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New Data Confirms The New York-To-Philly Migration Of 2020 Is Real

The coronavirus has been ravaging the U.S. for about six months now, and new data has emerged to support the locally popular notion that it is driving more people from New York to Philadelphia.

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New data from location services firm Unacast shows that from the beginning of this year to the first week in September, around 7,500 people have moved to Philadelphia from New York’s five boroughs — around twice the number of Philadelphians who have gone the opposite direction over that same time frame.

Philly’s MSA is the third-most-likely target for those who have pulled up stakes this year and left the New York metropolitan area, behind Miami and Los Angeles, Unacast data has found. But since Los Angeles has sent similar numbers of migrants back to New York, Philly’s MSA has gained the most net residents of everywhere apart from South Florida.

Rather than a direct reaction to the coronavirus pandemic, locals believe it to be an acceleration of a multiyear trend.

“I can’t say I’ve seen an increase in the past six months, but in the past two years, we’ve seen an increase in tenants coming from New York, New Jersey and Washington, D.C.,” The Badger Group President and CEO Paul Badger said. “I imagine it’s because of the relatively low cost of living and the resurgence of our downtown.”

Every year starting in 2015, Philadelphia has gained more new residents from New York than it has lost, according to research by Center City District, increasing from a net positive of around 150 in 2015 and reaching 1,790 in 2018, the most recent year for which U.S census data is available.

“I would never want to overestimate the impact of less than 2,000 people, but when you get a positive trend like this, it’s clearly worth keeping an eye on,” Center City District CEO Paul Levy said.

When the first stories about a pandemic-driven potential mass exodus from New York City emerged in April or so, much of that movement could have been attributed to short-term escapes due to the city’s soaring case numbers and death rate. Data from Apartment List suggests that such movement was temporary, as it did not correspond with an increase in searches for new apartments.

“When we look back to April, we were wondering if anyone would move this year because everyone was stuck in place,” Apartment List Chief Economist Igor Popov told Bisnow. “We saw a huge freeze in searches around then. But starting in probably late April, and definitely into May and June, moving activity has experienced a strong rebound. So I think this summer was when most of the action took place.”

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A coronavirus molecule

Unacast comes by its numbers by tracking anonymized individual devices to see from where they connect to the internet and over what period of time. If a device has remained in a new location for a certain length of time, then Unacast logs that as a migration — meaning it doesn’t account for what type of accommodations they move into.

“It’s still to be seen if this is a consistent migration pattern because the real estate industry is very interested to see how many of these movers have just been staying with family,” Unacast CEO Thomas Walle said. “We see that of the people that left New York, about 10% went to Florida, and the assumption is that a lot of those people have secondary or vacation homes there. Now the question is, are they going to live there permanently or come back?”

Back in April, some were still optimistic that the summer would bring a return to normalcy. Now that Labor Day has passed and case numbers are lower in New York than many other areas of the country, migration is more likely a response to the pandemic’s economic impact than its health effects.

“I would still say it’s somewhat early to tell; it always takes a while for these things to play out,” Brown University professor of sociology Michael White said, echoing his “wait-and-see” comments in April. “It’s true that it’s not the short-term disruption people had hoped for back in March or April.”

Before the disruptions of 2020, Philadelphia’s growing inflow from New York had a strong correlation with Philly’s job growth, which remained stagnant in the first half of the decade after the Great Recession but then started to rise about five years ago. Despite the stock market’s good performance this year, the U.S. economy still experienced a major crash, felt most significantly in the job market. If Philly’s recovery pattern from the past downturn repeats itself, it may lose a key factor in attracting new residents.

“We shed a huge number of jobs and we’re starting a slow recovery now,” Levy said, citing city estimates of 76,000 lost jobs in February and March. “There’s no reason the migration can’t continue in the middle of this, but I think the big jump will be when the recovery begins in earnest.”

If people are more likely to move to a place in search of jobs, the loss of jobs or income could be a major impetus behind city residents fleeing for cheaper areas while remaining in range of their home city. The four New Jersey counties closest to the city have all seen more net migration than Philadelphia, according to Unacast data. Philadelphia proper has lost net residents to Bucks, Montgomery and Delaware counties to its west, and Camden and Burlington counties to its east — outnumbering the residents it gained from New York.

