Category Archives: Economy

Can You Afford to Live in NYC?

A recent report from SmartAsset showed that those living in a 2 bedroom New York apartment need to make $164,614 per annum.  Median Manhattan rentals are $3,450 and the median cost of buying is $1,315,700.  While that figure has dropped 1.0 percent in the last year it is estimated that it will increase 2.5% within the following year.

So it’s not cheap to live in New York.  However, jobs in the city are generally high paying.  Indeed, according to recent analysis from Ladders, New York has the second highest number of six figure jobs.  As well, companies around the world offer high salaries to people who will work for them and live in New York.

So can someone like 32 year old Alicia Kennedy — a freelancer NYC food blogger — make it in NYC?  Three years ago when she first went freelance (having left a steady copy editor position at New York Magazine), the $5,000 tax bill was quite a surprise.  She’d miscalculated at $3,000.  Anyway this is how she makes it.  She spends:

  1. $1,000 on rent
  2. $1,000 on food (don’t forget she’s a food blogger)
  3. $250 monthly student loan repayments
  4. $150 on phone
  5. $15 on gym
  6. $150 in a monthly savings account.
  7. $200 miscellaneous (incl. transportation, charitable donations, credit card, leisure).

So Alicia is successfully living in NYC even though she’s far from a six figure salary!

Benefits of Running a Business in NYC

While Silicon Valley has for many years been the preferred choice of location for business development and operation, it seems that New York City is now being propelled as a great alternative.  According to a recent article in Business Insider by Zoë Bernard, here are some of the reasons why:

  1. One of the world centers for fashion and finance
  2. Fantastic pool of talent
  3. Venture capital environment with the likes of Hercules Capital, Insight Venture Partners and BetaWorks.
  4. Startup scene there has a real sense of community spirit with mentorship programs such as Oceans.
  5. Female founders have traditionally done well in NYC.
  6. Quite simply, because it is anywhere but Silicon Valley and that alone gives it an edge.

In addition, just looking at real estate transactions in the area over the last few years one can see the improvement in living and working conditions in NYC.  For example, a decade ago, it was not at all easy to get financing for mortgages due to the fiscal crisis.  But now, according to 3 World Trade Center developer Larry Silverstein, that has all changed.  With 40 percent occupancy already, he pointed out that “these buildings never stay empty for long.” And corporations will want to go there since they “need technology and you can only get technology in brand-new buildings.”

Furthermore, as Alexandros Washburn said, every time there’s a crisis with New York, it bounces back, concluding that: “Every time it’s comes back with a better balance, more richness in the types of buildings that are here, the types of open spaces.”

Growth of NY Economy

According to Xinhua News Agency, this month New York encountered a substantial growth in its business activity.  There was an increase to 20.1 points for its main index number, with the general business conditions index surpassed expectations by of 15.5.

In terms of people’s level of satisfaction/happiness at the office it was hard to tell as 40 percent claimed conditions had improved throughout May but 20 percent said they had worsened. There are more employees though with the index for the number going up to 8.7

The index for number of employees edged up three points to 8.7, with a drop in hours for the average workweek.  Perhaps even more importantly, there has been an increase in optimism for the next six months.

New York State, Taxes, Money

New York’s Environmental Protection Fund has made $350,000 available to supplement protection Hudson River’s natural resources.  This money – delegated by the DEC Hudson River Estuary Program – will be used to enhance water quality; counter flooding; conserve wildlife habitat.

in an effort to protect annual tax levy increases, the New York property-tax cap (that was implemented 7 years ago) puts a 2 percent cap/rate of inflation (whichever is lower) on taxes.  How does this impact us now?  For the 2018-19 academic year, average school districts cap is around 2.9 percent thanks to the exemptions with around 98 percent of districts being compliant.

According to NY Association of School Business Officials Executive Director Michael Borges:

“Although school districts have a higher cap this year than last, higher health and pension costs, coupled with economic instability due to federal policy changes, create an uncertain fiscal picture for school districts. Stable, adequate and equitable state funding is more important than ever.”

WeWork is Working!

