American Cities on Life Support: Will They Survive?

In the aftermath of COVID-19, George Floyd, the protests, the riots, etc., America’s greatest cities are on life support. Will they survive?

Below please find the following:

First, a podcast that was recorded after the publishing of the blog that follows, and

Second, the blog post upon which the podcast was based.

We hope you enjoy both!


A Mentor to Phew

My nephew – Brendon Lemon, the “Phew” in Uncphew – works in New York City.

One of the first people he connected with in NYC – several years before moving there, in fact – was a man named James Altucher.

James, among many other things, is an entrepreneur, an angel investor, a blogger and a podcaster.

Oh, and a chess master.

That’s James in the image below.

He’s also the co-owner of a comedy club based in Manhattan — Stand Up NY — whose stage has been graced by the likes of Jim Gaffigan, Tracy Morgan, Jerry Seinfeld and many other renowned comedians.

Because of their connection, Brendon has appeared on James’ podcast several times.

In fact, it was on one of Brendon’s appearances on one of those podcasts that James challenged Brendon to write the first book Brendon ended up publishing, a work entitled The Stoic Salesperson.

Brendon has such respect for James, and we’ve discussed him so many times, that I almost feel like I know James, at least on some small level.

James has been a friend and a mentor to my nephew for several years, and I greatly appreciate all that he has done for Brendon.

A Hardcore New Yorker Wrote This?

So, when I stumbled across a blog post written by Altucher – titled NYC is Dead Forever… Here’s Why, which a number of my friends had posted randomly on Facebook a few days ago – that instantly caught my attention.

And when I dove in, I was surprised at what I found. Here is the intro to that blog:

I love NYC. When I first moved to NYC, it was a dream come true. Every corner was like a theater production happening right in front of me. So much personality, so many stories.

Every subculture I loved was in NYC. I could play chess all day and night. I could go to comedy clubs. I could start any type of business. I could meet people. I had family, friends, opportunities. No matter what happened to me, NYC was a net I could fall back on and bounce back up.

Now it’s completely dead.

“But NYC always always bounces back.” No. Not this time.

“But NYC is the center of the financial universe. Opportunities will flourish here again.” Not this time.

“NYC has experienced worse.” No it hasn’t.

A Facebook group formed a few weeks ago that was for people who were planning a move and wanted others to talk to and ask advice from. Within two or three days it had about 10,000 members.

Every day I see more and more posts, “I’ve been in NYC forever but I guess this time I have to say goodbye.” Every single day I see those posts. I’ve been screenshotting them for my scrapbook.

A little later in the blog, James wrote this:

In early March, many people (not me), left NYC when they felt it would provide safety from the virus and they no longer needed to go to work and all the restaurants were closed. People figured, “I’ll get out for a month or two and then come back.”

They are all still gone.

And then in June, during rioting and looting, a second wave of NYCers (this time including me) left. I have kids. Nothing was wrong with the protests but I was a little nervous when I saw videos of rioters after curfew trying to break into my building.

Many people left temporarily but there were also people leaving permanently. Friends of mine moved to Nashville, Miami, Austin, Denver, Salt Lake City, Dallas, etc.

Now a third wave of people is leaving. But they might be too late. Prices are down 30–50% on both rentals and sales no matter what real estate people tell you. And rentals are soaring in the second- and third-tier cities.

Powerful Impact

Knowing what I already knew about James from Brendon – that he is a hardcore New Yorker and a massive supporter and lover of the city – his words hit me hard.

Really hard.

If this guy thinks NYC is truly in trouble, there must be something to it.

Even more jarring, later in the post, Altucher mentions that he recently relocated to South Florida, into a home he saw for the first time the day he moved into it.

Not only is he saying the city is in trouble, but he feels so strongly about this that he actually moved. Wow… 

That spoke volumes to me.

And Altachur’s post apparently impacted others as well.

Talk show host Glenn Beck read Altucher’s entire post on his show on August 18.

Beck opened the following video with, “So it’s really rare that I will read a full article on the air… ” and he then proceeds to do exactly that.

Love him or hate him, that a pundit of Beck’s status would do that – read Altucher’s entire post on air – made me realize just how much that post was impacting people.

