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Their nuanced findings confirm what industry watchers have observed since the onset of the pandemic: Commercial real estate in cities that “rely heavily on subway and light rail” has been affected more by the adverse impacts of COVID-19 than cities where commuting is dominated by the automobile.
The authors caution that these trends do not suggest that downtowns are done for — far from it. The analysis revealed that businesses, even since the onset of the pandemic, have been willing to pay a premium for commercial real estate in the city centre and near rail-based public transit.
The paper shows transit cities reported a higher density of employment in the urban core, reflecting businesses’ preference for central locations. On the flip side, commercial rents declined faster in transit cities than it did in auto-centric cities as the distance from the city centre increased. Furthermore, “COVID-19 reduced the value of density by 21 per cent” in transit cities.
The authors said COVID-19 does “weaken” city centres, but they still remain attractive, and the weakness is only in the largest and most dense cities.”
There are only three urban centres in Canada where public transit accounts for more than 20 per cent of work trips: Montreal, Toronto, and Vancouver. Just behind them is Ottawa-Hull, where almost 19 per cent of work trips are made on public transit.
Downtown Toronto constitutes the country’s largest employment hub, with almost 500,000 pre-COVID-19 jobs packed tightly in a small space. Neither downtown Montreal nor Vancouver is as large and dense as Toronto, yet both are still bona fide large employment hubs.