As the road to recovery continues, the future of cities in the face of the ongoing pandemic remains top of mind for small business owners. In this video, learn why cities like Boston will continue to matter moving forward and how small businesses can work with their communities to rebuild their cities into more vibrant and equitable spaces.
Good afternoon. I'm Christina delay head of product for Small Business Banking at Santander bank. Welcome to a conversation on the future of cities and the lifestyles they enable. Every day My team and I are thinking about how to help small businesses prosper in the face of a global pandemic, economic uncertainty, and the changing landscape of our cities. So many of our small business customers rely on the hustle and bustle of cities and the communities that they serve. With people flooding to the suburbs, and more and more work from home flexibility for employees. We are challenged every day to meet the needs of these small businesses. We often think about three areas that affect our customers, infrastructure, community and economics. These are the pillars of growth, the connections, conductors of culture, and ties that will not only help recovery will be critical in the evolution of cities as we know them. I thought I do we're seeing several things, infrastructure and cities is changing, commercial real estate projects that paused in 20 are either still on the shelf or taking on new directions. The business districts of New York and Boston are quiet the residential streets are bustling with socially distance activity. Additionally, the transformation of the business workday is having a greater impact than just on the nine to five hours. Technology, flexible workspaces, and collaboration enablement, are all vital to how cities attract workforces back to business districts and beyond. And lastly, the way we gathers change, we're asking ourselves have security and comfort replace convenience and cost? When the arts, theater and events return at Mass? How will the common enjoyment connections that they've created in the past impact the businesses around them? These factors and many more will affect the economics of cities moving forward. We believe that cities who invest in infrastructure, invite people in with the promise of safety and comfort and adopt new technology that modernizes experience may find themselves in demand as the new kind of hub. The panelists here from today have roots in expertise in these areas, and are excited to share their thoughts. I'd like to introduce Tim Logan, a reporter from the Boston Globe who covers Boston's building boom, from downtown towers to fast changing city neighborhoods to the ever evolving suburbs. Tim has its finger on the pulse of the communities, infrastructure and anomic that are economics that are shaping the future. Over to you, Tim.
Hey, thanks, Christina. Yeah, like Christina said, I'm Tim Logan, I'm a business reporter at the Boston Globe. And Iread about real estate, housing, economic development, small business, all the things that make cities thrive. And I'm here today with three people who thought quite a bit about how cities thrive, for a conversation about how places like Boston will emerge from the covid 19 pandemic, hopefully, hopefully, at some point, regaining the dynamism that has so disappeared for these last 18 months, and hopefully along the way, becoming more inclusive and more equitable places than they were before all this started. Joining me today is Greg Greg mynott, managing principal at the dream collaborative, an architecture firm in Boston that has worked on projects ranging from the Winthrop center tower, which is currently under construction downtown, to wework offices to the preservation of the oldest house in Cambridge. He also currently serves as president of Boston Society of architects. We also have Betsy King, Betsy, Betty's family owns via Mexico, a Mexican lunch spot in the heart of Boston's financial district. It's just around the corner from the globe and back. And before times, I would see and sometimes be among the people lined up down waterstreet for their burritos, when you could go some time. She's also on the board of Massachusetts restaurants united and has emerged as a vocal advocate for small businesses and their employees as we all weather the pandemic. And we also have Ed glacier. He's an economics professor at Harvard University, and renowned scholar on the economic health of cities. He's also co author of a new book that's out this fall called survival of the cities to city living and thriving in an age of isolation. And it's hard to imagine a more timely topic than that. What all four of us have in common, I think it's fair to say is that we love cities, we believe that cities matter. They've always been places where people come together to build lives and businesses to spark new ideas, and to connect with each other. And that goes back centuries. But the last 18 months have caused a lot of that into question, white collar workers have retreated to their homes, the restaurants and other small businesses that have seen their customer bases evaporate. Huge inequities, which have long existed in our cities have been laid bare and often exacerbated. And meanwhile, the connections that make city life what it is afraid, some say that freight for good. What happens next, though, is a subject of much debate. And it's one we'll get into today. We have a few questions for the panel, and then hopefully some questions from the audience as well. So let's get started. Because we get right into this sort of the existential question facing cities right now and a lot of people's opinion, we're in a world where a lot of white collar workers and their employers have grown quite comfortable with remote work. And that's context, what's the value of a dense urban business district like downtown Boston? What's the argument is a really expensive place to be? What's the argument to be here right now? I just wrote a book on this topic. So let's start with him.
