MUScoop
MUScoop => The Superbar => COVID-19 => Topic started by: mu_hilltopper on August 16, 2020, 04:29:14 PM
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I read this article about how COVID has changed NYC .. and the author's musings on its future.
https://jamesaltucher.com/blog/nyc-is-dead-forever-heres-why/
I think every downtown area has been hit hard, and it's .. awful to think of their futures. They're all ghost towns .. all the white collar people are working from home. Sure, some businesses will slowly come back in 2021 -- maybe.
I gotta figure a boatload of cubicle farms will get downsized and commercial real estate will be plummeting as huge chunks of the formerly downtownites will WFH going forward.
So many ramifications beyond real estate office space .. I mean, so much of every mass transit system is designed for commuting, bringing people downtown. NYC's mass transit is down -75% compared to last year's numbers. I imagine that's the same everywhere. -- It won't stay -75% but .. maybe -50%?
Not to mention all the roads that we've built. I think I've bought two tanks of gas in the past 5 months.
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You might wanna put some Seafoam in the gas tank then.
Vaccine and downtowns come back. No doubt honestly.
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I don’t know if this will happen since the demographic that owns NYC property is not feeling a liquidity crunch, but if it does go south, I would seriously consider buying.
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30% of the workforce can work at home. The other 70% must be in a workplace (think waitress and surgeon).
The fear was the 30% could not work well from home. Four months later and we learned that is not the case. Further, the 30% really like not having to go into the office for eight hours a day, five days a week.
The other 70% are loving not having the 30% clogging up their daily commute.
So, what is the future of the office? Those big buildings in the city center full of people. Tell me that and you answered the future of the city. (I'm not arguing the office completely goes away. It will not. But does it fundamentally change? How?)
Remember, having employees stay at home saves a ton of money. Those that think everyone must return full-time will have to compete with lower cost comeptitiors that think they can do it without the expense of a large office and support staff for that office. Many of the most talented might like the idea of a less stressful and free work environment of working at home and ditch the commute, and/or the most expense city neighborhoods to reduce that commute, for those companies.
So, I ask again ... Post COVID what is the purpose of the office? Has it changed? Is it still the place you are expected to be at 40 hours a week (again, if you're among the 30%)?
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Two things ... this artcle from today's FT:
If you can do your job anywhere, can anyone do your job?
Trusting people to work well from home is one skill managers now have to learn
https://www.ft.com/content/fe5a7907-14b9-4e61-9938-ec3dd9d06831
And this passage from the Altucher post above ...
F) OK, OK, BUT NYC ALWAYS COMES BACK
Yes it does. I lived three blocks from Ground Zero on 9/11. Downtown, where I lived, was destroyed, but it came roaring back within two years. Such sadness and hardship and then quickly that area became the most attractive area in New York.
And in 2008/2009, there was much suffering during the Great Recession, again much hardship, but things came roaring back.
But… this time is different. You’re never supposed to say that but this time it’s true. If you believe this time is no different, that NYC is resilient, I hope you’re right.
I don’t benefit from saying any of this. I love NYC. I was born there. I’ve lived there forever. I STILL live there. I love everything about NYC. I want 2019 back.
But this time is different.
One reason: Bandwidth.
In 2008, average bandwidth speeds were 3 megabits per second. That’s not enough for a Zoom meeting with reliable video quality. Now, it’s over 20 megabits per second. That’s more than enough for high-quality video.
There’s a before and after. BEFORE: No remote work. AFTER: Everyone can work remotely.
The difference: bandwidth got faster. And that’s basically it. People have left New York City and have moved completely into virtual worlds. The Time-Life Building doesn’t need to fill up again. Wall Street can now stretch across every street instead of just being one building in Manhattan.
We are officially AB: After Bandwidth. And for the entire history of NYC (the world) until now, we were BB: Before Bandwidth.
Remote learning, remote meetings, remote offices, remote performance, remote everything.
That’s what is different.
Everyone has spent the past five months adapting to a new lifestyle. Nobody wants to fly across the country for a two-hour meeting when you can do it just as well on Zoom. I can go see “live comedy” on Zoom. I can take classes from the best teachers in the world for almost free online as opposed to paying $70,000 a year for a limited number of teachers who may or may not be good.
Everyone has choices now. You can live in the music capital of Nashville, you can live in the “next Silicon Valley” of Austin. You can live in your hometown in the middle of wherever. And you can be just as productive, make the same salary, have higher quality of life with a cheaper cost to live.
G) And what would make you come back?
There won’t be business opportunities for years. Businesses move on. People move on. It will be cheaper for businesses to function more remotely and bandwidth is only getting faster.
Wait for events and conferences and even meetings and maybe even office spaces to start happening in virtual realities once everyone is spread out from midtown Manhattan to all over the country.
The quality of restaurants will start to go up in all the second- and then third-tier cities as talent and skill flow to the places that can quickly make use of them.
Ditto for cultural events.
And then people will ask, “Wait a second, I was paying over 16% in state and city taxes and these other states and cities have little to no taxes? And I don’t have to deal with all the other headaches of NYC?”
Because there are headaches in NYC. Lots of them. It’s just we sweep them under the table because so much else has been good there.
NYC has a $9 billion deficit. $1 billion more than the mayor thought it was going to have. How does a city pay back its debts? The main way is aid from the state. But the state deficit just went bonkers. Then is taxes. But if 900,000 estimated jobs are lost in NYC and tens of thousands of businesses, then that means less taxes unless taxes are raised.
(Revenue sources for NYC are all going down but the deficit is going up)
Next is tolls from the tunnels and bridges. But fewer people are commuting to work. Well, how about the city-owned colleges? Fewer people are returning to college. Well how about property taxes? More people defaulting on their properties.
What reason will people have to go back to NYC?
I love my life in NYC. I have friends all over NY. People I’ve known for decades. I could go out of my apartment and cross the street and there was my comedy club and I could go up onstage and perform. I could go a few minutes by Uber and meet with anyone or go play PingPong or go to a movie or go on a podcast and people traveling through could come on my podcast.
