The Rise and Fall and Rise Again: The Collapse of New York City
Jay-Z and Alicia Keys couldn’t have expressed the energy and excitement of New York better
than they did in the song, Empire State of Mind, which was released over a decade ago.
Having come from the suburbs, I remember working in New York City and being awestruck
surrounded by the hustle and bustle in what many consider the Capital of the World. But today,
New York City is facing a great challenge and some might even say, downturn or collapse.
There have been struggles in the past such as 911, the great recession of 2008 and many others. From
each of these major events, New York City always emerged bigger and better on every level. However,
landscapes change and problems evolve. Today, the City faces issues almost no one anticipated.
There are many issues facing NYC, but since we have limited time, I wanted to focus on
three key trends. In this video, I’ll deep dive and give you the Company Insight into what I
see as the changes happening now - Mass swarms of residents relocating out of the city,
cultural shifts trending away from hustle and bustle and businesses exiting the city limits.
New York City is resilient. It will survive, and live to thrive again in a Post-Covid world,
but what elements of the city that never sleeps will be sacrificed?
We’ll explore these issues and more, but before we begin, if you guys enjoy videos like this,
please take a quick second, click the LIKE button, subscribe button and notification bell to know
when new videos come out each week. Thanks for doing that and now let’s start the video.
Economics 101: Supply and Demand
If any of you have taken Economics, you’ll know that Supply and Demand guides all economic
movement. New York City is no exception to this principal. The City is facing
and will face ever evolving challenges that today's social and viral climate
has brought on. Let’s take a quick preview of what’s happening in terms of Supply and Demand:
First, even prior to Covid, 2,600 People a Week Were Leaving New York City.
For an ever-expanding city, the drop in entertainment and industrial value, brought
on by the Covid-Era has created a shrinking demand for a city that was already no longer growing.
Second, Young Americans have had a year to explore the vast entertainment potential of the formerly
frowned upon quiet Friday evening at home. The city that never sleeps has longer operating
hours, where it can turn a profit. Businesses with a profit base in
the 11pm-4am time bracket in New York will now have a social trend to contest with.
Third, businesses are now aggressively taking that inside-track towards remote operations.
The most problematic issue for New York City is that physical corporate
headquarters are no longer essential to success in today’s remote access world.
With that in mind, the concept of Supply and Demand will guide New York’s evolution
to a new day, but these challenges are important to watch in the Post-Covid Era.
The Covid Relocation Sales Event The market will supply what the masses want.
For those seeking day to day adventure, in the big-city-rat-race, The Big Apple is the obvious
first choice in the entire country. However, the demand for its fast-paced lifestyle is diminishing
in today’s contemporary American Society. The following population statistic marries
favorably with future prospects for affordability in New York City, so listen up. 2019 saw a daily
domestic migration departure rate of 376 people each day leaving. This number is nearly 100 more
departures per day than 2018. These statistics demonstrate that society was ahead of Covid-19,
as New York was losing people even before the viral onset.
But why are people leaving New York City? Is there a collapse happening now? Let's deconstruct a few
reasons for leaving the Big Apple pre-Covid; First, New York boasts the highest state and local
taxes (around 13%) in the entire United States. You can also add City tax on top of that.
Second, residential rental rates have been no less than $2,300 for even
small studio apartments. That’s close to $30,000 per year on just rental alone.
Third, there are two million rats in the City. (just thought you should know)…
Fourth, the pre-covid great migration away from big cities did not isolate itself only to New
York City. In fact, all three of the topmost populated cities in the United States have all
seen an increased departure rate in recent years. Los Angeles and Chicago were among other cities to
see daily departures in the triple digits last year. This evidence shows cultural trends away
from PHYSICAL cultural hubs - Evidence gathered even before Covid, which can be considered the
largest cultural upset America has seen since the twin towers fell in September 2001.
The Post-Covid-Era Promise New Yorkers are used to major
challenges and have always handled them with grace for decades. New York City has
not seen negative population growth before 2019, since the 1970s stagflation economic collapse.
But as situations evolve, with state mandated regulations on entertainment and dining,
the ends no longer justify the means for a significant portion of city residents.
As former New Yorkers leave, they open up opportunities for new residents to join the New
York lifestyle, but these newcomers do so based on an implied promise, that “Yes, we will fully
reopen promptly, to the New York you remember.” With that said, I don’t believe there is a threat
of a complete collapse of New York City -a city starved of residents, its culture withered.
People will always gravitate towards this melting pot, for its grandiose aesthetic and
the city’s promise of ease-of-excitement for those seeking adventure. Therefore,
with any long-term drop-off in population, the tried and true fundamental principle of supply
and demand will drive rent prices down, opening up opportunity for a cultural renaissance;
where the less financially successful, the struggling artists, and the people with hours
of free time-not dedicated to paying for the roof over their heads-will flood the streets.
If you have time, check out the YouTube channel of Cash Jordan. This avid Youtuber goes around making
videos of apartment tours exclusively in New York City and you’ll see that prices have come down
a lot! I strongly believe that the potential for innovation and creativity with a new flavor,
lost to the high price barrier in New York of today, will result in more and more younger
and creative people slowly moving to NYC resulting in a cultural renaissance.
The Introverted Generations The second change I foresee that will
affect New York City is the change in culture. As a whole, culture is presented by socially selected
spokespeople. Their art, their expression, is successful and followed because they relate to
large parts of the society they have been chosen to represent. To quote a millennial spokesperson,
Justin Bieber “I’m at a party I don’t wanna be at.” from the 2019 hit song, “I Don’t Care.”,
this song did not gain widespread success and non-stop radio play for no reason.
