Tag Archives: New York City

“NYC isn’t dead”…for the wealthiest

Posted on by

A look at the ten most expensive properties sold in the United States in 2020 highlights the presence of New York City properties on the list:

Google Street View image of 220 Central Park South (September 2020)

By the end of September, the volume of Manhattan co-op and condo sales was down 43% year over year, according to a report by Douglas Elliman, as sellers held back from listing their apartments and buyers increasingly gravitated toward the suburbs…

Of the top 10 national sales compiled by Jonathan Miller, president and chief executive officer of Miller Samuel appraisers, five were in 220 Central Park South, a new luxury tower on Central Park designed by architects at Robert A.M. Stern…

Another trend from this year, namely rich people “fleeing” New York for Florida, didn’t manage to trickle up to the highest tier. Only two of this year’s top 10 sales were in Palm Beach; last year there were three…

Even the three Los Angeles entries diverge slightly from conventional 2020 narratives. Yes, the L.A. market is one of the few urban bright lights this year, with sales soaring and inventory hard to come by. But numbers at the very top are down from last year, when it notched four entries in the top 10, totaling $463 million. This year there were three, totaling $293 million.

The actions of the wealthiest homeowners matters not only because people often have an interest in what those who have lots of money do with all that money; it matters because these are people with clout and influence. If they are continuing to purchase in New York City – it is less clear how much time the owners would necessarily spend in the city – it is a sign of the importance of the city and the prospects for future development.

The optics of 2020 might not be favorable to the list above but the project and the trends were underway far ahead of COVID-19. In a very expensive land and housing market, purchasing a residence in one of the newest buildings and in such a location within Manhattan is an object of desire for some who have the resources to purchase such places. While a figure later in the article notes that the total price for the properties on this list is lower than the price for the properties the year before, this may only allow the wealthiest to get into hot markets even more.

It may (or may not) be worth noting that five of the ten properties are in a tower in New York City while the other five properties are large homes on some land. On the whole, Americans as a whole tend to prefer or idealize single-family homes but the wealthiest in the United States and elsewhere may be more inclined to purchase large units in multi-unit buildings.

How far might rent drop in Manhattan and other cities and who will benefit?

Posted on by

As some people reconsider living in Manhattan and other cities with high housing costs amid COVID-19, how far might rents drop?

According to StreetEasy, the median rent has fallen below $3,000. That is the lowest price since 2011.

The third quarter of 2020 also marked the first time since 2010 that Manhattan, Brooklyn and Queens all recorded year-over-year rent declines.

StreetEasy says renters are no longer willing to pay the so-called “commute premium” of living in Manhattan, because so many people are working from home.

Any rent drop in Manhattan or in New York could provide opportunities for people who even just a short time ago had little chance to live there.

At the same time, dropping below $3,000 for the median suggests that rent is still pretty high. Who can take advantage of this drop? Those with resources to do so, not necessarily people who need affordable or cheap housing. Indeed, if these lower rents quickly induce a number of people to take advantage, then rents could stabilize and head back up.

Perhaps there is little that could actually move rents and housing prices in certain housing markets to a point where many more residents could take advantage. A pandemic is unlikely to lead to the production of more housing and struggles with employment, among other factors, will limit who would move to big cities with temporarily lower prices. At the same time, COVID-19 could help nudge conversations about housing in a productive direction.

Survey data on wealthy New York City residents thinking about leaving the city

Posted on by

New survey data looks at what New York City residents making more than $100,000 think about leaving the city:

We found that 44% of high-income New Yorkers say that they have considered relocating outside the city in the past four months, with cost of living cited as the biggest reason. More than half of high-income New Yorkers are working entirely from home, and nearly two-thirds believe that this will be the new normal for the city…

Of those considering leaving New York City, 30% say that the possibility of working remotely makes it more likely that they will move. Of New York City residents who earn $100,000 or more annually, 44% have considered moving out of the city in the past four months (see Figure 4). Looking ahead, 37% say that it is at least somewhat likely that they will not be living in the city within the next two years…

The cost of living, more than any other factor, contributes to the likelihood of leaving New York City (see Figure 5). A total of 69% of respondents cite cost of living as a reason to leave the city; that figure is even higher among black (77%) and Hispanic (79%) respondents. Other reasons cited by respondents considering leaving New York City include crime (47%), desire for a nonurban lifestyle (46%), and the ability to work from home (30%)…

Only 38% of New Yorkers surveyed said that the quality of life now was excellent or good, a drop by half, from 79% before the pandemic (see Figure 2). Most believe that the city has a long road to recovery: 69% say that it “will take longer than a year” for quality of life to return to normal.

Finally some data on New Yorkers leaving the city! (Of course, this is more about attitudes than actual behavior.)

If I am interpreting the data above correctly, it sounds like COVID-19 has brought some other issues to light. This includes:

(1) If I can work remotely, do I value city life enough to stay there even though I do not need to be close to work?

(2) If the city is not what it was – and it is not clear when it might return to normal – because of decreased social activity due to COVID, the cost of living may not be justifiable.

Ultimately, is it worth living in a global city – with all that comes with it for high earners including jobs, cultural amenities, and a high cost of living – when the positive features of this city are muted during a pandemic?

Carmageddon in Los Angeles vs. Carmageddon in New York City

Posted on by

Remember Carmageddon and Carmageddon II in Los Angeles? Now, Carmageddon has come to New York City:

In Chicago and in other cities with robust transit systems, people who have never owned cars before are suddenly buying them. In New York City, some are calling it “carmaggedon,” as residents there registered 40,000 new cars in July, the highest monthly total in years. Meanwhile, NYC subway ridership is still down more than 75% from last year.

pexels-photo-1116244.jpeg

Photo by Jack Gittoes on Pexels.com

The difference in what leads to carmageddon in each city is striking. In Los Angeles, closing a section of a major highway is a problem for the entire system. Because of the emphasis on driving and the various chokepoints in the road system, a single closure has ripple effects. In New York City, the opposite is the case: high mass transit use, particularly in Manhattan and denser parts of the city, is necessary. If something threatens the mass transit lines – here, it is an unwillingness to use mass transit when there is a pandemic – then too many cars may be on roads that cannot handle the increased volume.

Fortunately for Los Angeles and unfortunately for New York, the length of Carmageddon matters. Closing a major highway for just a few days is survivable. Indeed, Los Angeles got out ahead of the problem and enough drivers were able to make alternate plans. Decreased mass transit use due to COVID-19 is another story. How long will the virus be around? Will there be a point where residents return to mass transit even with the threat of the virus present? Carmageddon in New York might prove more lengthy and much more difficult to remedy.

Treating suburban communities as another consumer good to choose among, Part One

Posted on by

A recent New York Times article made the case for why prospective suburbanites might choose to live in specific desirable communities in the region. Many suburbs have particular characters and ways they differentiate themselves from other suburbs.

family doing shopping in the grocery store

Photo by Gustavo Fring on Pexels.com

Yet, this is an consumeristic approach to suburban communities. Does the typical suburbanite look at all the possible options and then select one that meets specific criteria? I doubt it. Here are a few of the factors that likely come into play:

1. Resources. How much money do they have for housing? This is a key sorting mechanism.

2. Information from social networks. What do people they know say about a community?

3. Quality of local schools and other local amenities and features (parks, crime, noise, density, family-friendly aspects, etc.).

4. Distance to work/commuting distance. The average commute is just under half an hour so staying within a particular radius and avoiding traffic congestion for held or potential jobs matters.

5. The status of the community. Which ones are known favorably (and not)? If you were moving to the New York City region and knew little about the suburban options, which communities would emerge?

6. Proximity to family if present in the area. Why move to Montclair if family members all live in New Canaan?

Even with all of these factors, it may take time of living in a suburb before a resident gets a sense of what is unique, different, and/or desirable.

Tomorrow, I will consider what this approach of searching for the best suburb could lead to.

