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THE BRAIN GAIN: How the Region’S Shifting Demographics Favor the Lower Manhattan Business District

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THE BRAIN GAIN: How the Region’S Shifting Demographics Favor the Lower Manhattan Business District THE BRAIN GAIN: How the Region’s Shifting Demographics Favor the Lower Manhattan Business District October 2012 THE BRAIN GAIN: How the Region’s Shifting Demographics Favor the Lower Manhattan Business District Over the last decade, Lower Manhattan has become the epicenter of the region’s vast pool of high-value, knowledge workers – as educated young and mid-career adults forego the suburbs in favor of the subway- and PATH-connected neighborhoods of Manhattan, Brooklyn and the cities along New Jersey’s Hudson River waterfront. DowntownNY.com 1 The Region: NY-NJ-CT-PA Combined Statistical Area Ulster Litchfield Dutchess Putnam New Haven Orange Pike Fairfield Westchester Sussex Rockland Passaic Bergen Morris Suffolk Essex Bronx New York Hudson Queens Nassau Union Kings Richmond Area Within a 30-Minute Commute of the Hunterdon Somerset Lower Manhattan Central Business District Middlesex Monmouth Mercer Harlem Hoboken Newport- Chelsea Grove Street Astoria Ocean Jersey City Lower Willliamsburg Manhattan Downtown Brooklyn Park Slope- Cobble Hill- Red Hook St. George DowntownNY.com 2 Today, Lower Manhattan is surrounded by residential communities that have an increasing share of the region’s high-value workers, while THE BRAIN GAIN: the far-off bedroom communities in Long Island, New York, and Con- How the Region’s Shifting Demographics necticut have seen their shares shrink. This demographic shift has had a profound impact on the value proposition of a Lower Manhattan Favor the Lower Manhattan Business District business address – both dramatically improving the opportunity to attract the best and brightest workers to Lower Manhattan, and diminishing the allure of Midtown’s commuter rail stations. Executive Summary Who are the region’s high-value workers and where do they live? To answer these critical questions, the Downtown Alliance analyzed Access to labor has always been among the most important factors data from the 2000 U.S. Decennial Census and the 2010 American in corporate leasing decisions. This is certainly true in the financial Community Survey for the population of the NY-NJ-CT-PA Combined Statistical Area (CSA), a broadly-defined region including 30 counties, services, professional services, media, creative services, management, 1 and information sectors that drive office leasing in New York City. looking at neighborhoods, or PUMAs to determine: • where people working in the fields of advertising, media, arts Lower Manhattan was the original center of the New York City and entertainment, professional services, management, information office market, but over the course of many decades some companies technology, finance, insurance, and real estate live today versus 2000. moved away from Downtown to areas surrounding Midtown’s Grand Thought of together as “creative and professional” industries, these Central Terminal and Penn Station, in pursuit of high-value workers sectors account for the vast majority of office leasing in New York who moved out of the urban core to bedroom communities in subur- City. ban New Jersey, Long Island, Westchester and the Hudson Valley, and Southern Connecticut. • where college-educated adults, ages 18 to 44 live today versus 2000. This group includes recent college graduates, as well as people in However, the last ten years have seen a monumental shift in the popula- young and middle adulthood, many of whom are married and tion of these high-value workers in the greater New York metro region. raising families and likely contend with the decision of whether Extensive residential development and dramatic neighborhood revi- or not to live in the suburbs. talization in Manhattan, Brooklyn, and New Jersey’s Hudson River wa- terfront cities have attracted huge numbers of young, educated people, The answer is loud and clear: the high-value knowledge workers workers in the professional and creative fields that drive leasing in New who drive the region’s economy – the people companies want to hire – York City –who prefer apartment living and shorter commutes via sub- increasingly live within a 30-minute commute of Lower Manhattan. way, PATH, ferry, bike and foot to suburban life and lengthy commutes via heavy rail or car. The New York metro region’s substantial population growth among the cohorts most important to the New York City office market was driven 1 “PUMA”standsforPublicUseMicrodataArea,geographicallycontiguouscensustractsgroupedtogetherinpopulationclustersof100,000ormore.Inthisstudy,PUMAsprovidethebestopportunitytolinkdatatoidentifiable communities in NYC, and also approximately match one or more towns and cities in New York State, New Jersey, and Connecticut. PUMAs are referred to as “communities” in this report. DowntownNY.com 3 overwhelmingly by the changes that occurred in the areas immediately The analysis revealed: surrounding the Lower Manhattan central business