ARGUMENT: RESIDENTS ARE LEAVING
DNYUZ (Aug 20):
While the moving industry is fractured among numerous small business owners, and official statistics are tough to come by, one thing is clear: From professionals who are downsizing following a job loss, to students moving back in with their parents, to families fleeing the city for the suburbs, New Yorkers are changing their addresses in droves.
According to FlatRate Moving, the number of moves it has done has increased more than 46 percent between March 15 and August 15, compared with the same period last year. The number of those moving outside of New York City is up 50 percent — including a nearly 232 percent increase to Dutchess County and 116 percent increase to Ulster County in the Hudson Valley.
New York Post (Aug 17):
In early March, many people (not me) left NYC when they felt it would provide safety from the virus and they no longer needed to go to work and all the restaurants were closed. People figured, “I’ll get out for a month or two and then come back.”
They are all still gone.
And then in June, during rioting and looting, a second wave of NYC-ers (this time me) left. I have kids. Nothing was wrong with the protests, but I was a little nervous when I saw videos of rioters after curfew trying to break into my building.
Many people left temporarily but there were also people leaving permanently. Friends of mine moved to Nashville, Miami, Austin, Denver, Salt Lake City, Austin, Dallas, etc.
Now a third wave of people are leaving. But they might be too late. Prices are down 30-50% on both rentals and sales, no matter what real estate people tell you. And rentals soaring in the second- and third-tier cities.
The article is saying that people left because of COVID-19 and the riots. One would say that at some point COVID-19 will disappear or become more manageable. And riots can't continue forever. So why won't people return. The article responds with:
. . . The difference: bandwidth got faster. And that’s basically it. People have left New York City and have moved completely into virtual worlds. The Time-Life building doesn’t need to fill up again. Wall Street can now stretch across every street instead of just being one building in Manhattan.
We are officially AB: After Bandwidth. And for the entire history of NYC (and the world) until now, we were BB: Before Bandwidth. Remote learning, remote meetings, remote offices, remote performance, remote everything.
New York Times (May 25):
Hundreds of thousands of New York City residents, in particular those from the city’s wealthiest neighborhoods, left as the coronavirus pandemic hit, an analysis of multiple sources of aggregated smartphone location data has found.
Roughly 5 percent of residents — or about 420,000 people — left the city between March 1 and May 1. In the city’s very wealthiest blocks, in neighborhoods like the Upper East Side, the West Village, SoHo and Brooklyn Heights, residential population decreased by 40 percent or more, while the rest of the city saw comparably modest changes.
. . . There is already evidence that many New Yorkers with the means to do so have left town. Reports have depicted a withdrawal to second homes and vacation towns. The weight of household trash is down in affluent neighborhoods. But to find more precise estimates, location data may be the best choice.
. . . The phone data shows New Yorkers primarily went to surrounding counties — east into Long Island’s Nassau and Suffolk counties, west to Monroe County in Pennsylvania, south to Monmouth County in New Jersey, north to Westchester County, northeast to Fairfield County in Connecticut and farther afield in all directions. Palm Beach County, in South Florida, was among the top locations for displaced New Yorkers.
Okay, this article mentions that 420,000 people have left the city between March 1 and May 1. The Bloomberg article below argues it is only 40,000 to 50,000. Specifically for this article; however, it is mentioned that the 420,000 includes students and people moving to second homes. The students will likely come back, but will those moving to second homes come back? I would think yes, but as the New York Post article states, we now have broadband. Even with broadband, I would think employers would still want employees in the office at least part of the time. To me, professional work connections are better established when you randomly talk to someone in the kitchen or bathroom or after a meeting. Yet, maybe people will only come into the office 3 days a week and work from home the other 2 days. If that is the case, maybe you stick with your second home and just deal with a long commute for three days a week.
In July, there was a 44 percent increase in home sales for the suburban counties surrounding the city when compared with the previous year, according to Miller Samuel Real Estate Appraisers & Consultants. The increase was 112 percent in Westchester, just north of New York City, and 73 percent in Fairfield County, Conn., just over the state border.
At the same time, the number of properties sold in Manhattan plummeted 56 percent, according to Miller Samuel.
. . . “What is worrisome is that the high-income earners, particularly those with more than $1 million, provide a substantial amount of resources to the New York City budget,” Ms. Doulis said. “To lose them would really represent a blow to the budget.”
That last quote is why this cycle of people leaving might become a permanent trend. The wealthy in New York cover a significant portion of the city's budget. If they're gone for good, the city budget suffers. If the city budget suffers, then maybe crime goes up, maybe schools get worse, etc etc. It becomes a cycle that then encourages more and more people to leave.