Great, thank you so much. It's really exciting to be here. And I'm really thrilled to be part of part of this panel. So 40 years ago, Alvin Toffler wrote a mega bestseller called The third way, where he predicted that new forums of technology that would have been the fax machine and the personal computer in those days would make cities and offices obsolete. And our cities would become, you know, forests and empty skyscrapers and people deserted their offices to work from home, for 40 years, he was completely and totally wrong. When our cities experienced an amazing Renaissance, and then all of a sudden, he was right. Right, he was right, starting in May 2020. But I think he's unlikely to stay right. I think the past 40 years indicates that a world in which knowledge is more valuable than ever, a world in which innovation is so highly prized is a world that plays to city strengths. For we are at our heart, a social species don't get smart by being around other smart people. And just a few facts on this, right. So studies have looked at the productivity of call center workers when they've gone remote, easy job to do from long distances. And so productivity doesn't fall at all. But the promotion rate for call center workers drops by 50% or more. And what is likely going on is to be promoted as a call center worker, you need to figure out how to handle the difficult calls, those real pain in the neck who really wants something to change. I'm often that pain of the neck and back. And the and but how would you learn how to do that if you weren't around other call center workers? How would your manager know that you were good at this if you weren't around other call center workers. Proximity is how we get smart. Similarly, new hires have collapsed. The burning glass data shows that even though programmers are just as productive as they they've always been are. So Microsoft tells us, the new hires for programmers were down by 40%, between met February 2020, and November 2020. And so many businesses found it difficult to onboard new workers. And I think Finally, and most importantly, if you imagine a world in which we're going to have gone remote, this is a world that is even more extraordinarily unequal than the world that we had beforehand. Right? Because 68.9% of Americans with advanced degrees were working remotely in May 2020, which was the height of the remote working boom, but 5% of people with with who were high school dropouts were working remotely 15% of Americans who were Collette, only a high school degree were working remotely. And we just will not be able to tolerate that level of inequality, that level of disconnection, we have to look forward to a world in which we can reconnect with each other and find the joy of actually living live again.
Greg, Bessie, anything else you'd like to sort of add on the value of cities and where we go from here? Why people in businesses want to be downtown?
Yeah I mean, I think, you know, those points are extremely important, not only for offices, how people actually work better in teams, right. And it is something that even outside the restaurant level, we obviously cannot work remotely, but interacting with our customers is a completely different experience than just doing curbside pickup or delivery or relying on third party delivery companies to deliver our food. So it really goes down to every single industry, where human interaction is more powerful and important than just virtual interaction. And not to mention, you know, for so many restaurants and small businesses, making it to the city is such a goal, really, it was for our business. We started in the suburbs, and slowly but surely over 20 years, we managed to make it into the financial district of Boston. And it came with a lot of hurdles, and a lot of hard work. And for so many other different restaurants and small businesses, it's the same. So you're talking about people's life investments in cities, to reach more customers to reach a wider audience that has now just gone to the suburbs. And suburbs are not as easily connected, even through transportation compared to cities. So it's harder for us to get any type of product for them delivered or, you know, mailed or anything else. So really, this interaction, this human importance is not just necessary for the offices, it's necessary for every single industry that wants to actually grow, thrive and survive.
Definitely I agree with that, and some really great points and I'll start by answering that by sharing a story about how I spent my morning. So this morning, I had a business meeting downtown in New Orleans Square in fact, and I sat in a parking lot, hoping to have gone inside of a cafe. But the whole the cafe was closed. It was only open on the weekends. We It was a well No one cafe in New Orleans Square, didn't know it was gonna be closed this this morning. We're hoping to go in and enjoy a favorite beverage and connect with my coworker. So we ended up sitting outside in the courtyard that they had ended our meeting there. Well, as we were sitting in the parking lot, there were people have to look, first off the person coming up to the closed door, only to find it couldn't get in. Why do I share that? After that, or meeting my coworker, we decided to walk around the neighborhood, and we ran into a business owner, were able to hear about the stories that he had to tell us about what he'd been doing over the last 18 months to grow his business. And some of the struggles, he invited us in to his storefront and showed us so many incredible artwork, because that's part of what he does, that he's been working on with some local artists. And I learned so much over that, you know, two to three hour period that I was done in and newbie on square, that it helped me to actually remind myself and my co worker of the reason why we're doing what we're doing each and every day to help redevelop cities. So it's really important that, you know, we still get together, you know, cities have been a human invention for 1000s of years still continue to be that way. I think we're reminded every day that we do need people, we do need a social interaction. And while our behaviors have changed, where we're working remotely, you know, some of us most of the week or parts of the week, we're still social beings, as I said, and we that has not changed, even though some of our behaviors have had to change over the course of the pandemic. So, from my perspective, I'm still betting on cities. That's what the core of our business is about. And I was really reminded about that this morning.
That gets that gets right to another question that my next question, Greg, and, you know, your behaviors have changed, right. And a lot ot people, people who used to come into the city every day tor work, and stay in our office buildings all day would say that that's really not what they want to do anymore. They want to come in, they want to come into the office, but they only want to come in three days a week, or four days a week or two days a week, and have a more flexible and better balance between work and life, which is great, but what does that mean for the small businesses that thrive on downtown foot traffic that used to serve lunch? Or do people's dry cleaning? Yeah, all the all the small businesses that make the fabric of our cities that rely on on those people being there. A lot of people are thinking about this. Ben, Bessie, you're one of them. What do you think? And where does where does this go for for the small business community of downtown Boston?
