A major exodus out of New York City may be a very real possibility and in fact may have already begun.
A surge in crime, along with riots and looting (which are, of course, crimes too), are driving New Yorkers out of their homes and causing businesses to close their doors for good, writes Ann Kadet in The Wall Street Journal.
Although the flight from busy cities is not entirely new, the movement picked up steam with the coronavirus pandemic and the subsequent economic fallout. Rioting, looting, and a sharp rise in other crimes are proving be the last straw for many New Yorkers.
“The Coronavirus lockdowns were bad, but things really began to fall apart with the rioting and looting, which [New York City Mayor Bill] de Blasio allowed to continue without enforcing law and order,” the Gateway Pundit reports.
“The Partnership for New York City estimates that more than a third of small neighborhood businesses might close permanently,” writes CEO Jeff Blau in an opinion piece for The Wall Street Journal. Blau implores owners to reopen their businesses lest they “allow the economy to continue to decay.”
“The tightly woven fabric of our urban economy is in danger of fraying beyond repair,” Blau writes.
With companies increasingly allowing employees to work remotely as the coronavirus lockdowns intensify a preexisting trend, there is much less reason for workers to return to New York City. Nancy Wu, an economist for StreetEasy, told NBC 4 that rents in New York City are declining for commercial units and apartments. StreetEasy documented an 87 percent increase in new apartment-for-rent listings in Manhattan compared to last year. StreetEasy also noted that those who were able to sell their homes in Manhattan did so at well below the asking price, on average.
“[T]he gap between asking price and closing price (in percentage terms) was the largest StreetEasy has ever recorded,” NBC 4 reports.
With locations within the city limits losing renters, the New York City suburbs are experiencing a spike in real estate prices. In addition, distant places such as Lake Tahoe, Nevada are experiencing a real-estate boom. The quiet, remote town in low-tax Nevada has become a mecca for those relocating from high-cost cities such as those in the Bay Area, CNBC reports. Tahoe properties that once took three or four months to receive an offer are now selling in four days, and many are going for well above the asking price after receiving multiple bids.
Since the millennials began to enter the workforce, the media consensus had been that they were flocking to high-status urban cores and that many Americans found city life appealing, writes Jim Geraghty for National Review. Urban areas such as New York City, Seattle, and Boston were experiencing unprecedented job growth—though analysts such as Joel Kotkin and Wendell Cox had noted the major growth was still in the suburban areas, even for millennials. In any case, those who had gravitated to the cities for jobs, glitz, and glamour are increasingly packing up and moving out.
New York City isn’t the only place experiencing this trend. States with the highest tax burdens—such as California, Illinois, and New York—are all losing residents, The Epoch Times reports.
“The evidence is clear that competitive tax rates, thoughtful regulations, and responsible spending lead to more opportunities for all Americans,” notes the Rich States, Poor States report by the American Legislative Exchange Council (ALEC) and the Laffer economic analysis team.
The ALEC/Laffer report compares the economic progress of states based on factors influenced by state policy. The Economic Performance Ranking calculates a state’s economic prospects based on three factors: state gross domestic product, absolute domestic migration, and non-farm payroll and employment. The study identifies New York as the state with the worst economic outlook in 2020—a rank the state has held since 2014. Utah ranks first and has done so for the last 13 years.
The report documents the significantly higher tax burdens in states such as New York, Illinois (ranked 47), and California (ranked 46). Residents and businesses in the best-ranked states—such as Utah, Wyoming, Idaho, and Indiana—enjoy lower taxes and less government regulation. The states that gained the most population in the last ten years include low-tax Texas and Florida, the report notes.
“These states provide a pro-business environment, better tax policy, and more economic competition,” says Jonathan Williams, a coauthor of the ALEC/Laffer report. Still among the states losing residents are high-tax New York, Illinois, New Jersey, Vermont, and California.
“New York is the most expensive city in America,” writes Kristin Tate in an opinion piece for The Hill. “Its lower-cost neighborhoods are riddled with crime and homelessness.”
“What’s happening in the Big Apple is a microcosm of what’s happening in the nation’s blue states, cities and towns,” Tate writes. “New York, Los Angeles, Chicago—the places where power and capital have traditionally congregated—have become so over-regulated, so overpriced and mismanaged, and so morally bankrupt and soft on crime that people are leaving in droves.”
States with high taxes are generally not working on cutting them but instead are proposing further increases, notes economist Arthur Laffer, a coauthor of the ALEC report. Despite losing 1.3 million residents between 2009 and 2018, New York continues to maintain the highest tax rates in the country.
“Government spending is taxation,” Laffer told FOX News. “Government doesn’t create resources. … They redistribute resources. Whenever the government spends $1 trillion, it takes $1 trillion from workers and producers. … We need free markets more than ever.”