Homelessness and crime rates are rocketing and residents are packing their bags. Jane Mulkerrins, who recently moved back to London after 10 years in New York, investigates a city in crisis.
When she moved from Florida to New York, aged 23, to work in the city's competitive, dynamic magazine industry, Kim Kaupe "definitely never considered leaving again". But, like many Manhattanites, when the coronavirus hit with ferocity in March 2020 and the city swiftly became the epicentre of the outbreak, she and her fiancé fled, first to rural upstate New York, then, a month later, to Austin, Texas, to stay with his parents.
"We drove down in April thinking that we would be there for 'a few weeks'," she recalls. "Then a few weeks turned into a few months. Then a few more."
For the first three months, she says, "I was kind of in denial. Then, around June or July, I realised: this thing isn't going away. Then, a few months after that, I realised: and we're not going back to New York." In October 2020, they flew back to the city and packed up their Tribeca apartment.
"Living in Manhattan is not an easy life. It's hard," she says. "But you live there for the vibrancy – because you love the plays and the restaurants and the buzz. And so when you take that vibrancy away, when Broadway is shut down and the restaurants are all closed, you're like: wait a minute, I live in a shoebox-sized apartment, I don't have a garden, and I don't have a dog because there is no garden. And if the vibrancy is gone, then what am I doing here?"
In the Lone Star State, by contrast, life was continuing almost as normal. "For better or worse, Covid didn't really exist – at least not to the governor of Texas. You had the freedom to go outside and meet people for coffee, and we started to make friends." Also, she says, "Winter started to hit, and it was 75F and I was in a maxidress. That was delightful."
Austin, having long been one of the coolest cities in the US, with a thriving music and nightlife scene, is now also one of the fastest-growing, with major tech firms such as Google, Tesla, Oracle and SpaceX opening headquarters there. During the pandemic, its reputation as a tech hub rocketed as significant numbers of firms and their workers relocated from Silicon Valley, which, along with high taxes and a high cost of living, was also suddenly subject to some of the strictest lockdowns in the country.
Now 36, Kaupe runs her own marketing agency, while her fiancé works in finance; both quickly found Austin to be "a budding ecosystem for entrepreneurs, and very business-friendly". Particularly compared with New York. "For an average small-business owner like me, New York is extremely difficult. The taxes are superhigh and it's miserable," says Kaupe.
She's exactly the sort of person David Solomon, CEO of Goldman Sachs, was referring to recently when he warned that high taxes in New York threaten its position as a business and financial hub. "It's not guaranteed for any urban centre that you have a permanent place in the world," said Solomon during the Financial Times' Global Banking Summit last November. "New York has to be aware that there are good choices, and it's got to make sure it keeps itself super-attractive. At the end of the day, incentives matter, taxes matter, cost of living matters."
While all Americans pay federal income tax on the same scale, state and city taxes vary dramatically. Texas, for example, levies no personal income tax – compared with a top rate of 10.9 per cent in New York state – and no corporate income tax – compared with 6.5 per cent in New York state, plus another 8.85 per cent in the city of New York (though Texas does charge a corporate franchise tax).
"From a business standpoint, from a personal standpoint, Austin just makes sense. I don't think it makes sense to go back to New York," says Kaupe.
Florida, like Texas, has no state income tax either, and Miami has rapidly become the new US hub for cryptocurrency investors and entrepreneurs – the "crypto bros". As Miami's mayor, Francis Suarez, noted recently, "There's a cost-of-living differential, which is about 2:1 right now – it's twice as expensive to live in New York as it is to live in Miami." Such is the influx from the city that South Florida is now being dubbed New York's "sixth borough".
New York's incoming mayor, meanwhile, retired police officer Eric Adams, who took up the post on January 1, vowed late last year that, "On January 2, I'm taking a flight to Florida and I'm telling all those New Yorkers that live in Florida, 'Bring your butt back to New York.' "
Adams had made the pandemic exodus a central plank of his campaign, telling the annual SALT conference, a gathering of business heavyweights and money managers, "New York will no longer be anti-business."
While many major metropolises, including London, emptied out in the pandemic, New York's exodus was dramatic. According to data from the US Postal Service, 320,000 people left the city in 2020, a 237 per cent increase on the year before. Some returned, but not all. And it's estimated that up to another 100,000 left during 2021.
The majority of those who departed were residents of means – New Yorkers with second or third homes in other parts of New York state, such as the Hamptons or the Catskills, or other states such as Texas, Florida and Wyoming.
The mass migration of the millionaires has cost the city tens of billions of dollars in lost revenue and taxes; a report by Bloomberg revealed that the top 1 per cent of New Yorkers, just 38,700 people, contributed US$4.9 billion in tax revenue in 2018.
