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Wednesday, January 27, 2021

NYC’s mass COVID-19 exodus cost $34B in lost income, study says

The mass exodus from New York City amid the COVID-19 crisis has cost $34 billion in lost income, according to a new study released Tuesday.

About 3.57 million people fled New York City between Jan. 1 and Dec. 7 this year — and they were replaced by some 3.5 million people earning lower average incomes, the findings from Unacast said.

That means the Big Apple lost a net 70,000 people during the pandemic.

“The exodus isn’t as big as people have been talking about,” said Thomas Walle, chief executive and co-founder of Unacast, a location analytics firm. “Maybe the greater impact is how the population is changing and how the demographics are changing.”

To reach its findings, Unacast analyzed anonymized cell phone location data to look at the impact COVID has had on three neighborhoods: Williamsburg, Astoria and Tribeca.

Tribeca, population 20,000, took the biggest hit out of the three — with a net loss of 3,500 residents — equaling a net income loss of $1 billion.

The more than 8,000 residents who bolted from the well-heeled ‘hood in downtown Manhattan earned an average income of about $140,000, Walle said. The typical person moving into the area earned an average of $82,000.

“Downstream, there are clear implications,” Unacast warned in its report, noting the drop in income. “That means [residents] can afford less in terms of mortgages, rent, restaurants, retail and other consumer expenditures. As a result, stores etc. that are more accustomed to catering to higher-end clientele will likely lose market share to
more affordable brands.

“Where Chanel and Ruth’s Chris once reigned, H&M and an Outback may find a new
generation of customers.”

In Williamsburg, home to about 80,000, some 19,000 people moved out by Sept. 7, representing a loss of $1.3 billion income — “one of the hardest-hit individual NYC neighborhoods we examined,” Unacast found.

The Brooklyn hipster mecca, however, gained 13,000 people — creating a net loss of about $330 million.

“That is a great deal of forfeited discretionary spending in a small community with many local brands that currently show little sign of resilience or recovery,” the report said.

About 18,000 fled Astoria, costing the neighborhood about $1.29 billion in lost income. But 14,000 new residents flocked to the Queens neighborhood, putting Astoria “ahead of the curve compared to Williamsburg,” according to the findings.

Retail and restaurants have also taken a considerable hit under COVID-19 safety restrictions this year, the company said.

There was 33 percent less retail foot traffic compared to last year and 34 percent fewer people in restaurants.

Unacast blamed those numbers on new residents earning less.

“The popular interpretation is that this is foot traffic-related, but a tertiary cause is net outflow in city neighborhood populations everywhere, coupled with a reduction in average income and therefore reduced buying power,” it said.

Unacast’s analysis comes after apartment vacancies in Manhattan hit a 14-year high last month, with more than 16,000 spaces empty.

“The big question is, ‘How does real estate and retail in particular adapt to that?’” said Walle.

Lia Eustachewich

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