Poor Census response rate in neighborhoods with fleeing New Yorkers

Posted on by

Here is another consequence of city residents leaving for other places during COVID-19: absent New York residents are not filling out Census 2020 forms at a good rate.

chart close up data desk

Photo by Lukas on Pexels.com

Only 46 percent of Upper East Side households have filled out their census forms, according to a June 25 report circulated by the Department of City Planning’s chief demographer, Joseph J. Salvo — well below the neighborhood’s final response rate in 2010, and short of the current citywide rate of almost 53 percent…

Even if New Yorkers have asked the Postal Service to forward mail to their second homes, census forms are addressed to the household, not the individual, which — unless New Yorkers pay for premium forwarding — prevents the post office from including them with the forwarded mail…

Officials hope that many of the coronavirus evacuees will return by the end of October, the new extended deadline for final responses to the census. But with Manhattan parents now enrolling children in schools outside the city, it is not clear that the evacuees will return to New York City in time…

The pandemic has prompted census outreach workers to adjust their tactics, especially in trying to reach undocumented immigrants and residents in illegal housing, who may be fearful of sharing information with the government. In the heavily immigrant neighborhoods of North Corona and East Elmhurst, outreach workers have approached New Yorkers while they wait in lines at food distribution sites, for example.

A lot of effort goes into conducting the decennial census and the data collected is helpful to many. Trying to boost response rates to surveys in a world awash in data collection is a difficult task without a global pandemic. But, I imagine this might lead to some interesting lessons about data collection. Researchers need to have some flexibility in all cases as circumstances can change and plans may go awry. This could be a helpful story about how a large organization adapted in a difficult situation and maybe even made future data collection more robust.

While the article mentions the potential consequences for New York City, there is another consequence of the movement of people: would these wealthy New Yorkers boost the Census numbers elsewhere, provided that they fill out the forms about residing in other locations? Granted, they would still have to fill out a Census form but others might do that for them (if they are living with others) or they might fill out a form once they are more settled in.

Do we know that 500,000 people have fled NYC since the start of COVID-19?

Posted on by

On the heels of much discussion of residents leaving New York City, San Francisco, and other major cities because of COVID-19, the Daily Mail suggests 500,000 people have left New York City:

vehicles on road between high rise buildings

Photo by Craig Adderley on Pexels.com

Parts of Manhattan, famously the ‘city that never sleeps’, have begun to resemble a ghost town since 500,000 mostly wealthy and middle-class residents fled when Covid-19 struck in March.

The number is also part of the headline.

But, how do we know this number is accurate? If there was ever a figure that required some serious triangulation, this could be it. Most of the news stories I have seen on people fleeing cities rely on real estate agents and movers who have close contact with people going from one place to another. Those articles rarely mention figures, settling for vaguer pronouncements about trends or patterns. Better data could come from sources like utility companies (presumably there would be a drop in the consumption of electricity and water), the post office (how many people have changed addresses), and more systematic analyses of real estate records.

A further point about the supposed figure: even if it is accurate, it does not reveal much about long-term trends. Again, the stories on this phenomenon have hinted that some of those people who left will never return while some do want to get back. We will not know until some time has gone by after the COVID-19 pandemic slows down or disappears. Particularly for those with resources, will they sell their New York property or will they sit on it for a while to give themselves options or in order to make sure they get a decent return on it? This may be a shocking figure now but it could turn out in a year or two to mean very little if many of those same people return to the city.

In other words, I would wait to see if this number is trustworthy and if so, what exactly it means in the future. As sociologist Joel Best cautions around numbers that seem shocking, it helps to ask good questions about where the data comes from, how accurate it is, and what it means.

Another claim that COVID-19 will push people to the suburbs

Posted on by

I have seen a version of this argument several times already and here is the most recent one: according to the New York Times, more New Yorkers are moving to the suburbs.

Cooped up and concerned about the post-Covid future, renters and owners are making moves to leave the city, not for short-term stays in weekend houses, as was common when the pandemic first arrived, but more permanently in the suburbs.

While some of the fresh transplants are accelerating plans that had been simmering on the back burner, others are doing what once seemed unthinkable, opting for a split-level on a cul-de-sac after decades of apartment living. Others seem to have acquired a taste for country life after sheltering with parents in places with big lawns or in log cabins.

But there’s also a sense that in today’s era of social distancing, one-person-at-a-time elevator rides to get home and looping routes to avoid passers-by on city streets has fundamentally changed New York City…

For starters, people seem to be packing their bags. Between March 15 and April 28, moves from New York to Connecticut increased 74 percent over the period a year ago, according to FlatRate Moving. Moves to New Jersey saw a 38 percent jump, while Long Island was up 48 percent.

Also, suburban towns not really known for their rental stock have had huge spikes in activity, which is being driven in part by escaping New Yorkers, according to brokers in those areas.

