Cost of living is skyrocketing here in Manhattan, as elsewhere in the US; in March it rose the worst it has in several years, according to Crain's New York Business.
Layoffs in the financial sector continue (e.g, USB cut 2,600 jobs and Morgan Stanely 1,500 this week; Credit Suisse cut 500 in April; you know the whole Bear Stearns thing already…that to many people signaled the start of the final slide into recession). But it’s yet to be seen if in general we’re still seeing signs of worse to come or signs of the worst being behind us.
Q1 NYC job growth was the worst since 2003. JPMorgan saw a huge drop in Q1 over ’07, but actually did beat expectations. AOL let about 100 people go in April (all in the advertising division). Verizon is actually doing pretty well, it seems, and is breaking Time Warner’s monopoly on cable service in Manhattan. (All those stats above come from Crain's New York Daily Alerts, by the way. Need a paid subscription to access online.)
Property is a different matter. Prices for studios, 1-, 2-, 3-bedroom condos and coops continue to go up and up and up. The sub-prime mortgage mess left NYC property prices pretty much untouched, especially in Manhattan, because sub-primes were tired almost entirely to homes valued at less that $1,000,000. In Manhattan, 1-bedroom apartments go for $1,000,000. (Average is probably around $750,000, I’d guess.)
Only in a few pockets in Manhattan (and the as of yet undeveloped Hudson Yards) is there not occurring--even now with the slowing economy--something like gentrification but far more brutal. It's ritzification, glassification. In some neighborhoods, it’s been a nearly complete transformation, with new condo buildings sitting on what used to be parking lots, local businesses that had been in place for 20, 30, even 40 years--beloved, cheap restaurants, cool shops for used CD’s, neighborhood barbers, local hardware stores, antique stores, flea markets, neighborhood vets, comic book stores, Laundromats, off-off Broadway playhouses, et cetera, are now bank branches, nail salons, high-end boutiques, national chains, or other specialty services tailored to the rich--things like day spas for dogs and cats.
It is, frankly, disgusting to me, and utterly destroying the socio-economic, cultural, and racial diversity of Manhattan (and many parts of Brooklyn, and some places in Queens and the Bronx, too); it is also making Manhattan a place that merely showcases expensive artistic performance (for the wealthy) instead of providing an environment for creating new art. No young person with a dream can afford to go to Greenwich Village or the Lower East Side right out of college now and get down to the work of living life and writing, making music, acting, painting as did countless great and not-so-great artists over the last many decades.
Manhattan is becoming a gated community exclusively the rich. Those shut out of Manhattan, it might be noted, increasingly include those who by NYC standards are the middle class, households and individuals who in most places in the country would be considered quite well off indeed. Yet they cannot afford Manhattan now either.
Another Manhattan endangered species is small businesses. I think their demise forces entrepreneurial energy too much back into large corporations. Yes, you hear the stories of small businesses that some entrepreneur got going recently in NYC, but often the entrepreneur first made millions in the financial services.
Every once in a great, great while one hears the tale of some investment banker, broker, or hedge fund manager who spent too lavishly and now can’t sustain his lifestyle, so he has had to (horror!) sell his 2nd car or his house in The Hampton’s. Jeez. This is suffering?
To my mind it’s past time for an economic corrective in Manhattan--in the U.S. The gap between the rich and poor, between the super-rich and everyone else, is enormous and still widening almost exponentially. The problem is that when market forces cause a corrective to a part of the US economy, it usually ends up hitting working families and the middle class the worst…. So much for market forces. Their free reign means pain to those least able to bear it. The solution is government involvement. But government involvement these days compounds, not counters, the problems. Consider: ExxonMobile’s profit (not revenue, but profit) January thru March 2008 was $33,000,000 per hour. Per hour. And yet under George Bush they continue to get the massive tax subsidies they’ve had for 20 years. At the same time, elderly and poor Manhattanites are rationing prescription drugs and being forced out of the apartments they've lived in for decades.
Something's not right. Things need to change not only in Manhattan but in healthcare-deficient, indebted, war-weary America as a whole, an America whose infrastructure of roads and bridges are crumbling, whose natural environment needs corrective repair and restoration, whose job force needs training and retraining. And how does any part of the necessary effective change include the likes of John McCain, whose campaign staff has more corporate lobbyists on it than Obama’s and Clinton’s combined? That’s not to say that Obama and Clinton aren’t in the pockets of the big corporations and the rich, too; but, historically, the Democratic Party has a hell of a lot better record of putting in place long-term solutions--not just feel-good quick-fixes--meant to have lasting results: savings deposit insurance, rural electrification, nationwide soil conservation, the GI bill, Social Security, Medicare, Medicaid.
That's my rant. In the meantime: I commend to you the blog Jeremiah's Vanishing New York.
From Crain's New York Business:
