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CNBC – The “Urban Doom Loop”

  |   By Polling+ Staff

NEW YORK, NEW YORK - SEPTEMBER 05: The New York City skyline is seen during sunset on Day Nine of the 2023 US Open at the USTA Billie Jean King National Tennis Center on September 05, 2023 in the Flushing neighborhood of the Queens borough of New York City. (Photo by Al Bello/Getty Images)

No kidding!

CNBC headlines what certainly appears obvious: https://www.cnbc.com/2023/10/06/the-urban-doom-loop-threatening-cities-like-new-york-and-san-francisco.html

The ‘urban doom loop’ threatening American cities like New York and San Francisco, explained

CNBC reports:

“Major American cities such as New York and San Francisco face serious problems — mass migration, empty offices and declining tax revenues.

“Because cities have to balance their budget, they now need to cut spending,” said Stijn Van Nieuwerburgh, professor of real estate at Columbia Business School, who studies the long-term effects of COVID-19 policies. “That means less money—for public safety, for sanitation, for transportation, for education—makes the city a less attractive place to live.”

At the height of the Covid-19 pandemic, remote work policies prompted employees to relocate to different states and many businesses to cut back on leases. These trends have had a direct impact on cities, which rely on tax revenues for funding, a significant portion from commercial real estate. Van Nieuwerburgh has defined this cycle of spillover effects as the ‘urban doom loop.’ 

From San Francisco to New York, cities across America are dealing with the budgetary consequences of vacant commercial office buildings. And regional banks, which hold a lot of commercial real estate debt, now face a credit crunch.”

The Covid related office vacancies are not the fault of liberal run cities. But as was vividly illustrated the other day when Texas Congressman Henry Cuellar was the target of a carjacking a couple blocks from the Capital, the crime problem in these cities is serious.

The real problem here is liberal policies – Sanctuary cities, defund the police, teachers unions with vise-like grip on the education system and more.

So the results of Covid on real estate problems in these big cities are real. But there is much more going on these cities than that.

Oh so much more.