Passenger Trains > NYC: Time To Turn Off the Lights?

An opinion piece in the left leaning NY Daily News asks if NYC is on its way to becoming another Baltimore, Cleveland, or Detroit.

The real estate business is seeing collapsing demand for office space. Hotels and restaurants are handing back the keys. People can do their work without taking the subway, NJ Transit, etc.

https://www.nydailynews.com/opinion/ny-oped-actually-were-in-deep-trouble-20200919-x5fuxkuvqbakrdta7vr3urvjzi-story.html

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The next 12-24 months will be a hard bruising economy for cities in the USA.  The economic shifts such as working from home, travel industry collapse, etc. will hurt the downtowns in many cities where millenials were hot to live and work.  I cannot see much office and residential construction in the next 24 months.  On the other hand, the housing market in the suburbs is doing quiet well.  

One can hope. The state of Florida welcomes them. 



Edited 1 time(s). Last edit at 09/20/20 19:07 by Typhoon.

Mountain communities are booming, as people are bugging out.  Wonder if rural communities are experiencing this?

Typhoon Wrote:
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> One can hope. The state of Florida welcome them. 

Yes, we have two new neighbors this week who moved from Long Island and New Jersey.

The real question is whether the infrastructure (restaurants, shops, retail, etc) is needed if the buyers (banks, brokers, ad agencies, publishing, etc) don't come back to New York City in any significant size.  Subways, NJ Transit, etc are already seeing huge drop off.

Some companies have designated tax friendly "business locations" to avoid having employees taxed as NY employees when they work from home. That's already showing up as a huge problem for New York, as witholdings have dropped.

There's a huge fundamental change happening in how we work going forward. The Covid 19 pandemic coupled with major advances in technology have vastly accelerated a drastic mindset change of the practicality of remote working. My WAG is that in terms of NYC it will result in a reduction of at least 30-40% in major corporate office space needs which will cause a huge reduction in rents as landlords compete for an ever shrinking customer base.

   Likewise I think expense account business travel will also experience a major, permenant reduction which does not bode well for Acela's premium priced product. Without a robust corporate expense account base of customers the Acela priced product will not work. 

   The next 2-4 years will show us the extent of the major changes and the ripple effects of them.

    IMHO-Ross Rowland 

Typhoon Wrote:
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> One can hope. The state of Florida welcome them. 

I understand that the cost of home insurance has greatly increased in recent years and will continue to increase.  The State of Florida had to get involved in the insurance business to mitigate these increases and also provide another source of insurance as insurance companies are less willing to provide policies for Florida homeowners.  Someone correct me if I'm wrong.

Home sales in my town of Tyler, Texas , 2 hours east of Dallas, off the charts.

We aren't seeing many east coasters, but lots of Californians moving here.

Dallas home sales are doing well also with imports from both coasts.

HOWEVER, I recently read a piece, WSJ???, that there are recent rumblings about work from home.  The crux of the issue is that problems that used to take an hour to solve can now take all day.  I suspect 5 years from now we will settle somewhere inbetween.  Also of interest is the arts and entertainment.  Big Business will still want to WOW certain clients.  Will enough millenials stay in the cities for arts and entertainment to flourish?

https://www.nbcnewyork.com/news/local/mta-expected-to-outline-possible-service-cuts-layoffs-amid-12b-deficit/2585597/

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I agree times are a changing. I wouldn't be surprised if "Corporate America" realizes they really never needed  that many people in their offices to begin with. Time will tell when it's time for everyone to return to the office once we figure out there's not much productivity in the WFH offices. On the front lines the people that are responsible for "making it happen" to pay for all these administrative employees are still required to show up for work. Not much demand for a pipe fitter, bank teller, auto mechanic or most people that actually provide a service to the customer to perform their jobs at home.

As a person who has been on the road for more than 20 plus years 18 days every month travel has suddenly become much more difficult. Very limited dining choices, how do i safely get to work, is my hotel room sanitary. So do I risk flying with every airline but Delta filling the majority of the seats on the skeleton flight schedule now offered or take Amtrak and double or triple the hours it takes to get to work, drive in the same time it takes to ride Amtrak? Just not many pleasant options.

