For much of the pandemic, it was all the rage to declare the demise of New York City as many successful business people were decamping to Florida and Texas due to their pro-business policies and lack of state income and estate taxes. In contrast, New York was deemed to be an outdated relic.
But let’s take a look at the record since March 2020.
With a new pro-business and crime-fighting mayor likely to be elected in November, major infrastructure projects on the way and a solid anti-Covid policy in place supporting the vaccination of government and business employees, and the recent bold action requiring proof of vaccination for indoor dining, gyms, and entertainment, the prospects for NYC are much brighter today. New York City is now taking the lead for the entire country, as it always has throughout our long and glorious history.
What a difference a year and a half has made! New York was in a disastrous condition for months at the beginning of the siege with a record high in Covid cases. However, the situation is now vastly improved. According to the New York Times, 66% of New York City residents, 68.7% of New York State residents and 74% of Manhattan residents over 18 are now fully vaccinated, all well above the national average of 60.4%. As a result, even though cases have understandably risen in New York recently due to the more contagious Delta variant, hospitalizations are only up slightly and the death rate has not gone up yet (although to be fair, that good news may not last).
Now let’s consider Florida. Blessed with warm weather to allow outdoor activities and a driving lifestyle so that living is not nearly as dense as in New York, it has squandered its natural advantage with policies that discourage masking and just 58.9% of its adults over 18 are fully vaccinated (despite a high proportion of seniors who are vaccinated at much higher rates than the general population). In Florida, Covid cases represent approximately 1/5 of the national total, an all-time state high of almost 22,000 cases was reached on July 30, over 10,000 people are hospitalized which is also a new state high, and sadly, deaths are on the rise.
Further, due to lack of foresight and inadequate government regulation requiring a wait of 40 years for a formal structural and electrical report to recertify buildings, the Florida condominium market has been plunged into chaos due to the tragic building collapse in Surfside. It is a cruel irony that hundreds of thousands of people who moved to Florida to save on taxes will now be forced to pay sky-high insurance rates if they can get insurance at all. As a result, it is not hyperbole to say that an important sector of Florida’s economy is literally built on sand.
Next, let’s look at Texas which is the other major state which proudly promotes its low taxes and lack of regulation. Since the pandemic, its citizens were forced to endure weeks without heat and electricity in subfreezing temperatures due to the privatization of its market for power. This left hundreds dead, thousands homeless and millions of people temporarily forced into third-world living conditions.
Of course, Texas is another state that has banned local mask mandates even though the intensive care units in the state capital of Austin are full. Its fully vaccinated rate is even lower than Florida at 55.3 % for adults over 18. School will be starting soon, with a de minimis percentage of vaccinations for the 12 to 18 population and no required mask protections for children who will be returning in much larger numbers. Their politicians are at each other’s throats, as the mayor of Austin said on Sunday that this approach will leave schoolchildren defenseless against the virus.
This leads me to the twin infrastructure bills working their way through Congress that appear to be on track to pass. Who will benefit most from the infrastructure package? The answer is New York City, which will receive $10 billion for mass transit as well as billions for the Gateway tunnel under the Hudson River so that Amtrak can secure long-needed repairs to ensure that the rail service that connects the Northeast corridor which comprises a massive percentage of our national economy (New York is close to 10% alone) is not significantly disrupted. Further, it is our densely packed cities that present the greatest opportunity for energy savings due to greater use of mass transit, bicycling, and walking (my favorite pastime).
I don’t want to indulge in schadenfreude, but rather to simply point out that things look a lot better from the New York perspective than they did a year and a half ago. It appears to me that the Broadway theaters have it right. If you want to come to see the shows, you have to be vaccinated as do the cast and crew so everyone is safe.
That seems to be an appropriate metaphor for our time. The recent problems bubbling up in Florida and Texas clearly demonstrate that laissez-faire in business and health matters may not be the best approach for their residents, even if they are great places to live for many. As a happy coincidence, it turns out that what’s good for the community is good for business as well. And to modify the famous Broadway saying, that’s the best way for the show to go on or at least restart. New York City is now poised for a strong recovery – if only the virus would cooperate.
So that’s the way I see it. More importantly, what do our friends and clients think, as we always learn from your comments? Please let us know.