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Aon: How The Pandemic Is Accelerating Trends In Urban Space

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Overview

The novel coronavirus (COVID-19) pandemic is changing how we use our city space — and these trends are likely to continue well into the future.

Some of these shifts are already hitting home: New York City’s Empire State Building anticipated just 15 percent to 20 percent of the building’s usual 15,000 worker population returning as the state moved into the second phase of reopening. Across Europe, a cycling boom prompted $1.1 billion in investment in cycling-relatedinfrastructure and the creation of 1,400 miles of new bike lanes. In the U.S., the pandemic — and new freedom to work remotely — is prompting migration to the suburbs and rural areas, outpacing housing supply andraising concerns about growing inequality. Government leaders in Ontario, Canada, called off pre-COVID-19construction plans for a new courthouse to make sure the design reflects today’s changing needs.

As our travel habits change — particularly when it comes to commuting — cities are repurposing their streets to scale back their mass transit and focus on micromobility, pedestrians or outdoor dining.

“The pandemic may accelerate trends that we were already seeing with our cities, and in extraordinary ways,” says Tariq Taherbhai, chief operating officer, Global Construction and Infrastructure at Aon. “We’re going down paths we were already taking, but faster than anyone could have anticipated.”

In Depth

It won’t be the first time a pandemic has reshaped a city. Cholera and other outbreaks prompted major cities such as New York City, London and Paris to build public parks two centuries ago so residents could have a place to exercise in fresh air. As the present-day cycles of lockdowns and physical distancing continue, city parks are seeing visitor numbers soar as those residents lucky enough to have access to a park find a deeper appreciation for greener spaces.

Here is a look at other ways our urban habits are changing.

OUT OF THE URBAN OFFICE?

Many companies may rely on a completely remote, or a mix of on-site and at-home, workforce well into the future — and in some cases permanently.

“Traditionally, gateway cities like New York City, London and San Francisco attracted talent with high-paying jobs in city centers, but some of these jobs are the ones that can be done remotely,” says Prashant Tewari, partner at The Townsend Group, an Aon company.

What becomes of the “downtown office” if most employees work elsewhere?

While the physical office concept may remain, companies will adjust spaces to accommodate the need for physical distancing. “After a prolonged trend of reducing commercial office space per person, we now expect average office space per worker to increase,” says Tewari. “Given the shift to remote work, some employers may scale back their office space requirements to reduce operating costs and prioritize retaining their employees.”

Others may opt to relocate offices, Tewari says.

“High city taxes could mean businesses speed up plans to relocate or add more work-from-home days to minimize local tax liabilities,” Tewari adds. “Demand for office space in desirable live-and-work neighborhoods — and suburban areas — is likely to rise.”

No longer tethered to a physical office location, U.S. workers may continue flocking to cities in the South and Southeast, with lower costs of living and warmer temperatures, accelerating a trend that started pre-pandemic, Tewari says.

There have been predictions about a “working from home” future before: Since the 1980s there have been headlines about telecommuting and the end of the office so the question remains — is today truly different?

“Many organizations will still look to preserve in-person interaction — in office spaces, at industry conferences — for the innovation, collaboration and networking benefits of being in the same space,” says David Bowcott, global director of growth, innovation and insight for Aon’s Global Construction and Infrastructure group.

MICROMOBILITY IS HAVING A MOMENT

The pandemic has prompted many people to choose personal over shared transportation options such as mass transit and ride-sharing to get around.

“Many people are shifting to micromobility, like bikes and scooters, for distances of 1 to 3 miles,” says Jillian Slyfield, Digital Economy practice leader at Aon. “It’s bigger now than it was pre-pandemic, with more rides occurring per day today than at the prior all-time high. It is due partly to physical distancing reasons, but also because with fewer cars on the roads, it feels safer.”

Biking in particular is enjoying a boom in major U.S. and European cities, both for mobility and exercise.

Passenger numbers are down significantly for transit agencies: Canada saw a 75 percent drop in June 2020 compared with 2019. Because of a decrease in the number of people using its networks, Transport for London reported a 90 percent decline in advertising revenues between April 1 and June 27, 2020 — the worst quarter inits 20-year history.

And the slump may affect how governments make infrastructure investments in the near term.

“People are rethinking some of the transit projects that were being considered because transit ridership is down so dramatically,” says Bowcott. “Where you’ll see spending is on roads — people are still driving and will likely [drive] even more so as economies recover.”

REPURPOSING CITY STREETS

Yet with different traffic patterns and the need for more outdoor space, some cities are repurposing how they use street space, notes Slyfield. She says Oakland, Calif., closed down 10 percent of streets for reuse.

“In some cities, restaurants and retail spaces aren’t open for inside seating and shopping so they’re shutting down streets or extending sidewalk space to move operations outside. It’s an interesting shift from an infrastructure perspective. Some of these changes are driven by economics and some of it’s consumer preference,” Slyfield says.

In cities with colder climates such as Chicago, small businesses are getting creative to continue their outdoor operations through the winter — using heaters, tents and makeshift igloos.

Some cities have banned delivery vehicles during certain hours on city streets. However, this may soon be reconsidered if the reliance on online commerce and the resulting uptick in deliveries continue to grow.

Taherbhai notes that in the infrastructure industry “curb-sharing” is a hot topic. “How do you share a street with multiple stakeholders effectively, whether it’s delivery trucks, or pedestrians or cyclists?” he asks. “How do you give people access to curb space? Those are the sorts of decisions that people will be thinking through long term to make our cities more effective and attractive.”

CHANGING OUR LIVES, CHANGING OUR URBAN SPACES

Over time, our relationships with cities have evolved, as has the shape of our cities. The aftermath of COVID-19 will provide the latest stage in that evolution. The internet and many companies’ rapid adoption of remoteworking in response to COVID-19 may be a wild card in this case, but Taherbhai thinks cities still have a future.

“In the long run, people want to live and work and play together,” says Taherbhai. “I think cities will continue to be vibrant centers though they may look different than today.”


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The opinions referenced are as of the date of publication and are subject to change due to changes in the market or economic conditions and may not necessarily come to pass. Information contained herein is for informational purposes only and should not be considered investment advice.

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