Major changes seem like a tidal wave more than a ripple for sure. I don't see how America is going to avoid 20-30% inflation over the next few years when we just print more money and hand it out free gratis.
 

WrongWayMurphy Wrote:
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> We aren't seeing many east coasters, but lots of
> Californians moving here.

There have been non-TO discussions out here, whether Silicon Valley is really needed for tech innovations anymore. That might sound good for Austin, where many tech companies have a presence, but the bigger question is whether talent needs to be concentrated in a small area to make an industry thrive.

Oregon, Washington, Nevada and Arizona have hosted California's outward migration for years. "Leave your (left-leaning) politics behind you" is one of the biggest complaints, implicitly from more conservative residents of those states. In other words, it's not all good for those receiving the migrants. :-)

Tominde Wrote:
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> HOWEVER, I recently read a piece, WSJ???, that
> there are recent rumblings about work from home. 
> The crux of the issue is that problems that used
> to take an hour to solve can now take all day.  I
> suspect 5 years from now we will settle somewhere
> inbetween.

For now, I see outward migration out of cities as a short term trend, rather than a long one. Ultimately, businesses will do what make them competitive, and productivity, as you mentioned is very important for that.

Tech companies, especially software-based ones think people are like computers and can easily be "reprogrammed" (brainwashed). Based on watching kids' more honest reactions to "remote learning" (hate it), I think they are wrong regarding the "growth" of working-from-home. It goes against human instincts to accomplish difficult tasks in groups, and I don't buy "virtual groups" as effective, especially wth the huge potential for individual distractions.

Big cities can still suffer, as new "centers" for jobs could be created elsewhere, work-from-home or not.

dan Wrote:
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  Wonder if rural communities are
> experiencing this?

In some areas of Montana the answer is yes.  In other areas, No.  One thing that has become very obvious is the large number of U-Haul trailers that have appeared at the U-Haul franchise in Great Falls, MT.  Usually there are maybe a dozen trailers of various sizes in their lot.  I estimate that count is close to 100 trailers now.  Their truck inventory is also considerably higher.  I think that rural areas that have easier access to hub cities will see a population shift.  Especially if those rural areas have fibre optics. (more and more do)  But remember,  Albertsons, Target, McDonald's, and Costco cannot be very far away.  It's a matter as to what you think is rural.  Where I am at, there are 25 students in the school K-12.  There is capacity for many more students but a population shift is highly unlikely.  Albertsons and Big Macs are 45 miles away.  

 

Not all rural areas are seeing a boom. With the oil market in the toilet a lot of the activities that happen in the field have stopped.
And the rural jobs that went with them went away.

 A few tech firms have already said they have no problem with work-from-home employees moving where ever they want but also announced that those who move to lower cost areas will have their salaries reduced. 

interesting.........

https://gothamist.com/news/tired-feeling-powerless-ceos-pen-letter-de-blasio-about-quality-life-issues

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John Wrote:
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>  A few tech firms have already said they have no
> problem with work-from-home employees moving where
> ever they want but also announced that those who
> move to lower cost areas will have their salaries
> reduced. 

That seems to be a minority position, so far.  In areas and industries where employees are considered valuable assets, nobody would do that.  Carrier is relocating its HQ and some research facilities into our area, and the new arrivals feel like they are in heaven.  "Northern salaries with Southern costs and taxes"

If your people can find new jobs tomorrow, and aren't interested in moving, you have to be very careful.

OTOH, f you consider your employees a liability, and something to get rid of, that's another story.

Florida the place that is always hot and humid in the summer, where you never turn off the AC for months, where the bugs are big and the poison snake chase after you, where homes sink and the hurricanes blow them away, where there are no mountains except for Big Thunder at the Magic Kingdom, that almost fell down becuase it was rusting away, and many other questionable thiings.

Lastly and most important where the train chasing is poor.

Don't forget the alligators, hurricane insurance, and an almost totally automobile society.