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A considerable number of (parts of) cities and towns have experienced decay over the last few decades. Due to a combination of safety, lack of services, and job market changes people have fled these regions. Abandoned homes and neighborhoods are being reclaimed by nature.

Meanwhile, some places have skyrocketed in price.

How much of the housing cost increase in expensive areas is due to decay causing population flight? If somehow this decay didn't occur, would the housing costs in, say Manhattan or San Francisco be substantially less?

COVID has reduced the need to commute but blighted areas are still largely not being refilled. However it has only been two years, so as time goes on the decay may indeed reverse in several areas. Real estate in the most expensive areas has already dropped slightly.

Kevin Kostlan
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  • How exactly do you define and measure 'small town decay'? What is the source for it happening in a considerable number of cities? Where? Also, why do you automatically assume town decay causes population migration? It might as well be exactly the opposite, population emigration causing decay. This question would benefit from more details and clarity – 1muflon1 Jan 06 '23 at 20:48
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    Wouldn't you expect this to work both ways as people priced out of the cities might settle in the "decayed" towns? – user253751 Jan 06 '23 at 23:36
  • @user253751: Yes it could, maybe due to COVID. Has anyone tried to quantify these trends? – Kevin Kostlan Jan 07 '23 at 21:39
  • @1muflon1: 1. Besides "what the experts say" and population decline (and occupation rate) I would use metrics based on square meter of housing floor-space (including abandoned homes): decline of Govt expenditures; of services (hospital, fire dept, schools); of commercial (grocery stores, gyms, etc). I also look for visual indicators (broken sidewalks, tagging, property damage, etc). 2. The wiki on "rust belt" and "rural flight" provides links to several sources. 3. Most people don't want to live in the "decayed" areas, so both tend to reinforce each-other in a vicious cycle. – Kevin Kostlan Jan 07 '23 at 21:55
  • I would be hard pressed to say urban decay has somehow accelerated across the US, gentrification and regrowth and housing replacements are a natural part of cities since the beginning. However, work from home has rendered communting costs to roughly 0, and fear of disease has pushed people into rural areas. It would be hard to attribute the recent sudden uptick to 'urban decay' rather than covid. Better Q- has covid altered the natural city cycle and equilibrium – RegressForward Jan 08 '23 at 14:45
  • @RegressForward: COVID/remote commuting does seem to be reversing the trend of concentrating into certain cities. Lets hope that we see revitalization without increases in expense. – Kevin Kostlan Jan 08 '23 at 20:21

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I would say that it depends on how you model the demand of these people who flee bad neighbourhoods. If you think that they have the same resources as the usual demand for available houses in the most requested city then they could create an increase in that demand. But since they are budget constrained it is more likely that they cannot have access to that type of market. Covid in this case is also irrelevant. I would say that an increase in house supply would make the market less tight, and that's something which has an effect on every place that you build, for the cited substitution effects.

Dario Marino
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