New York, a Dying City in a Dying State

Harvard University set up a database to track the economic impact of the coronavirus pandemic. The New York Post reported the data regarding dear old New York City, among the most mismanaged cities in one of the most mismanaged states in the country.

The Post explains the economic damage:

As of this month, more than 47 percent of small businesses citywide remain closed, while revenue for those that are open has dropped nearly 60 percent, according to TrackTheRecovery.org, a Harvard University-run database tracing the virus’ economic impact.

In Lower Manhattan, commercial office leasing dropped nearly 70 percent in 2020, while a staggering 12 percent of businesses — ranging from hotels to department stores to restaurants — closed for good, data from the Downtown Alliance shows.

And then there are office vacancies. We have reported on this before. 

Vacancy rates in residential, office and retail spaces have continued to skyrocket — with as much as 21 percent of buildings in parts of Manhattan and Brooklyn empty, according to data from Coldwell Banker Richard Ellis, the world’s largest real estate and investment firm.

And there’s more:

It took 11 months to roll out an outdoor permit program for the city’s flailing live arts sectors, three of five promised emergency busways remain unbuilt, hampering transportation, and there’s still no aid package for tenants who collectively owe more than $1 billion in back rent.

As we have noticed, the rising crime rate, the dangerous subways and the closed entertainment venues have killed tourism, and more than their fair share of jobs.

New York must also address quality of life issues to convince tourists — and residents who fled — to come back, said Jerome Barth, president of the Fifth Avenue Association.

“New York managed to become the number one tourism destination in the world by being the safest big city in the world and we need to own that label,” said Barth, referencing the homeless crisis, high murder rates and rising crime on the subways.

And then, Francis Menton, of the Manhattan Contrarian blog compares New York State and Florida. (via Maggie’s Farm) As we have noted a lot of very serious New York money is now migrating to South Florida.

As you know Gov. Ron De Santis has become an important Republican presidential prospect, for having saved his state the horrors that Gov. Andrew Cuomo visited on New York. Also, New York wants to keep raising taxes while Florida has been offering its citizens lower taxes and lower government spending.

Meanwhile, a week after Cuomo unveiled his $193 billion state spending plan, Governor Ron DeSantis of Florida put forth his own plan for spending of $96.6 billion over the same period. In other words, Florida’s state budget is just about exactly half New York’s, even though the state of Florida now has about 10% more population. The Florida budget is balanced — and indeed proposes increasing reserves to over $6 billion — without any income tax at all, and without counting on any federal bailout. There is even some modest tax relief in the proposal, mostly in the form of an 8-day “back to school” sales tax holiday.

Hmmm. As for the coronavirus, Florida did not shut down the state, which has largely saved the economy:

Over on the coronavirus front, Florida remains wide open for business, and yet has achieved results in the top half of states, and far, far superior to those of New York with its drastic and never-ending lockdowns. Deaths per million as of February 20 are at 1,388 (compared to New York’s 2,412), or just over half as many. Throughout the pandemic the left-wing media have been desperate to vilify DeSantis for his refusal to yield to demands for totalitarian business, school and recreation restrictions.

Menton concludes:

Every few weeks I seem to learn that another friend has bought a condo in Florida and is somehow arranging to spend just over half the year there.

I do not know whether these hedge fund zillionaires are Menton’s friends, but they are leading the march to South Florida. Via, the Wall Street Journal:

Three Manhattan listings—a downtown penthouse asking $39.5 million, a sprawling co-op seeking $40 million and a pair of Upper West Side condos on the market for $25 million—share one thing in common. Their sellers are among the top brass at Elliott Management, a hedge fund that announced last year it is moving its headquarters from New York City to Florida.

Real-estate veterans and hedge-fund executives believe a seismic shift is under way, one that is moving vast amounts of Wall Street wealth from New York to South Florida. For the past several years, Wall Street has been colonizing the Sunshine State, attracted to more favorable tax policies and sunnier climes. And the momentum is only accelerating amid the pandemic.