New York’s office sector and other real estate segments are still struggling with the fallout from the pandemic, and a study by a prominent nonprofit think tank signals challenges facing the largest U.S. city are far from over.
New Yorkers are feeling much more downbeat about their quality of life, with only 30% rating it as excellent or good, down from 50% in 2017, the last time a similar survey was done, according to the New York-based Citizens Budget Commission in a report released this week. Only about half of the survey respondents said they plan to stay in the city over the next five years.
Most New York residents aren’t just dissatisfied with their quality of life. When it comes to public safety, only 37% gave the issue high marks, down from 50% in 2017, the survey of 6,600 residents between September and December conducted by Polco for CBC found.
As New York Gov. Kathy Hochul said earlier this month she’s deploying some 1,000 state personnel, including 750 National Guard members, to the city’s subways to make commuters feel safe, the CBC study said only 49.1% of respondents feel safe riding a subway during the day, down from 81.5% in 2017 and 86.1% in 2008, the first time CBC conducted a comparable survey. The percentage that feels safe riding a subway at night has declined to about 22% from about 46% in 2017.
The survey also found New Yorkers give overall much lower grades on several topics, including the quality of and their experience with city services. Only about 11% said the city is spending tax dollars wisely, down from 21% who said so in 2017.
"The implications of the CBC report for commercial real estate are clear," Ruth Colp-Haber, president and chief executive of Wharton Property Advisors, told CoStar News in an email. "A high quality of life is essential to attract talented employees of all income levels when NYC is in competition with other cities, particularly in a time of remote work when people can live anywhere. This means that there must be both the perception and reality of personal safety and a sufficient supply of affordable housing or we will lose people, jobs and businesses."
The study comes as New York’s office vacancy rate has shot up to what CoStar data shows as another record high of more than 14%. While the hybrid pattern of employees working just some days in the office has played a part in hurting some office demand, landlords and employers have cited public safety and quality of life among concerns that could derail the city’s economic rebound and return-to-office rate. They also have ramifications for other areas, including retail and services demand.
Safety and crime issues rank at the top of the most pressing topics for New Yorkers in the CBC survey, followed by other worries such as housing and development, cleanliness, homelessness, traffic and the migrant crisis.
“The city needs to focus on the basics — safety, cleanliness, delivering high-quality services,” Ana Champeny, CBC’s vice president for research, told CoStar News. She said the city needs to improve New Yorkers’ perceptions to ensure it “remains a competitive and attractive place to live and work.”
New York state has led the country in out-migration of population, and about 158 investment firms managing over $1 trillion in assets are said to have moved out of the state since the pandemic started, in early 2020, through early 2023.
In another worrying sign, the CBC study found the state’s out-migration trend may not ease any time soon. When asked if they plan to stay in New York City in the next five years, only 50.1% said yes, down from 58.2% in 2017, CBC told CoStar News, adding it plans to do a more detailed analysis on the topic.