Saturday, May 23, 2020
The coronavirus lockdown has left young New Yorkers reconsidering the city's high cost of living
People who can work remotely are eyeing the suburbs or contemplating moving back home with their parents
A recent survey found 69% of people in tech and finance said they would leave New York if they were given the option to work from home permanently
Twitter, Facebook and Spotify recently announced they will allow employees to work from home long-term
Pat Stedman, 31, a dating and relationship coach, said the pandemic has only sped up his and his wife's exodus from the city and now plans to work remotely from overseas
Many residents have also expressed concerns over whether New York City will successfully bounce back when it finally reopens in the coming months
Young people are joining the rich and are fleeing New York for the suburbs after the coronavirus lockdown left many professionals reconsidering city life as companies begin to permanently adopt work-from-home models.
As COVID-19 gripped the country in mid March, residents of New York City's wealthiest neighborhoods fled to ride out the lockdown at their vacation homes, while many young people hunkered down in the suburbs with their parents.
Some were forced to break their leases and move back to their hometowns because they could no longer afford the city's exorbitant rent prices after losing their jobs, while others have continued paying for their cramped city apartments while they shelter elsewhere.
The majority intend to return at the end of the lockdown period, but the economic impact of the pandemic as well as the shift to remote working has led some people to ditch the city for good.
Among them is Shelby Gutleber, who lost her job as a waitress in the Upper East Side in March and moved to Keansburg, in central New Jersey - a move she described as the best decision she ever made.
Young professionals are leaving New York City and flocking to smaller, less populated areas after the coronavirus pandemic left many to reconsider the city's high cost of living. Pictured: Pat Stedman, 31, looks out at Manhattan after ending his lease on his Kips Bay apartment
Shelby Gutleber (left) moved back home to suburban New Jersey after losing her job as a waitress in the Upper East Side at the beginning of lockdown. The 26-year-old called the move 'the best decision she ever made'
New York City has been converted into a ghost town after the March 15 lockdown with thousands of residents fleeing to the suburbs to shelter. Pictured: A virtually empty Fifth Avenue on May 4
Five percent of New York City's population, or 420,000 people, left between March 1 and May 1 amid the coronavirus pandemic. The bottom 80%, who earn less than $90,000 per year, mostly stayed while the top 1%, who earn about $2.2 million per year, left
The 26-year-old was living in an apartment in Washington Heights and was finishing her degree in political science at Columbia University when the pandemic struck.
'I was laid off and I couldn't get unemployment. I just finally got it about two or three weeks ago. So thinking about paying $1,250 in rent when you're unemployed is frightening,' she told DailyMail.com.
'On top of that my roommate and I didn't get along so I was basically stuck in my room.'
Coronavirus cases and deaths in small East Coast towns where NYC 'refugees' have fled
Martha's Vineyard, MA - 29 cases
Nantucket, MA - 39 cases
Newport, RI - 212 cases
Suffolk County, NY (The Hamptons) - 43,218 cases / 1,814 deaths
Cape May County, NJ (Ocean City) - 545 cases / 46 deaths
Ocean County, NJ (Jersey Shore) - 8,242 cases / 678 deaths
Monmouth County, NJ (Jersey Shore) - 7,724 cases / 543 deaths
Data as of Saturday, May 23
Facing financial uncertainty and an uncomfortable living situation, Shelby jumped on the opportunity to move back to the suburbs when her brother offered her a spare room in his house in April.
'It's been great. This pandemic is horrible in New York City and there is no place to get out.
'Here I can hike and bike, walk, run, and go to a store without stepping foot on a subway. And no insanely high rent,' she said.
The college graduate is among the hundreds of thousands of New York City residents who have fled the Big Apple between March 1 and May 1.
As the lockdown entered its third month, a New York Times report last week showed Manhattan's overall population has fallen by almost 20 percent, with many residents flocking to small east coast towns or popular vacation home destinations.
The data, collected from smartphones, revealed usually-bustling Manhattan neighborhoods such as SoHo, the West Village, Morningside Heights, the Upper East Side, the Financial District, Midtown, Gramercy and Brooklyn Heights, emptied by at least 40 percent.
For New York City office workers, being able to work remotely has made it easier for them to relocate and do their jobs elsewhere during the pandemic.
But as cities begin reopening, a number of companies have announced plans to keep the work from home model for good, raising questions over whether employees will now flee major metropolitan areas for cheaper, and less densely populated regions.