In April 2021, New York politicians moved to generate US$4 billion in revenue to help the ailing city, with a tax increase on wealthy New Yorkers and corporations, taking the top rate of personal income tax to 14.7 per cent, the highest in the country. Solomon and 250 fellow chief executives signed a letter arguing against the move. "Many members of our workforce have resettled their families in other locations, generally with far lower taxes than New York, and the proposed tax increases will make it harder to get them to return," they wrote.
If Kaupe's social circle is anything to go by, Solomon's fears are not unfounded. She estimates that 40 of her friends left the city during the pandemic, and just five have so far returned.
Even without recent tax rises, New York was already a notoriously pricy place to live. I moved back to London last year after a decade in Brooklyn, where my 500sq ft one-bedroom apartment was considered "a steal" at US$2,800 ($4,140) a month. And it was a steal, when you consider that most of my friends were paying more than US$4,500 ($6,650) a month for their similarly compact one-bed places. (By comparison, I was renting out my one-bed flat in London for £1,400/$2,800.)
In Austin, says Kaupe, "We can afford to have a house. I plant lettuces in the garden. It's hard to get the genie back in the bottle."
For a brief spell in the summer of 2020, when New York landlords were desperate to fill their many empty apartments – new leases in Manhattan plunged 62 per cent in May of that year – the city was a renters' market, with hefty discounts on otherwise out-of-reach properties.
Some commentators speculated that there could be a silver lining to the pandemic and the exodus of the wealthy, and that perhaps the city would become affordable once more for those creatives and artists dislocated in recent decades by wildly unaffordable rents. However, as Bloomberg has reported, by autumn 2021 landlords had increased prices again, by 50, 60 and even 70 per cent, as the market has rebounded with vigour.
And for many families, living in tiny apartments with small children and no outside space, the pandemic – and the prohibitive cost of property in the city – was the tipping point.
Emma Patterson, a 40-year-old literary agent, had bought a two-bedroom apartment in Brooklyn with her husband, a creative director in an advertising firm, where they lived with their four-year-old daughter. Pre-pandemic, they loved their modest home. "It was the first real estate that my husband and I had owned together, in a lovely prewar building in a nice family neighbourhood, with great neighbours," she says. "When the pandemic hit, our apartment suddenly felt very claustrophobic very quickly. My daughter was at home, my husband would be on Zoom in the living room, and we started losing our minds. I was completely worn down." They wanted a house or at least a patch of outside space. "But in order to get that in Brooklyn we'd have to spend well over US$1 million, which is money we don't have."
Instead they moved to Mamaroneck, a small suburban town in Westchester, an area popular with commuters 50km north of New York on the edge of Long Island Sound. "As soon as we got here, I felt my anxiety reduce. It's easier to work, easier to get places, easier to manage life. My husband and I both have an office now and we can't hear each other, which is marital bliss."
She travels to her office in Midtown Manhattan one or two days a week. "The commute is 40 minutes, which is no more than it was from Brooklyn." But the city, she says, "feels dirtier and more abandoned. When you walk down the side streets of Times Square, where there used to be little locksmiths and shoeshine people and delis, a lot of them have closed down. There are areas where the whole block has 'for sale' signs up."
That was something Kaupe noticed too when she was back in the city in November. "Walking around Tribeca, walking around SoHo, I would say every third or fourth shopfront is boarded up," she says.
With an ongoing absence of office workers, even behemoth chains including Starbucks and Pret A Manger have closed numerous outlets in the city, the former shutting almost 50 coffee shops since the start of the pandemic and the latter having only reopened half of its 60 stores. Considerably more than 1,000 restaurants across the city have permanently closed since March 2020.
Of course, the absence of New Yorkers is not the whole picture. According to figures from Bloomberg, spending by visitors to the city dropped by 73 per cent in 2020 compared with the previous year, losing the city another US$1.2 billion in tax revenue. NYC & Co, the city's tourism agency, estimates that total visitor spending in 2021 was US$24 billion, down from about US$47 billion in 2019.
From May 2020 to June 2021, nearly 200 hotels closed down, according to the Hotel Association of New York City, and as of mid-November, almost 100 remained closed.
Laura Pugliese, a make-up artist for television shows including Good Morning America, was living in downtown Manhattan with her family when the pandemic took hold. Unlike Kim Kaupe and her fiancé, however, "We had nowhere to go. We didn't have a holiday home or any family close by that we could go to stay with." She and her husband and their two children, aged six and eight, "were trapped in our apartment, just trying to get through every day".
Pugliese had arrived in the city aged 26, "with no fear, no money, knowing not a single soul, but with an internship at Madonna's record label". A self-described "diehard" New Yorker ever since, "I would have nightmares about leaving the city."