You know , that is such an interesting and tough question, because that is essentially what we're figuring out ourselves right at the restaurant level. And this is something that we have heard from many other restaurants as a board member of mass restaurants united, working in collaboration with the independent restaurant coalition out of New York, and now with other restaurant organizations across the country, we are figuring out what does this mean? How can we survive with people, you know, coming into the office two or three times a week, if we're downtown, right? Maybe our customers are gonna rotate to those two or three days that they're in the office, one day, they're going to be at the Italian restaurant, and the next day that they're in, they're going to be at the Mexican restaurant, and the next day that they're in, they're going to be at the Greek place. And then next week, they're going to rotate again. But that's not sustainable. And by all means, there's nothing wrong with suburbs, right? This was a great opportunity for servers to show that they matter. But in reality, if we want equity and equality than suburbs, if we want to continue this boom that they've suddenly been given because of COVID, they need to have accessibility. And we need fair transportation options that don't just need a car for us to go to the suburbs and enjoy those services that they offer. Equally for businesses that are in the city, we need to ensure that our employees that our team members, and not just our customers are able to come into the cities to work and to do business with us. So it's it's a whole cycle of needs that we are looking at right now in order to become more sustainable, because the reality is, this is a new normal. So how can businesses survive with only customers coming in three days a week, if they're going into their offices, and that's going to entail talking about rents, talking about accessibility, talking about services for employees, and for customers like childcare or you know, benefits if we are not able to pay them a higher rate, because we're only really making business three to four days a week is a lot of conversations that have to involve our governments and that have to involve really looking at equity and equality for small businesses to survive.
Greg, anything else you'd like to sort of add on that topic?
Yeah , I think the most important thing to recognize is that there will be rent adjustments, right? So if there is a decline in demand for commercial urban real estate, in the medium run, commercial rents are going to go down. That spells good news for the small businesses that are renting restaurants. But it also means that in some cases, you will see, you know, older businesses be replaced by younger scrappier businesses. Now, many of those younger workers would eat out more often anywhere, right? Because they're younger, and they're, they're, you know, they're looking for fun. Moreover, if businesses are efficiently using their valuable space, they're going to make sure that even if individual workers are coming in only three times a week, they're going to get better space share. And so the offices will still be occupied, as long as they're still really expensive real estate, as long as the businesses are doing their job. So I think once we get past the disease, once we get past the awfulness of delta, I have every expectation that you know, the the offices in a place like Boston are going to be full, where you should expect to see vacancies and much more of sort of an urban and retail Armageddon is in those cities where commercial rents were already low, where a 20% reduction in commercial rents will lead to massive office vacancies. And that will ripple out through the entire urban ecosystem, right, causing a great deal of pain to urban restaurants. But I think I Bessie, if you know, if small businesses can just hang on there, the demand for city space is sufficiently strong, the demand for your food is sufficiently strong, that, in fact, this will thrive. And I am skeptical that there's ever going to be a possibility that, you know, we'll solve the public transit needs of all the suburbs, certainly not in places, unlike Boston, where our suburbs are just completely designed around the car. And that access to public transit is a tremendous advantage that cities have, and it's something that will keep people coming back to cities.
And I also just want to add that I believe that we have to get the building owners involved in this conversation. Because, you know, just to give you go back to the story I said, I shared earlier, in Nubian square, there are a ton of the occurrences right there a ton of vacancies of ground floor retail, prior to the pandemic, and it's got, you've onlygotten worse during the pandemic. And what I learned this morning is that, you know, some business owners for starting a business owner, building owners for whatever reason, they'd rather have the, the storefronts vacant, then accept below market rents. So they probably have their own philosophy about that. But my point is, I really think that we really have to have a broad net of engagement includes the the restaurant tours and retailers, the building owners, and city hall to really kind of unlock the gridlock here and to be able to, to get new businesses into these spaces. I look, I think there's gonna have to be some public intervention, there's gonna have to be some types of subsidy. You know, the market rents weren't sustainable to a lot of business before the pandemic, and it certainly has just gotten worse. No. So I really think a broader scope of engagement is really necessary here and involves those business building owners.
Exactly. And if that is such a great point, and if I find my just ad is, you know, we have allowed in a way, building owners and landlords to really have the, the the way they want it, right. And so if COVID taught us anything, is that exorbitant rents don't work, luxury condominiums and luxury offices aren't always going to be full. And when you surround your cities, around high rates, high rent rates, and exclusive luxury businesses or services. It's not sustainable. It's not equitable. So it goes right back to that. We need to have reality check and honest conversations about what is fair pricing. What is a fair rent? And what kind of businesses do we want in our downtown's in our cities, if we're willing to have just chains, you know, then great. Expect to eat at a sweet green right? Starbucks or you know, any sort of chain every other day of your week when you're going to the city. But if you actually want diversity, if you want representation of the people in your city in downtown's, then we need to have those honest conversations. And we need to make things fair for the tenants as well.
That brings up a really interesting question. There's so much vacant real estate, particularly retail real estate in Boston and a lot of cities right now. And, you know, we hear talk of national chains, we sing, you know, restaurant national restaurant groups coming in and leasing spaces in Faneuil Hall that used to be local, for instance, and Newbury Street. You see it in a lot of the sort of shopping districts around town right now. What is the role of government of the Civic community to say, you know, Boston, and energy city is a pretty unique place. So we don't we don't just want national cash. We don't want everything to look the same. We want to nurture, you know, new and interesting places that bring vibrancy to city, who whose job is that? to make that happen? Do you think I can start with Greg?
