Monday, February 9, 2009

Shocking: New York Ain't Cheap!

Manhattan is in trouble. Research from the Center for an Urban Future has revealed that New York City is simply to effing expensive.
For much of its history, New York City has thrived as a place that both sustained a large middle class and elevated countless people from poorer backgrounds into the ranks of the middle class. The city was never cheap and parts of Manhattan always remained out of reach, but working people of modest means—from forklift operators and bus drivers to paralegals and museum guides—could enjoy realistic hopes of home ownership and a measure of economic security as they raised their families across the other four boroughs. At the same time, New York long has been the city for strivers—not just the kind associated with the highest echelons of Wall Street, but
new immigrants, individuals with little education but big dreams, and aspiring professionals in fields from journalism and law to art and advertising.

In recent years, however, major changes have greatly diminished the city’s ability to both retain and create a sizable middle class. Even as the inflow of new arrivals to New York has surged to levels not seen since the 1920s, the cost of living has spiraled beyond the reach of many middle class individuals and, particularly, families. Increasingly, only those at the upper end of the middle class, who are affluent enough to afford not only the sharply higher housing prices in every corner of the city but also the steep costs of child care and privateschools, can afford to stay—and even among this group, many feel stretched to the limits of their resources. Equally disturbing, even in good times, the city’s economy seems less and less capable of producing jobs that pay enough to support a middle class lifestyle in New York’s high-cost environment.

The current economic crisis, which has arrested and even somewhat reversed the skyrocketing price of housing, might offer short-term opportunities to some in the market for homes. But the mortgage meltdown and its aftermath will not change the underlying dynamic: over the past three decades, a wide gap has opened between the means of most New Yorkers and the costs of living in the city. We have seen this dynamic play out even during the last 15 years, as the local economy thrived and crime rates plummeted.

Despite these advances, large numbers of middle class New Yorkers have been leaving the city for other locales, while many more of those who have stayed seem permanently stuck among the ranks of the working poor, with little apparent hope of upward mobility.

This is a serious challenge for New York in both good times and bad. A recent survey found the city to be the worst urban area in the nation for the average citizen to build wealth. For the first time in its storied history, the Big Apple is in jeopardy of permanently losing its status as the great American city of aspiration.
New York Daily News summarized the report with these findings:
  • A New Yorker would have to make $123,322 a year to have the same standard of living as someone making $50,000 in Houston.
  • In Manhattan, a $60,000 salary is equivalent to someone making $26,092 in Atlanta.
  • You knew it was expensive to live in Manhattan, but Queens? The report tagged Queens the fifth most expensive urban area in the country.
  • The average monthly rent in New York is $2,801, 53% higher than San Francisco, the second most expensive city in the country.
  • New Yorkers paid about $34 a month for phone service in 2006. In San Francisco, similar service cost $17 a month.
  • Home heating costs have jumped 125% in the past five years and are up 243% since 1998.
  • Full-time day care costs can run up to $25,000 a year for one child, depending on the neighborhood, or about as much as some college tuitions.
  • Meanwhile, wages in the city have remained mostly flat in all boroughs but Manhattan — even during the boom years from 2003 to 2007.

I have never desired to live in New York, which is strange considering how much I love enormous cities. NYC is just too much for me though. I'm quite satisfied with the Mini-apple over the big apple :-P.