In Triumph of the City, Harvard urban economist Edward Glaeser argued that dense cities were still important even in the age of telecommuting and the Internet because of the importance of face-to-face contacts. For this reason, while Glaeser didn’t support subsidies for density, he still expected to see dense cities well into the future.
The Antiplanner disagreed. “Thanks to the automobile, we can have such face-to-face contact with far more people, and a greater diversity of people, than those who are within walking distance of a Manhattan high rise. Thanks to the Internet, we can dispense with face-to-face contacts when doing such routine things as shopping and many types of work. In other words, the economic forces that built dense cities such as London and New York are far weaker today.”
In this light, it was interesting to read yesterday’s report in the Wall Street Journal that New York banks are moving many employees well out of Manhattan (if this link doesn’t work, Google “New York Banks Cut and Run”). After the financial crisis, the city’s ten largest banks reduced their Manhattan rental space from 38 million to 32 million square feet. Property owners hoped that they would pick up that space as the economy recovered, but instead they are moving people to lower-cost areas such as Florida.
“The new reality is that you do most of your work by phone,” says an employee of Deutsche Bank who works in Jacksonville (if this link doesn’t work, search for “Deutsche Bankers Warm Up to Florida”). “Why can’t we do that in a location with a better cost of living?”
