To paraphrase the misquotation attributed to Mark Twain, "The rumors of my death have been greatly exaggerated." The narratives about the death of American cities which are being pushed by conservative media are similarly colored by exaggeration and hyperbole.
In order to understand why New York City and other major American cities will rebound from the pandemic and the ensuing financial crisis, let's consider an affluent historical city that actually did get abandoned. And then let's consider why this is emphatically not a parallel to what's happening today in places like Boston, Chicago, New York City, and Portland.
That city was Petra, in Jordan. You've doubtless seen it Instagrammed countless times. It is breathtakingly picturesque – not just as a ruin, but for the concept of classical buildings carved into the massive rocky outcroppings of the desert. The Greeks demonstrated the elegance of buildings constructed piece-by-piece of marble; the Nabataeans who built Petra around the 3rd century BCE took this a step further by constructing classical buildings directly into the rock itself. It was labor intensive, and another way of demonstrating their city's wealth to visiting traders.
It was a fabulously wealthy city, and they demonstrated their wealth by clever engineering of aqueducts, rainwater basins, cisterns, and plumbing which allowed them to lavishly use water in the midst of a desert. We see Petra today as a monochrome city of red rock. In its heyday, it would have been lush and green – colored with hanging gardens, fountains, and pools.
Petra's location or geography did not make it inherently wealthy. The area did not have particularly rich soil or mineral wealth. Instead, its location at the nexus of trade routes made it particularly significant - and in that way it was quite similar to New York City itself. It was a thriving marketplace for good and services, and no doubt for ideas as well. Those from surrounding areas would no doubt aspire to become traders, to live in Petra, and to enjoy the life and opportunities it offered.
Two events led to its abandonment. First, the trade routes shifted – whether this was a policy change under the Romans, or a reflection of different products, or perhaps the discovery of a shorter route across the desert – favoring the town of Palmyra. That town began to grow affluent as Petra's activity declined. Second, an earthquake in 363 CE destroyed parts of the aqueducts and the town itself. The aqueducts were vital to the Petra's survival. It survived for another three hundred years, although in a much diminished form, until it was finally abandoned in the 7th century.
In contemporary terms, Petra faced similar challenges as a Rust Belt town where the factories and mills had long since closed after the owners had moved production offshore. The driver of the town's affluence had shifted. Change might have been possible, except for the earthquake which destroyed much of Petra's aqueduct. Without a steady supply of water – or the resources to repair the expensive aqueduct network – Petra was no longer viable as a settlement. It could be argued that the earthquake did more to hasten the abandonment of Petra than the shift in trade routes.
Despite well-publicized narratives to the contrary, New York City is not experiencing anything even remotely parallel to this. Pundits – and a number of equity research analysts – argued that 'tech was over' after the devastating market correction which began around April 2000. Twenty years later, the most valuable companies in the world are tech companies that were merely rounding errors at the time.
The pandemic has shown us that remote work had long been feasible. Will remote work continue after a vaccine and treatment are broadly introduced? Possibly, but not absolutely. If anything, higher-level workers – and ambitious mid-level ones – may choose to go to a smaller office for the networking opportunities. Or perhaps mid-level work will be continue to be done from home. Or perhaps there will be some public relations campaigns that encourage people to return to their offices. (Truly, who would have thought that we'd be rhapsodizing about the office, when most of the sitcoms about work focused on the tedium of being in a fluorescent-lit open-office hellscape. But I digress.)
Perhaps some offices will be converted into residences. This happened before, after the 1987 market crash and the pundits were saying that Wall Street was dead forever. It wasn't, of course. But many offices were converted into residences. This city always seems to find a way through challenges, preferably by applying opportunistic investment principles to the problem at hand.
If anything, the real challenge to New York City's ongoing survival and quality of life is the one that has not been mentioned: climate change. Manhattan is an island that has been expanded by landfill, and that landfill sinks over time, making vast low-lying sections of the island susceptible to horizontal flooding from storm surges and rising sea levels.
That, if anything, would be the parallel to the earthquake which put the proverbial nail in the coffin of the city of Petra.
For market commentary or for data regarding a story, please contact us at (917) 447-8800.
© 2012-2017 NeighborhoodX Corp. All rights reserved.
All information regarding property for sale, rental, exchange, or financing, as well as data regarding neighborhoods, boundaries, zoning, transit, historic districts, public housing, and analytics derived from any of these sources, is from sources deemed reliable but is subject to errors, omissions, changes in price, prior sale, rental, or withdrawal without notice. Please see Terms of Service for additional restrictions.
All square footage dimensions are approximate. For exact dimensions, you must retain the services of an architect or engineer. The number of rooms and bedrooms listed should not be considered a legal conclusion. Each person should consult with his/her own attorney, architect or zoning expert to make a determination as to the number of rooms in the unit that may be legally used as a bedroom. Nothing herein shall constitute an offer or solicitation with respect to the purchase or sale of any property in any jurisdiction in which such offer or solicitation is not authorized or to any person to whom it would be unlawful to make an offer or solicitation.
A trademark can be a word, phrase, symbol, or design that distinguishes the source of the goods or services.
The NeighborhoodX name and logo are registered trademarks of NeighborhoodX Corp.
The following is a non-exhaustive list of NeighborhoodX's trademarks and service marks. The absence of a trademark from this list does not constitute a waiver of NeighborhoodX's trademark or other intellectual property rights concerning that name or logo.
A SALE OF TWO CITIES
HOMES IN THE RANGE
REAL ESTATE REGRETS