Is The Bloom(berg) Off The Big Apple?
It's been a great run. Anyone who lives, works or plays in Manhattan or the boroughs knows what a fantastic improvement has taken place since Rudy Giuliani first got tough on quality of life issues. New York City and Manhattan are cleaner, crime is down, and many neighborhoods that were down and out are bustling with commerce, entertainment and new residents. But like all cycles, this one has gotten a bit long in the tooth. The cost of living in Manhattan has gone through the roof, mere mortals are being priced out of the market and affordable housing has been taken off the market at a rapid pace in the last number of years. We are even seeing the real estate foreclosure debacle impact the boroughs.
Let's look at some numbers:
The Observer served up these figures in an April article on "Where Manhattanites Move When They Want to Stay in New York." (FYI, the punch line was: The Bronx...from 2001 to 2006 over 23,380 Manhattanites moved there).
From 2005 to 2006 10,000 Manhattanites moved to the outer boroughs.
The average Manhattan apartment price hit nearly $1 million in 2005, $1.25 million in 2006 and by the last quarter of 2007 it was $1.4 million (the latest data according to Prudential Douglas Elliman).
The City is losing 30,000 rent-regulated apartments per year and 28,000 similar unregulated units, according to the Gotham Gazette article As City grows, Affordable Housing Shrinks.
The number of foreclosures in the five boroughs increased 51.4% from q4 2007, to 918, according to PropertyShark.com.
Manhattan's population of children under 5 years old jumped 29.4 percent from 2000 through 2006, according to the US Census Bureau. This compares with 6.6% growth for the city overall.
We have recounted several impending quality of life and economic issues on Urban Digs before,
in "School Crowding A Concern!" and "The Ax Man Cometh: Can the Tax Man Be Far Behind?".
The school crowding problem was discussed again in a recent New York Times article, "New York's Coveted Public Schools Face Pupil Jam," which pointed out issues downtown, on the upper west side, as well as in Brooklyn, the Bronx and Long Island City. The surge in families staying in the city is also impacting recreation opportunities, as pointed out in a Crain's New York article in April, "Ballfields become new community rallying point," which quotes a little league board member saying "The fields are absolutely filled to capacity."
The financial industry layoff issues continue to mount. The recent Lehman losses and dilutive capital raise could obviously foreshadow, more head count reductions there as well as at other firms who may have more losses coming. One friend of mine at a big bank believes there are new losses from CDOs that need papering over. Another friend who is a partner in a small securities firm confided that they had their first ever layoffs. The firm has been around since at least the late 1980s and just cut 25% of their staff, due to the lack of investment banking business.
Noah has noted the rise in the cost of a slice of pizza in New York as a lighthearted reminder of the increased cost of living resulting from recent inflationary pressures. But more serious signs of financial stress on New York consumers are now in evidence. According to a recent Crain's New York article entitled "More Can't Pay Utilities Bills," "Con Ed alone says that more than 187,700 customers were in arrears last month, a 9% rise from a year earlier."
So while New York City retail rents are reportedly surging, according to this New York Observer article, which cites a recent REBNY report, Urban Digs readers are reporting seeing lots of empty storefronts around town in more residential neighborhoods(see "Manhattan Downshift, Yes or No?....Let us Know").
Foreign demand for apartments, shopping, entertainment and meals has certainly been bolstering the city's economy thus far in the downturn, while the quality of life for New Yorkers from rich to poor shows signs of fraying. The overheated environment of recent years is now taking its toll, with the crane wrecks of late being a clear manifestation of the intersection of fevered growth, cost increases and a slowing economy. If New York becomes an unfriendly place for New Yorkers, unfriendly New Yorkers may make it an unfriendly place for our foreign guests (that makes sense, I think).
So with undeniable signs that the city has challenges, what we really need is a solid leader, a guy who can do what's necessary to address the city's problems, a guy who doesn't have to answer to special interest groups, a guy who can make hard decisions and keep the city government moving forwards....OOPs - We already have Mike Bloomberg and perhaps the biggest risk to New York City over the next couple of years is the loss of leadership like Mr. Bloomberg's.
At least there is some hope here, according to the New York Times, Mayor Mike is considering trying to overturn the city's term limitation statute so that he can run for Mayor again in 2009. Alternatively, he may seek the Governor's chair in 2010.