New York is too expensive and crowded

New York City shrinks. For the second Time in a row, the number of inhabitants of the city decreases year on year. According to the statistical office of the United States in the twelve months up to July 2018, with a 40'000 to 8.4 million. The development of the real estate company Redfin: More New York will be confirmed a house outside of the city as Foreign a place to Stay in the Big Apple. Recently has accelerated this Trend. This is not surprising. Because the city is a victim of its own success.

"New York has grown in the past years has been phenomenal," says Seth Pinsky, portfolio Manager of the real estate company, RXR and former head of the economic development Corporation of the city of New York under mayor Michael Bloomberg. "Per year 80'000 to 100'000 new jobs were created, per decade the number of residents increased by several hundred thousand, and the number of tourists has doubled in twenty years, 65 million". This also shows the statistics. The economy is growing, and the unemployment rate drops.

investment required

But, unfortunately, the expenditure for the infrastructure growth does not keep pace. "We have neither enough housing nor enough office. The Subway and the trains are overloaded. Even the sewer has reached the limit of its capacity," says Pinsky. "That's why the city is crowded and is getting more and more expensive." In order to secure the ability to function, it needs, according to Pinsky in all areas of "significant investment". Otherwise it will repeat the case of Alliance Bernstein.

The asset Manager had announced in the past year, to relocate the headquarters from New York to Nashville, Tennessee. According to Kathryn Wylde, President of the business Association, the Partnership for New York, founded the company in step with the decline in the quality of life in the city, as she explained to the New York Times. On average, the employees of Alliance Bernstein required ninety minutes each way to and from work.

High density of talent

With their complaints, Alliance Bernstein is not alone. According to a survey by the Partnership for New York city – an Association representing the interests of the company – is not the public infrastructure, the main reason why international companies continue to expand the presence, as Wylde of the New York Times said. Companies to move jobs is not new. However, earlier lower costs were the main reason. So wall street moved, for example, in the nineties the back-office to New Jersey. Even today, there is this shift. So the COO-Office of the big Bank, Barclays, for example, to Whippany, New Jersey.

The high costs are still a factor that can militate against New York. "Companies such as Google, in search of the best project managers and programmers, to come to New York and pay for these people a lot of money," says Nicole Gelinas from the research Institute the Manhattan Institute. Companies that do not want to pay these high Salaries, or, according to Gelinas, however, difficulties to find qualified personnel. "You are more likely to be in Nashville to find it." States such as Tennessee, Georgia and Florida, there is also no income tax.

A town in the city for the super Hudson Yards:. Photo: Bloomberg

"The high density of Talent is the biggest advantage of New York," says Alex Pearlstein of Market Street Research, which advises cities to the settlement of companies. This is also a reason why Tech-expand business in New York. But meanwhile, develop according to Pearlstein in Nashville, Austin and Portland Talent Hubs. "This is likely to make the city planners of New York."

For Pinsky there is another danger. "Due to the capacity limits of the measures to be taken to solve the problems of inequality and affordability." You can, in the long term damage to the economy. For example, brisk often resistance against construction projects. "But if we can't build more, they will all suffer, because we already have a problem of Capacity."

The crumbling infrastructure of New York is a big problem

The Subway is a Disaster, the Brooklyn-Queens Espressway, the Flooding threatens the collapse of the Railway under the Hudson.

the rat race over the tracks. In a trickle between the rails of waste flows. And from the walls the tiles fall down. The Subway of New York is a disgrace. Not only is the cleanliness. Trains remain in the Tunnel, Stuck, right in the middle of Brooklyn operation and the end of the roadmap, not to Manhattan, but Queens. Commuters in the metropolis of the East coast will need patience and a lot of time to get to your destination. Probably, therefore, the annual number of metro passengers has dropped in the past two years.

But not only the subway is a Problem. Hardly better, the trains are for commuters who live outside of the city. There are also overcrowded carriages and delays. Driving to Manhattan is not much better. Because the roads are also heavily congested chronically. Also, thanks to the cars for ride-sharing services like Uber and Lyft are on-the-go. Accordingly, the average speed of Taxis in Midtown declined from 2010 to 2017 to 30 percent. To change this, has caused the Governor of the state of New York, Andrew Cuomo, in March, cars that want to drive in 2021, South of 60th street in Manhattan, you must pay a fee of at least ten dollars – the exact prices have not yet been defined. So New York is the first city in the United States, which wants to introduce Road Pricing.

"Road Pricing is a first step to relieve traffic and to increase the Budget for the MTA," says Zachary pike, Policy Director of the industry Association, Tech:NYC. The Metropolitan transportation Authority (MTA) is responsible for the U-Bahn, which is chronically under-funded. This Hurt is likely to relieve the road fee, to flow, however, 80 percent of the revenue of the Metro.

The money is urgently needed. Because the MTA wants to invest over ten years to $ 40 billion in the U-Bahn. Among other things, the Zugsignale to be updated. They are partly already since 1930. The subway runs 24 hours a day and seven days in the week, complicating the task. Repairs are almost only at night and on weekends. On top of that, the politicians argue about responsibility and influence.

investments to date: The Brooklyn-Queens Expressway under Brooklyn must Heights to be urgently renovated. Photo: Alamy

although the MTA operates primarily on the urban area, it is controlled by the Governor who shall appoint the Chairman of the Board. The seventeen-member Board of Directors is occupied by a regional key. For the financing, the city is responsible. According to Nicole Gelinas from the research Institute, the Manhattan Institute, it would be better if the mayor for the metro would be responsible. "Then the people also, whom you can thank or blame would have to give knew." It is, however, not to think, especially since Governor Cuomo's meddling into the day to day business.

Outdated roads, bridges and tunnels

investments in the billions are also in the case of roads and bridges necessary. For example, the section of the Brooklyn-Queens must be renewed Expressway beneath Brooklyn Heights. Was built in the part of the piece, on the daily 153'000 vehicles, between 1944 and 1948. The structure is supported by the cement cast steel rods, which decompose slowly. According to Gelinas, the funding is not the issue here, but that many commuters have to use the roads. During the multi-year Renovation, the city wanted to run the traffic on the Promenade – the heart of Brooklyn Heights. After vehement resistance of local residents, she once again goes on the books.

A big question mark, there is also a Hudson River tunnel. Connect Manhattan with New Jersey. Trains to Philadelphia and Washington D. C. have to go through the eye of a needle, such as regional trains to Hoboken and Newark. However, the Tunnel has been in operation since 1910 and in good condition. Per day 200'000 commuters use the trains through the Tunnel. Due to the age between the cases and fractures are not uncommon. However, an Alternative is missing. The Plan of the tunnel construction was sunk by the former Governor of New Jersey, Chris Christie. As it continues, is unclear.

Rent increases

headache also of the housing market. "The housing situation is a huge Problem," says Seth Pinsky, portfolio Manager of the real estate company, RXR Realty. The typical household of New York must pay, as measured by the income for the apartment. The city is against tax. So you want to build over ten years 200'000 in subsidized housing or receive. According to Gelinas but that is not enough.

many luxury currently being Built homes in exclusive high-rise buildings. For example, in the Hudson Yards or along the 57sten street in Manhattan. "Often they stand empty, because it is an investment," says Gelinas. "These homes help to reduce the price pressure, but not enough to reduce the high prices."

(financial and economic)

Created: 25.04.2019, 15:54 PM