Insight: I Love (Hate) New York (City)

New York City is one of the world’s most influential cities. This media and financial capital is known worldwide for its amenity rich environment as New York attracts many tourists, migrants, and immigrants. New York’s diversity has transformed the city into a creative centre, as there is a unique blend of successful creative individuals across numerous occupations, from finance to the arts. Previous Insights have shown that while there are such a large number of members of the Creative Class in New York across varying occupations and levels of education, the City is also home to a very large Service Class share. While New York is known for its Creative Class opportunities and therefore draws a large number of people in search of prosperity, the city is also highly competitive and pushes many highly educated individuals into lower wage Service Class occupations. This can make life within the city difficult for many as the cost of living and median housing values in New York are some of the highest in the U.S. While New York is able to attract a large amount of migrants to the city, the opposite trend is taking place at an even higher rate. The recently released white paper entitled I Love (Hate) New York (City) by former MPI researcher Tomasz Bugajski and MPI Research Director Kevin Stolarick examines New York’s high out-migration trend to other states and cities, while providing some of the causes and public policy recommendations that could help deal with the out-migration.

Migration to New York City from regions across the U.S. has been taking place for many years as it is a world city with a mix of vibrant cultures, amenities, and is a city in which art and business can thrive. While the city brings in many people, it has recently been pushing out even more people to other parts of the U.S. as migration losses are the highest in New York since the 70’s. According to Forbes, from 2005–2011 outbound migration has been higher than inbound migration in most of the boroughs in New York City. During this same time period, the City has lost around 300,000 outbound migrants a year. From 2005–2010, the counties within New York City that lost the largest number of outbound migrants were Kings County (Brooklyn) and Queens County (Queens). A previous Class and Education Insight illustrated that there are many highly educated primarily Service Class tracts also within Brooklyn and Queens, alluding to the fact that there is an occupational mismatch taking place. This is interesting as this could possibly contribute to the notion that young skilled individuals moved to New York to try and reap the economic benefits that the city offers, while living in the more affordable boroughs. But as time has passed and living and housing costs have increased drastically throughout the entire city, middle-income workers have been leaving the city. This is a distinct possibility as the average income of those leaving New York City is higher than those entering. For example from 2009–2010, the average income of outward-migrants was 15 percent higher than in-migrants. The draw of New York for migrants, especially young professionals is unlike any other city, but it seems as if they and a large number of middle income residents are and have been leaving the city at an increasing rate. It is also important to note that New York City attracts a large number of immigrants, who once becoming American citizens could be migrating elsewhere due to factors such as rising housing values.

NYC Migration Insight_Ex01_500pxMedian Household Sale Prices

There are many reasons for which people migrate to certain cities as looking beyond job availability and other economic factors and analysing tolerance and amenities has been crucial in understanding migration trends. It seems though in this case, as if economic factors are pushing people out of New York. Rising housing prices and the high income tax rate in New York (one of the highest in the U.S.) could be pushing middle income people out of the city. This is partially due to the environment, tolerance, and amenities that are drawing people into the city, as combined with a limited supply of land, the growing number of wealthy residents are constantly bidding up housing prices. This makes it difficult for New York to retain its middle class. While economic factors are the cause of the out-migration in this case, the paper eludes to the fact that the destination city that out-migrants of New York City chose, is most likely determined by the same amenities and attributes that draws people to New York. The top five MSA destinations for out-migrants from the New York metro for example were found to be: Philadelphia, Miami, Washington, Los Angeles, and Boston. While these are large cities, they do not have as high housing prices as New York, yet offer similar amenities, attributes and diverse environment that New York City does.

The paper goes on to further discuss some of the other reasons for the large number of out-migration from New York, along with some public policy recommendations for addressing it. New York City is a magnet for all types of people as the city’s environment provides residents with a variety of amenities and cultures, along with the opportunity to succeed within numerous occupations, but due to many factors more Americans are leaving than are moving to the city. In order to sustain the growth and development of large cities such as New York, it is important to not just create an environment that attracts people, but one that supports residents remaining within the city.

To read the full New York migration paper click here.

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The Martin Prosperity Institute at the University of Toronto‘s Rotman School of Management is the world’s leading think-tank on the role of sub-national factors — location, place and city-regions — in global economic prosperity. We take an integrated view of prosperity, looking beyond economic measures to include the importance of quality of place and the development of people’s creative potential.