Motivated to Do My Own Research

Altucher’s blog is what motivated me to write this post.

More specifically, Altucher’s blog is what motivated me to do the research that I ended up doing, to either confirm or not confirm his point of view.

Even though I was inclined to believe Altucher – because of his obvious candor, and the fact that he has so many reasons not to say what he said in his blog – I still wanted to see what I could find on my own, as there was a part of me that felt Altucher may have been overreacting given how close he is to the situation.

I wrote this post to summarize my findings, and my take on those findings.

So, let’s start with the obvious first question: Are people really leaving America’s largest cities?

Are People Really Leaving?

The short answer to that question is yes.

And the reality is that an exodus out of major American cities was already happening even before all the events of 2020.

Now – in the aftermath of COVID-19, George Floyd, the protests, the riots, the spike in crime, etc. – that exodus has accelerated significantly.

And this fleeing of the masses is taking a major, devastating toll on a number of major American cities.

Based on what I’ve learned, it is my belief that some of these cities – New York, San Francisco, and perhaps others – will not recover for years, or perhaps even decades.

Or – maybe, as Altucher said explicitly about his beloved New York City – they will never recover.

The Exodus is Real, and Already Well Underway

That people are leaving major cities in large numbers is not a theory.

It’s real, and it’s already well underway (emphasis added here, and throughout):


Nearly a third of Americans are considering moving to less densely populated areas in the wake of the pandemic, according to new data from Harris Poll. 

Per an article in the New York Times entitled America’s Biggest Cities Were Already Losing Their Allure. What Happens Next?:”

The pandemic has been particularly devastating to America’s biggest cities, as the virus has found fertile ground in the density that is otherwise prized. And it comes as the country’s major urban centers were already losing their appeal for many Americans, as skyrocketing rents and changes in the labor market have pushed the country’s youngest adults to suburbs and smaller cities often far from the coasts.

The country’s three largest metropolitan areas, New York, Los Angeles and Chicago, all lost population in the past several years…

Now, as local leaders contemplate how to reopen, the future of life in America’s biggest, most dense cities is unclear. … And with vast numbers of professionals now working remotely, some may reconsider whether they need to live in the middle of a big city after all.

What was New York is gone,” said Josh Dorf, a businessman who lives in Tribeca. “When I go outside here, it’s like a movie set downtown here. It’s empty and boarded up.”

Per the

A record 27 per cent of Redfin users are looking to move to other metro areas.

New York City was listed as the top metro area with largest net outflow, or number of people moving out, in the second quarter of 2020, with 35.2 percent of Redfin users looking to move out of the area…

San Francisco, home to the country’s tech hub, came second on the list, with 22.7 percent of users wanting to leave the city…

The metro area with the third largest outflow was Los Angeles, where 16 percent of Redfin users were searching for homes outside of the city…

A survey conducted by anonymous professionals group Blind found 69 per cent of New Yorkers in the tech and finance field said they would consider relocating if they knew they could work from home permanently.  

Per an article on entitled “New York, San Francisco may not rebound after pandemic exodus, other factors:

Residents in major U.S. cities like New York and San Francisco have started to leave in droves due to various factors, including the lack of jobs during the coronavirus pandemic, technology and a potential increase in violent crime, according to a column posted on Monday.

Apartment rent prices have already decreased significantly in certain areas. Data collected from Zumper determined that rent prices have fallen by 7.4 percent in Seattle, 11.1 percent in San Francisco, and 6.9 percent in New York City, since the same period last year.

Per an article on entitled “The great exodus out of America’s blue cities:”

And make no mistake: What’s happening in the Big Apple is a microcosm of what’s happening in the nation’s blue states, cities and towns. New York, Los Angeles, Chicago — the places where power and capital have traditionally congregated — have become so over-regulated, so overpriced and mismanaged, and so morally bankrupt and soft on crime that people are leaving in droves.

Per another article on entitled “Americans leave large cities for suburban areas and rural towns:”

A combination of the coronavirus pandemic, economic uncertainty, and social unrest is prompting waves of Americans to move from large cities and permanently relocate to more sparsely populated areas. The trend has been accelerated by technology and shifting attitudes that make it easier than ever to work remotely. Citizens of all ages and incomes are moving in record numbers to suburban areas and small towns.

