Many thinkers today, like those bearded sign-bearers in the cartoons, are proclaiming that the end is near, at least for big cities. During the pandemic, the argument goes, residents and businesses fled cities, beginning an “urban doom loop” in which falling property tax revenues make cities less livable–prompting still more residents and businesses to flee. The eventual result, they foretell, will be the death of urban real estate.
Is the doomsaying accurate? We decided to find out by building a detailed model that projects future demand for office, residential, and retail space in “superstar cities” (roughly speaking, those with a disproportionate share of the world’s urban GDP and GDP growth) in the United States, United Kingdom, Europe, and Asia. We considered important factors not typically incorporated in the prophecies of doom, including long-term population trends, employment, and employment-mix trends, migration, office attendance patterns, shopping trends, and city-specific elements (such as physical structure and home price gradients), as well as information from a large global survey that we conducted.
