Here we are in wonderful midtown Manhattan. New York City
has a new mayor and a new district attorney. Most of us have been optimistic
about the new mayor, though it is probably too soon to judge him on his ability
to tamp down crime.
And yet, when a man of a certain ethnicity murdered a young
woman by pushing her in front of a subway train yesterday, Mayor Adams insisted
that the city is safe. It was not an encouraging sign.
The new District Attorney, one Alvin
Bragg, is another story. Bragg is a pro-criminal prosecutor, someone who
considers that the best way to solve the problem of minority crime is to
decriminalize crime. He wants to pretend that crime does not happen, because
this will make the crime statistics look better. At a time when some 75% of New
York’s crimes are committed by people of a certain ethnicity, we understand his
ostrich-like solution.
As it happens, Bragg’s fellow prosecutors are none too happy
with his absurd new policy. So, at least a dozen career prosecutors have
decamped from his office. Not what I would call a vote of confidence, cast, I
would underscore, by people who are surely not Trump voters. They are probably
not even Republicans.
So, criminals have gotten the message from the new DA. We
shall see whether he and the mayor can turn things around.
And then there is the jobs problem. New York City lost a
significant number of jobs to the pandemic. The same has been true across the
country. The only difference is that people across the country have returned to
their jobs while people in New York City have not.
A quick walk around midtown tells the story. Storefronts are
shut down. Restaurants have closed. Within a two block radius of my apartment,
at least a half dozen stores have shut down.
The only new replacement business, on the corner of 45th and
Second Avenue, is a large boutique that specializes in selling golf clubs. One
thing you do not really need in midtown is a place where you can buy golf
clubs.
Anyway, apartment rentals have been strong. Apartment sales
have been strong. Office occupancy is down significantly. Precisely how this
disparity between apartment prices and empty offices resolves itself is yours
to imagine. I do not think that it is a good thing.
True enough, there are openings for new jobs. Interestingly,
from the perspective of commercial real estate, many of these new jobs allow
for remote work.
The
New York Post reports:
New York City firms offered nearly quadruple the number
of remote jobs to new applicants in the past year, according to data obtained
by The Post.
“And this is just the beginning,” said NYC Partnership
CEO Kathryn
Wylde, whose business group analyzed figures compiled by the numbers
firm Emsi Burning Glass.
The key industries with the highest jump in virtual-work
offers amid the coronavirus
pandemic included administrative, information and financial
services.
In early 2020, there were 6,700 out of 163,000 postings
for city jobs that could be filled by remote workers, or 4 percent of the
total.
By this past December, there were 25,800 out of 243,000
jobs postings for the same work, or 10.6 percent.
Wylde noted that the virtual jobs “allow the employee to
work from anywhere in the world” — leading to a seismic impact on the city’s
business district and culture and society as a whole.
Fewer in-person workers in the Manhattan Downtown and
Midtown business districts mean less foot traffic for eateries and pubs in the
area, potentially leading to other job losses and firm closures.
Of course, this new reality means that the city and the
state will be losing tax revenue. How long will it take for senior executives,
the people who pay most of the taxes, to decide that life will be sunnier in
Florida.
As for office occupancy, the situation is bleak:
A poll
conducted by the partnership in November found just 28 percent of
Manhattan workers were back at their desks on an average workday and that a
majority were still working remotely 18 months into the pandemic.
And employees are not in a hurry to return to their cubicles.
A just-released national survey by Morning Consult
found that 55 percent of respondents tele-working from home said
they would considering quitting
their jobs if they were forced to return to their office desks
before they felt it was safe.
On the bright side, one study found COVID-induced at-home
set-ups saved
New Yorkers thousands of dollars by eliminating commuting and other
daily expenses.
“This is a big cultural shift, and I don’t see it
reversing,’’ Wylde said of the work-from-home phenomenon.
“It will require repurposing retail and older
office space for housing and other purposes. It also will require
rethinking transit and city services, since long-standing commuter patterns
will change.”
Note well, for many people the issue is safety. If people
feel that they cannot travel on the subways without risking their lives, and if
they believe that the new mayor does not see the problem and that the new
district attorney is encouraging crime, they will stay away.
One notes, as the article points out, that the movement
toward remote work is happening across the country. And yet, the city is doing
far less well than other cities in bringing back jobs:
The
New York Post has the story:
New York City lags behind the rest of the country in
post-pandemic pandemic jobs recovery, a new city report has found.
The US has gained back “nearly all” jobs lost during the
pandemic and is on course to surpass pre-pandemic employment levels this year —
but the Big Apple isn’t expected to reach pre-pandemic levels “until late in
2025,” according to the Jan. 4 report from the city’s Independent Budget
Office.
Only around 35% of the city jobs lost in calendar year
2020 had come back by the end of 2021, according to the Jan. 4 report by the
city’s nonpartisan fiscal watchdog.
The city lost about 615,200 of its 4.7 million jobs in
2020 and saw just 212,600, or 35%, return in 2021, the report said.
Jobs in the hardest-hit, tourist-dependent leisure and
hospitality industries are especially slow to return, the report said.
Wholesale and retail trade also suffered outsized job losses during the
pandemic, and were expected to recover slower than sectors like professional
services due, in part, to “in part due to IBO’s expectation of fewer people
commuting into the city on a daily basis, as well as fewer tourists and
business travelers.”
One understands that people who have deep investments in
real estate retain an optimistic posture. And yet, the strength of residential
real estate coupled with the weakness in office occupancy is a contradiction
that will eventually resolve itself-- and not necessarily for the better.
Might be worth asking...what factors allowed NYC to grow and thrive in the first place?...and how many of those factors still exist? Also, are there any new ones?
ReplyDeleteA son of a friend has worked for Goldman Sachs since leaving school about 4 years ago. When his apartment lease expired he was unable to find another location near their downtown office. His solution was to go to Charleston, SC with his girlfriend and live there at half of the cost of New York. He periodically travels to NYC to make sure the boss has not forgotten him.
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