Why is New York ’emptying out’?

A house with a backyard and space to set up an office were Giovanna Almeida’s dreams before the world heard about the coronavirus for the first time.

Giovanna left Belo Horizonte for New York in 2015 and lived in Brooklyn when she had to isolate herself at home during the peak of the pandemic.

Back when she was still at the office, she spent an hour commuting between home and work. The chance to hold meetings and reports from home completely changed the life of this Brazilian woman, who anticipated her project to spend less and live with more space by at least two years.

Today, she and her husband live in New Jersey, a state next to New York, where their eleven-month-old baby will soon be able to run freely on the lawn at the back of the house they recently bought.

Giovanna is a typical example of a trend that has transformed New York into one of the states that has lost the most residents in the last two years. The island of Manhattan is the county in the country that saw the largest number of its residents looking for houses and apartments in other cities or states. Two hundred thousand in all, since March 2020.

Two other counties in New York, Queens and Brooklyn, also saw the departure of many residents. There were 51,000 in Queens and another 88,000 in Brooklyn, where Giovanna lived.

Columbia University Business School professor Stijn Van Nieuwerburgh researches Real Estate and Finance and is concerned about the future of the city he chose to live in in 2003.

He supports New York but thinks the authorities need to take urgent measures to prevent the city from entering a vicious cycle with less tax revenue, a dwindling population, companies moving and increasingly precarious services. “That’s what happened in the ’70s,” he recalls.

According to a survey by the Partnership for New York City organization, remote work, at least during part of the week, is here to stay. As of October 2021, 54% of the city’s office workers are working from home. Only 8% commuted each day to work in offices and other facilities.

In April 2022, there were 28% working remotely, but the hybrid model became popular and the number of those who worked from the office every day remained at just 8%.

In the last survey, last September, 16% still worked from home all the time and only 9% went to work every day. As a result, many offices are empty.

On December 15, New York City Hall and the Government of the State of New York announced the end of the work of a commission that spent six months studying precisely this problem: the evasion of businesses and residents. Why is New York ’emptying out’?

Just take a walk along 57th Street, between Fifth and Sixth Avenues to understand what’s going on. This area, which had one of the most expensive commercial square meters in the city, now has several closed stores and completely empty office buildings, with “for rent” signs.

One of the commission’s proposals is to convert these offices into residences. Professor Nieuwerburgh believes the idea is good and cheap. Just change the zoning law.

“You can keep the store on the first floor and convert all the offices on the other floors because it will generate demand for trade,” he says.

That coming and going of people who end up stopping at the snack bar, sitting down for lunch or deciding to buy something at the store, on the way home ensures the survival of small and medium-sized businesses.

Juarez Bochi hasn’t left New York yet, but he’s been thinking seriously about moving with his wife to a more distant city.

He was forced to work from home at the beginning of the pandemic and never returned to the office. In fact, if he can stay like that, he even prefers it.

With autonomy to manage his own time, he now runs in the morning and yet, at eight, he is already working. He hardly ever passes the area he used to frequent at the old office address. Today he is more in Brooklyn, where he lives.

As many people did the same, subway revenue plummeted. Shops, bars and restaurants are also feeling the brunt. But in Professor Nieuwerburgh’s opinion, New York’s future is the other way around. Bring back those who have left and ensure that the city’s population is diverse in terms of income and interests.

“No city can live only on professionals in finance, technology and lawyers”, he says. To return to being a vibrant city, it will also be necessary to keep the artists, hotel and restaurant employees, the people who work in the entertainment industry here.

“Before the pandemic, 60 million tourists visited New York every year”, recalls the professor, warning that “without Broadway, without theaters and restaurants, they will not come”.

And city hall accounts also need help. He says that starting in 2024, New York will run a deficit of $10 billion every year on a budget of $100 billion. That is, ten percent of the budget.

It’s such a hole that the city will need to close by increasing revenue or cutting spending. In other words: more taxes and less service. The risk is to see New York repeat what it faced in the 1970s and what Detroit still hasn’t managed to overcome.

That’s why Stijn Van Nieuwerburgh advises: the faster the city votes to change the zoning and convert commercial buildings into residential buildings, the faster tax collection will grow again, guaranteeing the maintenance of transport, education and security services.

This text was originally published here.