The big names of Justin Bieber and Ed Sheeran represent millennial culture as it stands today.
This particular song catches the ear of a silent majority who reluctantly “go out”. The
song revolves around two people who don’t enjoy the party dynamic and fall in love - an idyllic
course of events that lives in the dreams of the introverted, millennial and gen-z generations.
The culture guiding generations of today, Millennials (born 1980 - 1994) and Gen-Z (born
1995 - 2012) both have the unique experience of growing up with advanced, wide access technology
like the internet and social media messaging services like Whatsapp. Without any further
context, one can infer that these generations obtained less classical human social skills,
most notably in face-to-face interaction, than any other generations in the history of mankind.
A statistic to support this wide, sweeping statement comes from the segment of Americans in
the highly social, face to face field of sales. To be successful in the sales field, one must
possess a heightened social aptitude. That’s the science of sales. With that, it is evident that
millennials and gen-Z’ers shy away from this social craftsmanship more than generations past. The 2000
US Census calculated nearly 15 million salespeople in America. While in 2019, Statista reported a
total US sales force of only 4 million people! Meanwhile, in the time between 2000 and 2019,
the US population grew from 281 million to 331 million people. Sure, there may be many reasons
for this drift away from sales, but the fact remains that social skills are, at a bare minimum,
less practiced by the average person in America than previous decades.
This leads us to my next point, which is how the young population of millennials and Generation
Z’ers will react to the reintroduction of the social experience-based nightlife industry. The
reason is because nightlife is a major portion of New York’s mystique. Of course, at first there will
be initial surge of interest when the post covid era begins as people are free from lock-down.
But then what will happen in the medium term and long term and how will the
landscape of New York City change with them? The End of Nightlife, As We Currently Know It
As stated earlier, the Millennial and Gen-z generations are a less social people than previous
generations. With the cultural acceptance they have faced, throughout the Covid-Year, regarding
“staying in”, these introverted generations will have an informed decision to make, every weekend
on whether to go out or stay in. A safe assumption is that the opening months
of the post covid era will see unprecedented money spent in that entertainment industry of clubs and
nightlife-esque events. True authentic experiential events will still thrive,
but I believe the cursory corner club will be fighting an even steeper uphill battle
when the introverted youth take on more likelihood in their lives to stay home,
proudly and productively. The industry will still exist, but will nightlife be more appreciated or
grow stale after more than a year of separation from its struggles and price tags? From visitors
navigating the NYC subway system, to anyone waiting in that hour long line to get into a
fire-code-breaking club with music as loud as the drinks expensive, the potential for huge growth in
this industry is likely unlikely and this will most likely affect New York going forward.
The Capital of the World. Does location matter anymore?
A bizarre sight for any new yorker or local suburb dweller, is One World Trade. The tallest building
in New York City opened its doors on November 2014 and has dazzled in the skyline ever since�
except for the top quarter of the building, which remains uninhabited, lights out. No matter the
reason, this symbol of freedom in the post 911 world, in six years of existence has not fully
nestled into the skyscape. Although this is a testament to the time required for anything NEW
to find its sweet spot in the city that never sleeps, there is a note of caution, especially
when this was already prior to COVID. Now, the question is, what will happen to businesses now?
Will the Post-Covid New York City remain the economic epicenter of the Western World?
A concerning sign is emerging, as a prominent investment firm - Blackstone - recently opened
a new office in Miami, Florida. Boasting cheaper rents, an intimate connection to
Latin American markets, and … year-round Summer, the incentive is there, for big name corporations.
And Blackstone is not alone in its thinking. Goldman Sachs is planning on moving their asset
management business to Florida. AllianceBernstein already moved their offices to Nashville.
The list goes on and on. These are serious signs that could lead to a downturn or collapse.
And to make matters worse, office vacancies are now at a record for
the 21st century in Manhattan. However, it’s not just other American
cities competing with New York now. In 2020 (before the arrival of COVID-19),
there were already 7 million people working remotely in the U.S., or 3.4 percent of
the population. Over the last five years, the number of people working remotely has grown by
44 percent. Trends were beginning to shift, even prior COVID. As of October 2020, GALLUP reported
that 58% of the American workforce was performing some to all of their responsibilities from home.
Obviously, this 58% number cannot last after COVID ends, but certainly a significant percentage of
organizations will permanently shift to a remote work model. And this will definitely affect New
York going forward. If you’re working remote, what difference does it make if you’re working in New
York or working from Florida? It doesn’t matter anymore for both people and companies alike.
Conclusion I believe, over time, New York
will rise from the Covid-Era bigger and stronger. I don’t expect any collapse of New York City.
However, with added elements such as remote work and emerging alternative corporate cities,
businesses will have to evolve. Now that millennials and Gen-Zers have a taste for socially
acceptable introversion, New York nightlife will evolve as well. New York is never constant,
it’s always ever evolving. As music executive Jon Baker once said, “I lived in Manhattan for a total
of 25 years and I hear people say ‘oh New York has changed and is not what it used to be’. We all have
our preferred decade, but at the end of the day, New York City is the most intensely creative and
diverse few miles of island on this planet and it will always be. For me, every decade has had its
unique spin.” Personally, I find it's an exciting time to witness this massive center evolve.
Let me know what you think in the comments below on what will happen to New York.
So with that said, again thank you so much for watching my video. There was
a significant amount of research and work that went into making this video possible,
so if you wouldn’t mind giving the video a LIKE or sharing it with your friends,
it would really help out a lot. If you like videos like this one,
be sure to check out some of my other content like the Rise and Fall of Playboy or the Rise and Fall
of Honda. Thank you again for watching and I’ll see you again next week on Company Insight!