Everyone was supposed to be back at the office by now. It’s not really happening, however, and this has huge implications for the future of the American city.

Part of the reason is the cost, not only the finances of commuting but also the time. Another contributing factor is the crime and homeless population, which can be quite scary. Between inflation, rising poverty, substance abuse, and rampant post-lockdown incivility, the cities have become far less attractive. The impact on the commercial sector is becoming ever more clear.

Leases are coming up for large office spaces in major cities around the US. But there is a serious problem on the way. Occupancy of these offices is dramatically down in most places around the country. The decline is 30 percent on average and much more in San Francisco, Chicago, and New York City. That’s for now but many tech companies and others have laid off workers, meaning that even the companies that renew will be looking to downsize dramatically and with shorter-term leases.

[Investors had better prepare themselves for a collapse in the commercial real estate markets, of at least some significant scope. Cities will find their revenues shrinking too, and if retail businesses keep fleeing, their collapse will be even more substantial. That has implications for those who salted away their money in municipal bonds for safety, too. This could get very ugly, and not just for the people who live in the urban cores. — Ed]