Pat Stedman, a dating and relationship coach, said the health crisis has only helped speed up his and his wife's exodus from the city which they were considering before the outbreak. The couple is staying in suburban New Jersey until they move overseas
Margarita Lyadova (left) a partner manager for an ad tech company in New York City, let go of her Upper East Side apartment to move back home to Minnesota, and is now looking at cheaper markets. Sarah Moebius, 24, (center in brown) said she doesn't 'see the point' in going back to New York City until she's back at work
For Pat Stedman, 31, a dating and relationship coach, the health crisis has only helped speed up his and his wife's exodus from the city which they were considering before the outbreak.
The couple ended the lease on their apartment in Kips Bay last week and are now living with Stedman's parents in South Jersey until they make the move to Poland, where his wife is from.
The pair hope to buy an apartment and start a family overseas, and being able to work remotely has made it all the more convenient.
'Poland is very family friendly and the cost of living is very low. It's an opportunity to save a bunch of money,' Stedman told DailyMail.com.
'My business is remote, and my wife may be able to do the same with her job.'
'That said, it's hard to be in NYC now, all the energy has been sucked out of it. Aside from Central Park, it feels like a prison where everyone is afraid and subdued, not where people go to have fun and make things happen.
'We spent last weekend there to soak it all up, and we know our time there is done. NYC will recover - it always does - but it'll be a different NYC after, just like after 9/11 the city changed.'
Earlier this month Twitter announced it will allow some employees to continue working from home on a permanent basis - a concept other tech giants are also weighing up as they prepare for the post-pandemic era.
Music streaming service Spotify followed suit on Friday, telling employees that they can work from home until 2021.
A recent survey conducted by anonymous professionals group Blind, also found 69 per cent of New Yorkers in the tech and finance field would consider relocating if they knew they could work from home permanently.
Eighteen per cent said they would leave the metro area, while 36 per cent said they would move out of the state altogether.
Fifteen per cent said they would leave the country.
The data was collated from responses from more than 4,000 employees at major tech companies including Facebook, Twitter, Uber and Amazon, in Seattle, San Francisco and New York.
Of those respondents, New York had the highest proportion of those eager to flee (37 per cent).
It reinforces the prospect that big cities could become shells of their former selves as office workers transition to working from home permanently, and huge headquarters, that were once an indicator of a company's success, become an unnecessary expense.
A recent survey conducted by Blind found 69 per cent of New Yorkers in the tech and finance field would consider relocating if they knew they could work from home permanently
Fourteen per cent of respondents said they don't anticipate returning to the office when the pandemic is over
WHAT DOES NYC NEED TO DO TO REOPEN?
Cuomo's requirements for each of the regions of the state are as follows:
14-day decline in hospitalizations
14-day decline in deaths
New hospitalizations under two per 100,000 residents
30 percent of hospital beds free
30 percent of ICU beds free
30 tests per 1,000 residents
30 contact tracers per 100,000 residents
Based on Cuomo's requirements New York City meets four of the seven requirements.
It falls short on hospital beds where it stands at 28 percent as of Saturday, ICU beds where it stands at 26 percent and contact tracers (number unknown).
De Blasio announced new 'indicator thresholds' for reopening the city Friday:
Daily hospital admissions below a threshold of 200
Number of patients in ICU patients below a threshold of 375
New cases below a 15 percent threshold
Based on these requirements New York City meets two of the three thresholds but is above threshold on the number of ICU patients, with de Blasio announcing there were 471 patients as of Friday.
Margarita Lyadova, a partner manager for an ad tech company in New York City, let go of her tiny Upper East Side apartment on March 12 to move back home to Minnesota where she has been working remotely since.
The 23-year-old does not plan on staying in the Midwest long term, but is now considering cheaper markets and less populated regions where future outbreaks are likely to be less severe.
New York City has become the epicenter of the coronavirus pandemic, with 193,951 confirmed cases of COVID-19 and 16,333 deaths as of early Saturday.
'I lived in a tiny studio with little natural light, and that's not a safe nor comfortable place to be in all day. I couldn't go to a grocery store without taking public transportation or walking an extended period of time,' she told DailyMail.com.
'I left because what I love about New York can't exist during a pandemic. New Yorkers live to interact with each other. Everything is designed to be shared and experienced with others.
