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One of the most common questions these days goes something like this: which Covid trends will last and where will they take things? Most of the “trends” identified are questionable, but two offer a basis for firm conclusions: One, Zoom socializing will abate radically as soon as people become more comfortable with human contact. Human beings, even the young who are otherwise entirely accustomed to technologically enhanced social relationships, crave face-to-face contact and will opt for it whenever they can. Second, remote work relationships will last and will increase over time as businesses become more accustomed to them. This important trend will continue to affect the decisions of millions of Americans on where to live. They will in time likely morph from the immediate flight from cities to suburbs. As remote work allows increasing numbers to live outside commuting range, the suburbs will lose out to the exurbs and small towns.

At present, the cities are suffering the outward migration. It started before the pandemic. Because the 2017 federal tax reform limited the amount of state and local taxes a person could write off his or her federal tax obligation, it became considerably more expensive to live in especially high-tax cities. People began to flee to lower-tax venues in suburbs or in a favorite vacation destination. The anti-virus lockdowns and quarantines, by promoting work-from-home arrangements, enabled more people to follow this trend. At the same time, the virus and reactions to it has stolen from cities much of their former allure. People, of course, felt the greater risk of infection in congested spaces, but more than that, the strictures put in place to slow the spread of disease closed down the restaurants and shopping as well as the cultural activities that constitute the chief reason people live in cities. At the same time, and for separate reasons, crime rates rose and homelessness became more apparent further detracting from the quality of urban life.

Even as all these considerations continue to encourage the flight from cities to suburbs, they will also create a market-based countercurrent. Unlikely as it seems given history, some local and state governments may see the harmful effects of high taxes as well as rising rates of crime and homelessness and choose real solutions over the useless rhetoric on which these politicians have relied for decades. More significantly, the out migration will make city living more affordable. Already, rents in major urban centers have begun to decline, falling 0.5% over the past year according to a report by the national real estate firm, Zumper. Prices of condominiums have also begun to show weakness. At the same time, the lockdowns have driven businesses away and brought on bankruptcies, putting downward pressure on commercial rents.  Some 80% of New York City’s retailers and restaurants are late in their rent. Commercial real estate bids there have fallen to levels not seen since 2011. No doubt other large cities have seen similar movements. Work from home has also begun to reduce the need for urban office space. New York again provides an illustration. According to CBRE, a national commercial real estate service, leasing volumes there have fallen 39% during the past year.