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The End of New York

Will the pandemic push America’s greatest city over the edge?

Joel Kotkin
March 27, 2020
Library of Congress
Grand Central Terminal, New York City, 1941Library of Congress
Library of Congress
Grand Central Terminal, New York City, 1941Library of Congress

For over two centuries, New York has been the predominant urban center in North America. It remains the primary locale for the arts, culture, finance, and media, and will likely remain so for the foreseeable future. It has also served as the incubator of the many Americas—including Jewish, Italian, African American, Irish, and, increasingly, Middle Eastern, North African, and Asian cultures—and nurtured their contributions to the arts, business, and intellectual life.

Yet today, New York faces a looming existential crisis brought on by the coronavirus. It suffers the largest outbreak of infection by far, accounting for the largest numbers of both cases and deaths outside of Wuhan and Milan. New York is home to nearly half of the coronavirus cases in the United States, and a majority of deaths.

What’s particularly ominous for New York’s future is that the best way to slow the spread of the virus—social distancing—works against the very things that make Gotham so appealing. The very pleasures and crowded realities of urban life, such as mass transit, are particularly susceptible to pandemics. As New Yorkers are told to avoid crowded subways, subway traffic is down 60% and commuter train traffic by as much as 90%.

Cities like New York pay a price for being both dense and cosmopolitan. As a new study from Heartland Forward reveals, the prime determinants of high rates of infection include such things as density, percentage of foreign residents, age, presence of global supply chains, and reliance on tourism and hospitality. Globally, the vast majority of cases occur in places that are both densely populated and connected to the global economy. Half of all COVID-19 cases in Spain, for example, have occurred in Madrid, while the Lombardy region in Italy, which includes the city of Milan, accounts for roughly half of all cases in the country and over 60% of the deaths.

In contrast, suburban, exurban, and small-town residents get around in the sanctuary of their private cars and have far more room inside their houses. They do not usually get lots of visitors from outside, particularly from abroad. Overall, most rural areas around the world have been largely spared, at least for now, due to much less crowding and casual human contact, which abound in cities.

Pandemics naturally thrive most in big cities, where people live cheek by jowl and are regularly exposed to people from other regions and countries. Like COVID-19, the bubonic plague came to Europe on ships from the Orient, where the disease originated. As historian William McNeill noted, the plague devastated the cosmopolitan centers of Renaissance Italy far more than the backward reaches of Poland or other parts of central Europe.

Being away from people, driving around in your own car, and having neighbors you know, all have clear advantages when it comes to avoiding and surviving contagion. Even the urban cognoscenti have figured this out. Like their Renaissance predecessors during typhus and bubonic plague outbreaks, contemporary wealthy New Yorkers are retreating to their country homes where they struggle with the local townies over occasional short supplies of essentials.

In the long run, the extraordinary concentration of COVID-19 cases in New York threatens an economy and a social fabric that were already unraveling before the outbreak began. The city’s job growth rate has slowed and was slated to decline further, noted the New York City Independent Budget Office. Critically, New York’s performance in such high wage fields as business services, finance, and tech was weakening compared to other American metros. Half of all the city’s condos built since 2015 lie unsold as oligarchs, drug lords, celebrities, and others lose interest in luxury real estate now that cash, much of it from China, is drying up.

But it’s not just the ultrarich who are heading to the exits. Even before the virus hit, large urban centers like New York, Los Angeles, and Chicago were losing population; over 90% of all population growth since 2010 had taken place in the suburbs or exurbs. Even millennials, as demonstrated in a Heartland Forward report, are moving away from the supposed “magnets” of New York, Los Angeles, and Chicago, to the sprawling cities and towns in the middle of the country. Renowned demographer William H. Frey of the Brookings Institution indicates that the greatest net migration losses in recent years has occurred in New York. The growth in the migration of such prized workers is now two to three times faster in Salt Lake City, Pittsburgh, Cincinnati, and Grand Rapids than in regions around New York, Los Angeles, or Washington, D.C.

Those seeking to flee a disease-ridden, dangerous metropolis have plenty of options to choose from. New technologies make it increasingly easy for companies to work far from the dense megacities and will get a further boost from the coronavirus—which underlines the dangers of crowded urban spaces to workers and companies alike, while further normalizing the virtual office. The experience of a quarantined telecommuting workforce will likely give added momentum to a process that one British writer has described as “counter-urbanization.” For firms connected by the internet, it increasingly makes sense to locate in suburban regions and smaller towns that are generally safer, cleaner, and less expensive than big cities.

These trends undermine the notion, promoted by cheerleaders like Neil Irwin of The New York Times, that sees places like New York as having “the best chance of recruiting superstar employees.” Much of this puffery has been based on the notion that creative and innovative businesses need to collaborate in close physical proximity. Yet increasingly, tech, business services, and design firms can be interconnected by the internet; they operate less in the physical city than in what the late William Mitchell referred to as “a city of bits.”

This ability to work remotely can be seen in the flow of jobs in fields like finance, technology, and business services. In all these fields, according to an analysis by Mark Schill from the Bureau of Labor Statistics, New York’s performance has been either at the national average or well below. Top bankers or designers may continue to operate out of Manhattan, but their many minions can operate far easier in places like Austin, Dallas-Fort Worth, Nashville, Raleigh, Salt Lake City, and Jacksonville, which so far have been far less affected by the virus than New York.

Even before the current pandemic, the benefits of working remotely were apparent in terms of productivity, innovation, and lower turnover, particularly among educated millennials. These digital natives have already accepted the notion that they can accomplish as much at home as they can in the office. As one student told me, “I don’t see the point of driving an hour to go from one computer screen to another.”