I could go out at night to my favorite restaurants and then see my favorite performers perform. I could go to the park and play chess, see friends. I could take advantage of all this wonderful city has to offer.
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What is the market's opinion of the questions I pose above?
Total market value of all US airlines
$68.2 billion
Total market value of Zoom communciations alone
$69.1 billion
(Remember in additon to Zoom, we also have Skype, Webex, GotoMeeting, Google Hangout, etc etc.)
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I have worked from home for 2+ years. In spite of what you'd think I'd say, I do not believe most people in jobs that could work from home, will continue to.
The people suddenly arguing for it... Are largely the people that have been granted access to WFH since the pandemic began & think it's the greatest thing that ever happened to them. And are hunting for any possible story out there that WFH is clearly the best.
Meanwhile, their managers notice a downtrend in output, a downtrend in comradery (important in order to get people to want to put in 50-60-70 hr weeks when needed), & overall a difficulty in bringing up new hires/filling gaps.
People on the internet that love their newfound WFH will only mention the positives... And there are many. I believe in some industries, there will continue to be a desire for it especially when the cost savings are dramatic (such as paying for weekly travel, hotel, food). There will also continue to be a desire for it in truly prohibitive areas such as SF & NYC, where orgs can save 25-50% FTE salaries (you can barely live in SF on $100k, but you're a king in Alabama). Not for the whole workplace, but some. All of those trends were already in existence.
I would bet against there being a broad shift that causes entire or large parts of workplaces to WFH. Most businesses cannot sustain that, now or any time soon. It will rot them from the inside & they would start to be out-competed by others.
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Watching a concert, play, or opera is not the same over zoom. Same with museums.
Schools and education is not the same over zoom. Neither are conferences.
They suffice in a pinch, but the human element is extremely important. You'll see that people are more likely to make a deal with someone they've interacted with in person, than over zoom. That means the business that makes the effort for an in person meeting will outperform.
We'll see a good deal more work from home, but we are not going to see a sea change across the entire economy. The human element is too important.
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I have worked from home for 2+ years. In spite of what you'd think I'd say, I do not believe most people in jobs that could work from home, will continue to.
The people suddenly arguing for it... Are largely the people that have been granted access to WFH since the pandemic began & think it's the greatest thing that ever happened to them. And are hunting for any possible story out there that WFH is clearly the best.
Meanwhile, their managers notice a downtrend in output, a downtrend in comradery (important in order to get people to want to put in 50-60-70 hr weeks when needed), & overall a difficulty in bringing up new hires/filling gaps.
People on the internet that love their newfound WFH will only mention the positives... And there are many. I believe in some industries, there will continue to be a desire for it especially when the cost savings are dramatic (such as paying for weekly travel, hotel, food). There will also continue to be a desire for it in truly prohibitive areas such as SF & NYC, where orgs can save 25-50% FTE salaries (you can barely live in SF on $100k, but you're a king in Alabama). Not for the whole workplace, but some. All of those trends were already in existence.
I would bet against there being a broad shift that causes entire or large parts of workplaces to WFH. Most businesses cannot sustain that, now or any time soon. It will rot them from the inside & they would start to be out-competed by others.
Very well said. I’d further pose that, empirically, many of the people I know newly WFH and raving about it, have had decreased workloads from a variety of reasons. So yea, when you only have 20-25 hours of real work to do from home, as opposed to a standard 35-40+, it’s great. But otherwise, it gets to be a lot. A good friend of mine is a brand manager with a big CPG. Very meeting heavy role. He said it’s exhausting and horrible to be on Zoom conferences 8 hours a day in a way that meetings were not, and also finds that a meeting that would typically be slotted for an hour but would adjourn after 30-35 min in the normal world, is taking that full hour if not more in Zoom, which sucks. The “team” element of many work functions would implode if WFH became the norm.
They suffice in a pinch, but the human element is extremely important. You'll see that people are more likely to make a deal with someone they've interacted with in person, than over zoom. That means the business that makes the effort for an in person meeting will outperform.
We'll see a good deal more work from home, but we are not going to see a sea change across the entire economy. The human element is too important.
I’ve mentioned it early in this whole pandemic, but people championing this as the “end of business travel” are either academics with little real world business experience, or people with vested interest in a significant decrease in business travel, be it “green“ reasons or tech. The human element for deal making is IMMENSE, domestically but even more so across international and cultural lines.
I’m currently working on a few projects internationally, as is my normal business. One ongoing in Belgium has been in the works for 6 months. Even factoring in the COVID slowdown, this would have been wrapped up months ago cause I would have hopped on a flight to Brussels, sat with people in Antwerp over a few days and hashed it out. Instead it’s deprioritized emails and calls and the occasional video conference and things lack urgency. But when they know someone is flying in from overseas, there is a priority and respect paid and schedules are cleared or rearranged.
On a relationship basis, I have customers from Singapore I’m quite close with. We text and chat often, but our big convos about business have always been in person and what truly move things forward. We’ve done a few Zooms but it’s largely brief and a normal 2 hour in person discussion gets spread over 3-4 different calls cause the conversation can halt. And these are people I will sit on a 2 hour flight with and chat nonstop. It’s just a different relationship cadence
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Very well said. I’d further pose that, empirically, many of the people I know newly WFH and raving about it, have had decreased workloads from a variety of reasons. So yea, when you only have 20-25 hours of real work to do from home, as opposed to a standard 35-40+, it’s great. But otherwise, it gets to be a lot. A good friend of mine is a brand manager with a big CPG. Very meeting heavy role. He said it’s exhausting and horrible to be on Zoom conferences 8 hours a day in a way that meetings were not, and also finds that a meeting that would typically be slotted for an hour but would adjourn after 30-35 min in the normal world, is taking that full hour if not more in Zoom, which sucks. The “team” element of many work functions would implode if WFH became the norm.
I’ve mentioned it early in this whole pandemic, but people championing this as the “end of business travel” are either academics with little real world business experience, or people with vested interest in a significant decrease in business travel, be it “green“ reasons or tech. The human element for deal making is IMMENSE, domestically but even more so across international and cultural lines.
