Then again, if this summer’s wave of violence in New York City turns out to be more than a temporary reaction to a very stressful situation, and if the city’s and Metropolitan Transit Authority’s financial troubles lead to sharp cuts in services, the quality of life that those rents purchase may fall faster than the rents do. Comparisons to the city’s precipitous 1970s decline seem wildly overdone at this stage, but without adept civic and political leadership over the next few years (New Yorkers will elect a new mayor next year) things could get pretty ugly.
There’s also the complication that the supply of Americans in their early to mid-20s is on the wane. That’s who comes to cities. Most members of the giant millennial generation are now in their 30s, an age when people tend to contemplate leaving them.
This belatedly brings me to perhaps the most important factor in the revival of cities in the U.S. and across the developed world over the past quarter-century-plus: immigrants. Even during its years of most-rapid population growth in the 1990s and earlier this decade, New York City was still losing more people to the rest of the metropolitan area and country than it was gaining in new domestic migrants, with births and immigrants accounting for all of the growth. Now birth rates are down, and the immigrant inflow has slowed. Illegal immigration to the U.S. has been more or less at a standstill since the last recession, and President Donald Trump has been narrowing pathways to legal immigration since 2017 and has used the occasion of the pandemic to narrow them further. A true urban revival is probably going to require an immigration revival.
Justin Fox is a Bloomberg Opinion columnist covering business. He was the editorial director of Harvard Business Review and wrote for Time, Fortune and American Banker. He is the author of “The Myth of the Rational Market.”