Yeah, I think it starts with leadership. But at the highest level, I, you know, say a recent article, actually, I'm looking at it beside me here is saying Boston's Equity Plan is still on the ballot. And I think that goes to the heart of it is that we have to recognize that it's not a level playing field, inequities have gotten worse, during the pandemic. And, you know, we have two great candidates that are, you know, up. So speaking of Boston, that are running and, you know, I think this is front and center of the issues that we really need lit leadership from City Hall and from the statehouse. And I think it is going to require public investment, the market isn't gonna solve it on its own. I mean, you know, it's great that we have a free market economy. But, you know, we do need to do more to have the kind of equity and diversity as Betsy mentioned, that we really want. I mean, if you think if you look at how Boston is, is marketing in itself, it's run a great new campaign. It's, it's for an inclusive Boston, it's the word specific words are all inclusive Boston, where we are a city of people, all people. And I think that has to be true. And we have to take that seriously, to really change the brand of Boston. I mean, Boston doesn't have that reputation by accident. And so I think that it has to start with leadership, and that we do have to invest in our local neighborhoods, encourage diversity and a diversity of cultural experiences. Because that's, that's what makes us unique, I think we have to celebrate that. And once we do that, I think we're gonna start to see that, you know, we're gonna thrive again and start to evolve as a city in this post pandemic world.
Anybody else want to jump in?
Sure. The great challenge that cities throughout the world are facing is that the COVID pandemic has certainly laid bare the enormous inequities of our world, the enormous inequities of our cities, the fact that our cities are too expensive. The fact that our schools are often underperforming in providing upward mobility for urban kids, the fact that our police often do a better job. And I'm not certainly not specifically talking about Boston's here, of protecting people from crime, and they do have treating every young person with the dignity that they deserve. Those things desperately need to be addressed. But at the same point, we have just had this change in information technology that makes it easier for every business to leave the city that makes it easier for people to relocate. Even though I think people will be going back in the office, it's quite possible for your startup to leave Kendall Square, and relocate to Vail if everyone likes skiing or relocate to Honolulu, which feels like it's a replay of the 1970s, which was a period in which progressive dreams collided against the highways and containerships that made it possible for the wealthy to suburban eyes, and for businesses to urbanize. So what are the answers on this? We need to be smart, and we need to figure out what things we can do that will bring value for everyone. In the case of schools, I think there's no question that, you know, upward mobility for Boston's kids has to be an absolutely central priority for the whole city going forward. And if that takes more money, we need to raise money to pay it, but we need to actually demand performance in exchange for that. In terms of affordability, the most natural thing is just to permit more building, right and to target the permits towards housing that is affordable towards ordinary people. When it comes to businesses. It is shocking that we regulate the entrepreneurship of the rich, so much more likely than we regulate the entrepreneurship of the poor and middle income Bostonians, right, you can start your internet phenomenon in your Harvard college dorm room and have a billion users before any regulator looks over your shoulder. But try to start a restaurant, you know, three blocks away, and you have at least 15 products to get through. So we have power through permitting in order to make things easier for our ground level entrepreneurs. And we have the power to if we want to, to, to particularly favor, particularly forms of of restaurants, particular forms of culture. And I think it is so important just for the leadership itself, to emphasize the need for Boston to be diverse for it to be inclusive for to be a city, not just for empowered insiders. But a city that embraces its outsiders can give them the freedom they need to flourish.
Absolutely, I mean, Tim, these two gentlemen had written the nail. Look, I live in East Boston, it's been a dream of mine to live in East Boston for a number of years ever since I used to work for massport, over seven years ago. This is a neighborhood that I identify with, because it's highly Hispanic. But now that I am living here is not so much the case, because there's so many luxury developments that are happening, and that our city is responsible for. So right as it was just mentioned, the licensing, it just starts with something as simple as that. If we want people to live in the cities, if we want those students that are graduating from those colleges, to stay in Boston, and set roots and have families and make city life a possibility for generations to come, we need to make housing affordable. And it's as simple as that. If you have affordable housing, if you have affordable living options, then you can have a thriving local businesses who are gonna want to be around that city, that neighborhood, because that's what local businesses do exactly what the gentleman mentioned. They bring in culture, they bring in diversity, and they celebrate the city's historic roots. So, you know, fresh new leadership is coming. It is a year of reckoning for Boston and for many other major cities that have made it very expensive for its residents to survive. But we have an immense opportunity to change the quote unquote, business as usual that Boston has lived under for decades.
Sounds good. You know, in Boston, one of the things that has emerged and this has come up a few times already, but the the last 18 months have shown how the the sort of the winner take all economy that characterizes Boston and a lot of other cities, you know, seeps into so many aspects of life here. What what, yeah, what can and should aside from affordable housing bust, cities like Boston do to make sure that the prosperity that is here reaches and meaningfully improves the lives of every corner of the city. But what Yeah, what should our mayoral candidates and our civic life be be talking about spreading the wealth that we have downtown? Whoever wants to take that?