I’m currently working on a few projects internationally, as is my normal business. One ongoing in Belgium has been in the works for 6 months. Even factoring in the COVID slowdown, this would have been wrapped up months ago cause I would have hopped on a flight to Brussels, sat with people in Antwerp over a few days and hashed it out. Instead it’s deprioritized emails and calls and the occasional video conference and things lack urgency. But when they know someone is flying in from overseas, there is a priority and respect paid and schedules are cleared or rearranged.
On a relationship basis, I have customers from Singapore I’m quite close with. We text and chat often, but our big convos about business have always been in person and what truly move things forward. We’ve done a few Zooms but it’s largely brief and a normal 2 hour in person discussion gets spread over 3-4 different calls cause the conversation can halt. And these are people I will sit on a 2 hour flight with and chat nonstop. It’s just a different relationship cadence
Not to mention that meetings are much less productive remote, especially when they involve more than 2 or 3 attendees. The diffusion of responsibility & lack of anyone observing your behavior means that the majority of attendees are probably hardly listening, & the meeting involves 1 or 2 people simply reciting what they already knew.
The people hardly listening think it's great since they were able to play Minecraft the whole time (& maybe post on Twitter about the greatness of WFH).
The value of meetings & meeting structure are for another thread, but, we aren't getting rid of them... It is entrenched in society. And people are always going to schedule them for either 30 minutes or (usually) an hour. Further, certain people WFH lose their ability to perceive that they are wasting anyone's time when the meeting is meant to be an hour long, as opposed to being meant for some purpose.
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What I think will be the most interesting thing to come of all of this is that the 40 hour work week contains a LOT of wasted time.
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What I think will be the most interesting thing to come of all of this is that the 40 hour work week contains a LOT of wasted time.
I think it contains a lot of "social time," which isn't necessarily bad.
I found myself losing focus at home after about the Fourth of July. Have been back in the office the last couple of weeks and its been great! We are only keeping the offices half full through at least October.
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Let's just say that after this pandemic is over, large urban downtowns only 80% of all the workers "come back" to commuting downtown. Here's to hoping that if that is the case, that whatever buildings turn out to be no longer needed, that some sort of environmentally sound solution can take the place of whatever can be demolished. Maybe more parks, or some other type of environmentally positive type thing can begin to help in the battle vs. climate change.
I realize that since that type of thing won't help bring $$$ to the cities it probably wouldn't happen. But hey. let's try to look at turning a negative into a positive in some fashion.
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I agree with much of what has been said here - I doubt there will be a huge move to WFH. Maybe a few percent above pre-COVID levels.
That said, I suspect we will see far more 'flexible' work schedules, where maybe people go into the office a few days a week - the days where they have meetings or other activities for which in-person contact is needed - but work from home on those days when they need to do more solitary work. I have done this for years, and I suspect many other 'high-level' people here have as well. IMO - we will probably see this trickling down to mid- and lower level employees as well post-COVID.
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Very well said. I’d further pose that, empirically, many of the people I know newly WFH and raving about it, have had decreased workloads from a variety of reasons. So yea, when you only have 20-25 hours of real work to do from home, as opposed to a standard 35-40+, it’s great. But otherwise, it gets to be a lot. A good friend of mine is a brand manager with a big CPG. Very meeting heavy role. He said it’s exhausting and horrible to be on Zoom conferences 8 hours a day in a way that meetings were not, and also finds that a meeting that would typically be slotted for an hour but would adjourn after 30-35 min in the normal world, is taking that full hour if not more in Zoom, which sucks. The “team” element of many work functions would implode if WFH became the norm.
I’ve mentioned it early in this whole pandemic, but people championing this as the “end of business travel” are either academics with little real world business experience, or people with vested interest in a significant decrease in business travel, be it “green“ reasons or tech. The human element for deal making is IMMENSE, domestically but even more so across international and cultural lines.
I’m currently working on a few projects internationally, as is my normal business. One ongoing in Belgium has been in the works for 6 months. Even factoring in the COVID slowdown, this would have been wrapped up months ago cause I would have hopped on a flight to Brussels, sat with people in Antwerp over a few days and hashed it out. Instead it’s deprioritized emails and calls and the occasional video conference and things lack urgency. But when they know someone is flying in from overseas, there is a priority and respect paid and schedules are cleared or rearranged.
On a relationship basis, I have customers from Singapore I’m quite close with. We text and chat often, but our big convos about business have always been in person and what truly move things forward. We’ve done a few Zooms but it’s largely brief and a normal 2 hour in person discussion gets spread over 3-4 different calls cause the conversation can halt. And these are people I will sit on a 2 hour flight with and chat nonstop. It’s just a different relationship cadence
My international business has been busy lately. India - China & Singapore
In a weekly call thios morning the company Chinese salesman brought up some story of China invading Taiwan before the end of the year.
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I agree with much of what has been said here - I doubt there will be a huge move to WFH. Maybe a few percent above pre-COVID levels.
That said, I suspect we will see far more 'flexible' work schedules, where maybe people go into the office a few days a week - the days where they have meetings or other activities for which in-person contact is needed - but work from home on those days when they need to do more solitary work. I have done this for years, and I suspect many other 'high-level' people here have as well. IMO - we will probably see this trickling down to mid- and lower level employees as well post-COVID.
Goo, you described a massive change in the highlight part above without realizing it.
If this happens, office vacancy in city centers to to 30%/40%, buildings go bankrupt and the ecosystem around them (lunch places, shopping, gyms, etc) disappear.
Then going into the office becuase less desirable, because city centers are uneconomic and lose their appeal.
So, I ask the question again, what is the purpose of the office? (again, for the 30% that can WFH) Post-pandemic, WHEN IT IS SAFE TO RIDE MASS TRANSIT AT PRE-PANDEMIC LEVELS, why are you going back to the office after a year of WFH?
Let's just say that after this pandemic is over, large urban downtowns only 80% of all the workers "come back" to commuting downtown. Here's to hoping that if that is the case, that whatever buildings turn out to be no longer needed, that some sort of environmentally sound solution can take the place of whatever can be demolished. Maybe more parks, or some other type of environmentally positive type thing can begin to help in the battle vs. climate change.