'Even if some things open up over the summer, or even if things open fully, to me, it's not unthinkable that a second wave may hit come fall. That's why it's so important for me not to be financially tied down to high rent anywhere.'
The same goes for 31-year-old Alie, a research editor at a New York City media company who has been working from her hometown in Maryland since her job sent employees home in early March.
She is now considering not renewing her lease for her Astoria, Queens apartment, for which she has continued paying rent for three months, despite being away.
'If I have the option to remain remote, I would prefer it. Not so much over the job duties, but I think it's also from an economic standpoint,'.
'Rent in New York City is so expensive. If I'm able to do my job elsewhere, it might be worth considering.'
The coronavirus pandemic has also led many to rethink the city's appeal in addition to the high cost of living after being away from the congested streets and the hustle and bustle for weeks.
Zuckerberg (pictured) said there will be 'severe ramifications' for employees who lie about their home address to keep their Silicon Valley salary
Facebook's New York City office is settled in Manhattan (pictured) where homes sell for a median price of $945,000
'[It's] honestly just a more quieter, stress-free, healthier lifestyle [and] it's making me reconsider New York,' said auditor, Kevin, who wished to be identified by his first name only.
The 31-year-old is working from his parents' home in Englewood, New Jersey, after leaving his midtown apartment at the start of lockdown.
'Every time I return to my apartment in New York I realize how dirty and filthy the city is.'
Sarah Moebius, 24, who was working as an events performer in the city, has been staying in Raritan, New Jersey as she waits for her job to resume.
Anxious New Yorkers on Twitter have questioned whether the city will be able to bounce back to its former glory when it slowly reopens
Popular destinations among so-called 'coronavirus refugees' include Martha's Vineyard, Cape Cod, Rhode Island, the Hamptons, Hudson Valley, the Jersey Shore and southern Florida
'I'll move back when my job comes back but before then I don't see the point,' she said.
On Friday, Facebook CEO Mark Zuckerberg announced that he expects about 50 per cent of the company's 50,000 staffers to work remotely within the next five to 10 years.
But those hoping to take their large paychecks with them after moving to a less costly region would face salary adjustments, he said.
'That means if you live in a location where the cost of living is dramatically lower, or the cost of labor is lower, then salaries do tend to be somewhat lower in those places,' said Zuckerberg.
Facebook's New York City office is found in Manhattan, which has a median income of $82,459 and a median price of homes sold is $945,500.
The median price of homes currently listed is $1.5million in Manhattan.
Zuckerberg said the move to working remotely will help diversify Facebook's staff and hiring pool.
New York City Mayor says city will gradually reopen in June
NYC residents are growing increasingly weary as the city's lockdown rumbles on, as all other state regions are expected to reopen by the end of next week
On Thursday, Mayor Bill de Blasio said New York City is inching towards enacting phase one of its reopening plan on June 1 and June 15.
'I want to signal as clear as a bell, all roads are leading to the first half of June,' de Blasio said at his daily press conference.
'The city indicators, the state indicators, we're seeing very clear progress.'
Under state guidelines, New York regions are required to meet seven criteria in order to begin easing lockdown restrictions.
So far, New York City has only met four of those requirements including, a 14-day decline in hospitalizations and deaths, and diagnostic testing capacity.
In the meantime, anxious New Yorkers on Twitter have questioned whether the city will be able to bounce back to its former glory when it slowly reopens.
'I don't think I've ever truly, seriously considered leaving NYC, short term or long, but given the state of things and a bit of a conversation I had yesterday, I'm really thinking. I woke up this AM like toss the resume everywhere, if I goes, I goes,' Christine Cupo, a market consultant tweeted.
Another added: 'I never remotely questioned leaving NYC, but in 18 months if gyms don't open, parties/group events are dead, and I'm still working remote, who knows.'
How working from home long-term might affect your psyche
Will NYC become a ghost town? 80% of one landlord's retail tenants skipped April and May rent as companies 'take a field day' from office lease payments while weighing permanently working from home - triggering an 'alarming' drop in tax revenue
80 percent of Vornado's retail tenants failed to pay rent in April and May; 40% of its office tenants skipped payments too
Other landlords say even financially robust companies are 'taking a field day' from rent payments to see how the pandemic plays out
There is still no clear indication of when NYC will reopen despite mounting pressure from businesses
Many fled the city months ago and may not have plans to return if the biggest draws - nightlife, culture and being in a company's office - are not options
Of the new vacant apartments on the market, 70 percent slashed their prices between April and May
It paints a gloomy picture for commercial and residential landlords who are struggling to pay their mortgages and tax bills
They have not been given help from the government but they also can't evict tenants for failing to pay rent
They cannot show any of their vacant properties either until Phase 2 of the reopening gets into motion and there is no telling when that will be
Trump says he will not shut down the country if there is a second wave of infection
New York City's real estate market continues to be battered by the coronavirus lockdown and is likely to keep suffering with no end to the current lockdown in sight.
