U.S. cities that are the most vulnerable to the negative effects of COVID-19

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The novel coronavirus (COVID-19) is beginning to take a toll on the U.S. after making its way through Asia and Europe. Undoubtedly, we’ll begin to see the effects of COVID-19 – not just in terms of people’s health — but also their financial stability and economic activity. While most of the country will be affected by the novel coronavirus, some cities will be more vulnerable to it than others.

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Most Vulnerable U.S. Cities To The Effects Of COVID-19

In a 2020 study by Clever, 107 cities across the United States were ranked based on health, financial, economic, and social vulnerability. This is not a ranking indicating when or how COVID-19 will affect the cities, or measures taken by their local government, but rather an assessment of their vulnerability to the virus’s negative effects on each particular community. It does not mean that less vulnerable cities are not at risk or won’t feel the effects of COVID-19.

Here’s a rundown of the four metrics used.

  • Health vulnerability: Indicates the likelihood of rapid spreading and high death rates, as well as treatment availability. (This is weighted the heaviest of all four metrics at 4x full weight)
  • Financial vulnerability: The ability of residents to afford testing, care, and time off from work if needed. (3x full weight)
  • Economic vulnerability: The likelihood that the city will be negatively affected economically as a result of precautionary measures and/or the spread of the virus. (2x full weight)
  • Social responsibility: Residents' willingness and ability to participate in socially responsible actions to prevent the virus spread as measured by civic engagement and innovation. (1x full weight)

New York, NY

New York City tops the list as the most vulnerable city to the effects of COVID-19 — for several reasons. One of the major reasons is its health vulnerability. For starters, more than 60% of the population commutes by public transportation. This is a huge concern for the spread of the virus — as evidenced by much of the country closing businesses and communal areas in an effort to reduce contact between people.

Additionally, NYC has by far the highest population density of any of the cities ranked — almost 11,000 people per square kilometer. Pair this with a large amount of city debt per person, 51% of people employed by a small business, and you have a recipe for disaster in a time of pandemic.

San Francisco, CA

San Francisco also has a high health vulnerability, with high population density and 33% commuting by public transportation. Both factors mean people are likely to be in close proximity to others and, therefore, are more likely to come into contact with or pass along COVID-19.

Additionally, more than 73% of those in the city are employed by a small business.  These small businesses are likely most affected by the virus and measures to flatten the curve — they may include restaurants, gyms, hair salons, music venues, spas, or other service industries that lose business and may have to lay off employees permanently or temporarily.

Washington, DC

Our nation’s capital is the third most vulnerable city to the effects of covid-19, especially due to its economic vulnerability. Not only is there high city debt per resident (meaning the city is more hurt by a national or global recession), more than three-quarters of the population is employed by a small business. Small businesses have less capacity to allow sick employees to stay home or provide paid time off. Plus, they may have less wiggle room with continuing to be able to provide hours and paychecks to their employees when their business has slowed dramatically or stopped altogether.

Additionally, the city has many who rely on public transportation — DC has the second highest percentage in this category, just below New York City. Washington, DC also has a high population density, making the city especially vulnerable to COVID-19.

Detroit, MI

The motor city ranks in the top five of most vulnerable U.S. cities because of its high financial vulnerability. 37% percent of the population throws half their income or more at rent each month and more than 43% are living in poverty. Those who live paycheck-to-paycheck, are unable to work from home, or don’t get paid sick leave may be more likely to go to work when not feeling well.

To compound Detroit’s problem, nearly a quarter are non-employed or unemployed. Plus, the city has racked up more than $13,000 per resident in city debt. Detroit is only just now rebuilding after the city itself filed for chapter 9 bankruptcy in 2013. It may not be able to do much financially to help its citizens in times of need.

Miami, FL

Like Detroit, Miami has a huge financial vulnerability to COVID-19. People's ability to afford care and participate in social distancing are directly tied to their financial stability and characteristics of their employment.

Thirty percent of the population is without health insurance, more than a third spend 50% or more of their income on rent and nearly a third are living in poverty. This financial instability means Miamians may be less inclined to seek medical care if they suspect they have become infected or may not be able to afford hospitalization, increasing the likelihood the virus will spread in their community.

Effects Of Covid-19 The Future Of Real Estate

We’ve already seen huge impacts on the economy and the stock market, but there’s more to come. As seen during other times of uncertainty, people will spend less causing market slow down, especially in areas hardest hit by the virus. And this won’t hit just retail, but the housing market as well. Despite a recently booming housing market and record low interest rates, the looming COVID-19-induced economic recession may flatten or reduce home prices after years of gains.

Lawrence Yun, chief economist of the National Association of Realtors, says home sales could be reduced by 10% in the short term as a ripple effect of the coronavirus. Down payments from those looking to buy may have been reduced due to sharp decrease in the stock market. Plus, with job uncertainty or (at least temporary) lay-offs in many sectors, those who were looking prior to the pandemic may opt to put off their purchase until both the economy and their financial future is a bit more secure.

On the other hand, there may be more homes on the market if owners in a downturn economy struggle to pay their mortgage and are forced to sell. But, real estate agents may also struggle to show those listings and market properties without the ability to do in-person open houses. We’ll likely see a rise in FSBO sellers and flat fee MLS usage as real estate agents aren’t able to perform they’re typical services without risking infection.

Money won’t just be tight for buyers — sellers will be looking for low cost solutions to sell their homes and retaining a greater portion of the profit. Expect 1% listing fee and other cost-saving models to emerge as agents need to cutback on the in-person value they provide.

The housing market is in flux, but we can’t know the full ramifications of COVID-19 until we see how the virus spreads over the next several weeks.

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