I realize that since that type of thing won't help bring $$$ to the cities it probably wouldn't happen. But hey. let's try to look at turning a negative into a positive in some fashion.
80% means one day a week at home. Maybe two. That is at least a 20% reduction in office space need, maybe more. This is an economic depression for city centers. They are severly hurt with this big a loss.
Demolish buldings and turn them into parks are you have worsened the experience of downtown. If you turn city centers into versions of suburbs, why are people wasting time and effort to go there.
Not to mention that meetings are much less productive remote, especially when they involve more than 2 or 3 attendees. The diffusion of responsibility & lack of anyone observing your behavior means that the majority of attendees are probably hardly listening, & the meeting involves 1 or 2 people simply reciting what they already knew.
The dirty little secret is they were equally as unproductive in the office. They were their physically but were really updating facebook and watching netflix on their phones when no one was watching. Their has been little to no OVERALL loss of productivity moving to WFH.
A good friend of mine is a brand manager with a big CPG. Very meeting heavy role. He said it’s exhausting and horrible to be on Zoom conferences 8 hours a day in a way that meetings were not, and also finds that a meeting that would typically be slotted for an hour but would adjourn after 30-35 min in the normal world, is taking that full hour if not more in Zoom, which sucks. The “team” element of many work functions would implode if WFH became the norm.
See the FT article I linked above. They described this situation. And to be blunt, they perfectly described your friend and his inflexible attitude is the thing that has to change.
A new crop of managers that can manage people REMOTELY are going to be needed. Sounds like he is not up to the task. (sorry)
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It follows that this will have a negative effect on ride sharing, on taxis/Uber/Lyft, on bicycle sharing, etc.
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It follows that this will have a negative effect on ride sharing, on taxis/Uber/Lyft, on bicycle sharing, etc.
Those big building in city centers have an entire ecosystem around them, lunch place, shopping centers, gyms, night life (theatres), taxis, ride-share, etc. All of this is at risk
If we do not return to near the levels, again 80% does not cut it, Milwuakee spent $1 billion putting Fiserv in the wrong place. Maybe it should have been on the other side of the parking lot at Miller Stadium.
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Last week NY Gov Andrew Cuomo said the thing you are not supposed to say outloud. 1% of large city taxpayers pay 50% of the taxes. If only some of them leave, the cities finances are in deep trouble.
The uber-wealthy are the most mobile people in the world. They stay somewhere becuase they WANT TO, not because they HAVE TO.
Lately they are looking like they don't want to stay anymore.
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https://www.dailymail.co.uk/news/article-8595717/Cuomo-begs-wealthy-New-Yorkers-come-save-city-Ill-buy-drink.html
Gov. Andrew Cuomo is begging wealthy New Yorkers to return to the city to save it from economic ruin while fighting off calls from other lawmakers to raise their taxes - a move he fears could permanently drive the top 1 percent out of the city.
Thousands of New York City residents fled Manhattan and Brooklyn earlier this year when the city was the COVID-19 epicenter of the world.
Many flocked to their second homes in the Hamptons or upstate, while others rented or bought new properties, abandoning their expensive city apartments.
At a press conference on Monday, he said of the wealthiest residents who have long left the city: 'I literally talk to people all day long who are in their Hamptons house who also lived here, or in their Hudson Valley house or in their Connecticut weekend house, and I say, "You gotta come back, when are you coming back?"
"'We'll go to dinner, I'll buy you a drink. Come over, I'll cook."
'They're not coming back right now. And you know what else they're thinking? If I stay there, I pay a lower income tax because they don't pay the New York City surcharge,' he said.
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Hollywood's Apocalypse NOW: Rich and famous are fleeing in droves as liberal politics and coronavirus turn City of Dreams into cesspit plagued by junkies and violent criminals
https://www.dailymail.co.uk/news/article-8631063/Hollywood-Apocalypse-rich-famous-fleeing-droves.html
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Zillow Exposes Dramatic Exodus Out Of San Francisco Real Estate
https://www.zillow.com/research/2020-urb-suburb-market-report-27712/
According to the company’s “2020 Urban-Suburban Market Report,” home prices in the city have fallen 4.9% year-over-year, while inventory has jumped 96% during the same period, as a flood of new listings hit the market.
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Steve Levy is the President of Sudler Property management, one of the largest property managers in the city.
Chicago looting leaves residents feeling unsafe, ready to flee city, property management company tells Mayor Lori Lightfoot - ABC7 Chicago
https://abc7chicago.com/property-management-pres-chicago-homeowners-feel-unsafe-ready-to-leave-after-looting/6367902/
A prominent property management president said the residents he represents and the company's staff do not feel safe in Chicago after the city was hit by looters again on Sunday. Sudler President Steven Levy sent a letter to Mayor Lightfoot on Wednesday to express his concern.
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The dirty little secret is they were equally as unproductive in the office. They were their physically but were really updating facebook and watching netflix on their phones when no one was watching. Their has been little to no OVERALL loss of productivity moving to WFH.
At least for everyone I know, I can agree with this. If people were productive in the office, they have actually been spending more hours on the job at home. Slackers? Still the same slackers. Just at home.
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The uber-wealthy are the most mobile people in the world. They stay somewhere becuase they WANT TO, not because they HAVE TO.
Lately they are looking like they don't want to stay anymore.
Also agree. Although could probably drop it down to "well compensated" instead of wealthy. Seattle is going to have a problem with Amazon employees suddenly realizing they can be anywhere and not pay Seattle rent/mortgages. Some with SF tech workers as you alluded.
Though on the Seattle example, Amazon is about to have a real estate problem (too much of it)
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You may not see 100% WFH but I also don't think you'll ever see people move back to 100% in the office. It'll be a hybrid model. I don't forsee myself ever going back to an office 5 days a week every week ever again. Zero desire for all the distractions offices have. I am way more productive at home. I manage a brand portfolio that is 90% of my companies business. I see in the future being back 1-2 days a week in the office for "meeting" days. The rest of the time I'll work from home. The hardest thing has been doing new product development tastings but that can all be fixed.