One major commercial landlord said 80 percent of their retail tenants missed rent payments in April and May and others are reporting that even companies that have healthy finances are simply choosing not to meet their lease agreements, amid growing uncertainty over how many businesses will actually work in offices in the future.
Residents are also abandoning their expensive apartments by breaking their leases or failing to renew them to wait out the crisis in more comfortable surroundings. For the rich, that means spacious homes in the Hamptons and upstate and for the young, it is their parents' suburban homes.
The knock-on effect is an 'alarming' drastic reduction in the number of landlords who will be able to pay their tax bills on July 1 which will result in devastating losses in tax revenue for the city and, in turn, the state.
In April, NYC and the state collected just $78.5million in tax revenue on the sale of commercial and residential properties, down from $217.5million in March.
Tax revenues pay for the city's essential services like road repairs, sewage systems, police and fire fighters. Those will take a hit if the situation continues.
'This dramatic loss in tax revenue is alarming. The real estate sector is the city’s economic engine.
An abandoned 42nd Street in midtown earlier this month after offices closed. The city's real estate market has taken a hammering from the pandemic
Eighty-percent of one landlord's retail tenants failed to pay rent in April and May as the lockdown forced NYC's budding shopping scene closed indefinitely
'The pandemic has caused that engine to stall and we should expect such alarming trends to carry through May and June in the best-case scenario,' James Whelan, President of the Real Estate Board of New York, said in a statement on Wednesday.
66% OF STAFF FROM BIG TECH SAY THEY'D RELOCATE IF WORKING FROM HOME BECOMES PERMANENT
A survey of staff from major tech firms including Facebook, Uber, Twitter and Google has revealed that 66 percent would move out of big cities if working from home becomes more permanent.
The survey, by Blind, asked staff from more than 4,000 companies in Seattle, San Francisco and New York if they would relocate after working from home as part of the COVID-19 crisis. The majority - 66 percent - said they would consider a move.
While the number of respondents represent only a sliver of each's workforce, it fits with a growing trend of companies telling staff they can work from home permanently.
The results vary by company and by region and the majority of the respondents (2,768) worked in the Bay Area.
Thirty-three percent of Bay Area residents said they'd stay, 27.49 percent said they'd move out of the city and 27 percent said they'd move out of California.
Eleven percent said they'd even leave the US.
A third of the New York workers also said they'd stay in the city, 17 percent said they'd leave the city, and 35 percent said they would leave the state
Fifteen percent said they would move overseas.
In Seattle, 37 percent said they would stay in the city, 19 percent said they'd leave but stay in-state, and 26 percent said they would move out of state. Sixteen percent said they'd leave the country.
Fourteen percent of the workers said they anticipated never going into the office again, and 44 percent said they imagined only going in once or twice a week.
Only 15 percent said they imagined going in every day again.
Of the 354 Amazon employees from Seattle who answered, 32 percent said they would stay put, 24 percent said they would move out of the city and 26 percent said they would leave the state.
Thirty-one percent of the Google employees from the Bay Area interviewed said they would move out of state.
Some say buildings will not be able to operate for another month if they don't start collecting rent.
'There are hundreds of buildings in New York City operating at a loss because of COVID-19, and many of them will not be able to survive another month without help.
'If officials do not immediately target relief to lower-income renters and small owners who have mounting monthly expenses, they will not be able to reverse the damage this crisis will have on our city,' Jay Martin, Executive Director for the Community Housing Improvement Project, said.
In the residential market, rent prices are being driven down. Between April and May, 70 percent of listings on StreetEasy - the most used house hunting website - were reduced.
Brooklyn saw the biggest decline, with rents being brought down by three percent. Typically, cheaper apartments are seeing the biggest decline.
'The low end of each segment of the market has been more challenged in this market.
'Therefore there’s a higher probability that there’s negotiating on existing leases, whether it’s a deferral or a short-term discount off of existing rent. And that information is not in the public domain at all,' Jonathan Miller of Miller Samuel told The Commercial Observer earlier this month.
