Posted by Leonard Steinberg on April 18th, 2013
Corporate results are showing an eerily similar trend: profits are growing, but revenues are not. Is this mostly related to the fact that companies are not hiring while demand grows very slowly, thereby deriding profits mostly from reduced labor costs and low interest rates? Are existing workers forced to work harder and more efficiently to avoid hiring? The Great Depression has interrupted a decades-long trend of jobs steadily moving to the suburbs and hollowing out urban business districts across the U.S., a study finds.
City centers gained a greater share of employment than their outer rings between 2007 and 2010, according to a report from the Brookings Institute. Big suburban job losses, not large downtown gains — drove the shift and metropolitan economies are more decentralized than they were in 2000. The shift slowed during the downturn: The report follows up on a 2009 study that found a continuous migration of jobs from downtown to the suburbs between 1998 and 2006.
Urban revitalization and the notion of smart growth, which seeks to cluster housing and jobs near transit and entertainment, has had only limited success restoring downtowns. Now, faced with tight budgets wrought by the housing collapse, some metropolitan leaders say they’re redoubling efforts to nudge employers and workers toward locations that maximize the use of transit and existing infrastructure, cut pollution and improve quality of life. Maybe this explains the growth New York is experiencing? We are certainly seeing the results of heightened demand for luxury real estate: pricing on the high end is experiencing HYPER inflation in some areas…..we call it hyper-luxoflation as inflation on the lower end is significantly weaker.
When jobs are near housing and public transportation, commuting times, household expenses and government costs are cut. Not to mention quality of life if the large urban center actually addresses quality of life: yes, those parks and trees and bike lanes actually do make life better for most in New York. Now we are able to see the fruits of Mayor Bloomberg’s labors. With New York now providing so much better park space, trees, cultural centers, etc, the city keeps growing in its desirability for families to stay and not move to the suburbs. Bored suburbanites, or those who have lost their lives to lengthy commutes are moving back. And the jobs are here too.
New companies are moving here as they want to be right in the heart of that activity. Entrepreneurs start ventures that improve their communities: The entrepreneurial vibe necessitates density — density of ideas, people, culture. New York is an accessible place for these startups to get connected. And they are hiring and minting new millionaires weekly……the kind who buy high end real estate.