[Choi Jun-young's Urban Pilgrimage] Changes in Cities Brought by COVID-19

The spread of the novel coronavirus infection (COVID-19), which began at the end of 2019, has struck China and South Korea, then Europe and the United States. Globally, there are about 380,000 confirmed cases and over 16,000 deaths, and this trend is expected to continue for the time being. Although large-scale infectious diseases were previously thought to occur mainly in developing and extremely poor countries, COVID-19 has dealt a heavy blow primarily to developed countries. The spread of COVID-19 is shaking the global economy, and the stock and financial markets are facing the worst situation since the 2008 global financial crisis. Central banks around the world have mobilized all cards, declaring zero interest rates and unlimited quantitative easing, but restrictions on movement and activities due to COVID-19 are pushing the global real economy into its worst state.

The spread of COVID-19 is changing many everyday scenes. People have become afraid to gather in one place and prefer to handle tasks through contactless means whenever possible. Contactless interactions, including kiosks once considered inhuman, are being encouraged, and various meetings and gatherings are shifting to online video conferences such as Zoom. In this process, the sharing economy, which had recorded explosive growth over the past few years, has been severely impacted by COVID-19. Questions about who used shared items and how they are managed have long been raised, but this situation has firmly established these concerns.

Encouragement of Contactless Interaction such as Kiosks
Sharing Economy Severely Impacted by Explosive Growth

COVID-19 is also expected to significantly change the appearance of the cities we live in. The most significant anticipated change is a decrease in demand for office and commercial buildings. Since the mid-1990s, with the full-scale spread of the internet and high-speed communication networks, there were predictions that demand for traditional office spaces would decline and that people would prefer not to live in large cities. However, the rapid advancement of the IT industry in the 21st century accelerated population concentration in large cities contrary to expectations, and newly emerging IT companies focused on maximizing agglomeration effects by concentrating in specific areas like Silicon Valley. Along with this, globalization since 2000 has created a large global middle class, whose increased consumption levels have driven demand for large-scale malls and other commercial spaces. As a result, major cities worldwide have come to possess dazzling skyscrapers and splendid commercial facilities.

However, COVID-19 has reversed this trend overnight. Through remote work implemented due to the sudden spread of the infectious disease, many companies and individuals have realized that a significant portion of work can be performed regardless of location. Especially the millennial generation, who have had extensive contact with various IT devices since birth, is more receptive to this shift in work style. Consequently, questions have arisen about whether maintaining existing offices is truly essential and cost-effective, and future demand for office space is likely to decrease. Commercial spaces were already experiencing underutilization due to the expansion of online shopping, and the spread of delivery services due to COVID-19 is accelerating this trend. The distribution of ready-to-eat meals and meal kits, along with the expansion of early morning delivery, was already changing things, but COVID-19 is speeding up this transformation.

Choi Jun-young, Senior Advisor at Law Firm Yulchon

The second change is in transportation networks. Large cities with dense populations have suffered from traffic congestion and have introduced mass transit systems such as subways to address this issue. Public transportation like subways is regarded as a positive means that reduces commuting time and decreases private car use, thereby saving energy and reducing greenhouse gas emissions. The rise in housing prices is also partly attributed to increased demand for proximity between residence and workplace due to longer commuting times, leading to large-scale national investments in rail-based transportation networks. However, such public transportation inevitably involves many people sharing confined spaces, making it a potential transmission route for respiratory infectious diseases like COVID-19. Although not yet confirmed, there are concerns that contactless infections may be linked to public transportation.

Expansion of Remote Work Regardless of Space
Emergence of Public Transportation Avoidance
Need to Break Away from China-Dependent Industries

In response to these changes, people have begun to prefer personalized transportation such as private cars. Although long-distance travel is challenging, there is a strong tendency to use personal vehicles. If this trend continues, it could lead to changes in urban spatial structure. There may be a stronger tendency for proximity between residence and workplace, allowing commuting by walking or bicycle without using public transportation like subways. Conversely, if preference for vehicle use increases, urban sprawl may occur again. Strengthening proximity between residence and workplace could lead to rising real estate prices in downtown areas, while preference for urban sprawl would bring renewed attention to suburban residential areas including new towns.

The third change is the transformation of cities due to changes in the global industrial structure. Through COVID-19, countries worldwide have recognized their excessive dependence on supply chains centered on China. After the COVID-19 crisis subsides, countries are moving to diversify supply chains and relocate them to reliable neighboring regions. Experiencing COVID-19 has made major countries realize the necessity of maintaining domestic industrial bases, recognizing that maintaining and securing these bases is not a matter of cost and efficiency but a factor that can determine survival. Depending on how this industrial restructuring proceeds, previously declining industrial cities may seize opportunities for revival, and large cities that have transformed mainly into residential and commercial centers may revert to forms combining industrial functions as in the past.

In the case of the Republic of Korea, having undergone numerous upheavals and hardships over the past 70 years, the people regard COVID-19 as yet another challenge to overcome. However, citizens of Europe and the United States, who have not experienced urgent changes and shocks threatening daily life since World War II, are experiencing tremendous shock due to COVID-19. In the short term, reorganization and changes in health and medical systems are expected, but it is highly likely that this will lead to more fundamental changes beyond that stage, with cities also falling within the scope of these impacts.