Reimagining Cities-Disrupting the Urban Doom Loop

allowing for the private sector takeover of parks like Central Park and Bryant Park. The virtuous spiral had returned after 30 years of decline, coinciding with the national rise in demand for walkable urban development. This Virtuous Spiral can be seen in the data. Manhattan’s population increased by 8% in the last 17 years of the 20th century, regaining all the residents lost during the 1970s. 37 New York City’s multifamily housing entered the new century with a sub-2% vacancy and rental premiums 45% higher than the surrounding suburbs. 38 Additionally, office demand surged, with 36.9 msf of absorption from 1995-2000, second only to Silicon Valley. This demand drove up Manhattan office rental rates by 45% in the late 1990s. Overcoming an Episodic Doom Loop: Manhattan’s Financial District After September 11 At the turn of the century, Manhattan was just picking up steam as the economy recovered and the structural doom loop of the late 20th century receded, fueled by pent-up demand for walkable urbanism. Popular TV shows like “Seinfeld,” “Sex and the City,” and “Friends” showcased Manhattan, reflecting and driving new consumer desires for walkable urbanism and city living.

The economy did fall into a Dot-Com bubble induced recession starting in late 2000, but Manhattan remained a desirable place to live, work and play into 2001. Then, the largest terrorist attack in U.S. history occurred on September 11, destroying the Twin Towers— two of the five tallest buildings in the world— and five other buildings in the World Trade Center complex. The attack resulted in the loss of 2,606 lives and destroyed nearly 12.9 msf of office, hotel and retail space in the World Trade Center complex, and an additional 9.8 msf of space nearby. 39 Many media stories sparked fears that Manhattan might revert to the late 20th century doom loop. However, the public’s determination to “not let the terrorists win” and the market desire for walkable urbanism led to an even stronger market rebound over the next seven years, until the Great Financial Crisis in 2008. Despite the devastating terrorist attack and significant loss of life and property, Manhattan’s boom in walkable urbanism continued . Lower Manhattan might serve as a model for encouraging mixed uses. After September 11, many newly vacant office buildings were converted into residential buildings. Both the city and state encouraged these conversions by streamlining zoning and permitting processes and providing tax incentives. 40 Overcoming a Structural Doom Loop: Detroit Up to the 1950s, the city of Detroit was booming with Drivable Sub-urban development. The skyrocketing popularity of automobiles, made by local auto factory workers, bolstered the city’s revenues and population growth. As the headquarters of the auto industry, Detroit experienced the rise of Drivable Sub-urban development (both in the city and suburbs) years before it became standard nationwide. However, from the 1970s until the end of the 20th century, Detroit faced significant challenges. Most auto plants closed or moved to the suburbs, many middle-class

37 U.S. Census Bureau 38 CoStar 39 Joseph J. Salvo, Arun Peter Lobo, and Joel A. Alvarez Population Division, New York City Department of City Planning. A Pre- and Post-9/11 Look (2000 2005) at Lower Manhattan 40 Mischke, Jan, Ryan Luby, Brian Vickery, Lola Woetzel, Olivia White, Aditya Sanghvi, Jinnie Rhee, Anna Fu, Rob Palter, Andre Dua, and Sven Smit. “Empty spaces and hybrid places: The pandemic’s lasting impact on real estate.” McKinsey Global Institute, 2023.

24 Cushman & Wakefield