A perfect storm of factors makes the decision to leave major cities like New York very obvious. … The city that never sleeps now resembles a ghost town in many areas after thousands of its wealthy and middle class residents fled early in the pandemic. … An estimated quarter of a million New York residents will move upstate for good, while another two million could permanently move out of the state.

When the allure of cities declines further thanks to the risk of disease, a crashing economy, and a future of telework, the flight to suburban and rural safety will continue well after a coronavirus vaccine hits the market.

Quoting from entitled “Time to Get Out of Dodge: Migration to the Suburbs:”

I want to discuss some of the permanent changes that the national economy is going through. It has to do with what you might call the Great American Exodus. There’s a massive migration out of the big cities. Millions of Americans are fleeing the cities for the suburbs or the country from coast to coast. There’s hard data to support that claim.

Quoting from Altucher’s blog again:

Businesses are remote and they aren’t returning to the office. And it’s a death spiral — the longer offices remain empty, the longer they will remain empty. In 2005, a hedge fund manager was visiting my office and said, “In Manhattan you practically trip over opportunities in the street.” Now the streets are empty.

The video below, posted on August 16, 2020 by James Woods, lends credence to that last quote…

Reasons Why American Cities Are On Life Support

All that said in terms of the reality of the exodus from some of America’s largest urban areas, here are the reasons I believe America’s greatest cities are on life support, and why their very survival hangs in the balance…

There Are Significantly Fewer Jobs in Major Cities

As everyone knows at this point, the pandemic has pushed in excess of 40 to 50 million people into unemployment.

Given that so many people live in major cities specifically because of employment factors – that’s where the jobs are/were – it stands to reason that there are now far fewer jobs based in major cities.

In fact, relatively speaking, things may actually be even worse than that.

A Second Great Depression?

Per an article on entitle “A second Great Depression? Unemployment crisis hits big cities hard:”

Great Depression levels of unemployment have hit some of the country’s biggest cities.

The coronavirus pandemic has pushed the jobless rate in New York, Los Angeles and other major urban areas to near or above 20%, nearly twice the national rate.

Per an article on entitled “New York, San Francisco may not rebound after pandemic exodus, other factors:

Large cities were already hurting before the pandemic. Now, statistics from Indeed, an employment-related search engine, have shown that major U.S. metropolitan areas have seen a greater rise in unemployment and a larger percentage of job loss compared to smaller metros

Data from Indeed found that job postings in New York City over the past year have decreased by 36.4 percent, while San Francisco and Portland have seen their postings plunge by 38.5 and 33.5 percent, respectively.

Per a article entitled “New York and San Francisco Can’t Assume They’ll Bounce Back:”

Big cities are taking a big hit from the coronavirus pandemic. Statistics from employment search giant Indeed show that major U.S. metropolitan areas have lost a larger percentage of jobs, and have experienced greater rises in unemployment, than smaller metros. Especially hard-hit have been so-called superstar cities such as San Francisco, New York and Seattle.

Housing markets tell the same story. Rents in superstar cities have plunged, often by double-digit percentages. This is due in part to the reduced ability of residents to pay, but also because of wealthy people fleeing cities like San Francisco and Manhattan for (literally) greener pastures.

If the jobs lost during the pandemic don’t come back, that could be devastating for major urban centers.

Jobs Determine Population Size

What’s potentially most troubling about this is that “job count” in any given market correlates so proportionally and so directly with “population size.”

Basically everything hangs on population size, and “number of quality local jobs” is the number one predictor of population size.

And “population size” is what drives everything else in terms of a local economy: the number of restaurants, bars, shops, stores and malls that can be supported, the number, types and sizes of public transportation options required, the tax base needed to fund the operations of a given city, etc.

Minimum Critical Mass

Further, another factor directly related to this is what I will call “minimum critical mass.”

What I mean by that is that, without a certain minimum number of people living and working within a given metropolitan area, that metro area simply cannot sustain itself economically.