Being in the office is nightmare of time sucks all around you.
For those who feel stuck on zoom meetings need to start just declining ones that are not needed. If there is no agenda, don't go. Don't blame your poor discipline or companies culture on time sucking on WFH.
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The Uber-wealthy or the well off don’t keep a place in the city for ‘work’. They do it because it’s fun and has access to the best theater, food, etc, etc.
If all that goes poof, then yes cities die.
I would bet on other things going poof before our cities.
Also Chili — +1 on the hybrid.
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Also agree. Although could probably drop it down to "well compensated" instead of wealthy. Seattle is going to have a problem with Amazon employees suddenly realizing they can be anywhere and not pay Seattle rent/mortgages. Some with SF tech workers as you alluded.
Though on the Seattle example, Amazon is about to have a real estate problem (too much of it)
Several years ago, New Jersey largest taxpayer was David Tepper. He runs the hedge fund Appoloosa and is the owner the Carolina Pathers ... he fired Rivera and released Can Newton.
He left New Jersey for Florida (no state income tax in FL), and just his loss of taxes put the state into an economic crisis.
https://www.nytimes.com/2016/05/01/business/one-top-taxpayer-moved-and-new-jersey-shuddered.html
Another dirty little secret ... Chicago largest taxpayers are Ken Griffin (hedge fund Citdel) and Sam Zell (private equity/real estate). If just these two guys leave, and Griffin is openly talking about it, the city loses its investment grade rating and teeters on financial disaster, (FYI - Griffin, owns the two of the most expense homes in the state of Florida, a 100+ million Palm Beach Estate and a $60 million condo in Miami)
Add in Liz and Dick Uihlein and these four people, by leaving, have the ability to ruin the state of illinois by taxing their tax bill and leaving.
Every state has this problem ... remember it is easy for them to leave. And lately they are thinking differently and seriously considering it.
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None of this is new Heise. It’s fun to discuss but this really isn’t because of COVID. It also isn’t a dirty little secret. It’s pretty well known.
Now if the vaccines don’t get things back to a new normal on 12-18 mo. Then maybe we have something to talk about.
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None of this is new Heise. It’s fun to discuss but this really isn’t because of COVID. It also isn’t a dirty little secret. It’s pretty well known.
Now if the vaccines don’t get things back to a new normal on 12-18 mo. Then maybe we have something to talk about.
Then start talking! Because they economy was built on the old normal and it sounds like we are not going back to that. So, big changes are coming.
Chili is correct ... I just think think you (all in the collective) do not realize how big a change this represents. It's huge!
Yes, we will adjust over time, but they means a lot of pain first for those that need the old normal to return. And large city centers and the purpose of an office, and how it structured, and where it is put are going to have a huge change.
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Ok counter point. I’ve heard from a bunch of people that 1918 was worse than 2020. If that didn’t kill NYC and cities why this time. Bandwidth? There were equal advances then that were just as revolutionary.
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Maybe, and I'm just spitballing here, we don't let society develop in a way that let's a few ultra-wealthy hold the rest of society at gunpoint?
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Ok counter point. I’ve heard from a bunch of people that 1918 was worse than 2020. Of that didn’t kill NYC and cities why this time. Bandwidth? There were equal advances then that were just as revolutionary.
I quoted the Altucher piece above ... bandwidth and Amazon delivery are the game changers. After 1918 (or the pandemics of 1957 and 1968) you had no choice but return to the cities. We lacked the tools to WFH.
This is the basis for his "this time is different" argument now.
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Maybe, and I'm just spitballing here, we don't let society develop in a way that let's a few ultra-wealthy hold the rest of society at gunpoint?
Its the problem with a progressive "soak the rich" tax rates. You become dependent on a handful of uber-wealthy to pay the freight. It is a problem everywhere that have progess tax rates (which is practically everywhere).
So if you want to get rid of being hostage to them, do any with progressive taxes.
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Illinois constituion says income taxes have to be a flat rate. On the November ballot is an admendment to change it to a progressive rate.
The exact argument they are using is 97% of people will not pay higher taxes. This is correct. 3% are going to pay the freight. They are rich they can afford it.
They can also afford to give Chicago and Lightfoot the finger and leave. See the Sudler property management letter linked above. More than anytime in the last 30 to 40 years the 3% (or 1%) are seriously considering leaving. Especially is WFH becomes a thing and they can manage from some nice weather tax friendly place.
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I quoted the Altucher piece above ... bandwidth and Amazon delivery are the game changers. After 1918 (or the pandemics of 1957 and 1968) you had no choice but return to the cities. We lacked the tools to WFH.
This is the basis for his "this time is different" argument now.
I saw Hamilton in person on Broadway and on Disney+. You still believe the reason rich people live in a city is ‘work’
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I saw Hamilton in person on Broadway and on Disney+. You still believe the reason rich people live in a city is ‘work’
The basis of all large cities is the large office buildings with lots of workers. It is the businesses in these building that make rich people.
If we are not returning to these buildings, as in the old normal return, lots changes. Starting with the lifestyle of the rich. The broadway you went to will not exist.
Go back and read the Andrew Cuomo story. Rich people are not in NYC (and Hollywood, also linked above). They left in March/April and have not set foot in the city for months.
They are getting comfortable NOT living in the city and Cuomo is (rightly) worried they are never going to return (as taxpayers, they will return as occasional tourists). And if their businesses are not there, and are virtual, why are they returning to be awaken by this ...
https://www.fox5ny.com/news/over-30-shootings-at-least-5-dead-across-nyc-as-surge-of-gun-violence-continues
The main reason all rich people are where they are is they have a business to manage that makes them very wealthy. If they business goes virtual, they have lost the dominant reason to be wherever they are. Then they have the means to be be anywhere they desire.
So, to answer your question, yes, the dominant reason they are in a city is to "work." That work is what made them rich.
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Actually the worst cities are only organized around work. Houston - Dallas anyone ?