In late May 2020, after the death of George Floyd, New York erupted in protest, most of it peaceful, some of it not. Thousands of riot police occupied areas of Manhattan and Brooklyn. A week-long curfew was imposed, the first in the city since 1943.
"I couldn't take my kids outside. It felt so tense," says Pugliese. "The police were so reactive, and helicopters sat low over our apartment day and night. It felt like a military presence." It was, she says, the first time she'd felt scared in the city.
She remembers precisely the minute she knew she had to get out. "I was driving down Broadway, where everything was boarded up and graffitied and there was nobody around at all." When she reached lower Manhattan, "People had taken advantage of the peaceful protest and there was now a homeless encampment outside City Hall. There were junkies shooting up in the middle of the park."
Homelessness has rocketed in New York during the pandemic, reaching a record high of around 80,000 people. Tented homeless encampments have mushroomed around the city, including north of Lincoln Centre on the Upper West Side, around Washington Square Park downtown, and underneath the tourist favourite, the High Line. In an effort to lure back tourists and office workers, the city's sanitation department has, for months, been clearing dozens of encampments a day.
Along with a vow to bring back businesses, the incoming mayor, Eric Adams, was elected on a platform of fighting crime, which has also risen dramatically in the pandemic. Murders in the city went up 47 per cent in 2020, robberies and assaults are both up, and violent crime reported on the subway is now double what it was in 2019. Before leaving New York, having previous travelled on the subway even in the small hours, I stopped using it after dark.
"I always used to walk around the city at night on my own and always felt incredibly safe," says Kaupe. "Now, there aren't as many people on the streets and there's a general undertone that feels unsafe. I have friends who have had their handbags stolen in broad daylight, and male friends who have felt nervous walking back alone to their hotels at night. It feels like a city in a third world country compared with February 2020."
Rats, which have always been a feature of New York life, have become a major health concern. There were 21,000 rat sightings reported to the city's non-emergency telephone line, 311, last year, compared with 15,000 in the same period in 2019.
Friends report the city feeling dirtier, more dangerous, the infrastructure crumbling more visibly every month; and without the energy and buzz for which it is famed, many wonder what is the point of struggling to stay.
Then there's the thorny issue of education, which Pugliese succinctly calls "a racket". There are plenty of private schools, costing an average of US$19,220 per year ($28,400), but the city's enormous public school network – encompassing 1.1 million children – is a lottery system, with places awarded via a complex application process and not based on geography. I have friends whose 11-year-old twins attend different schools, miles apart, and others with 13-year-olds who take three buses to reach their school two boroughs away.
"You have to tour all the schools and rank them," says Megan Eliot, 43, a clinical psychologist. "It's like a college application process every four years."
Eliot and her husband, Alex, who works in real estate, had lived in Manhattan, then bought an apartment in Brooklyn before their first daughter, now six, was born; their second daughter is now three.
Alex, a born-and-bred New Yorker, had balked at even crossing the East River from Manhattan to Brooklyn, but after a six-week escape to rural Connecticut in the summer of 2020, he began suggesting they make a more permanent move. "It was nice to have a backyard for six weeks, and we noticed how much better everyone got along when they had their own space," says Eliot.
In October 2021, they moved to Weston in semi-rural Connecticut, to a six-bedroom house. "Family life is a lot easier," says Eliot.
And applying for schools is simple. "There's one school system, with four buildings on the same campus."
Emma Patterson has found the same in Westchester. "Trying to navigate the New York public-school system felt like a full-time job; it was overwhelming. Now, all the kids in the surrounding streets go to the same school." With smaller districts and less bureaucracy, schools outside New York were also quicker to reopen in the pandemic. "There was a huge sense of relief, just from the kids being able to be in school," says Pugliese.
There are plenty of downsides, says Eliot. "I miss public space. In Brooklyn, after school, everyone is hanging out in the playground with their kids. Here, everyone is in their houses or their big backyards – the hours between four and six here are much more isolating than they were in the city – and you have to actually schedule playdates." After-school clubs are different too. "The talent pool in New York means that the person running your kid's theatre class would be an out-of-work Broadway actor who had graduated from [prestigious drama school] Tisch." She also misses high-quality food delivery. "Once a week we say, 'Let's order in for dinner,' and there just aren't any options." Nonetheless, she says she knows it was the right move.
Pugliese has more complicated feelings about her relocation. "A friend told me that I have to stop seeing leaving the city as a failure, that I came, I conquered and I was there for 21 years – that's solid." She realised, she says, that, "Some of my resistance was my ego but, really, what was I trying to prove?"
"You have to have a little bit of grit to live in New York," agrees Patterson. "Grit or money or both. We don't have the money. And I think between the pandemic and parenthood, I just lost the grit to live there."
Written by: Jane Mulkerrins
© The Times of London