REVIVING the CITY of ASPIRATION: a Study of the Challenges Facing New York City’S Middle Class CONTENTS
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www.nycfuture.org FEBRUARY 2009 REVIVING THE CITY OF ASPIRATION: A study of the challenges facing New York City’s middle class CONTENTS PART I: OVERVIEW AND HISTORY INTRODUCTION 3 WHO IS MIDDLE CLASS IN NEW YORK? 9 A HISTORICAL OVERVIEW 11 PART II: MIDDLE CLASS CHALLENGES WHY THEY CAN’T MAKE IT HERE: New York’s exorbitant cost 14 of living is making the city out of reach CHILD CARE COSTS: Many working parents spend thousands 18 on child care—if they can find a slot THROUGH THE ROOF: Over the past decade, housing costs 19 skyrocketed in virtually every corner of the city NO TICKET TO RIDE: There has been a steady erosion of 22 middle income jobs in New York NOT MAKING THE GRADE: Inferior public schools cause 25 middle class families to leave New York A PAROCHIAL VIEW: Catholic schools once offered a quality 26 This report was written by Jonathan Bowles, Joel Kotkin alternative to substandard public schools. Now, it’s not so clear. and David Giles. It was edited by David Jason Fischer STUCK ON THE TRAIN: Transit service has not kept pace 27 and Tara Colton, and designed by Damian Voerg. with growing demand in neighborhoods outside of Manhattan Mark Schill, an associate with Praxis Strategy Group, provided demographic and economic data analysis THERE GOES THE NEIGHBORHOOD: Out-of-scale 29 for this project. Additional research by Zina Klapper development has diminished the quality of life in many communities of www.newgeography.com as well as Roy Abir, Ben Blackwood, Nancy Campbell, Pam Corbett, Anne PART III: SNAPSHOTS OF THE MIDDLE CLASS SQUEEZE Gleason, Katherine Hand, Kyle Hatzes, May Hui, Far- ah Rahaman, Qianqi Shen, Linda Torricelli and Miguel SCHOOL’S OUT: University professors are opting to leave 30 Yanez-Barnuevo. schools in New York for locations where their salaries go farther CITY LIMITS: Municipal jobs used to provide a clear path to 31 This report was made possible by support from The upward mobility, but that may no longer be the case Bodman Foundation and Wagner College, New York DETOUR FROM THE DREAM: Successful immigrants are 32 City. The Center for an Urban Future is a project of City leaving New York for other, more affordable regions Futures, Inc. General operating support for City Futures has been provided by Bernard F. and Alva B. Gim- PART IV: REVIVING THE MIDDLE CLASS DREAM IN NEW YORK bel Foundation, The Citi Foundation, Deutsche Bank, A PLATFORM FOR MOBILITY: Community colleges should 36 The F.B. Heron Foundation, Fund for the City of New play a more central role in boosting New Yorkers into the York, Salesforce Foundation, The Scherman Founda- middle class tion, Inc., and Unitarian Universalist Veatch Program at Shelter Rock. A NEW ECONOMY FOR NEW YORK: City officials must do 39 more to groom industries that create middle income jobs City Futures Board of Directors: Andrew Reicher (Chair), IF YOU BUILD IT: Most of the new housing built in the past 42 Margaret Anadu, Michael Connor, Russell Dubner, Ken decade was geared toward the luxury market or the poor Emerson, David Lebenstein, Gail O. Mellow, Gifford BOLSTERING THE BOROUGHS: The outer boroughs 44 Miller, Lisette Nieves, Ira Rubenstein, John Siegal, Ste- represent the best hope of retaining the middle class phen Sigmund, Karen Trella, Peter Williams and Mark Winston Griffith. BACK TO THE BASICS: Instead of building stadiums, city 46 officials should focus on improving everyday life in NYC Cover photo: Adrian Kinloch RECOMMENDATIONS 48 3 PART I REVIVING THE CITY OF ASPIRATION For much of its history, New York City has thrived as a place that both sus- tained a large middle class and elevated countless people from poorer back- grounds into the ranks of the middle class. The city was never cheap and parts of Manhattan always remained out of reach, but working people of modest means—from forklift operators and bus drivers to paralegals and museum guides—could enjoy realistic hopes of home ownership and a mea- sure of economic security as they raised their families across the other four boroughs. At the same time, New York long has been the city for strivers— not just the kind associated with the highest echelons of Wall Street, but new immigrants, individuals with little education but big dreams, and aspir- ing professionals in fields from journalism and law to art and advertising. In recent years, however, major changes have greatly diminished the city’s ability to both retain and create a sizable middle class. Even as the inflow of new arrivals to New York has surged to levels not seen since the 1920s, the cost of living has spiraled beyond the reach of many middle class individuals and, particularly, families. Increasingly, only those at the upper end of the middle class, who are affluent enough to afford not only the sharply