The Wealthy Are Leaving New York As City Undergoes Monumental Demographic Shift

The New York metropolitan area lost 70,000 people during the coronavirus pandemic, equating to tens of billions in lost income for the city.

In total, about 3.57 million people left the city from Jan. 1 through Dec. 7, Reuters reported, citing data from Unacast. Around 3.5 million people moved in during that time; however, they were people with lower average incomes. The net loss for the city was 70,000 people — and $34B in lost income, the report showed.

“The exodus isn’t as big as people have been talking about,” Unacast CEO Thomas Walle told Reuters. “Maybe the greater impact is how the population is changing and how the demographics are changing … The big question is, ‘How does real estate and retail in particular adapt to that?’”

Notably, the average earning of a person moving into Tribeca was $82K, while the average income of the departing resident was $140K, according to Unacast.

New York had already been losing people before the pandemic. Its population shrank by a half-percent to 8.4 million between 2017 and 2018, according to the U.S. Census Bureau. Almost 1.4 million people have moved away from New York since 2010, according to analysis last year of census data by the Empire Center for Public Policy.

In total, New York State experienced a net migration loss of nearly 135,000 people in 2019, its second-largest loss in 39 years.

The pandemic has had a disastrous impact on the city. Tens of thousands of people have died, and the unemployment rate across the five boroughs has risen to 13%.

The departure of high earners, and their badly needed tax dollars, has been of particular concern. Goldman Sachs has looked into moving its asset management arm down to Florida, while Deutsche Bank is said to potentially be moving thousands of workers out of the city.

Real estate players are particularly worried about future policy changes that could make the city less desirable for the rich. The industry is banding together to lobby against the so-called pied-à-terre tax, for example, which would impose an annual tax on second homes.

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