In the first of four reports in Local Logic’s Future of Cities series, we look at the myth of the urban exodus during the pandemic and how city centres can get creative by levelling up to become 18-hour or 24-hour cities.
“On successful city streets, people must appear at different times.”
Urban theorist Jane Jacobs understood the many nuances to deeply livable cities, such as how energetic neighborhoods require diversity of use and function, why investing in public transit reduces traffic and promotes neighborhood activity, and how “flexible and gradual change” is almost always preferable to heavy-handed broad-stroke redevelopment.
What would Jacobs theorize about pandemic-stricken urban centres and the many challenges cities face in the coming months and years? She may wonder how to bring about that gradual change via intentional strategies that recapture the attractive characteristics of major cities, even as we make hard decisions on how to repurpose real estate for new applications designed to invigorate those areas.
Bridging the gap with the 18-hour city
Out of the ashes of pandemic-ravaged cities left empty by dusty office towers and restaurants resorting to curbside pickup could be the rise of the 18-hour city, a more tangible direction for some mid-size cities to progress towards. After all, 24-hour cities are rare—how many city centers could really elevate to the level of a London or NYC?
An 18-hour city boasts the following features, as outlined by Storeys.com:
- Population growth, particularly among young people
- Job growth, particularly in tech
- Strong transit system (a high percentage of non-auto commuters)
- A vibrant, densely populated downtown
- Low crime
- Regional distinctiveness
- 24-hour amenities (usually excluding transit)
So what accelerates a city to become the 18-hour urban centre attractive to both investors and residents? They do a lot of things right, such as making their areas more liveable. An academic paper on 18-hour cities found that a couple American cities elevated to that status due to how they promote pedestrian activity and attract a range of downtown citizens: “…walkable city cores in Portland and San Diego feature a range of exotic restaurants, art galleries and walk-to-work offices where highly educated millennials are moving downtown alongside senior citizens who are consciously electing a retirement in central locations with better amenities.”
Compared to 24-hour cities, 18-hour cities boast a unique culture, enviable amenities and a high quality of life at a lower cost than 24-hour cities. Such an appeal could make them a somewhat safe bet for investors, too.
Take the evolution of the Kitchener-Waterloo area in Ontario, which for decades was known as a quaint college town. But when major technology brands such as Research in Motion headquartered in the region, young engineers and labourers clamoured to the hotspot.
Despite RIM’s downturn over the year, the KW area is still relying on its technological backbone to carry it through into the 2020s. In November, Kitchener City Council approved a plan to allocate $8.5 million toward the University of Waterloo’s $35-million Innovation Arena, a cutting-edge research and development hub meant to churn out products to facilitate the digital transformation of Canada’s health system, as the Logic reports.
And turning south, Columbus, OH, is another 18-hour city that won such acclaim due to several factors: home to more than five Fortune 500 companies, a growing downtown population, and it “benefits from its ability to reach a large number of people by truck in a day, which helps to fuel demand for industrial distribution space in an era of rising e-commerce sales,” as Crowdstreet writes.
What helps all these 18-hour cities is establishing an identity and culture that sets them apart from lower-tier cities and shines a spotlight on how affordable and “up and coming” they are compared to 24-hour cities, such as London and NYC. That identity could be based on amenities (look at Las Vegas), the innovative companies appealing to young entrepreneurs (San Francisco, Kitchener-Waterloo) or its position as a capital and the jobs such a city attracts (Ottawa).
Millennials on the move
When COVID-19 first landed in urban centers around the world, media talk around people escaping to the suburbs and cottages soon circulated. The theory made sense: Why stay in business-heavy cities when remote work is now the norm and employees (and their kids) can work and take classes from home?
But this idea doesn’t hold much water when the appeal of cities is considered over the long term. “People always find their way back to cities,” according to a report in Fortune. “Businesses and work are an essential part of the appeal, but people are the heart. An insatiable craving for the culture, community, and bright minds that make up metropolitan areas persists, even in the darkest times.”
So 24-hour cities such as New York and Toronto aren’t being downgraded during and post-pandemic? The population retraction in cities has been greatly exaggerated, notes Shauna Brail, Associate Professor at the Institute for Management and Innovation at the University of Toronto-Mississauga. “It is too soon to say whether there has truly been an urban exodus this year, or whether the pandemic accelerated trends that would’ve happened anyway, since Canadians have long been moving to the suburbs after a certain period of living downtown.”
