomenon of American downtowns becoming empty. This is because citizens are moving away from city centers to the outskirts, creating a shape similar to a donut. Currently, people are disappearing from major U.S. cities such as Chicago, New York, and San Francisco. Why is the "donut effect" occurring even in New York, a globally influential city that is always mentioned among the world's major cities?

[Image source=Pixabay]

◆Sharp Decline in Urban Jobs Due to COVID-19... Surge in Suburban Migration

According to experts' analysis, as COVID-19 spread, Americans began moving away from large cities like New York, where office towns are concentrated, to suburban or rural areas.

New York, USA

The large increase in vacant offices and homes in downtown areas after COVID-19 confirms this trend. As citizens moved to suburban areas, housing prices outside the city surged. Suffolk County in Long Island, widely known as a middle-class residential area during the pandemic, saw home sales prices rise by 7.2% year-over-year in the second half of 2020.

On the other hand, during the same period, home prices in major urban areas such as mansions near Battery Park in Manhattan and homes in the Bay Area of San Francisco fell by 9.6% and 10%, respectively.

Why did people leave cities during the COVID-19 outbreak? The reason lies in jobs. The pandemic shattered the fixed notion that office workers must physically go to work. As more companies adopted remote work, employees no longer had a reason to live in cities crowded with millions of households. As workers stopped commuting to offices, nearby restaurants, gyms, and retail stores also saw a decline in customers.

The severe impact on downtown commercial districts due to workers moving out is also clearly reflected in job posting data by region. The U.S. non-profit National Bureau of Economic Research (NBER) compared the number of job postings between urban and non-urban areas from February 2020, when COVID-19 began spreading, to November 2021. In November 2021, job postings related to 25 major cities including New York and Miami decreased by 2.2% compared to February 2020.

However, the number of jobs increased sharply as one moved away from major downtowns. In 75 metropolitan areas excluding major cities, job postings increased by 15.8%, and in non-urban and small areas, job postings surged by 56.8%. As workers started remote work and moved to the outskirts, jobs naturally followed.

◆Will New Yorkers Return to the City? The Answer Lies in Space Utilization

So, now that the U.S. government has ended the COVID-19 emergency, will citizens who left the city return? Unfortunately, the outlook for urban residents returning is uncertain.

The reason lies in transportation. Experts explain that despite also suffering from COVID-19, cities like London and Paris remain bustling because of well-developed public transportation systems. In contrast, Chicago and Los Angeles are notorious for poor public transit infrastructure. Especially in Chicago, citizens bought private cars en masse to compensate for inadequate public transit, worsening downtown traffic congestion.

[Image source=Pixabay]

Experts analyze that unless transportation infrastructure improves, the donut effect spreading mainly in major U.S. cities will hardly improve. Detroit, a U.S. city that declined due to the slump in the automobile industry, has also seen population growth fall short of expectations despite years of reconstruction efforts due to insufficient transportation infrastructure.

Is there a solution for U.S. cities to avoid the donut effect? Experts advise converting the surplus commercial office spaces in downtown areas into residential use. Although population inflow still falls short of expectations, Detroit is praised for successfully revitalizing some of its downtown functions by repurposing old buildings constructed during past urban revival periods into multi-use spaces.

Given concerns that increasing debt from vacant commercial properties in the U.S. could trigger a financial crisis, space reutilization could be a viable measure. We conclude this article hoping that New York, called the heart of the global economy, will not become an empty donut.

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