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Unsanitized: The COVID-19 Report for Dec. 3, 2020

Mayors Know COVID Has Permanently Changed Cities

Radical shifts in the economy cannot be easily managed

 

A man offers prepared food to a homeless resident in downtown Los
Angeles. (Damian Dovarganes/AP Photo)

First Response

Yesterday was the deadliest reporting day since the pandemic began in
the United States, with over 2,700 people dead
. An incredible 1 out of every 800
North Dakota residents

have passed away from the virus. The real death count, based on excess
deaths rather than those attributed to COVID-19, has now hit 345,000
,
and there's no signs of slowing down.

Yet this dark winter doesn't exactly feel like March and April. It
doesn't quite match the sobriety of the moment. I think there are a
couple reasons for that. First, the initial shutdown was so novel, a
radical change to the American lifestyle, that nothing will replicate
that. Second, over the ensuing months the politics of shutdowns became
divided, and those divisions have taken precedence once again. The
solidarity we once had collectively over keeping safe has frayed.

But ask any mayor in the country whether things are different now and
they'll emphatically say yes. We've now incorporated so many facets
of the shutdown mindset that there doesn't have to be an actual order
anymore. Those with the ability to work from home do so. Less driving
means less parking, so fewer meter fees and fewer parking tickets.
Transit systems carry on without as many riders. Businesses lack
customers. And cities lack revenues.

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I've written about this before
,
how the pandemic has accelerated a transitioning economy, away from
physical space and commutes and the associated economies that build up
around that. The transition was too abrupt for anyone to adjust. If
people live in downtown business districts, they can still use the
retail establishments that cater to daytime workers. But many of those
businesses will no longer be needed, at least not at those locations. In
fact a lot of retail, which has been overbuilt over the years in the
U.S., may not be needed in the future.

That's what comes through in this survey of big-city mayors

run out of Boston University. Nearly half of them predict "dramatic"
cuts to public schools, along with 38 percent to parks and recreation
and 35 percent to mass transit. More than half-around 60 percent-see
a "permanent reduction" for in-person retail shopping and downtown
office building capacity. A whopping 80 percent believe racial health
disparities will grow.

Much of this is an artifact of the transition away from an
office-focused economy
.
Downtown business districts generate enormous property and sales taxes.
It's a very good thing that the Supreme Court ruled that online
businesses must pay sales tax, or else much of that revenue would be
completely lost. But the transition to eating at home over eating out is
a net loss for cities (groceries are typically not taxed). The
transition from meatspace businesses to online ones is a net loss of
property tax (Two-thirds of respondents to the mayoral survey said that
shuttered small businesses would not be replaced by new ones).

We Can't Do This Without You

There are certainly positive side effects to the changing economy, most
notably for the climate, from fewer greenhouse gas emissions from
transportation. But the shift caught lots of stranded assets short. Some
cities are trying to compensate for that. My city of Los Angeles took a
lot of heat last night merely for aligning with the countywide stay at
home order, which was mangled in some bad press releases and news
reports. Less remarked upon was that the city is giving $800

to out-of-work restaurant employees, an unprecedented one-time stimulus
at the city level.

Unfortunately, it's only available for 4,000 people, because cities
are also one of those stranded assets, and they can only do so much. The
takeaway from this survey is the expectation of enduring, long-term
misery. "The CARES Act was not enough for cities," said the director
of the survey. Indeed, it only gave funding to cities and states to
handle elevated costs from COVID programs, not money to cover revenue
shortfalls.

Even if by some miracle the renewed talk of stimulus

bears fruit, the bipartisan Senate bill that President-elect Biden and
Democratic leaders got behind

yesterday includes just $160 billion for state and local governments.
I've seen estimates of the shortfall as high as $1 trillion
;
the Center on Budget and Policy Priorities has it around $555 billion
.
Either way the proposed relief is insufficient, and remember that Mitch
McConnell's bill includes nothing, so if there's ever a final
number, it's likely to be under $160 billion.

Any amount of fiscal aid, while desperately needed, won't fully
account for the likely permanent change in habits that's going to hit
city and state budgets for some time. There's an optimistic path,
where the shifts in work patterns leads to more leisure time and
discretionary income, and business location patterns adjust, and we
actually live happier lives in more localized, interconnected cities.
But that will take time, which these mayors don't have.

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Days Without a Bailout Oversight Chair

251
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Today I Learned

* Unrelated: Thanks to Porchlight Books for placing my book Monopolized
on the longlist for Business Book of the Year
.
(Porchlight Books)

* COVID survivors being rejected for life insurance
.
(Bloomberg)

* Interpol warns of vaccines

being exploited by organized crime. (Interpol)

* This isn't necessarily a reason to reopen schools during a mass
death wave, but yes, wide-scale remote learning doesn't work
.
(Washington Post)

* Testing-lab workers also feeling despair from endless demand
.
(New York Times)

* As an activity bringing people together, college football probably did
make things worse
.
(New Yorker)

* The mayor of Austin somberly telling residents to stay home while on
vacation in Cabo

is just perfect. (Austin American-Statesman)

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