Well, I'd love to just ask, you know, our future mayors. It's just, we have such large, educational and technical and, you know, health institutions in Massachusetts, in Boston, that are not going anywhere, Harvard, MIT Mass General Brigham and Women's they're not moving their headquarters from this city. Why aren't they paying taxes? And maybe that's a very tough question to ask. But it's a realistic question. Because if we started taxing some of the major institutions that live in our city in our state, the fair share, or at least a portion of the share of taxes that they should be paying that would generate millions of dollars to invest into education, affordable housing, and other basic city services that don't include the police that are needed by our cities. Just start there, literally, let's see who's paying taxes and who is it? And next, let's see what's being allowed through permitting. And why do we make it harder for our local people, our local industries, just like it was Jared right now to open up shops compared to larger, richer corporations. That's a feasible question to answer.
Yeah, yes, some of that is great questions. Another thing that I would add is going back to the affordable housing. Question is, and I do agree that we do need options that are closer that approximate to where people are working. We have to go beyond the standard IDP inclusionary policy of 15 to 80% 18%. affordable units and especially in the downtown areas, we have to go well beyond that. But But I also want to just address the production rate for housing as well, you know, currently on average, from what my experience has been to do 50 units of housing in a typical process, you know, from concept through construction financing, and the rest can take you five to seven years to produce 50 units of housing, you know, we do have to their processes and things that we do have to fix, it's very expensive terms of the soft cost to produce this housing. Because it partly because of the tight takes on the complexity, I think we do have to fix that that system to make it less expensive to create the housing, we can do it in a in a much more speedier way. The other thing that I want to just touch on is that I believe that I would like to put forth this to the candidates, the idea of the inclusive city, which, for me, that is seven key areas, which I'll just run through really quickly. But one is it's designed for proximity, right, so one of the things that we enjoy both cities currently, is that you can live work, get your basic needs, and have the ability to connect with people within a 20 minute walking radius. That's not necessarily the same experience for those. And for those who can't afford to live in the cities and pay 30 $500 a month for one bedroom, they get to enjoy that, that benefit, the rest of us can't. So that that has to get fixed. That dimension, the transit, not everyone's life is within a 20 to 30 minute walking radius. So we have to make it affordable for people to be able to move safely between neighborhoods and, you know, not be afraid of getting sick, or some other thing happening on while they're trying to take public transportation. So I touched on a mix of housing, we need a good mix of housing, we knew that we you know, our open space, one of the things that we've benefited from in the pandemic is access to open space, when we can't be indoor. But Boston does not equitably distribute open space to our neighborhoods, or it's certainly not with the same level of amenities. Some of them don't have access to proper seating, shade, water or bathrooms, which are key to really being making accessible for people of different ages, genders, family situations. I've also just mentioned climate change, you know, there's an I could go into detail about that for them. But we do have to seriously address what our buildings are doing. To to the to our environment, as well as you know, the sea level rise. I touched on the artist community earlier. That's the that's the sixth point. And the last point is really think the most critical one is who gets to participate in building and sustaining the new model that we're all looking forward to. And really making it a priority that there's more diversity in terms of who the companies that get to design to develop the built to operate occupied spaces that we're creating in our city.
There's no repealing the laws of supply and demand. Right when if you have a city that is as attractive as Boston is, if you don't permit enough housing, it risks becoming turning into a boutique town affordable only to the wealthy. Right. Real affordability does not mean that there are a few exceptional affordable housing units that people who are lottery into them and get it means that any person can come and rent a studio apartment or a one bedroom at a reasonable price. That only comes if we have a totally different approach towards permitting, that just manages to get it through much more quickly, particularly on brownfield sites. But I think we also need to think about triple Deckers were a fantastic way to provide affordable housing in 1910. It's not obvious that they're a fantastic or climate friendly way to deliver affordable housing in 2040. Right, so we have to be able to tolerate urban change. And we really need to figure out a way to deliver the housing that will provide space for ordinary people to find their dreams in Boston.
That sounds good. Let's talk about jobs for a moment. The we talked earlier about remote work and how the preponderance of remote work among white collar office workers but and those industries have largely made it through the pandemic you know, in pretty decent shape. But service industries, hotel workers, restaurant workers, lots and lots of jobs have just evaporated. And those jobs were you know, those are the under the good of the working class of Boston and and It's not clear and what replaces them. So how do we find and help people who, who may not have the degrees to participate in our knowledge economy and may not want to go to college? How do we find them opportunities so that they can they can build a life here? How do we build those sort of jobs that will sustain families in this city.
