Why is New York shrinking?
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Aziz Sunderji produces data visualisation and analysis on the US housing market, and distributes his work via his newsletter Home Economics, where a version of this post first appeared.
Summer quietude aside, New York feels like it’s booming these days. Securing a restaurant reservation is as challenging as ever. Lines for tennis courts form at dawn. Rents are rising faster than just about anywhere else. You’d be forgiven for thinking the city is heaving with more sharp-elbowed, jostling bodies than ever before.
You’d be wrong. New York is shrinking, and faster than ever.
Over the past three years, the population has declined by almost 500,000. On a ranking of the country’s contracting cities, New York handily takes the top spot, shrinking by 400,000 more than the next on the list (Chicago). New York City is 6 per cent smaller than in 2020, the most severe decline in the largest 50 US cities over this horizon, after San Francisco (-7 per cent).
To be fair, the pandemic hasn’t been great for urban life in general: the top 10 cities outside New York have collectively failed to add any new residents since 2020. Still, most cities have merely stagnated. New York has experienced an exodus.
It’s not just a pandemic thing either . . .
This isn’t a new phenomenon. New York has steadily added fewer and fewer people every year since 2012, and population growth turned negative in 2018 — well before Covid. In the decade to 2023, the city shrank by 140,000 (the deep population losses over the past few years slightly overshadow the small gains from 2013-2016).
That’s a small number considering the size of the city, amounting to a loss of only 2 per cent of the population. It’s in line, in percentage terms, with some other large cities like Los Angeles and Chicago.
But consider that, over the same horizon, Phoenix grew by 8 per cent, Austin by 12 per cent, and Fort Worth by 23 per cent.
. . . It’s a domestic migration thing
Nothing changed abruptly in 2012. Long before then, New Yorkers were leaving the city in greater numbers than people were arriving from the rest of the country.
But before 2012, the migration gap was small: often a net loss of around 50,000 people per year. And the city nevertheless still grew in size, because that release of population to the rest of the country was more than made up for by international arrivals and net births.
What changed? Net births declined slightly, due to an ageing population, falling fertility — and in the past few years — the pandemic. International migration cooled during the Trump years, and then came to a virtual standstill in 2020-21. At least some of these factors are likely to prove temporary.
But by far the biggest change was an acceleration in the pace of people leaving the city for other places in the country. This is shown as falling ’net domestic migration’ in the chart below, on the right hand side.
It’s the economy, stupid
The conventional narrative is that people are leaving the city because of some combination of the following factors: housing is unaffordable; taxes are too high; there is too much regulation; and there is too much crime.
Affordability is the factor that most commentators emphasise. But Census data suggests the primary motivation lies somewhere else. The chart below shows what people who left New York between 2012 and 2023 told the Census Bureau about their reason for moving.
Jobs were, by far, the biggest reason New Yorkers cited for moving out of the state. Family was the second reason. Cheaper housing was the third.
To be fair, the Census offers many possible responses to this question, and a number of the popular responses hint at affordability concerns, albeit indirectly, even if they don’t mention affordability specifically. For example, how many of the thousands of people who said they left the city because they “wanted to own [their own] home” are really saying, homes here are unaffordable?
Still, even when we add up the number of people who cited any of the reasons that suggest the possibility that affordability is the ultimate driver, cheaper housing is a less important motivation of outmigration than jobs.
Digging deeper
In order to get a more holistic view of emigration from New York, we need more information: who are the movers — what are their demographic characteristics like age, income, and number of children? Where are they going?
Census Bureau microdata (the millions of Census Bureau records about individual households) on who moved away from NYC offers at least some clues.
The evidence suggests that affordability has played a role in the city’s depopulation, but a less important one than young people seeking jobs elsewhere, and older people seeking sunshine.
Kids these days
At least in one way, the conventional narrative is correct: the people leaving New York skew young.
The chart below shows the distribution of New Yorkers who left the city in any given year from 2012-23, versus the overall New York City population. While the age of New Yorkers is normally distributed around 50 years old, the emigrants are disproportionately concentrated among 25-40 year olds.
This could corroborate the notion that jobs are the primary motivation for leaving the city, since younger people’s careers are more in flux, and could require a geographic shift. But it might equally substantiate the affordability narrative, since younger people have lower incomes and face the brunt of high home prices.
Let’s look at incomes.
The young (rich) and the restless
Young emigrants earn substantially more than the overall New York population. But above the age of 45, the people leaving the city tend to have lower incomes than the overall city population at the same age.
