It May Be The End Of New York City
It will not fall into the East River along with all the bodies the mob has dumped there over the years, but it will probably no longer be the vibrant, bustling place it has been.
Part of the problem (for New York) is that it doesn't have as strong a hold as it did on being THE place or one of the biggies, now that people are working remotely.
Personally, I'm so glad I lived there before it went through the mallification in recent years and before now, with COVID changing everything.
Nicole Gelinas writes in the NY Post that New York City's urban model faces an existential crisis in post-pandemic world:
No one has any idea how New York's and New Jersey's transit systems can resume moving nearly 3 million people on and off a dense island by this fall. The answer won't be more driving. A 30 percent drop in pre-COVID transit would mean a doubling of vehicles on Midtown's streets -- a total standstill.So: What happens to all those offices sitting eerily empty? It isn't only a short-term problem. Even if we get a vaccine tomorrow, many commuters have found that they like staying home. JPMorgan Chase and Facebook -- both, prior to this, planning new Manhattan office towers -- are now saying people can work closer to home or at home.
That doesn't mean five days a week, forever. But even employers and workers deciding they would rather work in an office only two or three days a week has huge implications for the future price of office space and MTA finances.
It has huge implications, too, for restaurants, stores, theater, hotels -- all of which depend on business travel and on commuters spending a little extra time in Manhattan. Outer-borough restaurant and retail also depends on residents' wealth -- earned in Manhattan.
...Any big change is a shock to the city's tax system well beyond a few months. For its annual $66 billion in tax revenues, New York depends on high, and high-volume, property, income and sales taxes, all now imperiled. It could see double-digit adjustments, beyond what any one-year federal rescue can cushion.
...It's a shock to the region's tax system. The only reason Long Island villages can afford sky-high spending on schools and police is that some taxpayers bring home six and seven figures from Manhattan, and because residential property is worth a lot. It's worth a lot less if it's less valuable to be close to Manhattan.
Facing an unknowable future, New York needs to be flexible now: Temporarily furlough non-frontline workers so it can afford to bring back some later. Sponsor aggressive testing on how safely people can stand next to each other, masked, for now, on transit. Let restaurants start deploying open-air dining to give people a reason to stay this summer.
None of that sounds like meaningful solutions to the massiveness of the problem.
One wonders what kinds of things are done in New York that couldn't be done more easily and cheaply elsewhere. Couldn't all the Wall Street stuff be done from a couple office blocks on the beltway outside of Charlotte, with most people working remotely? And couldn't a string of dinner theaters in Metro Scranton/Wilkes-Barre take the place of Broadway?
Old RPM Daddy (OldRPMDaddy@GMail.com) at May 27, 2020 5:33 AM
Like many suffering businesses the recent disease is only accelerating a trend in New York that was already in place. New York's population has been shrinking since 2015. It's impact on national finances took a huge hit in 2008 as law changes more or less forced small businesses off of the NYSE and NASDAQ. On foreign immigration New York has fallen as well. It is now behind California and Texas and just barely above Florida. It sits at 10% of immigration and falling. On GDP growth rate New York did well in 2019, coming in place 10 with a respectable 3.8%. But recently it hasn't done so well. 2017 place 34 with 1.1% and 2013 place 46 with 0.7%.
COVID-19 and New York city's bungling of it are a recent hit but New York's (both state and city) excessive spending and corruption are decades old problems.
Ben at May 27, 2020 6:48 AM
Both California and New York suffer from tax systems (spending systems, really) that are vulnerable in the event of major change. Both have relied for far too long on wealth creation by industries built upon fragile business models vulnerable to change. Both states' tax systems rely on astronomically high real estate values and concurrently high salaries. Both states are heavily driven by large metropolises concentrating political power and dictating taxing and spending policy.
As companies have discovered the portability of knowledge and relied less on the physical proximity of expertise, both states have found their appeal to their core industries waning.
AllianceBernstein, an old money Wall Street firm, is moving its headquarters from Manhattan to Nashville, taking 1,050 of its 3,400+ jobs with it. Wealth management operations will remain in Manhattan, but look for those jobs to move as old money learns to embrace technology and virtual meetings.
The reasons given for the move were to "offer advantages to our employees that we simply couldn’t in the New York metro area" with Nashville offering "lower living expenses, taxes and housing costs, shorter commute times and a more modern work facility."
Conan the Grammarian at May 27, 2020 6:54 AM
Keep in mind that the big problem revealed by COVID is not disease itself, but overbearing state and local governments. Millions of people whose lives have never been in danger from COVID-19 have had their businesses and/or social lives destroyed. You can bet we'll move somewhere it won't happen again. Not just out of blue states but out of any city, or its likely expansion path, that has a lefty mayor or council.
And we'd better make the move soon, because already states are starting to limit building in rural areas, in accordance with the UN's "sustainable communities" nonsense plan which demands that as much of the population as possible must be forced to live in large cities.
jdgalt at May 27, 2020 7:42 AM
Old RPM Daddy: much of the back-office part of Wall Street has already moved out to the suburban periphery of the NY metro area.
The industrial era saw massive urbanization. The service economy is less than 50 years old. Techie visionaries have only been talking seriously about remote work for 30-40 years.
Go on youtube and take your pick of upper-middle-class visions: the New Urbanism of "walkable cities" or the off-grid hi-tech nomad in a converted van, or the Tiny House built in a yet-to-be-gentrified exurb or small town.
Meanwhile the Donald is working hard to bring manufacturing back to the USA - and New York could still leverage its trade and transport infrastructure to be a player in modern quick-turnaround, small-run manufacturing.
Which trend will prevail? Anybody's guess, proabaly a mix.
As a proud former New Yawker who grew up in the gritty, colorful Gotham of graffiti-covered subways, Studio 54, CBGB, and Ed Koch - I, too, wish that the theatre district and other quintessential locales had been cleaned up without being plasticized.
But big cities are constantly reinventing themselves. Even if Broadway has become a theme park, the arts are still very much alive in Manhattan and the other boroughs. The High Line and Riverbank state Park completely changed the shoreline of Manhattan - for the better. Parts of Brooklyn that were no-go zones for whites when I was younger are now beautiful neighborhoods with lovingly restored townhouses.
The questions that are being asked could be asked of many other cities without New York's advantages, attractions, or character.
Ben David at May 27, 2020 10:01 AM
It's not going to be the end of NYC
All cities go through phases. Maybe it'll go through a bad one.
But it's not going to be the end of NYC.
NicoleK at May 27, 2020 9:59 PM
"So: What happens to all those offices sitting eerily empty?"
The Equitable building in Atlanta is visibly underoccupied, from the nearby Westin. A few stories up, the city looks more abandoned than it may be, even pre-epidemic.
Answer: they will sit there until they are fought over once again.
Radwaste at May 28, 2020 10:20 AM
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