This was the amazing thing about our pandemic about this pandemic, right. And it makes it different from all of the pandemics of the past. So if you go back to the Black Death 1351 of the great demographic disasters in human history, a third of Europe died. But the people who remained were wealthier because in a farming economy, wealth is based on the amount of land per capita is around, Flash forward to 1918 1919. And the great influenza pandemic of those years, right. Yes, there were short term economic disruptions. But fundamentally, people still wanted to buy a toaster or wanted to buy an ice box, despite the pandemic, but over the past 100 years, right, automation, and outsourcing has caused those factory jobs to disappear. And the great salvation is the urban service sector. 1/5 of the American labor force, 32 million people labored in leisure, hospitality and retail trade in 2019. It was the employment safe haven, right from when the factories disappeared, the ability to serve a latte or a burrito with a smile was something that could enable someone who didn't have an advanced degree from MIT to still earn a living and find an amazing future, right. But those jobs can vanish in a heartbeat when that smile becomes a source of peril, rather than a source of pleasure. And so we will not get those jobs back in let until we are actually safe again. Now, I actually believe that if they're relatively unfettered, that in fact, Boston and the cities of the world war generally are full of amazing entrepreneurs, like Bessie here, right, who are capable of coming up with new forms of work, new forms of food and forms of entertainment, that can employ less skilled people. But the first job that we need to do is to actually, you know, get past this disease, when it comes to actually, you know, providing more opportunity for ordinary people, I think we have to recognize the need for more vocational training. And to recognize that often, you know, one track vocational training isn't the right thing. We need to do things that are experimental, like after school, on the weekends, summer programs, to train you to be a plumber or a programmer that doesn't take you out of school, where you can competitively sourcing, you can have community colleges compete in for profit companies and trade unions. And then you can pay for performance because you know, if someone's learned how to become a programmer or a plumber when they graduate. So we really have to figure out a way to flexibly deliver skills in a way that you actually upskill, those Bostonians who start with less, and we need to get past the pandemic and then enable the creativity that is so often stymied by the regulations to pull back small businesses.
Yes, yes. And yes, I mean, I cannot, you know, let's just start with, I read this morning, and I have it here an article from Bloomberg. That said employers and economics, economists expected a spike in job applications after enhanced unemployment benefits expired on September 6, that hasn't happened. And people are shocked, right? That was our big assumption was these unemployment benefits are gone, people are going to come back to work. But guess what, people are not going to come back to work if they still have children at the house. And there's no afterschool programs or daycare programs that are accessible, affordable and open. So that's point number one, people can't go back to work if they want to have families, and they want to take care of their families. And that's where government comes into work, right? What are we doing to help our children? What are we doing to make education accessible and open? And much like those technical programs? that's point number two, yes. What are we doing for people that don't want to get to that and go to college? over this past month, with all the rain that we have had our restaurant experience flooding? It took us almost a week to get a plumber to come to look at the damage. And right now we're in the, you know, semi battle with our insurer to try to get that covered, again, putting a burden on the business. And why is it a shame to be a plumber? Why is it a shame to be an electrician? It is not. And we need to remove the stigma from that so that people that don't want to go to college have a path. And last but not least for local industries like us in the restaurant industry, or you know, a small barber or a yoga shop or a retail shop. What are we doing to level the field? Right now a lot of restaurants got our F funds, restaurant rehabilitation fund relief money, it's a grant and you know, mass restaurants united and other restaurant groups are fighting right now for senate and Congress to pass a refund of those funds because there are so many restaurants that didn't get that money. But for those restaurants that did they were able to use that money and pay the $25 an hour or up for a waiter over the summer, that's not sustainable. But if we can't pay that, then how are we making it equitable for our employees across any small business to come into work so that they are not earning $30 an hour still, that is part of the reason why we have a lot of our workforce not returning to work, because they're trying to find affordable living options, and jobs that pay what they are worth. So again, that is a conversation in which we need to involve our governments and say, if we cannot pay $25 an hour to all of our employees across the board, regardless of their position, or their level of experience, what can we offer? And how can our government help, you know, even the playfield, so that they have healthcare so that they have affordable or free childcare and education so that they have affordable or free transportation, all these other things that are going to make possible for wage working employee to survive and not just live paycheck to paycheck.
Agreed, I just want to underscore the point about the housing that we definitely, as best was saying, Have to support with approximate affordable housing. You know, otherwise, we have to think about where people live as well. You know, for the coming 90 minutes to two hours each way for Hospitality or a social worker is just not sustainable. We need options that are closer, we need to continue to support funds, like the capital magnet fund, that helps to provide affordable housing through state resources. And not only for rental, but we also need homeownership that starts to really build wealth. And that is a key piece that for a lot of Americans, you know, myself included, one of the greatest assets that we have is our homes. And that has not been within reach for, for many of the folks that we're talking about here today. And we need to continue to support those kinds of initiatives on programs at the city and state level.
This has been a really good conversation so far. It's been a little grim, grim times, of course, but you know, here we are, so we get into the audience questions. But before we do, I wanted to ask each of you, what's one sort of unabashedly good thing that you have seen or learned about urban life over the last 18 months? It's been been a lot of tough times. But there's been a lot of good stuff, too. What do you guys see out there that makes you hopeful for cities like Boston?
Honestly, to me, it's our community. The the fact that it's gonna sound very rude in a way, but the fact that the people who were in from here went to whoever they were from, and you had all the Bostonians all the locals or the people who have been born and raised here, or who have lived here for a number of years, like me, 20 years, and I call this city home, and how we came together, to not only help our industry survive, but to help our neighbors. I think that really is what we saw in our communities and in the power of cities that we were so close to each other, that we really saw the the consequences of COVID that we lost people, that that closeness allowed us to see the reality of this pandemic, and to understand how valuable human life is and how valuable community is. And that is what's given us or at least me, the spirit to continue fighting for that community and to make Boston ours again.
