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January 27, 2023

How New York Stopped Fearing the Urban Doom Loop and Learned to Love It

John Sexton has written about the "urban doom loop" which may kill all the blue cities.

Covid sends the high-wage workers back to their suburban homes, which kills the restaurant and retail and entertainment industries of the city, which is the entire point of even living in or near a city in the first place, and as those businesses die, people realize there is no reason remaining to be in the city, and begin a mass emigration away that kills the cities.

The Democrats' embrace of violence, crime, and chaos as acceptable substitutes for restaurants, shopping, and entertainment obviously isn't helping. Covid took away all the advantages for living in the city, and then the Summer of St. George unleashed all the disadvantages of living in the city, with a vengeance.

Even the New York Times worries about the "urban doom loop," when they're not doing their level best to accelerate it.

Scholars are increasingly voicing concern that the shift to working from home, spurred by the Covid pandemic, will bring the three-decade renaissance of major cities to a halt, setting off an era of urban decay. They cite an exodus of the affluent, a surge in vacant offices and storefronts, and the prospect of declining property taxes and public transit revenues.

Insofar as fear of urban crime grows, as the number of homeless people increases and as the fiscal ability of government to address these problems shrinks, the amenities of city life are very likely to diminish.

The prospect of an "urban doom loop" was discussed by economists in a paper called, "Work From Home and the Office Real Estate Apocalypse."

One of the authors explained that their paper...

...emphasizes the possibility of an "urban doom loop" by which decline of work in the center business district results in less foot traffic and consumption, which adversely affects the urban core in a variety of ways (less eyes on the street, so more crime; less consumption; less commuting) thereby lowering municipal revenues and also making it more challenging to provide public goods and services absent tax increases. These challenges will predominantly hit blue cities in the coming years.

New York City's real estate values have taken a real hit -- as have all the nation's cities' real estate values.

In their paper, the three authors "revalue the stock of New York City commercial office buildings taking into account pandemic-induced cash flow and discount rate effects. We find a 45 percent decline in office values in 2020 and 39 percent in the longer run, the latter representing a $453 billion value destruction."

Extrapolating to all properties in the United States, Gupta, Mittal and Van Nieuwerburgh write, the "total decline in commercial office valuation might be around $518.71 billion in the short run and $453.64 billion in the long run."

This will provoke a crisis in city's budgets, creating a fiscal doom loop: Everything in cities will cost more and more, and you'll get less and less in return.

For example, the share of real estate taxes in N.Y.C.'s budget was 53 percent in 2020, 24 percent of which comes from office and retail property taxes. Given budget balance requirements, the fiscal hole left by declining central business district office and retail tax revenues would need to be plugged by raising tax rates or cutting government spending.

Both would affect the attractiveness of the city as a place of residence and work. These dynamics risk activating a fiscal doom loop. With more people being able to separate the location of work and home, the migration elasticity to local tax rates and amenities may be larger than in the past.

So: Is that happening?

Why yes. Yes it is.

Nike is leaving anarchic, antifa-controlled Seattle. So is a Regal Cinema multiplex, located in the "CHOP" Autonomous Zone.

The reason? Too much crime, too many homeless skels shooting heroin and sh!tting in the streets all day. Shooting and sh!tting, shooting and sh!tting -- and Seattle applauds.

Seattle's morgues are meanwhile overflowing with dead bodies, due to fentanyl overdoses.

Due to the record number of fentanyl overdose deaths in King County, Washington, the medical examiner is running out of places to store the dead bodies.

Seattle-King County Public Health Director Dr. Faisal Khan said during a recent Board of Health meeting, "The Medical Examiner's Office is now struggling with the issue of storing bodies because the fentanyl-related death toll continues to climb. Obviously, they have finite space in the coolers they use and that space is now being exceeded on a regular basis."

DC Mayor Muriel Bowser is warning Biden that DC may be the next city to die. She's telling Biden to order the federal workforce back to their offices, because DC is a ghost-town and local businesses cannot survive without the expected foot-traffic of hundreds of thousands of people coming into their offices every day to work.

She may even support a Republican bill forcing federal workers back to work.

Part of that pretense involves keeping federal employees on remote work, even with 92% of the adult population now vaccinated against COVID-19. Even though it makes no sense to keep offices closed, Biden and his administration refuse to order a return to them. Heck, Kevin McCarthy only this week reversed the rule that allowed proxy voting in the House of Representatives for the last two sessions, a rule that Nancy Pelosi refused to reverse for no good reason other than providing an excuse for continued emergency rule.

If Biden and his team force employees back to work, then that ends their pretense of a continuing "emergency." It will undermine their arguments in court for the mandates that never should have been issued in the first place, and are simply absurd in 2023. It also creates a confrontation between the White House and its civil-service corps, a rather large group of voters concentrated in the DC-northern Virginia area that have become critical for Democrats in keeping Virginia blue, just in time for a presidential election.

And now New York City has decided to accelerate the de-peopling of the cities, by all but ending the selective school system, which was the one thing keeping the prosperous middle class located in New York, and paying to keep the city's lights on.

Last year, I noted that New York was threatening to destroy its magnet school program. Magnet schools are competitive schools where only higher-performing students are permitted in.

These are extremely important, because they're the only thing keeping high-income but not super-rich families in New York. The cost of private schools in New York ranges from expensive to so expensive that only actual multimillionaires can afford it.