If a major urban center falls below that critical mass, and it does not recover fast enough, people will ultimately be forced to look elsewhere for employment.

And once that cycle repeats enough times, it stands to reason that urban center may never recover.

Altucher’s Death Spiral

That is the “death spiral” Altucher referenced earlier.

Not only that, but there is a psychological factor here as well; I don’t think people will be able to survive mentally in a major urban setting if literally half of everything is shut down or boarded up or sitting empty.

Think Will Smith in the movie I Am Legend (minus the zombies of course).

That’s exaggeration, of course, but I can’t think of too many things that are creepier or eerier than a major city operating well under normal capacity.

Or worse.

So, if jobs don’t come back to a given major urban market quickly enough and in large enough numbers, it is not hyperbole to suggest that such a city may not survive.

Tech Advances Have Made Working Remotely An Option for Most

At least one good thing has resulted from the pandemic: due to the lockdowns that prevented people from traveling to their places of employment, the physical distancing requirements, etc., many employers were forced to put to the test the theory that technology could make working from anywhere a viable option for most businesses.

Theory Put to the Test: It Worked

And many, or perhaps even most, discovered that that theory proved correct.

This has led many to the realization that people simply don’t need to work in a major city – or, really, need to work anywhere in particular – when tools like Zoom, and Skype, and Slack, etc., are available to bridge the physical proximity gap.

And while, in a vacuum, that IS a good thing, within the context we’re discussing – the future prospects of America’s largest cities – that’s a bad thing.

And – maybe – a very bad thing.

Quoting from

Before the pandemic, the research group Global Workplace Analytics estimated that just 3.6% of the US workforce worked at home at least half the time. But the group recently predicted that 30% of the workforce will work from home multiple days a week by the end of 2021. That means employees may not need to live in the city where their company is headquartered.

Per a article entitled “New York and San Francisco Can’t Assume They’ll Bounce Back:”

if offices can be replaced with Zoom and Slack, much of the reason for cities to exist will evaporate. …by forcing knowledge industries to go remote, may force companies, workers and financiers to realize that telework tools have reached a critical level of effectiveness

Quoting from an article on entitled “So long, New York: pandemic and protests spark new exodus to the suburbs:”

Demand for suburban property, especially those with extra rooms or home offices, comes as a survey by the Seattle-based Zillow found that 75% of Americans that have been working from home due to coronavirus would prefer to telecommute at least half of the time once the pandemic subsides, and 66% said they would consider moving if their job allowed them to continue telecommuting.

A separate survey produced by Redfin found that 50% of respondents in cities like New York, Boston, San Francisco and Seattle said they would consider moving out of the city if remote working becomes permanent.

Per another article:

More than a decade ago, back in 2010, the U.S. Census Bureau reported that some 7% of U.S. workers worked largely out of their homes, and that 10% or so worked from home one day a week. Today, roughly 40% of jobs can be done remotely.

Not only do a significant number of workers prefer working from home, corporations will benefit from the cost savings that come from consuming less office space.

The ability to work remotely enables a larger number of people to move from expensive coastal cities to more affordable cities and metropolitan areas across the country.

As you can see from those quotes, there is a huge, pent up population of people who have indicated they would consider moving if working remotely becomes an option for them, and the number of jobs that can be performed remotely is increasing dramatically with each passing year.

The “X” factor that is going to blow that door wide open?

I’ll let Altucher explain…

AB: After Bandwidth

Quoting from Altucher’s blog again:


Yes it does. I lived three blocks from Ground Zero on 9/11. Downtown, where I lived, was destroyed, but it came roaring back within two years. Such sadness and hardship and then quickly that area became the most attractive area in New York.

And in 2008/2009, there was much suffering during the Great Recession, again much hardship, but things came roaring back.

But… this time is different. You’re never supposed to say that but this time it’s true. If you believe this time is no different, that NYC is resilient, I hope you’re right.

I don’t benefit from saying any of this. I love NYC. I was born there. I’ve lived there forever. I STILL live there. I love everything about NYC. I want 2019 back.

But this time is different.

One reason: Bandwidth.

