While some residents have moved back to New York City since the COVID-19 pandemic began, many have yet to return, and others are considering their options. States like Florida, Texas, and North Carolina seem to have disproportionately reaped the benefits of this pandemic-driven migration, finding ways to provide a uniquely attractive value proposition to businesses and residents considering relocation—which is showing no signs of slowing down. So, what can New York learn from these other markets?
According to Bloomberg, almost 300 people are moving out of the New York Metropolitan area each day. New York saw the largest annual and cumulative numeric population decline, decreasing by 319,020 (1.6%) in 2020 and 365,336 (1.8%) in 2021. Ernie Russom, a recruiter and executive director at Westview Associates argues that “The choice for the companies and people is easy: move away from NYC and you will pay substantially lower taxes, have more available jobs, larger homes for cheaper prices, fresh air and a nice, easier life.” A study conducted by Forbes found similar motivations for businesses and residents that have relocated, citing greater affordability, generous tax incentives, and a greater overall quality of life. Others worry that as more businesses and residents relocate to other places in search of a better deal, taxes will only increase to compensate for the loss in government revenues. Increased taxes would further reduce affordability and create a troublesome circularity of taxation, migration, and reduced quality of life.
Caroline Spivack, a reporter for Curbed, disagrees that the desire to live, work, and play in New York City is any less than it used to be pre-pandemic. The NYC housing market has seen rental rates and demand rebound and even surpass pre-pandemic levels. With vacancies and available inventory at record lows, a proxy for New York’s reinvigoration, Spivack believes that the city once described to be on the brink of death is as alive as ever—if not more so. NYC & Company, the city’s tourism marketing division, concurs with her rationale, projecting that 85% of the peak visitation in 2019 will return with 56.6 million visitors by the end of 2022, with a full rebound imminent for international and business travel by 2024.Of course, these projections are contingent on New York finding ways to retain the talent and people needed to fuel, build and promote the City.
According to the U.S. Census Bureau’s Vintage 2021 data, the population of the United States in the past year grew by 392,665, or 0.1%, the lowest rate on record since its founding. Led by Florida and Texas, the South saw its ~127 million resident population grow by 1% or more, capturing the only positive net migration gain (i.e., movement of people from one area to another within the United States) for the region. Again, what did these Southern states get right that New York and other Northern states are missing?
Jared Walczak, lead researcher on the annual State Business Tax Climate Index and Location Matters, believes the answer is a simple one: people are leaving high-tax, high-cost states for lower-tax, lower-cost alternatives. It may seem glaringly obvious, but if you want to attract top talent, you need to provide incentives. Others point to the incredible job growth and talent base, affordable housing, climate and weather, entertainment options, and low crime rates as the primary drivers of migration to these areas.
Irrespective of whether you believe New York City is back to its pre-pandemic state and fully revitalized, there are lessons to be gleaned from the markets that have been attracting new businesses and top talent—especially if New York wants to remain competitive on a global scale, with workplace flexibility and remote work on the rise. Maintaining a competitive advantage in a complex and constantly evolving technologically driven world will require creative solutions.
What are some strategies NYC could utilize to differentiate itself in attracting businesses and top talent moving forward?
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