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The Billion-Dollar New York City Exodus

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During the Spanish flu of the early 20th century, people were fleeing big cities trying to escape the virus, just as the wealthy of London did during the 16th-century plague … and just the wealthy of New York City in 2020’s COVID-19 pandemic.  They fled the city and headed to the suburbs, or even more rural areas, with New York Governor Andrew Cuomo warning about the city’s density when it first went into lockdown in March. “There is a density level in NYC that is destructive. It has to stop and it has to stop now. NYC must develop an immediate plan to reduce density,” Cuomo Tweeted.

Similar to many end-of-the-world movies, the pandemic has caused a large number of urban residents to move out of the cities to rural areas or the suburbs.

Since the start of the pandemic, the major metropolitan areas with denser populations such as New York, Detroit, Los Angeles and Chicago, have experienced very high case rates.

Since the start of this year, nearly 16 million Americans have fled metropolitan areas. According to the survey conducted by Pew Research Center, some 30% listed the pandemic for leaving the city.

“About a quarter (28%) feared getting COVID-19 if they stayed where they were living. About a fifth (20%) said they wanted to be with their family, or their college campus closed (23%). A total of 18% gave financial reasons, including job loss.”

According to findings by Unacast, some 3.57 million people fled New York City this year. During the same period, the study noted major demographic change as those who left they were replaced by some 3.5 million people earning lower average incomes, 

Those who left the city took about $298 billion dollars of income with them, whereas the 3.5 million people that have moved-in brought about $264 billion dollars of income to town.

Related: Markets Up On Stimulus Hope

“That’s about $34 billion in income gone in about 8 months of COVID-19. Downstream, there are clear implications,” the study says. The exodus of wealthy people might continue even when life gets to normal, as the State of New York projects a $59-billion budget hole through 2022.

Governor Cuomo already announced that unless Congress passes another relief package, higher taxes and additional cuts will be imposed. That might cause more wealthy people to consider leaving.

However, New York is not alone in this trend. Exposure to the virus, economic uncertainty, and social unrest is prompting waves of Americans to leave big cities mostly in California. On the  other side, Arizona and Texas have benefited from it. 

The data shows that Millennials are leading in the exodus. Some 48% of millennials reported living in the suburbs this year compared with 44% in the previous, according to the research from investment management firm Cowen and Company.

Due to the pandemic, millions of Americans are forced to work from their homes to avoid the spread of the virus. However, it seems that some, vastly tech companies, are going to continue with keeping their officer closed until further notice

Facebook, Google and other tech companies have already announced that they would be working remotely until mid-2021 or even making working from home a permanent status. 

By Michael Kern for Safehaven.com

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