New Yorkers will no doubt survive the coronavirus pandemic of 2020, as they survived Sept. 11 or the crime waves and fiscal crises that haunted the city during the decades between the 1970s and ’90s. Yet crises do take a toll on people and cities, and leave families and individuals more amenable to leaving town. New York would appear to be headed into another such period of crisis, which may be further accelerated by the city’s increasingly bifurcated class structure and more limited opportunities for advancement.

In the vision of the late Jane Jacobs, New York served as a place of opportunity for the middle and working classes. But this role has diminished markedly over the last 30 years. In the 1980s and ’90s, deregulation helped expand the city’s financial industry, attracting a massive influx of capital and talent. Yet as e-finance and business services burgeoned, the economic diversity once provided by older industries, notably manufacturing and local retail, slowly evaporated.

I don’t see the point of driving an hour to go from one computer screen to another.

Initially, New Yorkers benefited from this transition, particularly among the city’s remaining middle-class ethnic communities. Under Rudy Giuliani, the city overcame the violence and disorder that made it seem utterly ungovernable in the 1970s. By being willing to take on public employees, advocacy groups, and the media, Giuliani helped make the city a safer and somewhat more efficient place; a net positive to most New Yorkers.

Michael Bloomberg, Giuliani’s mayoral successor, built on these achievements, but with a distinctly more elitist focus: Bloomberg’s vision was of a “luxury city” concentrated in Manhattan and fashionable parts of Brownstone Brooklyn—a city for billionaires like himself.

This approach may have worked well for New York’s elites, but that can’t be said for a large portion of the city. Today the top 1% in New York are taking in over 40% of the city’s income—about double the top 1-percenter income share nationally in the United States—while much of the city’s population find themselves left behind. Even the epicenter of gentrification, Brooklyn, actually got poorer in the first decade of the new millennium.

This reflected in large part a precipitous fall in middle income jobs—those that pay between 80% and 200% of the median income. Over the past 20 years, such jobs barely grew in New York, while such employment soared 10 times as quickly in Texas cities and throughout much of the South and Intermountain West. Of the estimated 175,000 net new private sector jobs created in the city since 2017, fewer than 20% are paying middle-class salaries. Amid enormous wealth, some 40% of working families now basically live at or near the poverty line. For most New Yorkers, the “luxury city” was not glamorous, but more resembled a version of Detroit—a place largely without hope. In the process, the primarily middle-class New York I knew as a young man has slowly evaporated. Since the 1970s, the middle orders’ share of the city population declined from more than 60% to 48%. Economic research shows this decline to be among the fastest in the country. While Bloomberg’s “luxury” city thrived, poverty became more entrenched and evident. As The Atlantic recently noted, Manhattan now suffers conditions where “the homeless shelters are full, and the luxury skyscrapers are vacant.”

Bloomberg’s successor, Bill de Blasio, who ran against the notion of “two New Yorks,” ultimately managed to only accelerate the city’s social unraveling. De Blasio’s policies on policing, notably bail reform, have engendered a noticeable rise in crime, including on the subways. If the virus doesn’t get you on your evening commute, it’s possible that a mugger will.

The spread of contagions in a starkly divided city, lacking the glue of its formerly tenacious and now greatly embattled middle class, will be accelerated by the growth of the homeless population on New York’s streets. These populations—exposed to the elements and living in often crowded, unhygienic conditions—can be breeding grounds for rats and all sorts of diseases, some of them distinctly medieval, such as typhus, and many of which will arguably be far more dangerous than coronavirus.

As working parents fear sickness and crime, the prospects for their children have been further eroded by de Blasio’s systematic, ideologically driven assault on the city’s education system. Charter schools, critical to retaining middle- and working-class families, are getting steamrolled by teachers unions and city administrators. The biggest losers here are usually innercity poor children, of which nearly 70% are black and Hispanic. At the same time, the mayor, along with New York City Schools Chancellor Richard Carranza, have been working assiduously—in the name of racial justice—to undermine the merit-based schools like Stuyvesant and Bronx Science, which remain magnets for primarily working-class Asian children. Equally critical is the fact that the city’s once thriving Catholic schools, long a bastion of working-class upward mobility, face rapidly declining enrollments. The assault on the city’s schools by the mayor makes it far less attractive both to middle-class residents and to businesses.

History shows that, whatever its challenges, New York remains a resilient place with enormous resources and appeal. After all, it survived the challenge of Sept. 11 and will no doubt find a way to cope with the coronavirus. But this cannot be done without some major political change. If the city does not change direction, it will continue to decline. The only group capable of overturning the current trajectory is what remains of the middle class. There’s clearly growing dissatisfaction with the current trajectory of schools and public safety, as well as with pervasive corruption. Barely one-third of all New Yorkers approve of de Blasio’s performance—a record low.

Yet while the city’s middle class may be dissatisfied, it is smaller, weaker, and more stressed than it was in the 1970s or after Sept. 11. Crucially, the middle class lacks a solid foothold in the ruling Democratic Party, which arbitrates between city employee unions, professional ideologues, and the megarich. Particularly critical will be the role of ethnic communities, including Jews, who retain a unique stake in the city’s culture. These varied groups offer the greatest hope for New York, which has survived greater challenges, to climb out of what looks like a very deep hole.

Joel Kotkin is the Presidential Fellow in Urban Futures at Chapman University and executive director of the Urban Reform Institute. His new book, The Coming of Neo-Feudalism, is now out from Encounter. You can follow him on Twitter @joelkotkin.