How Florida Beat New York
In a 2018 speech, Hillary Clinton claimed a partial victory in the presidential election she’d lost: “I won the places that are optimistic, diverse, dynamic, moving forward. And [Donald Trump’s] whole campaign, ‘Make America Great Again,’ was looking backwards.” Clinton was echoing a sentiment felt by many on the left, that Democratic-leaning states represent the future and Republican ones represent the last gasps of a dying empire.
Red states do tend to be poorer, sicker, less productive, and less educated. But Clinton’s remarks ignored trends indicating a coming reversal of fortunes. Just a few days ago, the National Association of Realtors (NAR) issued a report on the most popular states for domestic migration. Using Census Bureau data, the association found that Florida and Texas topped the list last year, with New York and California bringing up the rear. This report followed another bit of evidence that red states, contrary to Clinton’s observations, are the ones moving forward: As the economics writer Joey Politano pointed out on Twitter, “For the first time ever, there are now more jobs in Florida than in New York,” according to data from the U.S. Bureau of Labor Statistics. The longtime economic dominance of blue states such as New York, California, Washington, and Massachusetts has rested on their ability to attract and retain newcomers. At the heart of a prosperous society is people, and lots of them.
So what happened? Although this story cannot be simplified to the fortunes of two states, looking at the paradigmatic cases of New York and Florida can illuminate broader dynamics.
I’m not the only one making the comparison. A recent policy brief from Stanford’s Institute for Economic Policy Research outlined some key differences between the states. Florida’s population first surpassed New York’s sometime from July 1, 2013, to July 1, 2014. In 2021, Florida netted 4,200 people each week on average, whereas New York lost 6,800. Population doesn’t just drive the economy—it drives politics and culture. Since 1980, Florida has gained nine congressional seats while New York has lost eight.
Although many commentators attribute the shift in migration preferences to taxes—one recent Bloomberg article frames the NAR data in this manner—what’s largely driving the trend is housing costs. In fact, Census Bureau survey data consistently show that people move primarily for housing-related reasons, followed by family- and job-related reasons.
The Federal Reserve Bank of Atlanta tracks home-ownership affordability by metro area with an index that seeks to measure “the ability of a median-income household to absorb the estimated annual costs associated with owning a median-priced home.” The top 10 metro areas for unaffordability are a sort of who’s who of Democratic cities: Los Angeles–Long Beach–Anaheim tops the list, with New York–Newark–Jersey City rolling into the sixth spot as the first non-California metro. Miami–Fort Lauderdale–West Palm Beach is No. 12. That’s not cheap, but Florida’s other major metros, including Orlando-Kissimmee-Sanford and Tampa–St. Petersburg–Clearwater, are ranked far better on the Atlanta Fed’s index.
In 2017, Harvard’s Joint Center for Housing Studies concluded that almost 44 percent of all households and slightly more than 27 percent of renter households in the New York–Newark–Jersey City metro could afford a median-priced home in their area. In the Tampa–St. Petersburg–Clearwater metro, those numbers were about 63 percent and 51 percent, respectively.
What you’re getting for your dollar may be better in Florida than in New York as well. According to 2019 data, New York has the oldest owner-occupied homes, with a median age of 60 years. The economist Na Zhao at the National Association of Home Builders notes that “newer owner-occupied housing stock is mostly concentrated in the Sun Belt states where 14 out of 15 states, with the exception of California (43), have median owner-occupied housing stock age below the national median (39 years).” Zhao plots housing age against population growth and finds a correlation between the two variables: The older the stock, the lower the population growth. Survey data from 2021 show that the median New York home was built in 1957; the median Florida home is a full 30 years younger.
These long-term forces help explain how Florida beat New York. Another big factor is the coronavirus pandemic, which temporarily nullified and perhaps permanently weakened office life, thus undermining one of New York City’s greatest historical advantages: its gravitational pull on workers. A cursory look at the jobs graph showing Florida overtaking New York reveals that the former recovered quickly from the pandemic while the latter has failed to bounce back. A May 2022 report from the New York State government confirms that “less than 71 percent of the City’s pandemic-induced job losses have returned,” and that New York City lags behind both the state (82 percent) and the nation (95 percent) in restoring those jobs.
Housing costs plus remote work could result in lasting damage to New York’s prosperity—even if the losses are relatively small and the shift to work-from-home is only partial. When workers leave the state, they take their demand for various goods and services with them, affecting health-care workers, day-care providers, the hospitality industry, and so on. The same thing happens to a lesser degree when workers simply stay in their living room—which many of them now do. A January survey found that just 52 percent of Manhattan’s office employees are at their desk on an average weekday. Before the pandemic, only 6 percent of employees worked primarily from home. According to an Eno Center for Transportation report, New York’s subways used to log 5.5 million daily trips in 2019; they are now averaging just 3.5 million on a typical weekday.
As population declines, policy makers lose tools to retain and attract families. The San Francisco Chronicle noted that San Francisco recorded its lowest population in a decade in July 2022; the city is projecting a $728 million deficit over the next two years. Cities can enter a sort of doom loop, where declining revenues from taxes and user fees lead governments to cut important government services such as trash collection and public schooling, which can then further erode the city’s population and revenues.
This race is New York’s to lose.
Blue states aren’t doomed or dying. At any rate, high housing costs generally reflect very high demand from lots of people to live in a particular area; New York City isn’t some dystopian wasteland where no one can see their future. But even relatively small changes (minorities of workers working from home or moving away) can still lead to acute crises for cities, as the economist Adam Ozimek recently pointed out.
“The clearest indication of success at growth is a constantly rising urban-area population,” the sociologist Harvey Molotch wrote in his 1976 paper “The City as a Growth Machine.” At the time, looking back at the politics of the 20th century, he observed that cities were focused on attracting more and more people. But even then, Molotch noticed an “emerging countercoalition” of anti-growthers. This loose coalition would go on to successfully curb population and economic growth in our nation’s most productive job centers, frequently by instituting strict housing policies meant to reduce the construction of new units. These policies led to skyrocketing prices as workers continued to agglomerate in these places even as local and state governments refused to adequately plan for their arrival.
Blue states and, in particular, their superstar cities got too comfortable. They coasted for decades on the knowledge that firms and workers were being pulled inexorably toward their downtowns. Their leaders thought they didn’t need to work on basic amenities such as high-quality public transit. But given the realities of remote work and these cities’ relative unaffordability, that mentality just won’t cut it.
Urban dynamism is not simply a function of geography or the built environment. Neighborhood character does not arise from architectural quirks or accidents of history well preserved. What makes cities “optimistic, diverse, dynamic” and forward-moving is people: people of all types who choose to live there, create there, build businesses and grow families there; different sorts of people who come into contact with one another and produce interesting foods, ideas, art, and ways of living together. A healthy city attracts wealthy, middle-, and working-class people; it pulls newcomers into its orbit while leaving room for natives. That’s the type of city that produces the sense of “character” that makes people want to call it home.
I don’t have a lot of faith that the Republican regimes now attracting growing numbers of Americans will be invested in this type of inclusive growth. We’ve seen these states become hostile to LGBTQ rights, educational freedom, voting rights, racial equality, and more. Many Americans are being forced to choose between liberal values and financial security. Reversing that dynamic will require blue states to prioritize affordability. But until rent prices near good jobs in New York or Washington or Massachusetts can compete with housing costs near good jobs in the Sun Belt, Clinton’s pronouncement will seem more incorrect by the day.
Source: The Atlantic
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