New York City — the Big Apple, the City that Never Sleeps — whatever name you use, the city that survived a terrorist attack and a once-in-a-hundred year storm — is badly suffering the effects and after shock of the coronavirus. The economic and social impact of the virus, as well as restrictions that followed, will be felt for many years to come.
A shifting city
New York is a city formed by change. First settled in the early 1600s by the Dutch, the city was named after the Duke of York in 1664 by the British. The city’s strategic harbor made it a vital location during the Revolutionary War. Population grew steadily, and New York was the capital of the new nation from 1785 to 1790. The building of the Erie Canal in 1825 made the city the trading capital of the world. Then, in 1895, Manhattan Island converged with the outer areas of Queens, Brooklyn, Staten Island, and the Bronx to form the five boroughs.
During the 20th century, New York City was again transformed amid the construction of highways enabling people to leave the city and move to the suburbs. New York also became known as the financial capital of the world.In 1903, the New York Stock Exchange opened its first office, and the term Wall Street became synonymous with the stock market.
Then on September 11, 2001, the city and the nation experienced the worst terrorist attack on American soil, destroying the Twin Towers and killing over 3,000 people. New York recovered from 9/11, rebuilding and revitalizing, stronger than ever. And when Superstorm Sandy slammed the city in 2012 — resulting in 44 deaths and $19 billion in damages — New Yorkers again banded together.
While New Yorkers seem to find solidarity in calamity, the global pandemic did not unify the city. The city suffered approximately 25,000 deaths, and over 400,000 confirmed cases. New Yorkers were starting to look forward to the end of social distancing when social protests in the wake of the murder of George Floyd further impacted the city. Further protests throughout the summer left the city a ghost town.
A new normal for work
Lockdowns and social distancing restrictions due to the unknowns of the pandemic forced an immediate shift in workplace arrangements. Millions of people left their windowed offices and cubicles and the world waited with bated breath. What would happen next? Would the financial markets keep running?
The shift to remote work went a lot smoother than many had anticipated. With a few exceptions, businesses transitioned to a remote environment. As New York starts to relax restrictions, what will be the effect on the concrete jungle?
Future of tourism
The Big Apple spot as a major tourist attraction is undeniable. In 2018, 65.1 million tourists visited the city, an all-time high. The economic impact of tourism is substantial, providing jobs to over 390,000 people through hotels, museums, restaurants, and retail.
But the coronavirus has dimmed Broadway’s lights. In Times Square, at one point, foot traffic dropped 90%. McDonald’s closed its 17,500 square foot flagship Times Square location, retailer Valentino is suing to terminate its lease on Fifth Avenue, and Victoria’s Secret filed a similar suit for its Herald Square location. Broadway shows are not expected to reopen until sometime in 2021.
The health crisis is uncharted territory for the concrete jungle. The median price of real estate sales completed during the pandemic, fell 17.7 percent compared to the same time last year, to $1 million, according to a report by Douglas Elliman.
“The people ride in a hole in the ground”
Further complicating a return to normalcy is the city’’s main mode of transpiration — the subway — is considered one of the highest risk for transmission of the virus.
Homicides are also on the rise. According to city statistics, murders rose 87.5 percent for the 28-day period ended Jan. 3, 2021, versus the same period one year ago, with a 100 percent rise from two years prior. It should be noted that while recent data has risen, the long-term trend is still much lower.
Tax proposal increase
New York is already one of the highest taxed states in the country. According to Kiplinger, New York is third-highest taxed state. New York City adds additional taxes, including a commuting tax for self-employed who want to live beyond a bridge or tunnel.
Prior to the pandemic, a mayoral commission issued a report calling for a property tax overhaul, which would alter taxation for residential properties. Owners of one-to-three family houses are currently taxed on their sales value. The proposal would tax these houses, as well as coops and condos, at 100% of market value. This could further drive more residents from the city.
What will the “new normal” look like for NYC?
As both individuals and companies realize that most job functions can be done remotely, what will happen to New York and other megacities?
Even before the pandemic, the “city that never sleeps” was feeling the effects, losing 53,000 residents for the one-year period ended July 1, 2019, marking the third straight year of population loss. During 2020, data shows that approximately 70,000 residents left NYC. The shift has been mostly from higher-income neighborhoods, resulting in a tax loss to the city of roughly $34 billion.
With New York consistently ranking in the top 10 of the most expensive cities to live, will residents move on?
Can NYC, or most major cities in general, survive? Or will New Yorkers again defy expectations and reinvent the city yet again?