Urban myth: high taxes and the COVID-19 pandemic chased all the rich people away from New York City.
Urban reality: record-high rents, a high cost of living and unfunded mandates for co-ops and condos are chasing away lower- and middle-class New Yorkers — while the number of millionaires surges.
These are the findings of a new report by the left-leaning Fiscal Policy Group, as reported by The New York Times. The people leaving New York at the fastest rate last year were families making between $32,000 and $65,000. A disproportionately high share of these movers were Black and Hispanic. They were followed by people earning $104,000 to $172,000 a year, an above-average income in many parts of the country but a more modest one in New York City. While the state lost 2,400 millionaire households from 2020 to 2022, there was a net gain of 15,100 in the same period, because of strong financial markets that boosted earnings, and the return of some families.
The trend fuels the fear among many co-op and condo residents, especiallly in the outer boroughs, that rising costs — and unfunded mandates such as Local Law 97 — will force them to sell their homes and leave the city.
Continuing to lose these residents, who form the backbone of many essential services and white-collar industries, could jeopardize the city’s uneven recovery, says Andrew Beveridge, the president of Social Explorer, a demographic firm that reviewed the new data. “If you want a subway system," he adds, "an office sector, a restaurant industry, you need these people."
The report also found that affluent residents who left New York did not appear to have been driven away by recent tax increases. And only a fraction of them followed the lead of Donald Trump by moving to lower-tax states such as Florida. More than three-quarters of rich people who left New York during the pandemic moved to other high-tax states, including Connecticut, New Jersey and California. The report defines this group as the top 1% of income-earners, those making more than $815,000 a year.
The findings come at a time when the administration of beleaguered Mayor Eric Adams is preparing to slash the budgets of public services including police, sanitation, libraries and schools — cuts that could push more working-class residents out of the state, says Nathan Gusdorf, the director of the Fiscal Policy Institute. “The main priority for policymakers," he adds, "should be retaining the middle- and working-class populations of New York by making it affordable and livable.”
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