Tuesday, December 11, 2007

Graying Of the City: Young Families Fleeing New York

The New York Observer
by Tom Acitelli
December 11, 2007

Young families are leaving New York more and more, threatening to turn the city in the next few decades into one largely of older, childless and single people. It’s these young families that lay down the sorts of roots that animate a city’s culture and economy, and that ensure its long-term vitality. Lose young families and, eventually, lose a city’s soul and brainpower. (Exhibits A and B: Philadelphia and Detroit.)

“You have what’s been going on in other cities—the people staying are childless, and the people leaving have families,” said Joel Kotkin, author of The City: A Global History and a noted expert on the economic trends of cities.

He is co-authoring a report due out tentatively in March on the middle class in New York City, including population migration. Mr. Kotkin shared with The Observer last week preliminary results of the study. These show that more young families are leaving the boroughs, mainly because of higher costs of living—especially housing. As time goes by, they will make up less of the population.

New York City experienced a net loss of 8,163 young people with families in 2006, according to the preliminary results; in 2005, the city experienced a net loss of 8,034. These young people with families were defined as those between the ages of 25 and 45, with children and with at least a bachelor’s degree. Manhattan accounted in 2006 for the bulk of fleeing families, with a net loss of 3,477 or roughly 42 percent of the city total. Only Staten Island, among the five boroughs in either 2005 or 2006, experienced a net gain, adding 221 young people with families last year—but losing 725 in 2005.

The city’s own estimates show the school-age population as a percentage of the overall population dropping in every borough through 2030. Over the same time, the city anticipates that the number of 55-and-older residents as a percentage of the population will increase in every borough.

“It’s not even a question of, they can’t afford what they want,” Mr. Kotkin, a Brooklyn native who lives in Los Angeles, said of younger New Yorkers today. “When it becomes a situation of, instead of an apartment in Manhattan, you’re paying a lot for an apartment a 40-minute subway ride to Manhattan, you start to think, ‘Is this worth it?’”

More young New Yorkers are shouting, “No!”

Take Staten Island as an example. It is the smallest and most suburban of the city’s five boroughs, a last stop in affordability for anyone who wants to remain in New York City. Traditionally, home prices in Staten Island have been a fraction of what they were in Manhattan or Brooklyn, and even in large swathes of Queens and the Bronx.

Still, the percentage of 18-to-34-year-olds as part of Staten Island’s overall population has shrunk since 1980, from 28.3 percent then to barely 20 percent in 2000, according to a report released in April by the Center for an Urban Future. And, they’re not fleeing simply because it’s, well, Staten Island. The report points out that the median sales price of a single-family home in the borough increased 101 percent from 2000 to 2006, the sort of titanic home-price increase that’s happened citywide this decade and that few New Yorkers alive have ever witnessed.

“Families are leaving the boroughs; it’s not just Staten Island,” said Jonathan Bowles, director of the Center for an Urban Future. “And it’s not just stockbrokers and lawyers. … These are predominantly middle-class families.”

That New York City is expensive, and that that expensiveness may make living within the city limits impossible, is not news. But it’s no longer a question of affordability—it’s a larger, almost ethereal question of livability as created by this lack of affordability.

Do New Yorkers want their city in 25 years animated purely by commuting suburbanites, and full of gray-hairs and singletons who treat it merely as a Disneyesque playground, all safe and homogenous? Worse, do New Yorkers want their city to commence another long period of decline and decay as those who might have a vested interest in its upkeep and allure—say, the parent raising a child to pass a private home onto—disappear further into Hoboken, Stamford, Port Washington, et al.?

“Let’s say I was living in San Francisco and I wanted to move to New York in the early 1990’s,” said Mr. Kotkin. “I could do it. New York was more net affordable.”

Not anymore. Like in Staten Island, homes have become prohibitively expensive for most New Yorkers. In Manhattan, the median price of a condo—likely the point of entry for first-time home buyers as it requires a smaller down payment than a co-op and there’s no co-op board to pass—jumped 133 percent from 2000 through September 2007, according to research firm Radar Logic.

The average Queens home is more expensive than the average Suffolk County home (excluding the North Fork and the Hamptons), according to Radar Logic—and, hey, Suffolk County is barely a two-hour train ride away, the sort of commute one could get used to in exchange for much cheaper housing of similar or better quality. And, in a few years, it should be noted, that Suffolk commute will likely end not in the current low-ceilinged Penn Station but in a more expansive, much sunnier one as part of the Moynihan transit hub.

Then there’s Brooklyn. The city’s single greatest real estate story of the past 15 years or so has unfolded there: the gentrification, and the concurrent rise in home prices, within neighborhoods once thought undesirable. A midyear report from the Corcoran Group—a major brokerage that, like other Manhattan-based firms, had no Brooklyn offices until the late 1990’s—concluded that the median condo price in brownstone neighborhoods like Park Slope and Carroll Gardens had increased 11 percent from midyear 2006, to $650,000.

People with children already generally pay more for housing than childless people, according to Harvard law professor Elizabeth Warren, who with her daughter Amelia Warren Tyagi, a former McKinsey & Company consultant, wrote the 2003 book The Two-Income Trap: Why Middle-Class Mothers & Fathers Are Going Broke. Ms. Warren suggested that The Observer check out chapter two of the book, which had some pretty sobering statistics on how costly a young family’s housing can be compared to a childless singleton’s: “No matter how the data are cut, couples with children are spending more than ever on housing.”

That spending in New York City has only ballooned this decade. Couple this with stagnant job growth and job uncertainty in the mighty financial services industry, and it’s little wonder more young families are traipsing reluctantly beyond the city’s limits.

“I think people want to stay in New York if they can,” Mr. Kotkin, the author, said. “People leave because they have to.”

Nigel Holmes; Source: Center for an Urban Future

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