higher housing prices in every corner of the city but also the steep costs of child care and private schools, can afford to stay—and even among this group, many feel stretched to the limits of their resources. Equally disturbing, even in good times, the city’s economy seems less and less capable of producing jobs that pay enough to support a middle class lifestyle in New York’s high-cost environment. The current economic crisis, which has arrested and even somewhat reversed the skyrocketing price of housing, might offer short-term oppor- tunities to some in the market for homes. But the mortgage meltdown and its aftermath will not change the underlying dynamic: over the past three decades, a wide gap has opened between the means of most New Yorkers and the costs of living in the city. We have seen this dynamic play out even during the last 15 years, as the local economy thrived and crime rates plum- meted. Despite these advances, large numbers of middle class New Yorkers have been leaving the city for other locales, while many more of those who have stayed seem permanently stuck among the ranks of the working poor, with little apparent hope of upward mobility. This is a serious challenge for New York in both good times and bad. A recent survey found the city to be the worst urban area in the nation for the average citizen to build wealth.1 For the first time in its storied history, the Big Apple is in jeopardy of permanently losing its status as the great American city of aspiration. 4 This report takes an in-depth look at the chal- of the recent housing purchases were driven by unfair lenges facing New York City’s middle class. More and deceptive predatory lending practices. And in many than a year in the works, the report draws upon an communities, there have been long waiting lists for day extensive economic and demographic analysis, a care centers and private schools. While the economic historical review, focus groups conducted in every crisis is already leading to sharp spikes in foreclosures, borough and over 100 individual interviews with ac- a precipitous decline in housing sales and, most trou- ademics, economists and a wide range of individuals bling, a massive number of layoffs, it should not reverse on the ground in the five boroughs. These include the sense of many middle class families that New York homeowners, labor leaders, small business own- now offers a safe environment to raise their kids—a key ers, real estate brokers and developers, immigrant factor in the decision to stay in the city rather than de- advocates, and officials from two dozen community camp for the suburbs. boards. “The perception of New York among young peo- Throughout the course of our research, the vast ple is so phenomenal,” says Alan Bell, a partner with majority of New Yorkers—for the most part fierce de- the Hudson Companies, a housing development com- fenders of the city—were alarmingly pessimistic about pany. “It used to be that automatically you’d get mar- the current and future prospects of the local middle ried and had kids and you were out to Montclair, New class. “What middle class?” was the quip we heard Jersey or Westchester. Now they want to stay. The repeatedly after telling people about our study. question is how they stay since it’s so expensive.” But for all the valid concerns of those we spoke with, Set against this picture of progress, however, are our conclusion is that a strong middle class remains in some alarming trends. Most of the people interviewed New York, and that there are considerable grounds for for this report told us of middle class friends, rela- optimism about its future. In 2007, the city recorded the tives or colleagues who had recently given up on the second highest total of building permits issued since city. “I work with a lot of people who moved to Phila- it started keeping track in 1965, with Brooklyn and delphia and commute each day,” says Chris Daly, a Queens hitting records—a clear sign that large num- media director at Macy’s who now lives with his wife bers of people want to live in these long-time middle and three kids in Tottenville, Staten Island but plans class havens. Home ownership rates in the city reached to move to New Jersey. “It’s the cost of living. You’re their highest levels ever in 2007, another testament to going to see more people moving to Philadelphia, the the city’s desirability—even if a not insignificant share Poconos and commuting.” Middle Class on the Move? New York still does well in attracting highly educated people, but growing numbers of those with a bachelor’s degree are leaving the five boroughs 10,000 2004–2005 5,997 5,000 2005–2006 0 -744 -1,550 -5,000 -4,029 -4,442 -5,141 -5,984 -5,304 -10,000 -8,195 -15,000 -12,933 -12,955 -20,000 -25,000 -30,000 -29,370 Net migration of people with a bachelor’s degree -35,000 Bronx Brooklyn Manhattan Queens Staten Island NYC Source: Praxis Strategy Group, U.S.