This suggests that jobs might be the primary motive for younger people to leave the city, while affordability might actually be a bigger issue for older people.
Are cities for childless cat ladies?
Received wisdom is that people leaving New York are responding primarily to the financial and lifestyle pressures of having kids. But this appears to be untrue: at every age, people who leave the city have fewer kids than the overall population.
The chart above captures people who lived in New York and moved homes in the year prior to completing a Census survey, whether they moved from downtown Manhattan to Brooklyn or to Miami. Those who moved from New York City to the suburbs (rather than another city) do have more kids, but only slightly more, and still far fewer than those who didn’t move at all.
Where are they going?
The vast majority of New Yorkers who move from one home to another are doing so within the NY metro area. To put this in context: Los Angeles is the most popular destination for New Yorkers who leave New York. But for every New Yorker who moves to LA, 12 of them move within the NY metro area.
The intra-metro area moves are interesting, but outside the scope this analysis. Among New Yorkers who moved away from the local metro area, the five most popular destinations were:
Los Angeles
Miami
Philadelphia
Washington
Chicago
At this risk of beating a dead horse: aside from Philadelphia, these are not the kinds of destinations that make a lot of sense if one is fleeing high housing costs. Prices in LA are not much lower than they are in New York, especially if you factor in home insurance and that other LA necessity — a car.
Call me JD
So . . . Housing refugees don’t seem to comprise the majority of those who move out of New York. However, affordability is a problem for many, and analysing destinations by age and income might help tease out who those people are.
Old, rich people have moved to places like Hilton Head and Naples, Florida. But there are lots of lower income seniors who moved to places like Montgomery (AL), Canton (OH), or Florence (SC). Miami is the most popular destination for older people, and those who moved there were, on average, in the middle of the income distribution.
Wealthier middle-aged people gravitate to places like Jacksonville, FL and Worcester, MA. In the middle of the income spectrum, people at this age like Tucson, AZ. Lower income middle-aged people prefer Tampa.
There are lots of data points when we look at those under 40 (remember, most movers are young), and the results are pretty intuitive: the kinds of people who move to San Francisco are young and have high incomes (~$140K).
Other popular destinations for relatively high-earning young people are San Jose, Denver, Chicago, LA, Seattle, DC, and Boston. Note that these are all pretty expensive, jobs-laden cities. It’s likely jobs, not affordability, motivating these emigrants.
Places like Dallas, Houston, Atlanta, and Charlotte attract young, lower income New Yorkers. These are the households that the conventional narrative about young people facing affordability challenges and moving to cheaper cities most clearly exemplify.
You might have expected to see more young, lower income people moving to upstate New York, but while Ithaca, Syracuse, and Albany appear to be moderately popular destinations — moving upstate isn’t a major trend.
Blue states can’t govern?
Another purported reason people are leaving New York: blue states and cities are poorly governed; they’re mired in red tape and regulation that prevents them from building more housing and bringing down prices. For example, writing in the NYT last year, David Brooks argued:
Between 2010 and 2020, the fastest-growing states were mostly red — places like Texas, Georgia, Florida, Tennessee and South Carolina. During the pandemic, that trend accelerated, and once again, most of the big population-gaining states are governed by Republicans.
Those red states are indeed growing faster, but emigrating New Yorkers do not appear to favour Republican-governed cities more than others. They’re moving to blue cities in blue states, like Los Angeles, and to blue cities in red states, like Atlanta, Dallas and Houston.
The reality is that most emigrating New Yorkers are moving to other cities, and there are simply very few red cities any more. Oklahoma stands out, as does Jacksonville. But these are far less popular destinations for New York emigrants than the large blue cities.
And so . . .
New York City is shrinking because the pace of domestic outmigration has accelerated. Most people who leave the city are younger, higher income, and have fewer kids, compared to the overall New York City population.
Jobs seems to be the most important driver of emigration, more than housing affordability. Higher-earning young New Yorkers are moving to places like Los Angeles, San Francisco, and Washington, DC — hardly bastions of cheap homes. Moreover, Census Bureau surveys that directly ask about the reason for moving show that, for emigrating New Yorkers, jobs are more important than any other consideration.
There is evidence that some of these emigrants are motivated by concerns about stretched home affordability: some younger, lower income New Yorkers are moving to cheaper cities, particularly in Texas. This isn’t incompatible with jobs also being a key concern: payrolls data shows (below) that companies in Florida and Texas have been hiring more people than those in New York, especially over the past decade.
But on the whole, the reality of the New York exodus is a bit messier than the narrative would have you believe.
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