In 2008, average bandwidth speeds were 3 megabits per second. That’s not enough for a Zoom meeting with reliable video quality. Now, it’s over 20 megabits per second. That’s more than enough for high-quality video.

There’s a before and after. BEFORE: No remote work. AFTER: Everyone can work remotely.

The difference: bandwidth got faster. And that’s basically it. People have left New York City and have moved completely into virtual worlds. The Time-Life Building doesn’t need to fill up again. Wall Street can now stretch across every street instead of just being one building in Manhattan.

We are officially AB: After Bandwidth. And for the entire history of NYC (the world) until now, we were BB: Before Bandwidth.

Remote learning, remote meetings, remote offices, remote performance, remote everything.

That’s what is different.

I really have nothing to add to what Altucher said.

He is spot on: we are now officially AB, and that changes everything in terms of working remotely.

A Perfect Convergence of Factors

Putting this all together, if businesses have learned that it is possible for their people to work remotely – which they have – and if companies make more profits by working remotely – which they do – and if people prefer working remotely – which many seem to – and if all the trends suggest that more and more jobs will be able to be done remotely in the future – which they do – then what would compel any business to go back to the old way of doing things, with physical offices in major cities?

Particularly when so many of those businesses – the ones fortunate enough to have survived the pandemic so far – are now operating with significantly reduced levels of revenue and profitability?

And – again, to echo Altucher – the longer businesses stay away from major urban areas, the less likely they will be to ever return.

And the death spiral of major cities only intensifies with each passing day, week and month…

Basics of City Living Can No Longer Be Assumed

Why do people love living in cities in the first place?

There are many reasons, of course, but if I had to put together a list (after “quality jobs,” which would probably be number one on my list), it would consist of culture (shopping, entertainment, theater, restaurants, pro sports, etc.), infrastructure (highways, roads, public transportation, etc.) and city services (sanitation, police, fire departments, etc.).

America’s largest cities have been devastated on all three of these fronts.

Shutdowns Decimate Culture

Beyond what’s already been said here in terms of closures, I’m not going to support this one further.

The number of shops, restaurants, theaters and sporting venues in major cities that have been bankrupted, closed, shuttered or severely impaired in response to COVID-19 is incalculable.

Scroll back up and watch that video posted by James Woods again if you need a reminder as to how bad things really are.

Personally, the other day I stumbled across a list of all the businesses that have closed in my home state of Michigan in recent weeks and months.

I literally never finished scrolling, the list was so long.

And most of those businesses were bars, restaurants, gyms, yoga studios, specialty shops, etc.

Ergo, culture.

And while it is true that “culture” has been impaired everywhere, I think it is precisely the concentration of culture that attracts many to major cities.

Remove that concentration of culture from any major city, and you remove a major attraction for many people.

Consider this: what is New York City without culture?

Or San Francisco without culture?

I don’t know the answer to those questions.

I just know that my desire to travel to those places – let alone live in them – correlates fairly directly with the quantity and quality of the culture I’m expecting to find there.

Sharply Declining Revenues Impair Ability to Fund City Services

In order to provide infrastructure and city services, you have to have the money to pay for those things.

And if a city is bleeding both jobs and people, it stands to reason that is must also be hemorrhaging the tax revenues that those lost jobs and lost people once provided.

Per an article in the New York Times entitled America’s Biggest Cities Were Already Losing Their Allure. What Happens Next?:”

In California, Los Angeles County is expected to lose $1 billion in sales tax revenue this fiscal year. And in New York City, where tourism and hotel tax revenue are among the losses, Mayor Bill de Blasio said the city faced a revenue shortfall of up to $10 billion.“We’re not going to be able to provide basic services and actually have a normal society if we don’t get help from the federal government,” he said on CNN last week.

Per another New York Times article entitled “The Recession is About to Slam Cities. Not Just the Blue-State Ones:”

The crisis has arrived faster than the damage from the Great Recession ever did. And it will cut deep in the fiscal year ahead, with many communities likely to lose 10 percent or more of the revenue they would have seen without the pandemic, according to a new analysis. That’s enough for residents to experience short-staffed libraries, strained parks departments and fewer road projects.


