(Bloomberg) -- Large US cities are facing a “looming trifecta” of pressures as remote-work continues to depress office valuations, weaken tax collections and limit public transit ridership, according to a report released Thursday by S&P Global Ratings. 

“There are several key factors that, over the next few years, have the potential to increase downside credit sensitivity for some large US cities, particularly those with significant economic reliance on large central business districts and limited ability to adjust budgets quickly,” S&P analysts led by Scott Nees and Jane Ridley wrote in the report, which looked at 15 cities in the US. 

New York City, San Jose and Washington have seen downtowns recover quicker since the pandemic, while the tech-hubs of San Francisco and Seattle are among the laggers, according to S&P, citing data from the University of Toronto School of Cities Recovery Ranking. The analysts noted factors like geography, local unemployment and concentration of industry contribute to the pace of recovery.

The most impacted cities are likely to see “general obligation credit pressure amplify” in the coming years requiring officials to take “action to preserve credit stability and enhance the economic vitality of many downtown spaces amid depressed activity.” 

Despite the challenges due to return-to-office trends, S&P doesn’t expect a “broad-based” decline in city’s credit quality immediately, adding that many governments’ budgets are well-positioned to withstand pressures in the near-term. 

“We believe that cities that don’t see RTO trends moving in the right direction are more susceptible to a downward spiral of a reduction in both tax revenue and attractiveness of downtowns and are at the greatest risk of experiencing pressures to credit stability,” the report said. 

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