The Big City Problem That Won't Go Away
Money, and what it buys
It is not hard to be wrong. Write enough, think enough, and you’ll find that the future you imagined a few years back never arrived. So much of writing, in the public eye at least, is guessing at what’s to come; I’d prefer it weren’t that way, but inevitably you are peering into the fog of the future and trying to make sense of it. In 2020, in a column for the Guardian, I posited that the ravages of the pandemic offered at least one upside for New York City: cheaper housing that could allow for a working-class renaissance.
Here’s what I wrote almost three years ago:
New York will come back. It always does. The 1918 flu, the Great Depression, the 1970s fiscal crisis, the Aids epidemic, the destruction of the World Trade Center, the 2008 financial crash and Superstorm Sandy could not lay low New York for good. Predicting the demise of America’s biggest city, such a source of envy and fascination and resentment for the rest of the nation, is a longtime parlor game. The city is too attractive, too diverse, too overflowing with opportunity – even now – to crumble.
True enough. In 2023, New York City is still a very lively place with a strong tax base. Midtown isn’t what it used to be, but the outer borough bars and restaurants are packed. The museums swarm with visitors. Literary magazine parties can draw a thousand people. An actual day in the city doesn’t look very different than it did in 2019. Most of the fearmongering around the city’s decline comes from the suburbs or, quite frankly, people who don’t get out enough.
Here’s some more from that Guardian column:
One side effect of the Covid-19 crisis may actually benefit the working class and poor: falling rents. Here lies some opportunity and relief. The real estate bull market is dead and may not return for a few years, at least. Though the go-go 1980s of young Trump, Patrick Bateman and Sherman McCoy are what people usually imagine when conceiving of a reckless New York gilded age, the 2010s were the true apotheosis of greed – a housing market fed by foreign money and private equity, residential and commercial rents skyrocketing as the decade wore on.
And later on I added this:
If post-pandemic New York is going to be, momentarily, no longer a playground for the master class, it will tip the balance of power towards renters for the first time in decades. Landlords will cut prices in a desperate bid to attract tenants. Housing prices may decline enough for those with some cash to take advantage of near-nonexistent interest rates to buy property. The middle and working class – those who can stay employed – could find a new toehold in the 2020s, if the social safety net doesn’t vanish altogether.
Lower rents may bring about a fairer city, with poorer people able to carve out livelihoods in apartments once out of reach. Artists and musicians may discover a new Bohemia. Vacant office space, with the right investment, could be converted to housing. The moneyed, achromatic 2010s could give way to a more fascinating and unpredictable cultural landscape, with once marginalized communities asserting themselves. Out of the ashes, always, is possibility.
Not quite. The 1970s fiscal crisis was far worse, financially, for New York City. Crime was much higher, the tax base evaporated, and some of the poorest neighborhoods emptied out. The pandemic, which hit the city hardest in 2020, killed far more people than any 70s crime wave and will permanently reorder the commercial corridors of Manhattan. What it did not do was kill real estate speculation. In retrospect, I was naive. Rents bottomed out in 2020 and rocketed up afterwards to levels never before seen. The median asking rent in Manhattan has surpassed $4,000 and the average asking rent is $1,000 more than that. Brooklyn and Queens rents aren’t far behind. The cause, in the most basic sense, is demand outstripping supply, and this is now true in most large American cities. (The lack of available subsidized and public housing is glaring.) Los Angeles and Phoenix are both home to enormous and squalid homeless encampments. We have not seen a housing crisis like this in at least a half century. Rents are distressingly high and viable policy solutions are in short supply.