district. Meanwhile, the balance of the 30-county region – defined separately as the rest of • The fast-growing communities and towns surrounding Lower New York City, the rest of New Jersey, Long Island, Westchester and Manhattan posted large population gains among people working the Hudson Valley, Southern Connecticut, and Pike County in Pennsyl- in creative and professional fields. vania – contributed far less to the region’s total net growth, and in some • Nine of the region’s ten fastest growing communities are within a cases actually lost population of college-educated adults age 18 to 44 30-minute subway or PATH ride of Lower Manhattan. As a result, and those working in creative and professional fields. today places like Park Slope, the Lower East Side, and Jersey City’s Newport-Grove Street area contribute more of the region’s creative These geographic growth trends strongly suggest a shift in the and professional workforce than Scarsdale, New York; Fairfield, preferences of the region’s high-value workers, who are increasingly Connecticut; and Huntington, Long Island. opting out of the suburban lifestyle and emphatically favoring urban living. The implications for Lower Manhattan are clear: with an • At over 557,000, the 2010 population of creative and professional extensive network of multi-modal transit, Lower Manhattan is workers living within a 30-minute commute of Lower Manhattan exceptionally well-positioned to take advantage of its proximity outranked the populations of Long Island (298,000), Westchester to the region’s fastest-growing, talent-rich communities, and today and the Hudson Valley (226,000), Southern Connecticut (211,000), companies eager to attract the best and brightest of the region’s and the rest of New York City (457,000). labor force have every reason to set up shop in Lower Manhattan. • Lower Manhattan’s 30-minute commute area was the only part of the region to grow its share of workers in creative and professional Key Findings fields over the last decade. • The number of educated adults ages 18 to 44 within a 30-minute commute of Lower Manhattan jumped by 172,000 people, Growth of the region’s creative and skyrocketing 32% to reach over 717,000 in 2010. Contrast this with professional workforce is concentrated the rest of the 30-county region, which posted a net gain of only 6%. around Lower Manhattan. • This rapid growth in and around Lower Manhattan was due in large part to those in the higher age bracket of 35 to 44 years whose Communities surrounding Lower Manhattan population in this area grew by 44,000, or 24%. By contrast, the more suburban areas of the region barely held onto their population among show the fastest growth of college-educated this age group, posting a net gain of just 3,100. adults ages 18 to 44. • At over 717,000, the 2010 total population of college-educated 18 to 44 year-olds living within a 30-minute commute of Lower Manhattan Lower Manhattan's 30-minute commute area outranked the populations of Long Island (327,000), Westchester and the Hudson Valley (247,000), and Southern Connecticut (236,000). leads the region's growth of college-educated If these growth trends continue, it will not be long before the educated adults ages 35 to 44. population aged 18 to 44 of the area surrounding Lower Manhattan outranks that found in all of Long Island, Westchester and the Hudson Valley, and Southern Connecticut combined. DowntownNY.com 4 The result of the dramatic population growth in and around Lower Findings: Metro-Area Residents Employed Manhattan means that today, places like Park Slope, the Lower East Side, and the Newport section of Jersey City contribute more of the region’s in Creative and Professional Industries creative and professional workforce than Scarsdale, New York; Fairfield, Connecticut; and Huntington, Long Island.3 Between 2000 and 2010, there “Nine of the region’s was a dramatic increase in the top 10 fastest-growing number of people employed in populations of creative the creative and professional fields living within a 30-minute walk, and professional subway, PATH, ferry, bus or workers live in areas bike ride of Lower Manhattan. within a 30-minute subway or PATH ride While half of the region’s of Lower Manhattan.” 155 communities gained some population of creative and professional workers, most of the growth was found in the urban core, and in particular, in the areas surrounding Lower Manhattan. In fact, among the communities with Newport-Grove Street, JC East Village, LES the biggest gains of residents working in creative and professional fields, 9 of the top 10 were within a 30-minute subway or PATH ride of Lower Manhattan.2 Not only did the communities surrounding Lower Manhattan gain the greatest number of net new residents employed in the creative and professional industries, they also exhibited some of the fastest growth rates in the region. For example, Jersey City’s Newport-Grove Street area, from which commuters can reach the World Trade Center PATH station in 7 minutes, gained 10,670 net additional residents working in creative and professional fields, a 60% increase over 2000.
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