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Center City, Philadelphia, as of early 2017

Sacramento has become a popular destination for workers with jobs in the San Francisco Bay Area who can no longer afford to live there, much like Richmond, Virginia, has for Washington, D.C. Philly is several times bigger than either of those, but is only 20 miles farther from New York than Sacramento is from San Francisco. Of out-of-market searches for Philadelphia apartments on Apartment List, New York is five times more likely an origin point than its closest competition in Washington, D.C.

Though both cities are losing renters to their suburbs, Philly and New York’s multifamily landlords are behaving quite differently. Philadelphia’s rents have held fairly steady, even though concessions are becoming more common across the market, while rents in Manhattan have plummeted. (Philadelphia remains far cheaper by the square foot.)

Part of the cause could be the wide gap in the number of new units coming online, but Philadelphia has also seen an overall increase in apartment searches on Apartment List. It is the largest city in the country to be in the positive for that category.

“Philly obviously is more than just a peripheral city, but it shares the key characteristics with Sacramento and Richmond,” Popov said. “[It’s] 100 miles away from much bigger job centers and gaining its fair share of people who want to stay close to those job markets while seeking value — sort of hedging their bets.”

As working from home seems all but certain to apply to a larger portion of jobs even once the coronavirus is a thing of the past, the concept of proximity to work seems likely to shift. Perhaps a two-plus-hour commute to New York wouldn’t seem so daunting if one only has to do it once or twice a week.

“The disruptive effect of COVID-19 has probably made many individuals and organizations re-evaluate spatial proximity, as so many people have started working remotely,” White said. “And that change has probably affected the decisions people have made with regards to proximity to co-workers, clients or other organizations … 

“Philadelphia’s advantage is that the cost of space in renting and housing is less than Manhattan. If individuals have reconsidered proximity, they would still have instantaneous remote access to work but still physically get to D.C., New York or other places on the East Coast in a relatively short time.”

For those who lost a job and can’t find a new one at the same pay rate, or for those whose salary has been slashed, Philadelphia entices as an option — not just because its average rent is still lower than inner suburbs like Jersey City. The urban live-work-play fabric that has been touted for years as a magnet for young professionals hasn’t completely lost its appeal amid the pandemic.

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A rendering of The Durst Organization's proposal for development of two parcels of land at Penn's Landing on the Delaware River in Philadelphia.

Even though both Philadelphia and New York have reopened for outdoor dining at reduced capacity without seeing an immediate spike in coronavirus cases, Philadelphia’s foot traffic has rebounded much more than New York’s since both cities went on full lockdown in the spring, according to data from both Unacast and Center City District

“People are also seeking different cities because they still [value] urban culture and there are job opportunities,” Walle said. “We’ve seen that Philadelphia and Boston have recovered quicker than New York or D.C.”

Foot traffic in Manhattan remains 80% to 90% lower than it was at this time last year, according to census tract-based Unacast data. 

Philadelphia does have a slight lead on New York for indoor dining. It reopened restaurants’ dining rooms on Sept. 8 at 25% capacity, but New York City isn’t allowing indoor dining until Sept. 30. That doesn’t fully account for the gap in traffic, which Levy said has returned in Philadelphia to close to normal. Unacast did not have foot traffic data for Philadelphia at time of publication.

As unprecedented circumstances force unpredictable demographic patterns, Walle, White and Levy all agree that it is still too soon to say with any certainty whether Philadelphia will hold onto the gains it is making in relation to New York. (Walle suggested Christmas as a better landmark for trend-watching.) But the commercial real estate industry may be moving faster than that.

“I’ve seen an influx of out-of-state developers coming to invest in Philadelphia,” Badger said. 

The Badger Group had partnered with D.C.-based Hoffman & Associates for its proposal to develop Penn’s Landing, which ultimately lost out to The Durst Organization from New York.

“It’s been a general trend for the past couple of years,” Badger said. “But especially in the past six months have there been new projects proposed by out-of-towners.”