The Urban Doom Loop: A Threat to American Cities
Major American cities like New York and San Francisco are facing a concerning trend known as the "urban doom loop," characterized by mass migration, empty offices, and declining tax revenues. Remote work policies during the pandemic have led to employee relocations and reduced leases, impacting cities heavily reliant on tax revenues, particularly from commercial real estate. This cycle has resulted in budgetary consequences for cities and a credit crunch for regional banks holding commercial real estate debt. Local governments must take action to prevent further fiscal trouble.