Will the Coronavirus Usher People out of Cities

For decades in the US people have been shunning rural areas and moving into cities. Even the suburbs have seen people move out into the cities they are adjacent to. This is understandable since the economy has been shifting ever so steadily toward being technology driven.

The business of technology is dependant on the scale of large cities to flourish. This has created a vacuum that pulls young people towards cities in search of economic opportunity that does not exist in their rural communities.

People were willing to deal with the many hardships associated with living in a large city because the benefits outweighed them. There were Ok with a lack of a car because they had good public transportation. They could deal with the sky high rent on a tiny living space because they had no commute. High prices in bars and restaurants were tolerable because they had so many choices for them at their fingertips. Higher crime rates were Ok, you just had to know where to go and where to stay away from.

In comes coronavirus

In early 2020 the coronavirus came and might have thrown a monkey wrench in this trend overnight. For the last several decades the value prop of city living was clear. CV19 flipped that value prop on its head seemingly overnight. Many of the things that we assets of living in a city instantly became liabilities.

Public transportation quickly became a supposed germ magnet even if they remained open. Public transportation for many became scary rather than convenient. Despite the best efforts of public transit authorities, ridership plunged in many cities. If you did not have a car you could easily feel trapped.

Sky high rent on a tiny in town living space also became an albatross as the economy crashed you wondered how you would be able to afford it. As the quarantine measures took affect the tiny apartment that you were confined to could feel even smaller. I have friends in Manhattan and their quarantine experience was drastically different than mine in a suburban area.

The bars and restaurants, the scene you appreciate most about large cities, quickly shuttered or shifted to takeout only. Now you were paying high food prices to eat out of a box at home. Many of these restaurants will end up closing for good before it is over.

A generation of shell shocked Americans

This virus will one day pass and the value prop of city living will inevitably return. The question is will the people still feel comfortable living in them. Especially the younger generation whose formative years will be shaped by this virus.

Having lived through something like this many Americans will inevitably have their opinions and priorities shifted permanently. The things they value most will change from that of previous generations. Public transportation may just make people want to wash their hands and head to a car dealership.

Distributed workforces of the future

One of the key reasons people moved into the cities were economic. Cities were where the money was. The thing about American ingenuity is that we always find a way.

Attitudes on remote work are rapidly shifting with large trend setting technology companies rapidly shifting their policies on it. The employee of the future might be able to be just as productive, or perhaps more so, from anywhere in the country.

Businesses in areas with high cost labor pools, like San Francisco, will be incentivized to allow remote work permanently. They could hire a developer who lives in a small Southern town with a cost of living 20% of that in San Francisco. Leading companies are already doing this and others will follow or will get left behind.

This could eliminate one of the main drivers people have for moving to cities. This would ultimately give people more freedom and businesses a more cost effective labor pool.

Long term effects on residential real estate

It is a bit early to tell how this ultimately plays out. If the shift out of city centers starts to reverse long term shifts on urban housing prices will follow. If the Spanish Flu of 1918 is any guide, this will all pass and things will one day be back to business as usual.

One thing that wasn’t available in 1918 was the Internet. Ultimately people had to forgive cities and move back into them because they had no other choice. That is simply not true anymore. You can work remotely, maintain social relationships, bank and shop online. The coronavirus forced people to do this. They won’t forget it.


It is still too early to say how all of this shakes out. One thing you can say for certain is that people’s attitudes and priorities have been brought into question. There will likely never be a return to life as we knew it in 2019.

Large cities fared the worst and were decidedly more difficult to live with CV19 in. Once it blows over many may undoubtedly forget the hardships but others will not. Combined with a shifting attitude on remote work which encouraged city migration to begin with, could we be looking at the beginning of a perfect storm that can reverse the mass migration towards major cities?

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