New York City was not in a good position to withstand the economic headwinds created by the COVID-19 pandemic. Tourism has disappeared. Broadway has shuttered. Restaurants have been severely curtailed and many have closed.

Here are some of the highlights, or really lowlights, of what the crisis has done to the state’s economic engine:

    • More than 944,000 jobs were lost in March and April. That’s the largest job loss since the Great Depression nearly a century ago. Unemployment has spiked from 3.4 percent in February to 20.4 percent in June. It has never been higher in 44 years.
    • New York City has projected a revenue loss of $9.6 billion from the pandemic. It has taken $11.4 billion from different resources, including $4.1 billion from reserves and $2.6 billion from the Retireee Health Benefits Trust.

Per an article in the New York Times entitled America’s Biggest Cities Were Already Losing Their Allure. What Happens Next?:”

Now, as local leaders contemplate how to reopen, the future of life in America’s biggest, most dense cities is unclear. Mayors are already warning of precipitous drops in tax revenue from joblessness. Public spaces like parks and buses, the central arteries of urban life, have become danger zones.


A recent study by Azurite Consulting, a data research firm, found that 54% of companies in major downtown areas, like New York, Chicago, Los Angeles and San Francisco were considering or planning to move out of the city.

A June survey by FinanceBuzz found one-quarter of Americans who said they considered moving permanently because of COVID-19. In April, a different poll found close to 30% of people said they would move out of densely populated areas after the pandemic was over.

Already, the top 1% of New Yorkers, those who appear to have left the city first, account for more than 40% of the city’s tax revenue.

If city revenue dries up, it could face a “fiscal death spiral,” similar to the 1970s, Hendrix said, with the city providing fewer services, collecting less revenue and worsening conditions driving even more people away.

There’s that term “death spiral” again.

And that is correct: if it’s even remotely accurate that 54% of companies in downtown areas were to move out of major cities, and if anything even close to 30% of people were to move out of densely populated areas after COVID-19 subsides, I don’t see any way those affected cities can survive very long from a purely fiscal perspective.

That’s simply too much incremental tax revenue lost, above and beyond what has already been lost.

And what do governmental entities like cities and states  typically do when they need to increase revenues?

They raise taxes.

And what happens when taxes get too high?

People leave.

And the intensity of the “fiscal death spiral” increases.

Continuing and transitioning into the next points, on the Rubin Report less than two weeks ago, Newt Gingrich said this:

Physical Safety Can No Longer Be Assumed

I don’t think I need to say much here.

Unless you’ve been visiting a different planet for the last few months, you already know all about the wave of violence that has swept Minneapolis, New York, Chicago, Portland, Seattle and many other cities in recent months.

As I write this, Portland is now on day 85 – eighty five! – of nightly protesting and rioting.

And I doubt it’s anywhere near over.

If you’re somehow not aware of what’s going on there, click here and just start watching the mayhem.

Also, I’d recommend you follow a guy named Eric Post on Facebook.

He’s a native of Portland and has been documenting a lot of what’s happening there.

Here’s one of Eric’s random posts about what’s really going on in what I once considered the most beautiful city in America.

That this has been going on for nearly three months, unabated, is absolutely stunning to me.

What impact do you think that has on the desire of a business owner to locate their business in Portland?

Chaos in Major Cities

Can you even imagine being a business owner in Minneapolis, New York, Chicago, Seattle or Portland and watching your business be looted, destroyed or burned to the ground?

Can you imagine calling for help and getting absolutely no response?

For the first time in my life, physical security is no longer a given in many major urban markets in America.

In some places, it’s no longer even implied.

Part of that discussion is political in nature, and I’m going to skip that.

But, even after removing the political factor we’ve seen play out in Seattle, Portland, Chicago, New York and Minneapolis, what happens when there is an erosion in a city’s tax revenues?

As already noted in the prior section, those cities have even less money to pay for basic civil services.

Things like police departments, which are the only things that stand between where we are now and literal anarchy.

Worse yet, what happens when major cities vote to defund or even disband entirely their police departments?

Speaking personally, if I were looking to start a business, the very first thing I would have on my list of “must haves” in terms of choosing a place to locate that business would be “fully-functional and fully-funded police department.”