For me, Greg, you know, for me, there's several things, but I'm going to want to break the rule a little bit, I'll give you two. One is what Bessie just mentioned. You know, we realize how dependent we are on each other to survive. And I really would love to see us not lose that empathy and understanding for each other. I think that's that's a key. It's at the end of the day, it's all about people. And we have to we can't lose sight of that. But I also have to put on my Urban designer hat. And just point out that for too long cities have really been designed for cars and not people And what we've seen over the pandemic is an urban designers dream where we've had these street closings, we have had outdoor dining, you know, take over sidewalks and streets closed off for pedestrian to pedestrian only activity. And I really love to see that remain as a permanent part of our city fabric. You're seeing places like even Paris that has done this that has done more than any other city in the world to take space back from cars. And by doing that, you also attract more people to come down to the downtown area, because you're offering a unique experience. So I'd love to see that remain as we move forward into the future.
So I'm this is close to the first comment, but I think it's recognizing how precious human interactions actually are. And you know, I've been back in the office for a month, we've had our students around for three weeks now. And it is just amazing how much joy there is, in interacting. And yet, in recognizing how terrible that year and a half of zoom light was, and how you know, each smile as a celebration, each meal shared with an extra person is like a gala feast, a banquet, just because there's so much joy in being around other human beings. And I agree strongly that we've recognized our own weakness. And consequently, I hope, and I believe that we have also recognized our connections to the weaknesses of others. And our need to take care of each other as a species as a city as a community.
That sounds great. So we've got a few minutes now for q&a from the audience, if anybody out there has questions they'd like us to talk about fire away. But we do have a few people have already submitted. So first one is sort of something we've touched on a bit, but but to get into a little more detail. How do we address the skills and wealth gaps that exist in our community, the power gap between people of color and white people? It's existed for generations in Boston? And how do we become, you know, a new type of hub city without displacing our less advantaged the residents and make sure that everybody gets to share in that prosperity? How do we address those questions? Bessie?
You know, it goes back to the point that I was sharing about living here in East Boston and having a be less and less Hispanic than I remember when I was 13. Coming here. But I think one of the first things we need to realize is that Boston is not equitable, right? We need to make amends with it. And you were saying, it has been a very grim conversation. I don't think it's grim. I think it's realistic. And change happens when we face a reality. So if we are able and capable to realize that changes coming, we have or will have very new different leadership and our city government very soon. And we have two choices, to fight what they are going to try to implement and maintain, like I said, the Boston business as usual, or to acknowledge that change is needed. And that if any business even the you know , businesses that have been in power, or the landlords that have been in power, or XYZ that has been in power for decades, they will not be able to survive without sustainable equity solutions. So if they don't choose to acknowledge that change, and implement that change, then they are really going to be the ones to stand out and be left behind or be called out for their inability to help sustainable equitable change in our city. And I think that's the point where we're at now, where people are willing to stay quiet, and where people are willing to call out whoever is not willing to maintain this community that we have re engaged in our city.
So cities have long been places of incredible inequality. I mean, it was Plato, who wrote in the Republic, that every city of whatever size is in reality, two cities, one, the city of the rich, the other city, the poor, and they are always at war with one another. But that inequality is not something that is necessarily bad. Cities attract rich people by being relatively pleasant places to be rich. They attract poor people by being less miserable places to be poor, by giving the opportunity to get around without a car for every adult by providing job opportunities in the urban service sector. Boston shouldn't apologize for its inequality, just as suburbs that zone out by not allowing any home for poor people should take pride in their equity. Right? That's a very false type of, of equality. But the only thing that makes the urban inequality tolerable is if cities are also delivering opportunity, if they're enabling poor children to turn into middle income or wealthy adults, and that is, that is their historic mission. And what we know, from again, the opportunity, opportunity Atlas data that my colleague Raj Chetty has put together is that our central cities are failing to do that. And denser areas, denser neighborhoods produce less upward mobility for kids that are born there. And there's a break in upward mobility right at the edge of central city school districts, where if you're born right outside the Central City School District, you're significantly wealthier as an adult. And when you grow up as an adult, and you're significantly less likely to end up incarcerated. How do we change this in the long run, in the long run, there's no recipe but education, there's no no recipe, but skills. And that has to be the top priority. I agree, strongly agree strongly, vocational training needs to be part of this. But we need to focus on always to make sure that Boston is a learning machine, not just for people who work in fancy tech companies. But for kids who are disadvantaged, for teenagers who are starting with less, we need to make sure that they're they never stopped learning. And they recognize that cities, communities and people live or die based on their human capital. And that human capital can means lots of things, right, it doesn't necessarily mean just being a programmer, it can be being a great chef, as well, and being a great cook. Now, on top of that, we need to continue to do more for our entrepreneurs, we need to treasure them, I think largely, the rents will tend to correct themselves. But I do think that, you know, we have to worry about those things, which are preventing those quick adjustments. So some commercial mortgages have provisions that make it impossible for landlords to cut rents. Those things are clearly problematic in terms of the correcting of cities, the downsides in the cities. And I believe, also that we need to be wary about calling people out, we are one community. And it I think calling people out is dangerous. But I think the other way, which is praising and never ending are praising those people who are fighting for equity, those people are fighting for opportunity, those people are providing jobs for people who don't have fancy degrees, we should never stop praising those people and recognizing that they are they're really great community members.
