Mar 25, 2020

Axios Cities

By Kim Hart
Kim Hart

Welcome back. There's a ton of news to cover, so let's dive right in.

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  • Today's edition is 1,707 words, a 6-minute read.
1 big thing: Exclusive — Elected city officials brace for fiscal blow
Reproduced from National League of Cities; Chart: Axios Visuals

U.S. cities of all sizes are facing significant fiscal pressure as they try to fight the coronavirus. Many local elected officials expect that they'll have to curtail services, raise fees or draw down reserves to absorb the blow.

Where it stands: Congress and the White House reached a deal overnight to inject $2 trillion into the economy, with $150 billion set to be allocated to state and local governments, including $8 billion for tribal governments.

  • Details of how that money will be allocated are still unclear, as the text of the bill is not yet available. A Senate vote is expected today.

The big picture: Most cities have taken aggressive steps to try to control the spread of the coronavirus, according to a survey of elected leaders of 326 cities conducted by the National League of Cities.

  • 89% have closed public places, and 84% have banned large gatherings.
  • 70% have halted utility shut-offs, and 49% are funding food delivery programs, like school meal replacement.

Yes, but: Essentially shutting down their economies while also expanding safety-net programs comes at a huge cost.

  • When asked how much their city, town or village would likely be requesting from FEMA's Public Safety Assistance Program, 12% of respondents anticipated seeking $1 million or more in reimbursements.
  • 50% of city leaders expect to have to draw down their reserves to pay for their coronavirus response.
  • When ranking relief measures that would help the most, city leaders prioritized targeted funding to assist local employers (60%), block grants directly allocated to local governments (50%), and targeted funding for housing, including emergency mortgage or rent payments (45%).

A separate Morning Consult poll of 2,200 adults commissioned by the National League of Cities found that Americans overwhelmingly (86%) support the federal government providing funds directly to cities to help support coronavirus challenges.

  • 80% support local governments spending money to control the spread of the virus, even if it means raising local taxes.
  • Overall, a majority of respondents support local governments' policies to help stem the pandemic, including supporting at-risk residents.

Between the lines: Typically, emergency relief legislation directs money to state governments to then dole out to local jurisdictions. But counties and cities say there's simply not enough time to go through that extra procedural step — they need aid immediately.

  • Local officials worry that the legislation limits direct aid to jurisdictions with populations that exceed 500,000, leaving out smaller localities.

County governments, which run 1,900 public health departments, expect the crisis to cost billions.

  • Los Angeles County, the most populous in the country, is estimating $290 million in costs over six months, and 50 of the 88 cities in the county will face additional expenses of $145 million.
  • That doesn't factor in lost tax revenue due to businesses shutting down for weeks if not months.

What they're saying: "If there ever was a scenario where state and local governments needed a strong stimulus injection, it is now," Tom Kozlik, Hilltop Securities' head of municipal strategy and credit, in a client note.

  • He said this crisis is more dire than the Great Recession of the 2000s.
  • "What is facing them now is happening quicker, there is a national health care crisis to battle, and the economic and financial fallout is likely to be unprecedented."
2. The battle for New York

Illustration: Eniola Odetunde/Axios

New York's fight against coronavirus is also the nation's fight, as the state — and the city in particular — emerges as ground zero for the disease, with "astronomical numbers" of cases, to quote Gov. Andrew Cuomo.

Why it matters: The Empire State has 5% of the world's COVID-19 cases and about 50% of the nation's.

  • Its success — or failure — in fighting the virus, safeguarding citizens and treating the afflicted will tell us a lot about what can succeed in the rest of the U.S, Axios' Jennifer Kingson writes.

A pivotal moment: Cuomo spoke passionately at a press conference Tuesday about the importance of devoting all resources to New York's rapidly escalating caseload.

  • "What happens to New York is going to wind up happening to California and Washington state and Illinois," he said. "It's just a matter of time."

By the numbers: New York has 25,000 cases of the novel coronavirus vs. 2,800 in California, 2,200 in Washington and 1,200 in Florida, Cuomo said.

  • The apex of the epidemic in New York isn't expected for 14–21 days.
  • The state had 53K hospital beds pre-crisis and now expects to need 140K.
  • New York City accounts for more than half the state's cases: Nearly 16K people have been diagnosed and at least 125 people have died.
  • The first COVID-19 death in the state happened just under two weeks ago, in Brooklyn.

As the densest city in the country, "New York is really a testing ground" for ways to fight the coronavirus, Tomas Hoyos, co-founder of Voro, an online social network where people share recommendations for doctors, told Axios.

  • "To the extent that you can apply elsewhere the lessons you learn from the most difficult place to contain COVID-19, you're going to be in a good spot," he said.
  • The flip side? New York also has more resources and commands more attention than other places that haven't (yet) been hit as hard.

Worthy of your time

3. City spotlight: Topeka

Topeka, the capital city of Kansas and the county seat of Shawnee County, is a small city of 127,473 residents. Photo: Getty Images

Readers are telling me about what their own communities are doing. I'll try to highlight these stories each week.

