Henley & Partners: Cities Are Not Dead!

(The consultancy Henley & Partners asked me to contribute to the firm’s Global Mobility Report Q3 2021 with an essay on the pandemic-era myth about a flight from cities.)

(UPDATE: CNN was kind enough to quote me in its story on the strengths and weaknesses of global passports.)

Of all the misguided predictions made early in the pandemic, ‘the death of cities’ might be the most pernicious, undercutting the wealth and well-being of both residents and the rest of the planet. The cities that make themselves most hospitable to new arrivals in the wake of the pandemic are poised to be the capitals of the new Roaring Twenties.

The combination of contagion and lockdowns in cramped apartments, the story goes, sent inhabitants scurrying to larger homes in the suburbs, small towns, and countrysides, where remote work policies have enabled them to stay. Anecdotally at least, this thesis was buttressed by stories of billionaires decamping to the Hamptons and Florida, Bay Area programmers bidding up homes around Lake Tahoe, and the Notting Hill set setting up shop in Somerset.

While large cities lost larger-than-average numbers of inhabitants during the initial wave of the pandemic in 2020, the real story has less to do with the residents who left than the immigrants who never arrived to replace them.

In the USA, for instance — where the pandemic happened to overlap with the decennial census — the ability to work remotely and a propensity to move correlate most closely with wealth. New Yorkers leaving the boroughs solved their personal housing crises by bringing it with them, arriving in smaller cities such as Nashville with budgets that were 50% higher than those of locals, triggering a nationwide boom in housing prices and widening inequality — a phenomenon seen in London and other global cities as well.

This exodus should have been expected as it represents an acceleration of, rather than a divergence from, prior trends. According to an analysis by Brookings Institution demographer William H. Frey, several of the largest cities in the USA — including New York and San Jose at the center of Silicon Valley — saw declining populations even before the pandemic, while others grew only sluggishly. In most cases, the people who left headed for the suburbs of Sun Belt cities such as Austin, Phoenix, and San Antonio — the same destinations as before there were lockdowns and ‘Zoomtowns’.

What’s different this time is the absence of international migrants due to former President Trump’s travel bans. Frey estimates the number of new arrivals fell by more than half between Trump’s inauguration and last summer, to reach the lowest level in more than 30 years. This matters because overseas arrivals had more than offset departures to warmer and lower-tax destinations. With that faucet turned off, the typical ebb and flow appeared to become a flood of the outwardly-bound.

While Frey’s analysis is limited solely to an American context, a similar phenomenon appears elsewhere. London’s schools face budget cuts after a sharp decline in enrollments attributed in part to European migrants returning home in the face of Brexit. The number of EU citizens searching for work in Britain has fallen by more than a third since Brexit, according to the job-posting site Indeed. ‘Return migration’ and ‘brain-gain’ are officially on the EU’s radar as travel restrictions ease and countries reopen.

As global cities and nations alike grapple with the ramifications of Covid-19, it’s critical they realize the true nature of the threat — and opportunity — before them. Rather than dwelling on wealthy former residents now working from their second or third homes, they must focus on restoring the flow of immigrants.