Ilya Marritz covers business for WNYC.
Is NYC Better Off Than It Was 4 Years Ago? You Be the Judge
Friday, September 14, 2012
Is New York City better off than it was before President Barack Obama took office? With an election just weeks away, many variants of Ronald Reagan’s famous question to voters from 1980 are in the air.
“In New York City, and that's the only place I am an expert on, things are better than four years ago,” Mayor Michael Bloomberg said in response to a reporter’s question earlier this month.
But the worst economic crisis in a generation rocked many of the financial institutions that are the backbone of the New York economy, and much has changed in a short time.
Take 70 Pine Street as an example. The landmarked art deco skyscraper is Manhattan’s fifth-tallest building. For 33 years, it was the home of AIG, the world’s largest insurer.
But AIG had to sell 70 Pine Street after the insurer collapsed in September 2008, and accepted a $182 billion pledge of government aid.
The sole remaining occupant is The Ketch, a white-tablecloth fish restaurant on the ground floor.
John Lopez, the owner, estimates AIG employees once made up 40 percent of his clientele. He recalls the autumn of 2008 in the hushed tones other people might use to discuss a sick relation.
“People were scared. Even if people had money, it wasn’t cool to have an event,” Lopez said.
Eighty dollar lunches of miso-glazed salmon and chardonnay were out. But the Ketch toughed it out.
Now, new customers are showing up.
“Facebook had a group of people here,” Lopez said. “I said to my staff when I saw them come in, ‘See those young guys? That’s the future of our clientele.’”
And new potential customers will be moving in soon. After changing hands three times in four years, 70 Pine Street is being converted into a rental apartment building.
After four turbulent years, Lopez says things are improving.
And AIG? In 2009, the company moved to a smaller headquarters down the block. This week, the U.S. government sold most of its remaining stake in the insurer. Commentators marveled that a zombie company has in fact come back to life.
Here are five ways of seeing how New York’s economy has – and has not – improved in four years:
Since August 2008, New York City has regained all the jobs lost in the great recession, and added 70,000 new positions on top of that.
After a dip in 2009, sales tax revenues have surged, fueled by tourist spending in the city center, and newly opened big-box shopping centers in residential areas. In the second quarter of 2012, the city took in $218 million more than in the comparable period four years earlier.
Banks, law firms and ad agencies downsized in 2009 and 2010, sending the vacancy rate to a peak of 11.6 percent. Since then it’s fallen, but is still roughly two points higher than in 2008.
About 30 percent more people are overnighting in city shelters today compared with 2008. The city says cuts in state aid have made it harder to move the homeless into permanent housing.
This chart of year-over-year changes in the housing price index shows the value of apartments and homes in the five boroughs cratered in 2009, and dipped again in 2011. Prices are now recovering, but still stand below early 2008 levels.