I know you love the extreme but fight in man. And make sure to sell your Lincoln Park place before everyone flees to the open spaces with their zoom opera and one choice of restaurant that rich people cover.
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Actually the worst cities are only organized around work. Houston - Dallas anyone ?
I know you love the extreme but fight in man. And make sure to sell your Lincoln Park place before everyone flees to the open spaces with their zoom opera and one choice of restaurant that rich people cover.
All cities are organized around work, starting with the first modern city 400 years ago, Venice. NYC is the eptiome of a city organized around work. Why do you think Wall Street and Madison Ave have specific BUSINESS meanings?
And you have your argument exactly backwards. Operas and restaurants will follow the rich, not the way you describe. Ever been to Southern CA, are those billionaires crying about the lack of opportunity and culture for the uber-wealthy?
17 billionaires living in Chicago. Dallas is a smaller city and has 25 billionaires. Doesn't sound like the rich hate it there.
And, your last sentence suggests that billionaires are fleeing to Beloit. They are going to Palm Beach.
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Its the problem with a progressive "soak the rich" tax rates. You become dependent on a handful of uber-wealthy to pay the freight. It is a problem everywhere that have progess tax rates (which is practically everywhere).
So if you want to get rid of being hostage to them, do any with progressive taxes.
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Illinois constituion says income taxes have to be a flat rate. On the November ballot is an admendment to change it to a progressive rate.
The exact argument they are using is 97% of people will not pay higher taxes. This is correct. 3% are going to pay the freight. They are rich they can afford it.
They can also afford to give Chicago and Lightfoot the finger and leave. See the Sudler property management letter linked above. More than anytime in the last 30 to 40 years the 3% (or 1%) are seriously considering leaving. Especially is WFH becomes a thing and they can manage from some nice weather tax friendly place.
Interesting.
Are you sure that's the only way to avoid being in this situation?
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Interesting.
Are you sure that's the only way to avoid being in this situation?
You're asking how to have a tax base that is not held hostage to rich people that can leave and take their tax bills with them.
The answer is simple, tax the middle-class more!
A flat, less progressive, tax rate does that.
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You're asking how to have a tax base that is not held hostage to rich people that can leave and take their tax bills with them.
The answer is simple, tax the middle-class more!
A flat, less progressive, tax rate does that.
https://www.cbsnews.com/news/americas-richest-400-families-pay-a-lower-tax-rate-than-the-middle-class/
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https://www.cbsnews.com/news/americas-richest-400-families-pay-a-lower-tax-rate-than-the-middle-class/
Saez , who I know, is an unabashedly left-wing partisan and should never be confused as an unbiased researcher. That said, his work is referencing FEDERAL taxes. My posts above are referring to STATE and LOCAL taxes.
Do you think Cuomo is wrong for worrying all the billionaires will leave and blow a hole in his tax base? Should Lightfoot not care that Ken Griffin is openly talking about leaving and taking his tax bill with him too?
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Saez , who I know, is an unabashedly left-wing partisan and should never be confused as an unbiased researcher. That said, his work is referencing FEDERAL taxes. My posts above are referring to STATE and LOCAL taxes.
Literally the second bullet point at the top of the story:
"Factoring in federal, state and local taxes, those ultra-wealthy households pay a total rate of about 23% — that compares with just over 24% for the bottom half of households."
So, do you have evidence the research, data and findings are incorrect, or is all you got ad hominem?
As for Ken Griffin, he has no plans to leave Chicago and has said so. In fact, he just built and moved into a new $58 million home last year.
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Ultimately, Heiese isn't wrong that the race to the bottom is something of an issue when it comes to interstate issues, be it tax rates (individual rates or breaks to encourage job creation), employment standards and wage protection, etc. But the answer when faced with a race to the bottom problem can't just be "WIN THE RACE!"
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Literally the second bullet point at the top of the story:
"Factoring in federal, state and local taxes, those ultra-wealthy households pay a total rate of about 23% — that compares with just over 24% for the bottom half of households."
So, do you have evidence the research, data and findings are incorrect, or is all you got ad hominem?
As for Ken Griffin, he has no plans to leave Chicago and has said so. In fact, he just built and moved into a new $58 million home last year.
Saez can say that, but the domiant driver of this study is Federal taxes.
Cut to the chase ... do you believe if you jack taxes on the uber-wealthy they will not leave? And if they leave, city finances will be fine? Do you believe Cuomo was wrong?
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17 billionaires living in Chicago. Dallas is a smaller city and has 25 billionaires. Doesn't sound like the rich hate it there.
Texas doesn't have a state income tax. But I bet that is just a coincidence.
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Saez can say that, but the domiant driver of this study is Federal taxes.
Cut to the chase ... do you believe if you jack taxes on the uber-wealthy they will not leave? And if they leave, city finances will be fine? Do you believe Cuomo was wrong?
So you're not going to look at what the research actually says and just stick to your guns regardless. OK.
Anyhow, re: Cuomo, you're conflating issues, intentionally so, I imagine.
Cuomo's remarks were in regards to a specific tax proposal targeting only billionaires, and not progressive income tax systems in general, as you've tried to imply.
New York, in fact, already has one of the country's most progressive income tax models.
This kind if misleading is par of the course for you.
Do I believe Cuomo was wrong about a billionaires-ony tax? Probably not.
Do I believe you're wrong about shifting even more of the tax burden onto the middle class? Absolutely.
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Though on the Seattle example, Amazon is about to have a real estate problem (too much of it)
It's already happening. REI just announced that they will be selling an 8-acre corporate campus in Bellevue that they literally just finished building, and have said it was because Covid-19 demonstrated that WFH is actually a desirable model.
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demonstrated that WTF is actually a desirable model.
I don't know if it is a typo or an auto correct, but this is beautiful.
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I know it is a typo or an auto correct, but this is beautiful.
LOL It's a typo, but point taken.
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Another option:
Don't allow uber-wealthy to occur in your society. Have a more even distribution of wealth across all classes. Then you don't have to make the upper end pay a larger share of taxes. Maybe focus on labor as opposed to capital.