WeWork in Manhattan is today, Manhattan’s “second-biggest private office tenant.” This comes less than a decade after opening its first co-working space in NYC (in the SoHo region).

According to data from Cushman & Wakefield,  today WeWork boasts almost 50 locations in NYC, opening 10 new locations last year.  This spans 2.9 million square feet in the region. A further five are set to open in 2018. The company has received much support, in particular, from SoftBank’s Vision Fund ($4.4 billion). SoHo has five WeWorks.

Each of these WeWorks features: beer and microbrew coffee on tap; large open common spaces and more.  some have special things like photo studios/indoor garden/workout equipment.

https://www.recode.net/2018/3/22/17119012/wework-massive-growth-second-biggest-office-tenant-new-york-city-manhattan-cowork-space-real-estate

Thriving Minorities

Thanks to the generosity of the city, New York’s women and minority sector business (MWBE’s)  owners could be the recipient of part of the city contracts that have been pigeonholed for these groups from the City.

In an unprecedented move, a staggering $1 billion+ is being given over to these groups.  That figure is over double of what was allocated for the entire 2017 fiscal year (which was $400 million in 2015 and $700 million last year).

According to a recent report compiled by the New York City Bar Association, NYC law firms have a large presence of women and those from racial/ethnic minorities in key positions too.  There has been a steady increase since 2015 of those who hold positions on management committees in law firms.

Furthermore, NYC has established its $10 million contract financing loan fund with a focus on MWBEs. Those who apply to borrow the money have to have already secured (or are pursuing) a contract/subcontractor on a city-funded project and be a for-profit company. The industry of the MWBE does not impact eligibility as long as their product/service is purchased by the city.  The contract is the loan’s collateral.

De Blasio’s Tale of Two Cities

How much has de Blasio done to tackle New York’s age-old issue of being a “tale of two cities”?  Some would say quite a bit; others would say it’s just the economy that has fueled the impact of change.   But given that he ran on a platform of tackling this as it was the “defining issue of the day,” the question we must ask is, has he?  And if so, how much?

Still, when it comes to wages (increasing) and unemployment (decreasing) during his time, people are quick to see him in a positive light.  And the President.  And the government.  Or at least, the previous government which enjoyed “the longest economic expansion in the city [of New York’s] history.”

As Samar Khurshid recently noted, due to the economic climate though, de Blasio has worked toward putting policies in place that reduce inequality, in large part by developing the size and scope of city government.  But bear in mind that de Blasio has not (yet) had to encounter any crazy economic crisis or even stressors which would impact his progressive policies on the slashing of large government expenditures.

De Blasio is however, currently exercising caution with a partial hiring freeze on city agencies while focusing on the stimulation of private sector job growth via city government levers.

Over the years what he has done is this: put “progressivism” as an economic strategy as a top priority.  Right now he seems pretty undefeatable in a re-election.

NY: Escalating Wineries

While New York today boasts 140 wineries, 35 years ago there were around 10!  According to a prior head of the New York Wine and Grape Foundation, Jim Trezise (who now leads a national association advocating for the entire wine industry in America), the wine industry has significantly expanded its economic presence in Finger Lakes. Given that it is today commonplace to find good restaurants at wineries and the region is often regarded as one of the world’s “top wine country destinations,” things really are changing.

Indeed, it has been estimated by the 2017 Economic Impact Report on the American Wine Industry that wine country regions will generate around 43 million tourist visits and $17.7 b in annual tourism expenditures.

And New York is definitely doing its part.  Indeed, the total number jumped from $9.4b in 2012 to $13.8b this year – an increase of over 45% in just five years – with New York ranking number 2 in the country’s wine industry list (California holding the first spot).

According to New York Wine and Grape Foundation President Sam Filler:

“New York continues to expand its impact and growth as a leading wine producing state. Gov. (Andrew) Cuomo and our state Legislature deserve credit for their work on improving New York’s business climate by modernizing the state’s alcohol beverage laws and reducing regulatory burdens. Their continued partnership and support will ensure that the New York wine and grape industry continues its national leadership role.”