Guest post by Jeremy Zuker, Co-Founder, WhereiPark

Downtown. It’s a term that all of us immediately understand. It’s part of the lexicon, shorthand for everything that the centers of American cities represent. When we hear the word, we think of vibrant shopping districts, office towers, and trendy condos and lofts. And thanks to the pandemic, all of that may be changing. The new normal is anything but normal, and everything that we knew about cities a year ago is fundamentally different today – and will most likely never go back to the way it was prior to COVID-19.

Downtowns have always been in flux. They’ve been industrial centers, landing places for new immigrants, the flashpoint for gentrification, and the proving ground for new modes of public transportation. In the 1960s many US cities experienced declines as middle-class residents migrated to the suburbs; 50 years later, the children and grandchildren of those suburbanites moved into the downtown areas that their families had abandoned in search of their version of the American dream. But no matter the political or economic climate, downtown areas have always been centers of commerce. Until now. It’s not a stretch to say that urban business districts are collapsing. And while the downturn may have seemed like a short-term situation back in April and May, the reality is now setting in that we may be in for another major shift in the role of cities as commercial hubs.

The reason that cities are natural locations for commerce is density. Simply put, more people buy more goods and services. And downtown cores in cities provide the kind of numbers that allow merchants to thrive. Mix in the fact that fewer city dwellers own cars than their suburban counterparts, and the need for walkable retail destinations is obvious. It’s no accident that there seems to be a Starbucks on every corner of any city you visit.

And it’s not just the people who live downtown to drive the local economy: it’s the millions of Americans who work in downtown areas, even if they don’t live there. Locals might not line up at a deli to get lunch, but office workers are the lifeblood of an entire segment of the urban economy. It’s no accident that restaurant owners talk about their “daytime crowds” and their “evening crowds.” They are very different populations, but the end result is the same: they keep local businesses afloat.

The pandemic has changed all of this in a matter of months. Beginning in March, most American companies implemented emergency work-from-home programs to keep their employees safe. While this no doubt saved hundreds of thousands of lives, it gutted businesses that cater to people who commute to downtown areas. Today, if you walk down the street in any major city, you will see dozens of shuttered businesses, ranging from restaurants to office supply stores to barbershops. It’s simple economics: fewer people equals lower revenues. Unfortunately, most small businesses can’t weather this kind of sustained downturn. Even temporary measures — such as patio seating and expanded delivery services — aren’t enough to keep these businesses healthy.

To make matters worse, it’s not just remote working that’s affecting the viability of downtown business districts. Many urban dwellers choose to live in the city because it is convenient and close to where they work. Now that millions of Americans are working from home, there are fewer reasons to spend $2500 a month on a small studio apartment when it’s possible to rent an entire house just outside the city. As a result of this shift, New York is experiencing its highest vacancy rates in more than 14 years. Rents for San Francisco apartments – among the highest in the country – have plummeted by nearly 20 percent in 2020. Simply put, people are rethinking the need to live downtown if location is no longer a factor in their career paths.

With the loss of residents and commuters, urban businesses are closing at record rates. In fact, recent studies have shown that 61 percent of American restaurants might not survive 2020. That would have been unfathomable to consider even 10 months ago. If this were a temporary situation, cities might be able to figure out a way to keep them afloat until things return to normal. But it doesn’t look like things will return to normal, even when the pandemic ends. Major companies, including Shopify and Google, have announced plans to allow employees to work remotely even when a vaccine is discovered. Major tenants of downtown office towers are rethinking their real estate strategies and are downsizing their presence. Even companies that are keeping their offices are considering allowing people to only come in a few days a week. This does not bode well for businesses that support downtown workers.

It’s a pretty bleak picture, but it’s not time to give up hope just yet. That’s because cities are resilient. The death of urban areas has been predicted for more than a century, but cities remain vibrant centers of commerce and culture despite all of the naysayers’ predictions. Over the last decade, they have become the destination of choice for many professionals and young adults. What is needed now is a radical reimagining of what cities are, and what they can be.

Jeremy Zuker is the co-founder of WhereiPark, a technology company that enables multifamily residential and commercial property owners to discover new revenue sources through innovative solutions that leverage unused parking spaces.