ARGUMENT: THEY'RE NOT LEAVING
Bloomberg vis Yahoo (Sep 2):
Together with big transaction-volume declines in Manhattan, this leads [real estate appraiser Jonathan J.] Miller to a back-of-the-envelope estimate that about 40,000 to 50,000 more New Yorkers than usual will leave for the suburbs this year. A lot of them appear to be members of young, affluent(ish) families who had been living in rental apartments. Such people were prime candidates for leaving the city already, with the experience of being stuck in cramped urban surroundings with small children during a pandemic accelerating the decision. “What we’re getting now is 3 to 5 years of outflow all at once,” Miller says. That could mean fewer moves to the suburbs in coming years as demand is sated, or it could mean more moves as friends follow friends out of the city.
All in all, I can easily see how net domestic migration from New York might top 200,000 from mid-2019 through mid-2020, a big increase from 2018-2019’s 132,266. Who knows, maybe it could even top 300,000, but I still don’t think that counts as a full-on exodus.
Maybe this does represent a sudden outflow that really represents 3 to 5 years worth of people that would have moved out anyways. On the other hand, I would think that results in unintended consequences. City tax revenues decline unexpectedly. Places of entertainment suddenly see a drop in revenues and go out of business. If you have a sudden outflow and your inflows slow down, you have problems.
The writer of the article does hedge his bets by admitting that knowledge workers may work differently from now on though he brushes that aside. In terms of his discussion of nightlife, I address that later on in this post.
The great pandemic-induced experiment in working from home seems certain to result in lasting changes in how (and how often) knowledge workers use their offices, but they won’t completely go away. White-collar employers also won’t necessarily abandon cities, to which they had been returning from suburban office parks in recent decades in large part because cities were where educated young people wanted to be — and will likely want to be once again when indoor dining, nightlife and other attractions return.
Business Insider vis Yahoo (Sep 1):
Another U-Hauler, Tyler Nappy, however, was moving within the city — from the Upper West Side of Manhattan to Long Island City.
For Nappy, it was less about leaving Manhattan, and more about finding a new apartment with more space to work from home as the tech company he works for announced remote work will be in effect until at least July 2021.
He also acknowledges that the move to Long Island City likely wouldn't have happened if it weren't for the pandemic and his need for more work from home space.
Nappy says his brother who resides in Long Island and a friend from New Jersey are both planning to move into Manhattan soon.
"Honestly, I feel like it's half-and-half," Nappy said. "You have some people who are going out to the suburbs, other people are just traveling around, and I [know] people who are coming back in.
. . . This increased number of movers, and consequently, vacancies, is what encouraged Liz Gavin — a born and raised Manhattanite who's currently working remotely as a school nurse — to move to a "bigger apartment for a better price" while still remaining in the city.
Yes, people are leaving New York, but others are attracted to the city, because of falling rents. But this brings up the question of who is leaving (wealthy) versus who is coming in (middle class). Your tax base gets destroyed even if there is minimal over-all movement out of the city.
MY THOUGHTS
It isn't just New York City where I've read about people leaving the big cities. It is well known that Joe Rogan left Los Angeles for Texas. As he was getting ready to go, he had a number of comedian friends on his podcast who had or were planning on leaving Los Angeles. If they're leaving, you have to assume that many other comedians are leaving, as well. At what point do so many comedians leave that the Laugh Factory (a well established comedy club for those who aren't aware) just can't attract a paying clientele, because all the good comedians have left and aren't coming back.
As I do live in Los Angeles county, I know a little more about what is going on in the city. I haven't read many articles in the Los Angeles Times about people moving out of the city. I did read one article from an outside press that talked about the wealthy leaving Los Angeles. The Los Angeles Times (Sep 1) did have an article recently about how small and medium-size music venues are hoping that the "Save Our Stages" bill that was co-sponsored by Senators Amy Klobuchar (D) and John Cornyn (R) will pass Congress. (By the way, I've read a few articles about this bill and Klobuchar is always given the primary emphasis while Cornyn is mentioned in passing. I find that a little interesting, almost like Republican involvement is a necessary evil.) Yet, does the passing of the bill even matter?
In a way, the article does indirectly address the question of people (creatives specifically) leaving Los Angeles. Like comedians, how many musicians have already moved out of Los Angeles? Even if this bill allows venues to survive for six months and then lets say they re-open in June of 2021, how many local musicians will have left town over the last 15 months? How long will it take them to come back? How many people associated with the music scene such as light and sound folk have left the city? Perhaps they'll actually migrate to another city that opens sooner -- say Nashville? If musicians are gone, venues start to close.
Then we have Portland. Bret Weinstein of Evergreen State College fame mentions every so often how angry he is that the well off are leaving Portland and not staying to push back at the protesters. And for a little humor, even Mayor Ted Wheeler said he was moving out of his Portland condo. Maybe he moves somewhere else in Portland, but the protesters would eventually track him down so will he have to move out of Portland? Of course, a mayor can't possibly be a proper mayor if they don't live in their own city.
As always, we have to see how events unfold, but this discussion point of people leaving the big cities needs to be tracked.
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