Whew! The sky isn’t falling on the Big Apple after all.
The academic behind the infamous “Doom Loop” scenario says that things might be looking up for New York City, despite his earlier forecast that less need for office space would cast it into a death spiral.
Columbia University economics professor Stijn Van Nieuwerburgh wrote an oft-quoted, 2022, essay, “The Remote Work Revolution: Impact on Real Estate Values and the Urban Environment.”
Its thesis, later amplified in a report he authored with two colleagues, prophesied that less demand for offices after the pandemic would cast the city into a death spiral resulting from decreased tax revenue and resulting civic decay.
Van Nieuwerburgh as recently as October called the office market “a trainwreck in slow motion.”
But in an interview with online news site Gothamist last week, Van Nieuwerburgh hit a heavier pause button on the apocalypse than he did in a New York Times interview a year ago when he merely said it was “not inevitable.”
He told Gothamist’s Arun Venugopal: “New York City is recovering to a better extent than most large U.S. cities . . . [due to ] the fact that New York City’s economy is a well-diversified economy,” unlike tech-dominated San Francisco, which is on the brink of collapsing.
Van Nieuwerburgh added about New York, “It also has to do with the fact that the financial sector has been pretty strict about the return to the office.”
He might have mentioned that the same is true of law firms, which, like financial services, drive the high-end market.
Sounding almost like an “I Love NY” copywriter, he said, “I feel that New York City is coming back, because people are coming back to the city and when people come back, it makes it more attractive for their colleagues and their friends to come back as well.”
The Big Apple is “an amazing place to live, not just to work,” he said.