As of today, there aren't any confirmed cases of COVID-19 in Shawnee County, Kansas. But Topeka Mayor Michelle De La Isla immediately put in place stop-gap measures to keep residents safe, both physically and emotionally.

  • More than 70% of Topeka's schoolchildren receive free or reduced-price lunches. When schools closed, local churches stepped in to adopt a school and make sure families are fed.
  • Some of the elderly population relies on Meals on Wheels for daily food. Volunteers who are healthy are trained in proper hygiene to deliver food to the elderly and also check in on their other needs.
  • For people who want to help but can't leave their homes, De La Isla created a "warm calls" program. Volunteers call or FaceTime people who live alone or just need someone to talk to during this stressful time.

The latest: The county's health officer on Tuesday issued a stay-at-home order for 30 days, requiring residents to stay at home except for essential needs.

  • The Greater Topeka Partnership also announced a $2 million emergency stimulus fund for affected local businesses and workers.

Information overload is a concern as people are bombarded with information. De La Isla does a televised and livestreamed press conference every day at 5pm. Tonight local leaders are hosting a live Facebook chat at 6pm.

  • "We haven’t really been addressing that our country is going through trauma — fast-changing and immediate trauma," she told Axios. When possible, she's doing one-on-one Zoom calls or taking questions on Facebook.
  • "People are hungry for that human touch. I’m trying to make sure that personally I’m modeling what I’m asking people to do," she said.
4. Recession could lead to spike in automation

The coronavirus pandemic could accelerate the rise of the robots, according to a Brookings Institution analysis.

Why it matters: A COVID-19-caused recession will likely lead to a spike in automation, meaning some of the jobs lost to the virus will never return as companies restructure their operations to rely more on technology than people, reports Axios' Margaret Harding McGill.

Details: Mark Muro, a senior fellow and policy director of Brookings' Metropolitan Policy Program, says recent recessions show that companies tend to replace lower-skilled workers with a combination of technology and higher-skilled employees. A recession induced by the coronavirus would be no different.

  • Food service, manufacturing and transportation/warehousing jobs are most likely to be affected. Research shows roughly 36 million jobs are highly susceptible to automation.
  • Rust Belt cities — already hit with industrial automation — could face further job loss as automation moves to the service industry.

Go deeper: Tech firms crunch coronavirus data to track disease spread

5. Rural areas see short-term rental boom

Illustration: Sarah Grillo/Axios

While the travel industry and accommodations are taking a major hit amid the coronavirus pandemic, short-term rentals in U.S. rural areas (and suburbs, to a lesser extent) are seeing an uptick, according to new data from AirDNA.

The big picture: People are fleeing densely populated areas, especially on the coasts, and taking up shelter in isolated rentals in rural and more "destination" type of locales, Axios' Kia Kokalitcheva reports.

By the numbers:

  • Airbnb revenue in rural areas: $1.32 billion in March 2020, up from $1.04 billion in March 2019.
  • Airbnb revenue in urban areas: $631 million in March 2020, down from $706 million in March 2019.

Local data shows similar patterns.

  • New York: Most of Manhattan and parts of bordering New Jersey are collectively down 66% between March 2019 and March 2020, while Connecticut and the Hamptons are seeing a boom in bookings.
  • Boston: The city of Boston is down 66%, while Nantucket and other vacation areas are seeing a huge off-season uptick.
  • Chicago: Chicago is down 11% while lakeside areas in Illinois and Michigan are getting two or three times the bookings.

Yes, but: There's no evidence this will be enough to help Airbnb cruise through the current crisis. It's in discussions with potential investors for new capital as it decides what to do with its IPO plans.

Go deeper: Coronavirus hits Airbnb, already facing widening losses

6. Urban files

Illustration: Aïda Amer/Axios

The coronavirus economy will devastate those who can least afford it (Axios)

Justice during pandemic: Police seek to protect public and prisoners (Christian Science Monitor)

What a coronavirus recovery could look like (CityLab)

Keeping the coronavirus from infecting health-care workers (New Yorker)

Coronavirus hits state and city budgets (WSJ)

Coronavirus' existential threat to local news (Axios)

7. Rays of hope

Chino Hills High School Chamber Singers streaming a performance. Screenshot of Digg.com.

Because we could all use some good news, here are a few hopeful stories of how people are helping others in their communities.

  • Chino Hills High School Chamber Singers didn't let a canceled concert get in the way of sharing their vocal gifts via a streamed concert.
  • Boston-area residents have created informal mutual aid networks, stitched together with online spreadsheets and text message threads, to run errands or bring food to those who need help, per the Boston Globe.
  • Neighborhoods have urged households to put stuffed animals in their yards, trees and porches so families can go on "safaris" and "bear hunts" with their children. (H/t Axios' Stef Kight and Pri Oberoi.)
  • "Caremongering" Facebook groups have been set up in Canada to network neighbors looking to help neighbors, the BBC reports. "Scaremongering is a big problem," said Valentina Harper, who helped set up one of the first "caremongering" groups. "We wanted to switch that around and get people to connect on a positive level, to connect with each other."

Thanks to those readers who sent me their stories. Keep 'em coming!

Kim Hart

Thanks for reading! Stay safe and healthy.