Two shocking events bookended the first decades of the 21st century: the 2008-09 recession and the 2020-21 pandemic. Both rained dreadful effects on urban places, measured in particular by job loss but also by declines in other related measures. In the United States, for example, in 2009, the overall metro unemployment rate was 10 percent while in April 2020, it was 15 percent up from 3.6 percent four months earlier in January. The 2020-21 phenomenon, more fast-moving than the earlier event, was not evenly spread among and within cities and metropolitan areas in the United States and beyond. Further, it has highlighted health vulnerabilities and economic inequities, especially differences between front line and remote workers in cities. Finally, it has had ramifications for public transportation, housing, commercial real estate, and specific industrial sectors in the nation’s urban economies.
As part of its Cities and Contagion Initiative, launched in April 2020, Penn IUR has covered and is continuing to cover the situation in a variety of ways. The monthly Volker Alliance/Penn IUR Special Briefings include views from public- and private-sector leaders who, in real time, shed light on such key topics as the fate of local finance, the effects of the federal recovery programs on municipal government, and changing ideas about infrastructure investment. The year-old Recovering Cities Project brings together a select group of the global city’s leadership to document quantitatively and qualitatively New York City’s evolving experiences with getting back to normal. Penn IUR is supporting a special issue of the Journal on Housing Economics on the impact of the pandemic on housing (see link for information). And individual researchers and research groups are applying their analytical skills to assess the implications of the pandemic for urban areas internationally, nationally, and locally.
In line with the latter activities, Penn IUR is issuing three briefs this month. The first one offers a national overview as it assesses the recovery trajectories in the nation’s 105 most populous metros (those with 275,000 jobs or more). The second one focuses more deeply on a single city, New York, the pandemic’s original epicenter, chosen for the size and diversity of its population and economy and for its serving as an extreme bellwether for other urban places. The third one focuses on cities in the Galapagos Islands, Ecuador that, in the face the complete fall-off of international tourism, have the chance to re-invent themselves in a more ecologically sensitive way. The Penn IUR website will host these briefs. Over time, other observers will provide more reports; please visit the Cities and Contagion resource library for updates.
The following sections preview the Penn IUR briefs on the pandemic and urban places.
How Have the Nation’s Most Populous Metros Fared During the Pandemic?
In The Covid-19 Recession: Which Urban Economies Have Performed Better or Worse and Why?, its author John Landis, Crossways Professor Emeritus and Penn IUR Fellow, analyzes effects of the pandemic across the nation by looking at the unemployment rates between January 2020 and May 2021 in the nation’s 105 most populous metros. To measure the extent and velocity of losses, he tracks job loss data between January and May 2020, where he records a 14 percent overall drop (in contrast to the nation’s at 13 percent) with wide variation among metros. At one extreme, Los Angeles plunged 24 percent below its January 2020 figure while at the other end, Omaha, lost only 4 percent of its jobs in this time span. In a deeper look, he determined that population size, high density, costly housing, and relatively poor growth performance prior to the pandemic were associated with cities having the highest unemployment rates. Further, contrary to conventional beliefs about the resilience of economies based on “eds and meds,” in the face of economic disruptions, he found that those metros yielded worse returns than those with high numbers of government employees.
In assessing unemployment during the course of the pandemic, Landis reports a substantial recovery across the metros, with a comeback rate of 96 percent of the January 2020 level. He notes, however, that the slowest to recover were large, highly dense places dependent on the leisure and tourism and health and education sectors having high numbers of foreign-born residents. Their unemployment rates were three percentage points higher than the overall group. In contrast, he notes, not surprisingly, metros having vigorous economic growth prior to the pandemic bounced back more quickly than their less prosperous peers. In addition, metros with better educated workers were more resilient.
These data led to one of Landis’s counter-intuitive observations: metros that possess agglomeration economies (“synergies associated with complementary businesses locating near one another”), considered a critical success factor for positive economic growth in ordinary times, may slow down recovery.
How Has a Major City Fared during the Pandemic?
Moving from the metro scale to a single city, New York, Penn IUR researchers Bill Lukashok, Chandan Deuskar, and Eugénie Birch added nuance to the employment data in their brief, Recovering New York City: A One Year Look Back on the Penn IUR Recovering Cities Project, and a Look Forward towards Recovery. They reviewed a time series from July 2020 to September 2021 for employment and other metrics beyond jobs (e.g., health, public transport use, crime, residential and commercial real estate markets, park usage, retail, arts and culture, and foot traffic in key places). They tracked the ups and downs of the pandemic and its effects bi-monthly, an effort that illustrated dimensions not seen in the national study.