It means that when agents are once again allowed to show apartments to prospective tenants, there will be a rush for the lower-priced units that should drive prices down across the entire market.
There is a moratorium in place that means no business or person can be evicted from their apartment or place of work for failing to pay rent.
At present, the rules are that they will have to pay back what they don't pay now, but with many pondering whether or not they should even stay in the expensive city when they can't enjoy it, the number of rent payments coming in is likely to continue to decrease.
Vorndado, one of the city's biggest landlords, told investors on a recent earnings call that 80 percent of its retail tenants did not pay rent in April and May. Forty percent of its office tenants also skipped payments.
Empire Realty Trust reported that a quarter of its office tenants did not pay rent.
In April, SL Green, the largest corporate landlord, collected 90 percent of its office rent but only 65 percent of its retail rent.
The Financial District has been a ghost town since the lockdown began and it's unclear how many of the businesses that occupy huge offices there will return
THE YOUNG AND THE RICH FLEE FOR THE SUBURBS
The first wave of people to flee New York City were the wealthy.
They flocked to the Hamptons, where many own second homes, or more rural parts of the state to try to ride out the crisis.
Some, who did not own, rushed to get their hands on rental properties for inflated prices.
Now, some are permanently putting down the roots because the situation in the city remains so precarious.
In Connecticut, real estate brokers have seen a 'tidal wave' of interest in properties.
'One … called me up and said, "Do you know of anything else?" Mark Pruner, an agent for Berkshire Hathaway Home Services New England Properties, told The New York Post.
'She lives in a beautiful, 10-story coop on Park Avenue in New York, but every time [she] gets in the elevator … she is afraid,' he added.
It's not just the wealthy fleeing the city. Scores of younger residents are trying to get out of their leases or fill their rooms because they either can't work or they can't enjoy the city.
They are going back to their parents' houses in the suburbs.
'The draw of the city is the social life, the dating scene, bars, restaurants, the ability to do fun things on the weekend, it makes a lot of sense to just abandon ship and go back to your parents,'
Deniz Kahramaner, the founder of data-driven real estate brokerage Atlasa, told Bloomberg.
It remains to be seen how many companies will ever return to the offices they once occupied.
In a recent survey by Blind of employees from Amazon, Microsoft, Lyft, Uber, Facebook and others, 35.67% said they'd move out of New York to a different state if working from home became more permanent.
Fourteen percent said they anticipate never going back to the office, 39 percent said they anticipate going back to the office just one or two days a week.
Twitter has already told employees they can work from home permanently for the rest of their time with the company, and Facebook and Google are also weighing more permanent options.
What will become of their expansive, expensive Manhattan office spaces as a result remains unknown.
While residential and commercial tenants are still bound by their leases per the moratorium now, there's growing uncertainty over whether that will always be the case.
'Landlords’ ability to enforce the legal terms of their lease has been completely kicked out from under them,' Jane Lok, a landlord who collected half of what she normally does this month, told the Times.
To compound difficulty for the landlords, they can't borrow from banks because real estate is such a risky investment.
Businesses and Conservative pundits are calling for the city to reopen on May 28, claiming the lockdown is going on too long and bleeding them dry unnecessarily.
A coalition of 300 businesses have formed demanding that they be allowed to start serving people again.
Mayor Bill de Blasio and Gov. Cuomo say the city is still not ready because it doesn't yet have enough hospital beds free (they want it to have 30% and at the moment it only has 27%) and not enough contact tracers - a measure they and they alone insist on - have been hired.
Some 1,000 out of 2,250 have been brought on.
The three areas holding New York City back from reopening are the lack of free hospital beds and contact tracers which have to be hired by the local government
President Trump has said that he will not 'close the country' down if there is a second wave of infection, but he never closed the country in the first place.
On Thursday, he said: 'People say that's [a second wave] a very distinct possibility, it's standard. We are going to put out the fires. We're not going to close the country.
'We can put out the fires. Whether it is an ember or a flame, we are going to put it out. But we are not closing our country,' he added.
Trump was not in charge of ordering shut down orders. He left it down to the governors of each state at the start of the crisis, and came under fire from them.
He then claimed wrongly that he had 'total authority' as the president, a claim which drove governors including Andrew Cuomo to say: 'We don't have a king.'
Posted by ASC at 10:50 PM