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Another option:
Don't allow uber-wealthy to occur in your society. Have a more even distribution of wealth across all classes. Then you don't have to make the upper end pay a larger share of taxes. Maybe focus on labor as opposed to capital.
So socialism? Venezuela says hi.
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Literally the second bullet point at the top of the story:
"Factoring in federal, state and local taxes, those ultra-wealthy households pay a total rate of about 23% — that compares with just over 24% for the bottom half of households."
So, do you have evidence the research, data and findings are incorrect, or is all you got ad hominem?
As for Ken Griffin, he has no plans to leave Chicago and has said so. In fact, he just built and moved into a new $58 million home last year.
Poor guy...that tax hit he's taking is really limiting his ability to live his best life. He must have been shooting for a $60-$65MM home.
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So socialism? Venezuela says hi.
Or a democracy that just has more equality and better social infrastructure for the lower classes. Literally any other westernized country all of which have lower crime and most of which have higher quality of life say "hi"
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So socialism? Venezuela says hi.
Meh. I don't think you become Hugo Chavez if you say "we should make it a policy goal that the middle 75% of Americans possess 40% of American wealth" or something along those lines. If you're trying to draw a flat wealth curve? Sure, then that's an apt comparison. But a strong middle class and top marginal tax rate above 50% to fuel a strong public education system aren't exactly the same as government controlled means of production.
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Meh. I don't think you become Hugo Chavez if you say "we should make it a policy goal that the middle 75% of Americans possess 40% of American wealth" or something along those lines. If you're trying to draw a flat wealth curve? Sure, then that's an apt comparison. But a strong middle class and top marginal tax rate above 50% to fuel a strong public education system aren't exactly the same as government controlled means of production.
You mean Eisenhower wasn't a socialist?
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91% top tax rate. Socialized highway system. Warned about the dangers of the military industrial complex. Clearly somewhere between Kruschev and Mao.
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"The 1950s were the best time ever!!! It was when America was at its peak!!!!" (Except when it comes to tax rates)
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FWIW, in fairness, there is a lot of good data out there that suggests that even with the eye popping top marginal rate in the 50s, the actual tax burden on the ulta wealthy wasn't as high as we'd think. That's due to a lot of factors, among them that the 91% bracket didn't kick in until the equivalent of over $2 million in taxable income in today's dollars and that compliance was much lower (I would imagine due to processes like withholding and wire transfers being much less automated and trackable, but that's a total guess). So we can't draw a linear curve from the top bracket in the 50s to today and learn much about tax revenues. But the point remains that its a hell of a bit of governmental value projecting that wouldn't fly in today's climate where even the idea of proposing a predetermined-wealth-curve-as-policy-goal is met with screams of Marxism.
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"The 1950s were the best time ever!!! It was when America was at its peak!!!!" (Except when it comes to tax rates)
But all of the billionaires must have fled the US in the 40s, 50s, and 60s with their tax rate at 40+%, right? No? Weird.
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Love the scoop economists. ::) ::)
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Poor guy...that tax hit he's taking is really limiting his ability to live his best life. He must have been shooting for a $60-$65MM home.
Google Griffin's homes.
His Chicago home is about the sixth most expense one he owns. He has almost $1 billion in homes, including the most expensive home in the world ($250m+ in NYC), the most expensive home in London ($122m), Palm Beach ($100+m), Miami ($60m) and the two most expensive homes in Chicago (his $60m home and his ex-wife's $50m, home).
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So you're not going to look at what the research actually says and just stick to your guns regardless. OK.
As I noted earlier, I know Saez and have downloaded his raw data files and use his data in some of my work. I've even discussed it with him (around 2012).
That is, he is using 1040 tax returns. He is measuring income taxes. The dominant part of this is Federal Taxes. Yes state and local are included by they are small.
So yes, I'm sticking to my guns.
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As I noted earlier, I know Saez and have downloaded his raw data files and use his data in some of my work. I've even discussed it with him (around 2012).
That is, he is using 1040 tax returns. He is measuring income taxes. The dominant part of this is Federal Taxes. Yes state and local are included by they are small.
So yes, I'm sticking to my guns.
Given that 2/3 of all taxes are federal ... so what.
And no, he's not measuring just income taxes. Saying that over and over won't make it true, I promise.
I'll be done arguing with you now.
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So socialism? Venezuela says hi.
Lolz. Predictable.
The Nordic countries say hi
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Google Griffin's homes.
His Chicago home is about the sixth most expense one he owns. He has almost $1 billion in homes, including the most expensive home in the world ($250m+ in NYC), the most expensive home in London ($122m), Palm Beach ($100+m), Miami ($60m) and the two most expensive homes in Chicago (his $60m home and his ex-wife's $50m, home).
Sounds like the sort of guy who can afford to pay a lot more in taxes
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I love my life in NYC. I have friends all over NY. People I’ve known for decades. I could go out of my apartment and cross the street and there was my comedy club and I could go up onstage and perform.
You've never been funny on Scoop - at least not intentionally.
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I have worked from home for 2+ years. In spite of what you'd think I'd say, I do not believe most people in jobs that could work from home, will continue to.
I have said the same thing. I don't think I would have gotten any of the promotions at my job if I had been working from home. If you don't have person-to-person interactions with bosses and mentors, you aren't climbing the ladder.
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Love the scoop economists. ::) ::)
Many from the Paul Krugman School. Paul’s an expert, of course, and has a Nobel Prize to prove it. He’s so smart he said that Donald Trump’s policies would result in an immediate recession that would likely turn into a depression. He was right for a few hours (in premarital trading following election night) and then became spectacularly wrong.
When it comes to Nobel winning economists, give me Milton Friedman.
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The rich would pay a lot more, and the poor would actually receive money, under Friedman's taxation policy. A flat tax rate with limited exemptions and deductions, and a negative tax rate to give the poor a universal income.
No doubt that many would have a problem with him today.
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Many from the Paul Krugman School. Paul’s an expert, of course, and has a Nobel Prize to prove it. He’s so smart he said that Donald Trump’s policies would result in an immediate recession that would likely turn into a depression. He was right for a few hours (in premarital trading following election night) and then became spectacularly wrong.
