Middle Class Blues In A City Of Extremes

It's a difficult moment to be middle class in New York City — but a new study shows how to keep these residents at home in the five boroughs.

By: By David Giles

New York City’s middle class has fled from the dense, overcrowded inner city before.

Back when Queens still consisted mostly of open farmland and saltwater marshes, they took the 5-cent IRT train and settled down in two-family houses like the ones being built in Forest Hills Gardens or Sunnyside Gardens in the first half of the last century. And when those filled up, they moved farther afield to the new tract home developments being built all over Long Island and eastern New Jersey.

Today, according to a report published last week by The Center for an Urban Future, City Limits’ sister think tank, that process is as robust as it ever was. In fact, more New York City residents left in each of the years between 2002 and 2006, the report finds, than in 1993 when crime was higher and quality of life issues were a major concern for many New Yorkers. In 2006 the city had a net loss of 151,441 residents compared to 141,047 in 1993. The city’s total outmigration figures in 2006, as a percentage of population, outstripped struggling rust-belt cities like Buffalo.

But there are also a number of important differences: Today, New York’s chief competitors for the middle class are New South boomtowns like Charlotte, N.C. and Jacksonville, Fla. And even more important, compared to other periods of heavy middle class flight, many of the families and professionals leaving the city today would rather stay. Unlike in 1993, New York is as desirable in their eyes as it’s ever been. The culture, food, street life—they’re all pluses. These residents just can’t afford it anymore.

The report, “Reviving the City of Aspiration: A Study of the Challenges Facing New York City’s Middle Class,” draws upon extensive economic and demographic analysis, focus groups, and more than 100 interviews with academics, economists and other individuals on the ground in all five boroughs. Among the city's present and former residents who were interviewed for the report, Jay Greenspan, a writer, was pretty typical. “Can you live a middle class life in New York, even in Brooklyn, when it costs $650,000 to buy a two-bedroom apartment in Fort Greene?” Greenspan asked. “We’ve just decided to move. It’s heartbreaking because we want to stay.”

Nichole McDaniels, an assistant professor at Bronx Community College, was typical too. “We looked in New York City” for an apartment, McDaniels said. “But what we were seeing wasn’t even close [to our budget]. I don’t have expensive tastes. My needs are pretty simple. But I can’t afford New York.”

Last week, when Mayor Bloomberg was asked about the report’s findings, his response was fairly sanguine. He noted, quite rightly, that New York not only loses middle class people every year, it gains a fair number of them as well.

The problem is that New York, like the rest of the country, has entered a period of extended economic decline. Over $5 billion in new construction has been put on hold or stopped altogether since September, when Lehman Brothers failed and the credit markets seized up. And in case residents need to be reminded, New York City just came out of one of its longest and biggest periods of expansion in decades. If we couldn’t hang on to middle-class residents like Jay Greenspan and Nichole McDaniels during the best of times – when the city was at its most attractive and many residents were willing to make reasonable sacrifices in order to stay, leaving only when those were not enough – what’s going to happen in the next few years when budget cuts start taking a toll on essential city services? Much-needed education and public transportation funds are on the chopping block right now.

The report sees the boom period between 2002 and 2006 as a lost opportunity, a period in which needed investments in city bridges, roads, electrical infrastructure, and the public transportation network were neglected in favor of high-profile projects like the Olympics bid, a new Penn Station, and not one but three new top-of-the-line sports stadiums. Public subsidies for the two new professional baseball parks are expected to reach nearly $1 billion. The city also lost more than $500 million in property taxes in 2007 alone through the 421-a tax incentive that was used primarily to fund luxury condo developments in fashionable neighborhoods. At the same time, city officials sought to increase government revenue by doubling down on parking tickets, sanitation fines and other regulatory efforts aimed primarily at working- and middle-class New Yorkers.

Looking at New York’s recent history, an outsider might be forgiven for thinking the city doesn’t really want a middle class or else somehow assumes that they’re an inexhaustible or fungible resource, as Bloomberg's comment on the report's release date, Feb. 5, seemed to suggest. But here is a question for the mayor, and others who share his nonchalance: The feeling that “they come and they go” may be true at the moment – but what happens when middle class residents don't even want to stay anymore? Will there be others to replace them?

In case the path toward a permanent exodus is not one New York wants to travel, here are some suggestions, per the report (see p. 48), for strengthening the city’s middle class:
• Start making some big investments in the city’s six community colleges. Community colleges are a gateway to the middle class for increasing numbers of city residents. Enrollment has increased by 22 percent over the past 10 years while total funding, adjusted for inflation, has increased by just five percent during that same period.
• Develop a comprehensive strategy to diversify the economy and support the growth of middle-income jobs. If there’s anything the present financial crisis has taught us, it’s that Wall Street cannot be depended on to sustain a great city like New York. We should be nurturing the city’s entrepreneurs, artisans, freelancers and small manufacturers.
• Improve public transit service. In particular, put the kibosh on the MTA’s proposed service cuts. Keeping enough trains on the rails and making sure they’re on time is more important even than the popular and promised investment of hundreds of millions of dollars on a new Second Avenue subway line. Residents in neighborhoods like St. Albans in southeast Queens already suffer through commute times that are more than double the national average.
• Take steps to reduce the city’s building costs, which are some of the highest in the nation. New York builders have complained for years about the slow and inefficient regulatory process in the city. It costs 60 percent more to build in New York than in Dallas, 50 percent more than in Atlanta, and 20 percent more than in Los Angeles. According to both market-rate and affordable housing developers, higher costs are due in no small part to delays at the Department of City Planning and similar agencies.

– David Giles

David Giles is a research associate at the Center for an Urban Future, and a co-author of “Reviving the City of Aspiration.”