This election will be won in towns – but its winner needs to focus on cities

Boris Johnson and Jeremy Corbyn. Image: Getty.

The Centre for Cities on the election and everything after.

When this general election campaign started many commentators, myself included, expected it to be one that put people in the so-called ‘left behind’ towns of England’s North and Midlands at the heart of the campaign narrative.

It certainly began that way, with both of the main parties showering people in the ‘Red Wall’ of traditionally Labour voting but Brexit-supporting towns with warm words and promises of better infrastructure and public services, and lots more money.

But despite the early rhetoric, the two main parties’ manifestos had much less to say about towns. In fact much of what they have announced will benefit people living and working in cities – from the Conservative promise of more city-region focused devolution to Labour’s plan to reduce commuter rail fares, mainly an issue in London and the South East.

We will find out next week whether the distance between the early rhetoric and manifesto reality affects how people vote. However, one thing is certain now: after a decade of cuts that have disproportionately affected cities, they are being met with scepticism by urban political leaders of all parties.

It is striking how neglected and ignored city leaders and directly elected mayors feel by Westminster. According to the 2019 Centre for Cities / Arup Urban Voices survey, just one in 10 city leaders and elected mayors are satisfied with the support they get from national government.

Transport is a particular concern to them, with almost all city leaders saying that more money needs to be invested in urban public transport. City leaders know that, in many parts of the country, bad connections are the significant cause of weak economic growth. Centre for Cities made it a key plank of our Urban Manifesto. It’s encouraging that the main parties are promising investment in transport, particularly buses. But after the election they will need to deliver to convince city leaders it’s not just election rhetoric.

Most strikingly, climate change and air quality have risen from nowhere last year to the top of the biggest worry list for city leaders – no doubt due to the actions of Greta Thunberg and Extinction Rebellion.

As well as the Greta effect, city leaders are also worried about the Brexit effect. Almost nine in 10 city council leaders and elected mayors are concerned that their cities will not be able to get the workers they need after Britain leaves the EU.

Why do their concerns matter to this general election and beyond?

From a political perspective, city dwellers are typically less likely to vote than people in the rest of the country. Yet those city dwellers, and workers, drive the economy, accounting for around 60 per cent of the country’s jobs, business starts and GVA.

So while running a campaign around people living in small towns, otherwise known as marginal seats, may make good politics, it is bad economics.

If politicians want to make Britain a more prosperous and productive place to live then improving the economic performance of cities needs to be central to the next government’s plan.

Despite some good short to medium-term promises for cities in the main manifestos, the recognition of the unique economic role that Britain’s urban areas play in the national economy was largely absent.

Take the much-discussed British productivity problem, which is at the root of many of the doorstep issues that politicians are worried about – wages, good jobs, tax revenues. There is huge variation across the country. Cities in Southern England are almost 50 per cent more productive than cities elsewhere in the UK.

Getting more high-skilled firms to start and grow in these underperforming cities is crucial. One way to achieve this is for the next government to establish a £5bn productivity fund for councils to bid into to make their city centres more productive places to do business.

Because different cities have different challenges, access to this fund should not be overly prescriptive. In London, where people are leaving due to the high cost of living, it could be spent on housing. In cities such as Bradford or Wigan – which have suffered particularly from cuts to FE funding – it could be spent on adult education, and in other places like Barnsley and Warrington it could be spent on workspace and incubators.

While it is likely that this election will be won or lost in the towns of Northern England and the Midlands, the transformation that happens after 12 December needs to be anchored in cities. The next government must seize the initiative on this.

Andrew Carter is Chief Executive of Centre for Cities.


A new wave of remote workers could bring lasting change to pricey rental markets

There’s a wide world of speculation about the long-lasting changes to real estate caused by the coronavirus. (Valery Hache/AFP via Getty Images)

When the coronavirus spread around the world this spring, government-issued stay-at-home orders essentially forced a global social experiment on remote work.

Perhaps not surprisingly, people who are able to work from home generally like doing so. A recent survey from iOmetrics and Global Workplace Analytics on the work-from-home experience found that 68% of the 2,865 responses said they were “very successful working from home”, 76% want to continue working from home at least one day a week, and 16% don’t want to return to the office at all.

It’s not just employees who’ve gained this appreciation for remote work – several companies are acknowledging benefits from it as well. On 11 June, the workplace chat company Slack joined the growing number of companies that will allow employees to work from home even after the pandemic. “Most employees will have the option to work remotely on a permanent basis if they choose,” Slack said in a public statement, “and we will begin to increasingly hire employees who are permanently remote.”

This type of declaration has been echoing through workspaces since Twitter made its announcement on 12 May, particularly in the tech sector. Since then, companies including Coinbase, Square, Shopify, and Upwork have taken the same steps.

