Columbia University’s new business school, at the western edge of 130th Street, is a $600 million monument to urban dynamism, with buildings named for the billionaire entertainment mogul David Geffen and the billionaire private equity mogul Henry R. Kravis.
On the seventh floor of Kravis Hall, in an office overlooking the Hudson, works a soft-spoken real estate professor who has emerged as a prophet of urban doom.
Stijn Van Nieuwerburgh, 46, has wispy brownish-blond hair and a Belgian accent tempered by 20 years in New York. Last fall, he published two papers — one with colleagues from N.Y.U. and Columbia — that gave a name to the eerie feeling you can have passing a half-empty swath of Midtown Manhattan these days: an “urban doom loop.”
On a gray January afternoon in his office, Dr. Van Nieuwerburgh described the doom loop: Remote work has made New York’s office space less valuable, which will lower the city’s revenue from real estate taxes. People with money, whose work no longer requires them to be in the city, move out, taking their tax dollars and retail spending with them. The steakhouse and dry cleaner close, leaving empty storefronts. The city curtails library hours and housing subsidies. Foot traffic in neighborhoods dwindles, except for the increase in homeless people. Crime and grime increase. More people feel unsafe and leave the city, leaving more storefronts and office buildings empty. More crime, more grime, more cuts in services.
And so on. Downward and downward and Detroit 2013.
Dr. Van Nieuwerburgh and his colleagues only briefly alluded to this as a possible scenario in their otherwise relatively esoteric papers on commercial real estate values.
Then his phone started ringing. Doom sells.
“It’s been two or three months, nonstop, wave after wave,” he said. “After 20 years of writing papers and that not happening, you do not expect that to happen.”
Kravis Hall, which opened last winter 10 blocks north of the university’s main campus, is an odd setting for the pulpit of the apocalypse. Designed by the firm Diller Scofidio + Renfro, the business school has been called the most expensive ever built, with costs more than double those of newly built business schools at Yale, Northwestern and Carnegie Mellon. The 17-acre satellite campus around it, part of Columbia’s expansion in West Harlem, has the feel of an academic Hudson Yards, a gleaming capitalist biosphere plopped down on a site of car repair shops, warehouses and small apartment buildings. Built against opposition from Harlem community groups, the campus sings of urban growth.
As does the name on the building where Dr. Van Nieuwerburgh works. Mr. Kravis donated $125 million to the school.
Dr. Van Nieuwerberg chuckled. “Somebody’s got to pay the bills,” he said.
He noted the irony of his own circumstances, prophesying a city laid waste by remote work. “And here I am in my office five days a week,” he said.
Already the numbers support a doom cycle. On an average weekday, nearly half of New York City’s workers stay away from the office; on Mondays and Fridays, the share is even higher. Subway and bus ridership are down by one-third from prepandemic levels. Major crimes rose more than 20 percent last year, and more than 300,000 people left the city in the first year of the pandemic, taking a total income of more than $21 billion. If office values decrease in proportion with usage, city revenue from property taxes will drop by $5 billion a year, Dr. Van Nieuwerburgh said.
“So this is a train wreck in slow motion,” he said. “The second shoe has yet to drop.”
But he was quick to say that the downward cycle need not lead to Armageddon on the Hudson.
“What happens to New York City from here on out depends on the actions we take and the policy decisions that are made,” he said. “It’s not inevitable. There’s various degrees to how bad this can get. There’s a scenario in my mind where it’s not as bad as feared, if we make all the right policy decisions. There’s lots of other scenarios where we don’t.”
His introduction to New York offers some insight into this moment, and how the city might temper it, he said. After completing his doctorate at Stanford, he moved to New York in 2003, when Lower Manhattan was still recovering from the shock and exodus following Sept. 11. Many predicted a doom loop then: Fear of terrorism would cause residents and companies to leave the city, especially downtown, creating the kind of void that we see in Midtown today.
But then the government subsidized construction of new housing downtown and the conversion of commercial buildings into apartments. Instead of spiraling downward, Lower Manhattan thrived. Similar measures, with a big infusion of state and federal money, might greatly ease the damage from remote work, he said.
“In a best-case scenario, we remove 30 or 40 percent of the office stock in New York City, turn it into wonderful housing. New York City has all these great amenities, it’s a wonderful place where young people want to live, regardless of where they work.” He imagined people telecommuting to jobs in other parts of the country by day, then convening at bars in the Village by night. “That to me is the vision of New York City,” he said.
There are impediments to such a scenario, including the prohibitive costs of converting offices to apartments and zoning restrictions that bar residential construction in much of Midtown. In December, Mayor Eric Adams and Gov. Kathy Hochul announced a 40-point plan that included removing barriers to converting older office buildings to housing.
Not all economists agree that remote work signals doom for New York. Edward Glaeser, a Harvard economics professor who grew up in New York in the 1970s, knows what urban collapse looks like. He said the city was in a down cycle, but not a doom loop.
“The history of New York is one of continued resilience under duress,” he said. “New York has done this extremely well for centuries. The things we went through in the ’60s and ’70s, when the crime rate was much higher than it is now, when the shock to the core industrial structure of the city was much more extreme — this doesn’t feel like it’s that big a deal.”
And the city is still a prime destination for new college graduates seeking fortune and mates, said Kathryn S. Wylde, president of the Partnership for New York City, a business advocacy group. No one wants a future of celibate telecommuting.
“Blight precedes resurgence in New York City,” she said, adding that the city created 32,000 new businesses last year, mostly in Brooklyn and Queens. If Midtown Manhattan is suffering, other parts of the city are surging, she said.
And even in Midtown, she noted that at Mr. Kravis’s firm, KKR & Co., employees are back in the office five days a week — in Hudson Yards.
Even Dr. Van Nieuwerburgh, pressed with the essential New York question, revealed a bullish side. No, he said, it is not time to sell your co-op. The city was still a desirable place to live, even if not to work. “I can see an upside for residential real estate here,” he said.
As for himself, he is not going anywhere.
“I’m a New Yorker,” he said. “My kids go to school here. I’m stuck here for the time being.”