The Ruralization of the World
For my entire lifespan of sixty-six years, the world was moving in only one way on its inexorable trend towards urbanization. What began as a trend driven by the industrial revolution starting in the mid-1800’s, was driven into the entire world by both industrialization and the automation of farming. It was such a common theme that the song How You Gonna Keep Them Down on the Farm (Once They’ve Seen Gay Paree) was popularized at the end of WWI, over 100 years ago.
I have spent my life in both rural and urban settings. While definition of what constitutes an urban setting matters, I think it is clear that I lived in non-urban settings for ten years of my life (Costa Rica – 2 years, Maine – 3 years, Ithaca – 5 years). I spent the vast majority of my adult life in New York City, that was 43 years in the quintessential global urban environment. Thirty of those years was living in NYC proper, mostly Manhattan. The rest of the time was living in suburbia and commuting into NYC for work on a daily basis. On the other end of the spectrum I lived for two years in a remote tropical valley dominated by banana, coffee and sugar cane plantations. And then there was Maine, where the hillbillies of Appalachia were my schoolmates and the activities were all outdoorsy. If we define rural as remote (i.e. not otherwise connected in any manner with the bulk of the rest of the world), I would define that tropical valley in Costa Rica as the only truly disconnected place I lived where there was no TV and no awareness of the outside world other than word of mouth or written chronicles. That was in 1959/1960 and was pretty much pre-everything by today’s standards.
Right now I see mostly vegetation from every window. I am certainly not in an urban setting. I have always defined suburbia as a place where there are sidewalks. There are no sidewalks here, so at most this area qualifies as exurban. Since we live in the far northern part of San Diego County and are forty minutes from the airport (which so happens to be one of the few airports set in the center of the urban space of the City), I would qualify this as rural. Within minutes, I can be in horse country. We jokingly call this the land of the pick-up truck, the most popular vehicle on the road. I bought this house from an elderly couple where the man proudly displayed his award as “America’s Top Farmer” for his work in the commercialization of mushroom cultivation. I, on the other hand, can be accused as a Wall Street executive of many years, of “mushroom management” (keep ‘em in the dark and cut them off at the knees when they get too big).
This is Monday morning and I am at work in my study, answering emails and thinking about things I need to do to advance the cause of doing business of one type or another. Like me, a far greater proportion of American workers are today trying to work from home. Before Coronavirus, about ten million people (7% of the workforce) had the ability to work from home. Some other countries (notably, Sweden) were more advanced on that scale to about 20% of at-home workers. Compare that to the seventeen million workers that have been sidelined as unemployed by the current crisis, presumably mostly because their work either requires their physical presence and cannot occur during this quarantine, or their work is supporting people who cannot socially interact. My son, currently furloughed, works in marketing for a restaurant group that is unable to operate for the most part. He lives in NYC and is sheltering-in-place in his apartment with his roommate. What he did learn pre-furlough, was that much of his work could be done from home if there was an ongoing business to support.
Employee co-location in the information economy is increasingly suspect. We are culturally slow to adopt WFH practices, but this external shock of a national and even mostly global lockdown has suddenly changed all that. The canary in this coal mine seems to have been WeWork and their travails in the last six months. Some might suggest that its fall from grace and withdrawal from its IPO was caused by the extreme ego of its leadership and that may be true, but as the Bible suggests, “Pride Goeth Before the Fall”. The fundamental business model of WeWork was predicated on a trend shift in office occupancy. Back in 2009-2010 when I was working out a large property developer that owned a great deal of office space during the last big economic squeeze, I found myself questioning if the office property market would ever come back. The biggest bet on office space we had was the Times Square Building, which I was working to reposition as a tourism (hotel) and residential (condo) play. That was replaced after I left by the Kushner family purchase of the space and returning it to the roster of office buildings. It surprised me, but was not the first time I was wrong about a trend.
However, since then this co-working trend has picked up and represents more and more corporate hesitancy to dedicate resources to office space long-term. Some of that could be a financial decision not unlike lease versus buy, but it was also a strong statement on the long-term viability of urban office space. This could only be due to a view that social co-location was becoming less important. What was less important is now actually forbidden and will probably come out the other end of the Coronavirus crisis as less than compelling as a business model. If the Kushners come out of the Times Square Building whole I will be surprised.
I was speaking with a friend who owns a big property north of NYC. He was going to sell it to move closer to NYC, but has put that plan on hold. He says that brokers are telling him that the demand for properties like his is spiraling upward. This is like what I heard from my friend with a handful of houses in Vermont that she rents on Air-B&B. While I thought her business may have ended, she tells me it is booming and becoming a longer-term rental business for city families getting out of their urban settings. I recall the old movie Rollover with Kris Kristofferson and Jane Fonda when a financial collapse occurs and the protagonist gets out ahead of the collapse by buying rich farmland in the San Joaquin Valley as food production would rule the day as the urban centers got mothballed.
It is too soon to go buy farmland while we watch farmers plowing their crops under due to inability to sell their produce to a failed food service industry, but it is time to start asking ourselves whether the 150-year urbanization trend is at an end and needs to be rethought from the ground up in a world that may be governed more and more by infectious disease and the social interaction of an over-populated world. If a group of consultants came to Earth from another solar system, they would start by noting that humans life follows a strange practice of gathering in centers while leaving unpopulated whole swaths of the Earth. They would also note that we have put ourselves in harms way with Climate Change and abuse of our natural world while huddling together in a way that leads to our own self-destruction by increasing the incidence of disease and pestilence. Their suggestions for survival of the species would probably have at the top of their list the re-ruralization of the world and the reduced use of hydrocarbons to transport them to urban centers and gatherings as well as hither and yon on frivolous travel. Ouch.