Remote work is much more accessible to white and higher-wage workers in tech, finance, and business services sectors, according to the Economic Policy Institute, and the concentration of these jobs in some major cities has contributed to ballooning housing costs in those markets. Much of the workforce that can work remotely is also more able to afford moving than those on lower incomes working in the hospitality or retail sectors. If they choose not to report back to HQ in San Francisco or New York City, for example, that could potentially have an effect on the white-hot rental and real estate markets in those and other cities.

Data from Zumper, an online apartment rental platform, suggests that some of the priciest rental markets in the US have already started to soften. In June, rent prices for San Francisco’s one- and two-bedroom apartments dropped more than 9% compared to one year before, according to the company’s monthly rent report. The figures were similar in nearby Silicon Valley hotspots of San Jose, Mountain View, Palo Alto.

Six of the 10 highest-rent cities in the US posted year-over-year declines, including New York City, Los Angeles, and Seattle. At the same time, rents increased in some cheaper cities that aren’t far from expensive ones: “In our top markets, while Boston and San Francisco rents were on the decline, Providence and Sacramento prices were both up around 5% last month,” Zumper reports.

In San Francisco, some property owners have begun offering a month or more of free rent to attract new tenants, KQED reports, and an April survey from the San Francisco Apartment Association showed 16% of rental housing providers had residents break a lease or unexpectedly give a 30-day notice to vacate.

It’s still too early to say how much of this movement can be attributed to remote work, layoffs or pay cuts, but some who see this time as an opportunity to move are taking it.

Jay Streets, who owns a two-unit house in San Francisco, says he recently had tenants give notice and move to Kentucky this spring.

“He worked for Google, she worked for another tech company,” Streets says. “When Covid happened, they were on vacation in Palm Springs and they didn’t come back.”

The couple kept the lease on their $4,500 two-bedroom apartment until Google announced its employees would be working from home for the rest of the year, at which point they officially moved out. “They couldn’t justify paying rent on an apartment they didn’t need,” Streets says.

When he re-listed the apartment in May for the same price, the requests poured in. “Overwhelmingly, everyone that came to look at it were all in the situation where they were now working from home,” he says. “They were all in one-bedrooms and they all wanted an extra bedroom because they were all working from home.”

In early June, Yessika Patapoff and her husband moved from San Francisco’s Lower Haight neighbourhood to Tiburon, a charming town north of the city. Patapoff is an attorney who’s been unemployed since before Covid-19 hit, and her husband is working from home. She says her husband’s employer has been flexible about working from home, but it is not currently a permanent situation. While they’re paying a similar price for housing, they now have more space, and no plans to move back.

“My husband and I were already growing tired of the city before Covid,” Patapoff says.

Similar stories emerged in the UK, where real estate markets almost completely stopped for 50 days during lockdown, causing a rush of demand when it reopened. “Enquiry activity has been extraordinary,” Damian Gray, head of Knight Frank’s Oxford office told World Property Journal. “I've never been contacted by so many people that want to live outside London."

Several estate agencies in London have reported a rush for properties since the market opened back up, particularly for more spacious properties with outdoor space. However, Mansion Global noted this is likely due to pent up demand from 50 days of almost complete real estate shutdown, so it’s hard to tell whether that trend will continue.

There’s a wide world of speculation about the long-lasting changes to real estate caused by the coronavirus, but many industry experts say there will indeed be change.

In May, The New York Times reported that three of New York City’s largest commercial tenants — Barclays, JP Morgan Chase and Morgan Stanley — have hinted that many of their employees likely won’t be returning to the office at the level they were pre-Covid.

Until workers are able to safely return to offices, it’s impossible to tell exactly how much office space will stay vacant post-pandemic. On one hand, businesses could require more space to account for physical distancing; on the other hand, they could embrace remote working permanently, or find some middle ground that brings fewer people into the office on a daily basis.

“It’s tough to say anything to the office market because most people are not back working in their office yet,” says Robert Knakal, chairman of JLL Capital Markets. “There will be changes in the office market and there will likely be changes in the residential market as well in terms of how buildings are maintained, constructed, [and] designed.”

Those who do return to the office may find a reversal of recent design trends that favoured open, airy layouts with desks clustered tightly together. “The space per employee likely to go up would counterbalance the folks who are no longer coming into the office,” Knakal says.

There has been some discussion of using newly vacant office space for residential needs, and while that’s appealing to housing advocates in cities that sorely need more housing, Bill Rudin, CEO of Rudin Management Company, recently told Spectrum News that the conversion process may be too difficult to be practical.

"I don’t know the amount of buildings out there that could be adapted," he said. "It’s very complicated and expensive.

While there’s been tumult in San Francisco’s rental scene, housing developers appear to still be moving forward with their plans, says Dan Sider, director of executive programs at the SF Planning Department.

“Despite the doom and gloom that we all read about daily, our office continues to see interest from the development community – particularly larger, more established developers – in both moving ahead with existing applications and in submitting new applications for large projects,” he says.

How demand for those projects might change and what it might do to improve affordable housing is still unknown, though “demand will recover,” Sider predicts.

Johanna Flashman is a freelance writer based in Oakland, California.