Friday, September 16th, 2011

New York Stands High

Crain’s New York Business recently released its 2011 City Facts compilation and chose to title it, “New York Stands High” as they found much to celebrate in the numbers. Among them:

  • The most incredible stat to me is that NYC jobs in 2011 fell only 56K short of their all time peak in 1969. If the economy ever gets back on track, this seems likely to only go up.
  • Despite its roots in a financial crisis, Crain’s labels the recent recession as “The Great Recession That Wasn’t”, describing it as “one of the mildest since WWII” in terms of NYC job losses. This will no doubt infuriate bailout skeptics.
  • The number of companies operating in downtown Manhattan now surpasses its pre-9/11 total. Rents have been stagnant, however and vacancies are projected to climb.
  • The tech sector finally surpassed its dotcom/Silicon Alley level peak in 2000, and NYC is on the verge of overtaking Boston as the #2 destination for tech venture capital investment.
  • Though some claim many people were missed, the 2010 census showed an increase in NYC population and the city is now at an all time population high.
  • The population is increasingly diverse, with, for example, Asians now accounting for over one million city residents.
  • The population of downtown Manhattan grew by 150% between 2000 and 2011. Downtown apartment prices have more than doubled since 9/11.
  • Between 2007 and 2011, national home prices dropped by 19.1% from peak, while Manhattan apartments actually went up 9.1% in price.

The numbers aren’t uniformly good for the city, but it has performed very well comparatively. I think this illustrates more than anything the emerging two-track economy of which we’ve read so much, which is fueling an ever widening income gap, etc. What’s good for NYC isn’t necessarily good for America, and the model of success represented by the city (as well as other outliers like Washington, DC) simply can’t be replicated elsewhere. Thus these places don’t really represent a model of success for others to emulate, and they have only a limited amount to say on what urban policy should be elsewhere. Nevertheless, in a global economy, America does need places like NYC and Silicon Valley to be as competitive and prosperous as they can be. The challenge is how to bring about a more broad based prosperity that provides jobs and upward mobility to average Americans.

5 Comments
Topics: Demographic Analysis, Economic Development, Globalization, Technology
Cities: New York

5 Responses to “New York Stands High”

  1. David H. says:

    You make a very important point (which unfortunately, I seldom see noted in most analyses of the relative performance of various cities) which is that New York City’s “success” in this instance provides no lesson what-so-ever for any other city in the U.S. I have seen varying figures on the “tax” that our current financial system places on the rest of the U.S. economy – with profits from the FIRE sectors of the economy representing something like 40% of the current S&P 500 companies cumulative profits, versus an historical average of perhaps 20%. This extra 20% of the U.S. profits captured by the FIRE sectors comes at the expense of the remainder of the economy and every city that does not have a concentration of FIRE companies and highly compensated executives. Wall Street firms are back to paying record bonuses in spite of their abysmal record over the past decade. I don’t know the latest numbers for the total bonus pool but I recall a number of something on the order of $130 billion per year. Increase the income of any other large city in the U.S. by this amount and see how their performance relative to other cities improves.

  2. George Mattei says:

    The most amazing thing is that New York continues to be successful to this level despite the fact that it has so many things going against it-cost, lack of available land, heavy congestion, etc. It goes to show you that a broad-brush political, economic or planning philosophy is far too simplistic to apply uniformly over our nation.

  3. Benny Lava says:

    George,

    Perhaps those factors you cite aren’t necessarily negatives. I mean there are plenty of Midwestern cities with low cost, open land for development, and lack of congestion that are doing rather poorly.

  4. Lou says:

    While you are right that what works in NY might not work in Kansas City, following NYC could work for its satellite cities (especially the ones connected by rail) like Jersey City, Newark, and Bridgeport. Remember 3 states are directly connected with New York City’s economy (NJ, NY, and CT). These other places can be a low cost alternative to New York City and should look to New York rather than the rest of the country. same goes for dc, la, and sf.

  5. Alexis says:

    I wonder if these numbers, by differentiating between Manhattan, Brooklyn (and other boroughs), and the metro area (NYC, NY communities like Westchester, NJ and CT) would be more accurate and/or interesting. Brooklyn’s population numbers may have only slightly increased (1.6% since 2000) but I wonder if the influx of out-of-staters, young professionals and ex-Manhattanites might have affected income/educational levels, residential and retail development, and so forth.

    Perhaps comparing the rest of the country to Manhattan or NYC as a whole might not be advisable, it might make sense to compare other cities to boroughs like Brooklyn or Queens. On the other hand, it might just be useless exercise; if the point of the comparison is for the sake of emulation, I’m not sure the Brooklyn/Queens model is attainable for other cities even if certain cultural modes (DIY/hipsterism) have spread to other parts of the counbtry.

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