Massive Spike in Crime Rate

Per an article on entitled “Americans leave large cities for suburban areas and rural towns:”

Social unrest and urban crime rate spikes also raise the possibility of the sharp increase of exits from large cities. A breakdown in order, especially if police are defunded, could further downsize cities rebuilt with law and order approaches. Urban trends of the last 50 years are being reversed.


Violent crime has also soared, with shooting incidents across the city up 177 percent in July compared to last year.

Murders were up 59 percent for the month, burglaries rose 31 percent, and auto thefts increased 53 percent.

The city that never slept is now an eerie ghost town after dark, the empty streets of lower Manhattan punctuated by caravans of NYPD vehicles racing from one incident to the next.

If you want to get some quick perspective on the degree to which lawlessness has spread across America in recent months, watch this video:

Unstable Environments for Business

As if everything said in the prior section wasn’t bad enough, now add into the mix the basic uncertainty of the future.

Damage for Years and Decades to Come


An ongoing mass exodus of residents and businesses from New York City has led some to suggest that the damage to the city’s economy could last for years or decades to come.

There’s no reason to do business in New York,‘ said Michael Weinstein, the chief executive of Ark Restaurants, which owns Bryant Park Grill & Cafe in Manhattan and 19 other restaurants, in an interview with the New York Times. After months of harsh lockdowns and amid soaring violent crime in the city, Weinstein said he will never open another restaurant in New York.

J.C. Penney and Neiman Marcus, the anchor tenants at two of the largest malls in Manhattan, recently filed for bankruptcy and announced that they would shutter those locations.

For four months, the Victoria’s Secret flagship store at Herald Square in Manhattan has been closed and not paying its $937,000 monthly rent. It will be years before retail has even a chance of returning to New York City in its pre-Covid form,’ the retailer’s parent company recently told its landlord in a legal document.

Quoting from Altucher’s blog again:

That said, we (Stand Up NY) have no idea when we will open. Nobody has any idea. And the longer we remain closed, the less chance we will ever reopen profitably.

But the question now is: What happens next? And, given the uncertainty (since there is no known answer), and given the fact that people, cities, economies loathe uncertainty, we simply don’t know the answer and that’s a bad thing for New York City.

Another thing you might not know if you’ve never owned a business is that many (most?) businesses, particularly small businesses, operate on razor-thin margins. Altucher also writes about this:

Before the pandemic, the average restaurant had only 16 days of cash on hand. Some had more (McDonalds), and some had less (the local mom-and-pop Greek diner).

Yelp estimates that 60% of restaurants around the United States have closed. My guess is more than 60% will be closed in New York City but who knows.

When Will It End?

Where I live (Michigan), we’re still not fully open, and our lockdown started in late March.

I am writing this on August 22.

Accordingly, we are three days away from having been shut down, or partially shut down, for five months.

How do you think a business with 16 days of cash in reserve is going to fare in that type of situation?

You may be thinking, “What does this have to do with being in a major city? Couldn’t this same thing happen anywhere?”

And you are right – it could.

Harsher Lockdowns in Urban Settings

But common sense would dictate that the odds of more extreme shutdowns happening vary in proportion to population size and density.

Ergo, if you operate a business that survives on thin profit margins, the last place you’d probably want to start – or re-open – such a business would be in a dense urban environment.

Quoting Altucher once again:

There won’t be business opportunities for years. Businesses move on. People move on. It will be cheaper for businesses to function more remotely and bandwidth is only getting faster.

Major urban environments are inherently more unstable right now.

They just are.

At the risk of sounding like the proverbial broken record, the longer this remains the case, the less likely businesses will be to ever return to those major urban markets.

Real Estate Is Crashing

Given all of the factors detailed above – people fleeing major cities in droves, the significant decline in the number of jobs based in major urban areas, tech advances that have allowed people to work from literally anywhere they have a decent broadband connection, the decimation of the cultural destinations that attract people to major cities, a decline in city services, the spike in the crime rate and the overall instability of proper environments for businesses – it’s a given that real estate would be severely impacted in a very negative way.

And that is exactly what we are seeing.


