Falling Towers and Modern Ghost Towns: What does the future hold for inner cities post COVID?

What is the city over the mountains

Cracks and reforms and bursts in the violet air

Falling towers

Jerusalem Athens Alexandria

Vienna London

Unreal

Friends and foes (alas) alike who have known me long enough will know that I have this tendency to quote T.S. Eliot, an intellectual pretension which I have yet to outgrow (FYI, I am familiar with the TISM song from the mid 1980s which ridicules Eliot, in case you are wondering).

Sitting in my study on a rather cold Sunday afternoon peeping out at the grove of orange trees in my back yard, I cannot help but wonder about the future of many things which are likely to change when we are finally able to venture out of our homes again after this pandemic.

One is the nature of the inner city, to which many thousands of us commute to work in office blocks, and where thousands of people live.

Speculating on this is not highly original. After 9/11, when people in the USA were talking about rebuilding the World Trade Center taller than it had been (I think they actually did), some urban planners were saying that the day of the skyscraper had passed, and that people were more likely to telecommute in future rather than to need to work in large office blocks.

Perhaps the stars were not fully aligned for such a paradigm shift just then. My employer had only rolled out desk top internet access to staff the previous year, and I don’t think the Motorola phone I carried then offered internet (I was only then mastering SMS).

Now however, I am working three days a week at home (I so glad I upgraded to NBN and unlimited data in February), which is less than most of my colleagues, who are only coming into the office to do systems updates. The world of work has not ended – people seem more productive in the current arrangements than they did before.

Which does beg the question as to whether, going forward after the COVID is over, we will still need people to work in office buildings, or whether telecommuting (as the Americans call it) will become the new normal. More broadly, what is this going to mean for inner cities across the first world?

I will talk in terms of Melbourne, which I know well, but what I say probably could be true of most other western world cities, with large white collar workforces commuting to a central business district.

Almost invariably, my familiarity with the Melbourne CBD started in 1991 when I started working in an office there (with few short interludes elsewhere, either in the suburbs or interstate, I have continued to be based in an office in the CBD since then). Before then, my visits to the ‘city’ were more sporadic, and whilst I knew my way around, it does occur to me now that my memories of it pre-1991 are fairly few and far between. I did not have my favourite pubs, bars, or restaurants, or bookshops for that matter.

But I do know well that the city has constantly changed. The most visible and constant change is that of the skyline, where there are many gigantic apartment towers now rising amongst the office blocks and the expansion of the CBD into Docklands and Southbank (I remember when the Allens Lolly Factory with its neon sign still stood on the south bank of the Yarra, a familiar sight whilst I was taking the train home from uni after dark in 1987). When I look at the skyline from around the corner from my home, I marvel at the sheer volume of tall buildings that I cannot name.

Approximately 200,000 people still worked, pre-COVID, in the CBD. You can probably add a few more in the Docklands and Southbank expansion. According to the 2016 census, 37,321 lived in the CBD at that time (by now, you could probably add quite a few more thousand to that tally).

That the number of people living in the CBD is around 40,000 and climbing is itself a major change. I remember in 1984 reading an article in the newspaper which discussed the small community of 500 people then living in the CBD, in loft apartments in laneways. Until recently, the streets at the heart of the financial sector and legal professions, William and Queen Streets, would be deserted after 5pm on a weeknight until Monday morning, as indeed would be the intersecting streets at that end of town.

I remember in the 1990s as convenience stores gradually started appearing in the CBD, and then more recently getting replaced by actual (mostly scaled down) supermarkets.

The city has changed quite a lot, but a lot of this change is tenuous. 57.3% of the city’s denizens are tertiary students, most of whom are international students. Geopolitical fractures accelerated by the COVID crisis could impact on the durability of that demographic.

A large number of apartment blocks have sprung up on fallow land in the northwest corner of the Hoddle Grid. Pundits suggest that when those are completed and full, that corner, taking up some 8 hectares, will have a greater population than several major country towns.

But are people actually going to live in a lot of those apartments? The biggest problem faced by Docklands since it started to develop over 20 years ago is that whilst there have been few problems with selling apartments, it appears that overseas investors have bought a lot of those as a way to park money in a safe jurisdiction, and those apartments have remained empty – adding up to an incredible vacancy rate of about 25% in Docklands. This may have contributed to the low viability rates of restaurants and bars (and retail businesses) in the Docklands precinct. Whenever I walk through, the vacancy rate in shops is highly noticeable.

And there is the problem of cowboy developers, who have built apartment blocks with flammable cladding or other structural issues. This problem, which is not unique to Melbourne, is one which must be preying on the minds of many apartment owners.

As an aside, if you are going to be confined to your home during a pandemic, doing so in a stand alone house in the suburbs is much better for your sanity than a one bedroom apartment in the CBD – after all, the benefits of the latter evaporate if you cannot go outside to bars and cafes and restaurants.

What is going to happen to the CBD if a large number of those 200,000 office workers stop commuting in each weekday and work from home instead post-COVID? What if, at the same time, the boom in international students finally comes to an end? The viability of retail in the CBD will be diminished, as will that of the various restaurant precincts. We could be looking at Melbourne CBD (as indeed any other similar inner city area) turning into a modern ghost town.