How the “Donut Effect” Is Changing the Face of American Cities

( – The national health crisis changed the real estate market in America. Cities have transformed because of it. Experts are referring to the change as the “donut effect.”

When the virus swept across the country, many people began working remotely. That caused commercial occupancy rates in the middle of cities to fall dramatically. Apartment buildings also saw tenants leave as workers began relocating. While urban areas lost residents and workers, the suburbs, or outer rings of the cities, began to thrive. The shake-up was dubbed the “donut effect.”

Detroit, Michigan, is known as the original donut. The city thrived for decades while the automobile industry boomed. Then the industry changed, violence became commonplace, and other issues caused families to flee to the suburbs. Buildings sat abandoned in the city, empty houses turned into drug dens, and crime soared. Dan Gilbert, the founder of what became Quicken Loans, and others have begun investing heavily in the downtown areas in an attempt to revitalize the city.

New donut cities are grappling with how to convince those who left to come back. New York City was once one of the most popular metropolitan areas in America. The urban areas boomed, and people flocked downtown, settling in and finding high-paying jobs. Commuter times also made the city unattractive. Rent soared, and so did crime. Now, city leaders are trying to lure residents back by introducing “congestion areas” in order to cut down on traffic.

In Washington, DC, Chicago, Pittsburgh, and other cities, officials are offering people tax incentives to convert empty office buildings into apartments for residents.

The revitalization efforts won’t work everywhere, according to Nico Larco, the director of the University of Oregon’s Urbanism Next Center. He explained that urban areas were filled with office spaces and told Axios that they “will continue to be in a whole lot of pain.”

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