New York City’s luxury real estate market has been hit hard by the pandemic, with some properties selling for less than half their original asking prices.

In the second quarter, the number of luxury co-op and condo closings in Manhattan was down 54 percent from last year, and the median sales price was down 11 percent, according to Miller Samuel.

The property market plunged amid a mass exodus from the city as thousands fled to escape the misery caused by the coronavirus pandemic which killed hundreds a day at its peak in early April. Though the virus has been wrestled well under control in the city, harsh lockdown rules still stifle many of the pleasures of city life, while unemployment has risen sharply, and violent crime has exploded in the months since late May.

Total closings remained down for the quarter at dramatically lower rates than in the months following the terrorist attacks of September 11, 2001 and the 2008 collapse of Lehman Brothers, the data shows (see chart below).

As you can tell from that graphic, COVID-19 has had a far more dramatic impact on real estate in NYC than either 9/11 or the real estate crash of 2008.

Meanwhile, on the west coast, we’ve seen available real estate inventory explode.

Check out these Zillow stats showing the incredible surge in for-sale housing inventory in San Francisco:

Given all the factors at play, that real estate is being ravaged in major cities is essentially a given.

And that’s just the residential side of real estate.

Can you image how bad things are on the commercial side, with so many businesses going under, filing bankruptcy and ceasing operations in such a short period of time?

To be honest, I didn’t even bother to research that side of the equation, because I already know what I am going to find.

And so do you.

And that is just one more reason why some of America’s most important and iconic cities are on life support.

Concluding Thoughts

Of Course, This Could All Be Wrong

Could all of these predictions prove wrong?

Of course.

Could all of these factors and projections be completely overblown?


That said, there are enough factors here that are unprecedented that things really could could be different this time.

As an example of how quickly things can change, and how the entire paradigm can flip in the blink of any eye, if I had told you six months ago that, just around the corner, the entire country would be shut down by COVID-19, and that tens of millions of people would lose their jobs, would you have believed me?

Especially when, at the very onset, we were told we just needed to “flatten the curve” and that the shutdowns would only last a couple of weeks?

That is to say, until we actually experience the impossible, it of course does not seem possible.

My Biggest Concerns

I do believe that COVID-19 will pass, and that life will return to normal.

What concerns me most is the length of the shutdowns in some major cities, coupled with the move of so many business into virtual/remote working environments.

With respect to the first point, as Altucher said it:

NYC has never been locked down for five months. Not in any pandemic, war, financial crisis, never. In the middle of the polio epidemic, when little kids (including my mother) were becoming paralyzed or dying (my mother ended up with a bad leg), NYC didn’t go through this.

When you shut down major cities for such extended periods of time, people leave.

And many will settle into new locations and that will become their new norm.

And they won’t come back.

And with shutdowns forcing so many businesses into remote, virtual working environments – and with those businesses realizing that that process actually works, and provides incredible cost advantages – I have a hard time believing many of those businesses will go back to more costly, traditional working environments any time soon.

If ever.

As Altucher said it, “What reason will people have to go back to NYC?

I’d add to that: What reason do businesses have to go back to NYC?

Yes, that’s just New York City, but, as goes NYC, so goes America.

Or, at a minimum, as goes NYC, so goes San Francisco, Chicago, Los Angeles and a handful of additional large cities that have experienced the double whammy of COVID-19 and significant social unrest.

I LOVE America’s Greatest Cities

To be clear, I hope and pray that things return to normal quickly, and that every major city recovers ASAP.

I absolutely LOVE NYC.

I worked there for a short time back in the 80s, and loved every second of that experience.

Some of my favorite memories are from there.

I also love San Francisco (or, I used to, before it became what it has now become).

The culture and ambience of that place are like no other.

I love Chicago dearly.

The Windy City, the City of Big Shoulders.

It is a magical place.

And what about Los Angeles, the City of Angels?

The first time I went there, I swore I’d never leave.

When I think of America, the first things I think of are its wonderful urban areas.

Its phenomenal major cities.

America needs its great cities to be great again.

May they all return to their former glories, and may that happen as quickly as possible.

Sadly, for the moment, many are on life support.

Will they survive?

Only time will tell…