There is both a short-term and long-term view of this possible trend:

1. COVID-19 might lead to a sudden change in New York City and possibly other locations that are very dense (which does not necessarily apply to Los Angeles). For example, one report suggests denser cities and places with lower levels of educational attainment will struggle to recover.

2. The population of the big three cities – New York, Los Angeles, and Chicago – had already plateaued or started decreasing. COVID-19 may just be accelerating what was already happening.

Only time will tell which is more correct. In moments like these, it is easy to suggest cities will decline or people will have long-term fears – and I have seen these pieces as well – but Americans have preferred suburbs for decades. In the meantime, it is probably safe to say that life in cities has changed. What is often attractive in cities is the street life, the culture, the opportunities all within a short distance. COVID-19 is a unique problem in that it limits social interaction, the lifeblood of numerous city neighborhoods and gathering places. In contrast, the suburbs prize private spaces like homes and privilege driving. When people need to isolate, they are already used to it to some degree in suburbs.

A third option might end up being closer to reality: New York City, with all of its COVID-19 cases and its unique features, might suffer more from the pandemic than anywhere else in the United States. At the same time, this leading city will still have a lot going for it after COVID-19 fades and it will continue to be attractive to many.

NYC plans to provide social distancing space for pedestrians by closing more streets to cars

Posted on by

Sidewalks may not provide enough room to keep distance from others so New York City is planning to close more roads to vehicles:

New York City will close 40 miles (64 kilometers) of streets to cars, mostly near parks, to expand the amount of space that pedestrians have to keep social distance, Mayor Bill de Blasio said.

The ultimate goal will be to have 100 miles of “open streets” during the coronavirus outbreak, de Blasio said Monday at a press briefing.

The mayor has been pressed by the City Council and bike advocates to open more streets to pedestrians and bikers, and to give more recreation possibilities to New Yorkers. De Blasio had resisted these proposals, saying they would create challenges for law enforcement. The mayor also said he was concerned that drivers might not obey the street closing, placing pedestrians and bikers in danger.

As a temporary measure, this seems like it makes some sense given the need for space to get outside within denser communities. It does raise other issues, such as delivering packages in certain areas or, as the article notes, law enforcement concerns.

Perhaps more interesting is the long-term consequences of such a move. In the last one hundred years or so, American cities and communities have often prioritized moving vehicles through cities. Manhattan already had a problem with crowded sidewalks before COVID-19. Pedestrian and bicyclist safety is already an issue. More cities were already considering closing streets to cars. Road closures might be motivated in the short-term by COVID-19 but this could also be part of a growing movement to provide for human-powered means of transportation.

Subways and individual cars during COVID-19

Posted on by

A new study suggests New York City’s subway system helped spread COVID-19:

The paper, by MIT economics professor and physician Jeffrey Harris, points to a parallel between high ridership “and the rapid, exponential surge in infections” in the first two weeks of March — when the subways were still packed with up to 5 million riders per day — as well as between turnstile entries and virus hotspots.

“New York City’s multitentacled subway system was a major disseminator — if not the principal transmission vehicle — of coronavirus infection during the initial takeoff of the massive epidemic,” argues Harris, who works as a physician in Massachusetts.

While the study concedes that the data “cannot by itself answer question of causation,” Harris says the conditions of a typical subway car or bus match up with the current understanding of how the virus spreads…

“Social density … was a result of many factors — business, restaurants, bars, Madison Square Garden, sports arenas, concerts, and the things that make New York happen,” Foye said.

New York City is already unique with its level of mass transit use. The large subway system helps people move around in a crowded city where both parking and driving a car can prove difficult.

The contrast to New York City is sprawling suburbia (including within the New York City region – see Levittown). Americans love to drive and the suburbs are built around cars, driving, and covering relatively large distances on a daily basis within a private vehicle.

With Americans already predisposed toward driving if they can, will COVID-19 increase their reluctance to take mass transit? Is driving safer in these times? (Of course, one could look at the number of deaths related to cars – accidents, pedestrians – and argue otherwise.)

New York City is not the only city dependent on subways; numerous large cities around the world need subways to move large numbers of people. Perhaps there will be new health measures in subways and other forms of mass transit moving forward. But, without fundamentally altering such cities and the benefits that come with density, subways cannot be removed or limited on a long-term basis – can they?