I just want to add to what it's saying that I mean, I think the cause for these kind of commitment for you know, equity is not, it's not a zero sum game, or that there has to be winners and losers. I think we all benefit and win when we have an equitable and just society. Right. But I also just want to point out that we do have to embrace a very aggressive economic policy agenda for people of color. I think we have to add, saying we have to invest in businesses and entrepreneurs, we have to really embrace or entrepreneurs and business owners, people of color, we have to embrace empower them as leaders, we do have to invest in our students of tomorrow. And you know, we have to continue to invest in our in our cities, and especially those neighborhoods that are, you know, overexposed to the effects of climate change, and have poor health outcomes for the residents because of you know, bad air quality and things like that we have to continue to invest things that are not spending their hard earned dollars in medical bills. The other thing I just want to again, address and I mentioned earlier is homeownership opportunities. The homeownership rate for white families versus people is half right, people have colored on homes at half the rate of their white counterparts. And so we have to be able to enable more homeownership opportunities, especially in neighborhoods with high concentration of people of color, which has for years been the source of are the beneficiaries of rental homes, which is great. I mean, we we need ladders of opportunity to have different levels of of shelter, but we for too long have not invested in homeownership as a wealth building tool. And I believe that we have to really address that and really put more public dollars to helping to make those projects more financially feasible for those are building it. And so that those folks can benefit from the wealth building tools that for far too long have not been a accessible to a lot of people.
Sounds good. We got another question from the audience. It's sort of about the environmental case for cities as opposed to suburbs. I guess we've seen so many people move out to the suburbs over the last 18 months, what's the but it would seem like it's urban life is good for the planet, right? We have we have transportation, transit, we can walkable communities, you're less dependent on a car. All that? How do you make the environmental case now in this in this, particularly with climate change, becoming more and more obvious every year? Where does that fit into the argument for dense cities?
It's a big part of it. So this is something that I wrote about in my last book trying for the city. And it's this is from research that I did with USC environmental economist, Matthew Kahn, where we added up the carbon emissions holding income and family size constant associated with living in different parts of the country. And the truth of the matter is that the parts of the country that look Brown, or green, and the parts of the country that look green, or brown. And the reason for that is that people who live in cities, again, holding income and family size constant, live in smaller apartments rather than big homes. And that means less energy to cool in the summer and to heat in the winter. And they're much more likely to either take public transportation, or truth be told, in much of America, they're much more likely to drive shorter distances. Right. So one way of thinking about this is if the great growing economies of India and China see their per capita carbon emissions rise, that scene in the sprawling United States, global carbon emissions go up by 130%. But they stop at the level seen, but by wealthy but hypodense Hong Kong, global carbon emissions go up by less than 30%, we all have a lot to gain by Boston building up, right by not sprawling out. And by making sure that we don't artificially stop our cities from building, or that we artificially subsidize people to drive long distances on on highways by providing highways, which are not properly being charged.
Yeah, I agree, I believe in the densification of our cities. And, you know, buildings do conference, nearly 70% of our carbon emissions in our urban centers today. And they do contribute to significant cause of greenhouse emissions and environmental degradation, degradation. However, we can do something about it. And that's the beauty of it. You know, we just passed zoning overlay in Boston, that requires development and retrofits to take additional steps towards mitigating climate change, and then getting to a net zero level in terms of energy use and retiring fossil fuels. By 2050. It's an aggressive goal, I think that we will get there. And, you know, putting our heads together, you know, architects, developers, engineers, you know, electricians, that the trades coming together, you know, that really creates almost like a new economy almost for city can create a lot of new jobs. And in, in the process, we're making a post pandemic Boston, a really healthy place to live and really minimizing our carbon footprint.
Well, thank you guys, so much for joining us this afternoon. I think we could probably talk about this all day. There's so much to talk to touch on. But thank you all. And yeah, hopefully, hopefully, the virus phase of this is behind as soon as we can get back to building the city that we all love. I'm going to turn it back over to Christina for some final comments, but but thank you all for joining us.
Great , thank you, Tim, what a fantastic and candid session, I want to highlight a few key points that I heard, we need to be around each other physically to prosper and grow. At the end of the day, humans crave physical interaction, and that interaction is precious. We are coming from ad that I really loved proximity is how we get smart, and we depend on each other to survive and thrive. We don't want to lose the empathy, empathy we have for one another. And we want to keep that joy of interacting. We need to be thinking about stability, fairness, equity and diversity. It is not a level playing field and we need to work to make it one. We also heard about the importance of sustainability and climate change. We to focus not only about making a particular company more green, but the supply chain and the operations. We hear a sound dondero committed to these goals both here in the US and globally. Lastly, we all need to be part of the conversation. Here at Sandia. We have them and want to continue to be part of that conversation. It's critically important for us to help people achieve their own version of prosperity by helping them solve complex problems. Thank you for a great session and determine the panelists for the rich discussion. Have a great day.