So it's vital to have a functioning public school system in New York City. New York's main public school system is dysfunctional and terrible, but as long as the city kept its magnet schools open so that the propserous middle class had a free schooling option for their academically-gifted kids, it made living in New York with a family possible.

(Even if all of your kids couldn't get into a magnet school, it's still helpful to the family budget if you only have to, say, pay for expensive private schooling for one of your three kids.)

The left wanted to destroy the magnet school system, claiming it was "racist" because blacks and Hispanics were underrepresented in these competitive-entry schools.

I didn't think New York would really destroy the system. I thought they'd realize "We're about to tell the fat middle of our tax base, the prosperous upper-middle class, that they cannot raise families in New York, and should flee the city."

But they have.

And the prosperous middle class is now in fact fleeing.

Alex Shilkrut has deep roots in Manhattan, where he has lived for 16 years, works as a physician, and sends his daughter to a public elementary school for gifted students in coveted District 2.

It's a good life. But Shilkrut regretfully says he may leave the city, as well as a job he likes in a Manhattan hospital, because of sweeping changes in October that ended selective admissions in most New York City middle schools.

These merit-based schools, which screened for students who met their high standards, will permanently switch to a lottery for admissions that will almost certainly enroll more blacks and Latinos in the pursuit of racial integration.

Shilkrut is one of many parents who are dismayed by the city's dismantling of competitive education. He says he values diversity but is concerned that the expectation that academic rigor will be scaled back to accommodate a broad range of students in a lottery is what's driving him and other parents to seek alternatives.

Although it's too early to know how many students might leave the school system due to the enrollment changes, some parents say they may opt for private education at $50,000 a year and others plan to uproot their lives for the suburbs despite the burdens of such moves.

"We will very likely leave the public schools," says Shilkrut, adding that he knows 10 Manhattan families who also plan to depart. "And if these policies continue, there won't be many middle- and upper middle-class families left in the public schools."

Covid -- and I'm sure the Summer of St. Floyd -- accelerated this trend towards Harrison Bergeronism.

The retreat from selective middle schools in New York City gained momentum during the pandemic. Prior to COVID, almost 200 of the city's middle schools, or nearly half the total, used enrollment screens, typically grades and test scores, to select high achievers.

Whites and Asians won a disproportionate number of seats in these competitive schools, creating a form of segregation based on academic performance. For instance, at Salk School of Science, a junior high in District 2, these groups accounted for three-fourths of the enrollment, with blacks and Latinos taking less than a quarter of the seats even though they make up two-thirds of all students in NYC's system.

As the schools emptied out due to covid, some schools stopped imposing entrance requirements just to fill the schools with bodies.

And then some began agitating that this system of No Standards, No Selectivity should continue as the model going forward.


One District 2 mom, who taught in city public schools for six years, says she and her husband have already bought a house in Riverside, Conn., where schools provide accelerated education. They plan to move there if they can't afford a private school in the city.

"It's 100% certain that our children won't go to an unscreened school," says the mother, who asked not to be named because she has two kids in public elementary school. "It's heartbreaking because I grew up in the city and went to public schools. But the standards are falling now."

New York has already faced crippling losses in school population -- 10% of all students who left during covid never came back.

The drop-off accelerated in this and other cities nationwide during the pandemic. Many parents left after seeing the harm done to their children by remote learning when teachers, backed by their union, refused to return to the classroom. Families of all races, particularly blacks, and all income levels exited public schools for charters, homeschools, and mostly for an education outside New York City in New Jersey and in southern states like Florida.

By 2022, the city's schools were down to about 900,000 students, a remarkable 10% drop from two years earlier.

Nothing is more dangerous to the city's schools than the loss of students. State funding is based on head count, and the decline already forced Mayor Eric Adams to cut more than $200 million from the education budget this summer.

And now the City is telling another 10-20% of parents: Take your children somewhere safe.

"I have no doubt that some parents in areas like the Upper East Side will leave the city because of the elimination of screens," says Ray Domanico, a longtime researcher of the city's school enrollment both within the system and now at the conservative Manhattan Institute. "With significantly fewer kids enrolled today, the city shouldn't be pushing policies that could drive more families away."

The article points out that selective schools were enacted in the first place in the 90s to induce parents to stop abandoning the city to move to suburbs with better schools.

And now they've decided to tell the parents they stopped from abandoning the city, "You should now definitely abandon the city."

Selective middle schools were created decades ago to keep middle-class families in the city as crime was pushing them to the suburbs in large numbers. By the 1990s, as the soaring murder rate began to recede and more people moved into less inhabited areas of District 2, parents began to demand better schools, Domanico says.

"The school system chose to respond to those families by setting up screened schools," he says. "The city wanted to appeal to better-educated parents of all racial groups who had good jobs."

In District 2, officials rolled out screened middle and high schools that quickly gained a reputation for excellence, including the Salk School of Science on East 20th Street in 1995.

The schools helped lure white and Asian families to the district. In the following two decades, the number of white students in the district rose to 26% in 2020, up from 19% in 2003, according to state enrollment data. More Asian students enrolled in the district too, bringing their total to 22%, while the number of black students fell to 14% from 22%. Latinos, the largest group, declined as well.

You can't f*ck with someone's kids. You can f*ck with a lot of things in their lives, and they'll put up with it -- but when you f*ck with their children, you're crossing a line.

Urban doom loop, here we come.

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posted by Lamont the Big Dummy at 05:00 PM

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