New York is a service-based economy, and anytime you have a system like that, cost of living becomes an issue. While the finance bros working 80-hour weeks might be able to afford NYC prices, there’s a three-headed dragon wreaking havoc on everyone else…real estate.
The first head is the demographic problem, which comes naturally with being part of the fastest-aging region in the US. Many of these lifelong New Yorkers are aging into retirement, and it doesn’t make sense to stay there anymore. So we are amid a mass exodus of lifelong NYC service workers.
The second head was/is COVID. Once people realized they could work remotely and live a more spacious life outside the city, many didn’t want to crawl back into their studio apartments. Yes, NYC has made a more robust recovery than San Francisco, but it’s still not quite back to how it was. The government is taking quite a hit for each person that never returned to the city.
This dragon’s third and worst head is international fear and its impact on rent prices. As economies across the globe enter a state of flux, there’s nothing quite like parking your assets in a 50th-floor penthouse apartment in NYC (even better if you never step foot in it). For people who actually want to live in the city (like my social media manager), that means crazy rent prices and low inventory.
Does this mean that NYC is done? Of course not. For many, this probably sounds like the status quo for the world’s financial capital. However, the business models for the private sector and the government will have to change if NYC wants to thrive for years to come.
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