In May-July 2020, the city’s unemployment rate peaked at 20 percent but, within the Big Apple, certain boroughs fared quite differently and continued to do so through July 2021. The 2020 rate was higher in Queens (21 percent) and the Bronx (25 percent) and lower in Staten Island (17 percent) and Manhattan (16 percent). By July 2021, the unemployment rate halved (10 percent) but disparities remained with the Bronx (14 percent) higher and Manhattan (8 percent) lower. Throughout these times, New York City consistently had a higher unemployment rate than its metro: July 2020 metro, 17 percent; July 2021 metro, 8 percent.
Within industry sectors, variation was also present. The May-June 2020 peak job losses were most dramatic in the accommodations and food services at -69 percent and in the arts and entertainment sector, -64 percent. The impact of this fall-off flowed into low pedestrian counts in Times Square (-83 percent), subway ridership (-72 percent), park visits in Manhattan (-9 percent) and a physical office occupancy rate of only 6.6 percent. Meanwhile, in occupations that accommodated remote working, job loss was minimal. For example, finance maintained nearly 100 percent of its jobs.
By May 2021, most sectors, except the stalled food services accommodations (-35 percent) and arts and entertainment (-25 percent), progressed steadily to nearly normal. Seasons affected the trajectories of the lagging sectors: with more use of the outdoors, summer 2020 saw a slow climb upward, a winter upsurge of the pandemic led to a setback, then vaccination approval yielded improvements in summer 2021, but the appearance of the Delta variant yielded another slowdown. The health data are parallel these data: in July 2020 the daily cases would fall to 285 (from a peak in January 2020 of 6,442); in January 2021 they climbed to 5,948; in July 2021 they declined to 243; due to Delta, they surged in September to 1,800.
How Can an Urban Place Approach Re-Invention due to the Pandemic?
Starting in the winter of 2020, Penn IUR researchers in its City Climate-Resilient Infrastructure Financing Initiative (C2IFI) worked with planners and officials in Ecuador’s Galápagos Islands to investigate sustainable transportation infrastructure investments focused mainly on the islands’ two largest town centers, Puerto Ayora and Puerto Baquerizo Moreno, and the intra-island waters. This work took on more urgency as the pandemic struck. Tourism that had peaked at 24,000 visitors in September 2020 dropped to 1,000 in February 2021, wreaking disastrous effects on the island’s economy.
The team aimed to support the islands’ sustainability vision to transition from fossil fuel dependency—the Galapagos imports six million tons of diesel annually—to clean energy options expressed in its Zero Fossil Fuel Initiative (2007) as it works to preserve the archipelago’s biosphere, protect it from the effects of climate change, and ensure healthy communities while maintaining its valuable tourism economy. In #Galapagos Goes Green, they laid out a mobility program based on electric and solar powered vehicles. They envisioned new land and sea transportation incorporating e-scooters, bikes, cargo trucks and bus/shuttles and solar-powered boats and ferries to be used for tourism, provisioning, and daily life of the island’s 27,000 inhabitants. They also outlined supportive training programs and links to multi-development bank funding efforts to transform the island’s power grid to renewables and upgrade the ports now under consideration for Green Climate Fund support. While this brief stands alone as a case study of the potential for local reinvention while rebuilding, it is part of a larger C2IFI project aimed at assisting subnational leaders in early stage planning and development of mitigation projects in partnership with the global entity, the Cities Climate Finance Leadership Alliance.
Conclusion
In the past few months, Penn IUR has responded to the effects of the pandemic on urban places with activities encompassing its three functions as a convenor, voice, and lab. The Volker/Penn IUR briefings provided real-time information to state and local decision-makers through its monthly convenings of public- and private-sector leaders. The Recovering Cities Project, with its focus on New York, encompassed leadership convenings plus a research brief detailing multiple metrics reflecting the varied temporal, geographic, and economic effects on a single city. A second brief plumbed national data to monitor and assess the recovery metrics for the nation’s most populous metros, identifying several characteristics underlying stronger resiliency among the metro sample. Finally, the C2IFI lab assessed the pandemic’s effects on a tourism-based urban economy outside of the United States and offered ideas for a green recovery that it will continue to pursue in the coming months.
Eugénie Birch is Penn IUR Co-Director and Nussdorf Professor of Urban Research, Department of City and Regional Planning, Stuart Weitzman School of Design.
Providing expert commentary on urban topics and highlighting Penn IUR's research in the context of pressing urban issues.