What we’re also seeing is a shift in perspective depending on age. A New York Times report wrote that “after a year of pandemic lockdowns, it seems that younger homeowners are less inclined to give up on the city than older ones. A February study from Opendoor, a real estate tech company, showed that 32 percent of buyers feel differently about where they want to live as a result of the pandemic; and 35 percent of the millennials surveyed said they prefer to be in a city around others.”
What is accelerating the moves Millennials are making isn’t black and white but more nuances. Still, researchers at PwC noted that 18-hour cities lure young workers because “some will be dynamic regional centres that are busy establishing their reputation as diverse, exciting cities in their own right—often with the advantage of better housing affordability or a lower cost of doing business.” The report goes on to mention how edge cities could be comprised of the former suburbs “eager to achieve more balanced development and establish their own unique urban identity.” Montreal, Vancouver and Calgary may elevate into true 24-hour cities, buzzing with activity around the clock and living up to what Jacobs characterized as successful city streets.
Brail went on to say how data lag is a critical issue facing Canadians. Brail criticizes Statistics Canada for releasing data sometimes 12 to 18 months after collecting demographic details, amounting to such a lengthy lag in information about moving habits that it can be difficult to determine if suburban growth exceeded the norm.
But what may have stunted population growth in major cities in 2020 and into this year is a decline in international immigration, Brail adds. “It’s such a major driver of population growth in cities, it may affect growth in those regions, but still, it’s too soon to say definitely.”
Could office vacancies spur creative opportunities?
The pandemic upended how we work, leading to a rise in remote work and an obvious ripple effect: as more employees worked virtually, office space has languished, leading to unheard-of vacancy rates.
In Toronto, after reaching a record low office vacancy rate of 2.4% in 2019, that figure more than quadrupled by early 2021. Calgary’s incredibly high office vacancy rate of 22% in 2018 soared to 30% by late 2020.
Some theorists posit that a reduced demand in office space could actually be a boon for business districts. Author Richard Florida said in a Bloomberg interview recently: “Many of those office towers can be turned into much-needed affordable housing. Instead of being a 9-to-5 neighborhood, it can be a 24/7 neighbourhood.”
Adaptive reuse, such as converting office building to residential spaces, sounds logical but it’s often easier said than done. “It can be totally plausible if the cost to convert makes sense to the building owner,” says Sara Maffey, Head of Industrial Relations at Local Logic. “It could be expensive to add the mechanical systems for individual living units, and there has to be flexible zoning to allow for these conversions in the first place.”
What about entertainment spaces? Another creative direction for building owners to head towards could be repurposing office space that is often dark post-6 p.m. so certain floors could cater to crowds looking for, say, music or comedy stages. It won’t work for every office plan of course, but the right specs could be tweaked to usher in a new use for a building that could be beneficial for, say, 18 hours in total.
Today, however, tenants are hedging their bets by taking short-term leases on office space, Bloomberg notes, and quotes Frank Magliocco, national real estate leader at PwC Canada on how he expects a structural change in the way commercial real estate is addressed. “Employers are going to take a hard look at their offices and ask themselves what role that space should serve going forward,” he says.
Those 18-hour cities mentioned earlier could be the eye-catching opportunity for investors and residents who want to pass over the round-the-clock urban hubs of London and New York.
Over the years, the momentum these cities have accrued is gaining steam. “We’ve seen people move from those larger denser urban cities and move into secondary and tertiary cities that are more spread out and affordable and still provide the lifestyle people are looking for, such as Atlanta, Raleigh, Charlotte and Nashville.” Maffey says.
In 2019, Julia Georgules, Director of Research-Office, JLL, noted how 18-hour cities have strong development potential and “less competition among businesses for prime space and lower costs than the traditional, dominant U.S. cities such as New York, Chicago and Boston. For companies priced out of primary markets, these cities are becoming increasingly attractive, as reflected by rising rents and falling occupancy rates.”
Fast-forward two years and those remarks still hold true, even if rents have dipped somewhat due to the pandemic (but they’re expected to self-correct as vaccines roll out and the pandemic, hopefully, recedes as the year progresses). But it won’t happen overnight or with little foresight; city managers and urban planners have to be savvy in how they leverage areas such as public spaces in light of the pandemic’s many rotating lockdowns spotlighting their value to citizens.
Maffey points out the “real opportunity for cities is to invest in public placemaking in those public spaces and invest in the infrastructure of those spaces. For reasons other than leisure, these public spaces can be used when we consider how workers can move through them, especially as remote working offers people more flexibility on how and where they work. It could make sense to view some of these places as areas where people can meet for work, for example.”