Firms face the choice of sticking to their expressed commitment to social responsibility, or retreating from the rising crime and disorderThere’s a tried-and-tested solution to the crime and disorder that are spurring companies to abandon urban centres. Picture: BLOOMBERG
This comes on top of a spate of high-profile moves: in May, Boeing, the aerospace giant, announced that it was moving its headquarters to the Washington, DC, suburbs; in June, Caterpillar, the construction titan, announced that it was moving its base from Chicago to the Dallas region; a week later, Ken Griffin announced that he is moving the primary office of his Citadel hedge fund to Miami.
Still, it is fair to say that violent crime is significantly higher than it was in the early 2000s. The level of violent crime fell sharply from the 1990s before stabilising at a lower level. In particular, the big cities entered a relatively tranquil period, as a new breed of pragmatic big city mayors such as Richard Riordan in Los Angeles, Bob Lanier in Houston and Rudy Giuliani in New York City implemented tough crime policies.
When it comes to general disorder, the test case is not Chicago but San Francisco. Theft from convenience stores has been a fact of life in the city for years along with homelessness and open drug use. A 2014 ballot initiative to raise the felony penalty threshold for thefts to $950 hasn’t helped.
Before the pandemic it was fashionable to talk of an urban renaissance as young workers returned to cities in search of stimulation, and savvy companies followed them. The New York Times ran a celebratory article on “why corporate America is leaving the suburbs for the city”. McDonald’s and Motorola Solutions moved their headquarters to the Chicago city centre from their respective suburbs, Oak Brook and Schaumburg.
But two things are worth noting as we write the obituary of the renaissance. First, it was always exaggerated. The flight of both people and businesses from cities to suburbs and from the northeast to the sunbelt continued throughout the supposed revival . In particular, New York, Chicago and Boston continued to lose corporate headquarters just as sunbelt cities and suburbs continued to gain them.
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