When it comes to Nobel winning economists, give me Milton Friedman.
Milton Friedman certainly was an expert as well. His Nobel Prize proves it.
Of course, the implementation of one of his central and most prominent theories - that inflation is always a monetary phenomenon - led to the second-worst recession in U.S. history.
Some might say that's even worse than merely predicting a recession, but I'll leave it to all of you to judge.
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Milton Friedman certainly was an expert as well. His Nobel Prize proves it.
Of course, the implementation of one of his central and most prominent theories - that inflation is always a monetary phenomenon - led to the second-worst recession in U.S. history.
Some might say that's even worse than merely predicting a recession, but I'll leave it to all of you to judge.
If you’re suggesting that Milton Friedman caused the Great Recession I very much disagree.
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If you’re suggesting that Milton Friedman caused the Great Recession I very much disagree.
I'm saying the Fed's implementation of policies reflecting Friedman's theories of inflation was the primary cause of the 81-82 recession.
That was the country's worst recession prior to the Great Recession. For purposes of this discussion, I'm not calling the Great Depression a "recession."
FWIW I'm not a Friedman hater, nor am I big fan or frequent reader of Krugman. More of a Paul Samuelson guy myself.
But if you're going to drag one for a hyperbolic prediction that didn't come true, best be ready to acknowledge where the other was wrong.
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I'm saying the Fed's implementation of policies reflecting Friedman's theories of inflation was the primary cause of the 81-82 recession.
That was the country's worst recession prior to the Great Recession. For purposes of this discussion, I'm not calling the Great Depression a "recession."
FWIW I'm not a Friedman hater, nor am I big fan or frequent reader of Krugman. More of a Paul Samuelson guy myself.
But if you're going to drag one for a hyperbolic prediction that didn't come true, best be ready to acknowledge where the other was wrong.
I would argue that your assertion that monetarism was the primary cause of the 81-82 is an opinion, not a consensus shared by those in the field. I concede, however, that there are circumstances under which his theory has failed.
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Many from the Paul Krugman School. Paul’s an expert, of course, and has a Nobel Prize to prove it. He’s so smart he said that Donald Trump’s policies would result in an immediate recession that would likely turn into a depression. He was right for a few hours (in premarital trading following election night) and then became spectacularly wrong.
When it comes to Nobel winning economists, give me Milton Friedman.
If I remember correctly, Krugman argued that the economy was still in a fragile state, and if you throw on un-needed tax cuts, you'd exhaust all tools one needs to fight an emergency induced recession. And when an emergency would strike, Trump would have the wrong people in charge, and listen to the wrong people. You know like COVID, where the Fed had to poor trillions of dollars into the economy to rescue stocks, and we had to spend over $3T in stimulus funds, and maybe more.
His argument was that we'd have to do exactly what we had to do, and then unwinding all this debt may cripple the nation for a long long time.
That all may still come true, especially if we see another shutdown this fall. Let's hope we've seen the worst of the economic fallout.
I actually think Krugman was using hyperbole, but he wasn't that far off on what could/is occurring.
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I would argue that your assertion that monetarism was the primary cause of the 81-82 is an opinion, not a consensus shared by those in the field.
The Federal Reserve shares my opinion.
https://www.federalreservehistory.org/essays/recession_of_1981_82#:~:text=Lasting%20from%20July%201981%20to,effort%20to%20fight%20mounting%20inflation.&text=The%20economy%20was%20already%20in,unemployment%20at%20about%207.5%20percent.
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The Federal Reserve shares my opinion.
https://www.federalreservehistory.org/essays/recession_of_1981_82#:~:text=Lasting%20from%20July%201981%20to,effort%20to%20fight%20mounting%20inflation.&text=The%20economy%20was%20already%20in,unemployment%20at%20about%207.5%20percent.
So we were in a world of hurt coming off a sharp recession in 1980 which followed the problems of the 70s. Volker took the pain in 81-82 but he stayed with the policy which ultimately pulled us out of a long lasting morass and helped contribute to almost two decades of growth/prosperity.That sounds like mostly good news to me. What am I missing? (Honest question)
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So we were in a world of hurt coming off a sharp recession in 1980 which followed the problems of the 70s. Volker took the pain in 81-82 but he stayed with the policy which ultimately pulled us out of a long lasting morass and helped contribute to almost two decades of growth/prosperity.That sounds like mostly good news to me. What am I missing? (Honest question)
A couple of things, I think.
First, I'm not sure the only - much less best - way to counter inflation is to plunge the economy into a deep, 17-month recession with double-digit unemployment. Sure, it's effective - recessions do tend to eliminate inflation - but it seems a case of the cure being worse than the disease.
Second, it wasn't monetarism or adherence to any other Friedman principle that pulled us out of that recession. It was a massive increase of government spending combined with tax cuts. That was a prescription for ending recessions advocated by Samuelson, not Friedman. In fact, increases in public spending and rising deficits were policies Friedman typically opposed.
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A couple of things, I think.
First, I'm not sure the only - much less best - way to counter inflation is to plunge the economy into a deep, 17-month recession with double-digit unemployment. Sure, it's effective - recessions do tend to eliminate inflation - but it seems a case of the cure being worse than the disease.
Second, it wasn't monetarism or adherence to any other Friedman principle that pulled us out of that recession. It was a massive increase of government spending combined with tax cuts. That was a prescription for ending recessions advocated by Samuelson, not Friedman. In fact, increases in public spending and rising deficits were policies Friedman typically opposed.
Well, according to the article you posted, Volker (despite criticism and pressure) stayed the course and was ultimately vindicated. Inflation eased, which (in line with his policy) allowed for stimulus which grew the economy. That’s how I read the article, anyway.
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Sounds like the sort of guy who can afford to pay a lot more in taxes
He can ... but remember my original argument in the series of threads above (Pakuni has not).
Cuomo says 1% of the taxpayers in NYC pay 50% of the taxes. This ratio is similar in many cities. So, if you only lose a few very uber-wealthy taxpayers a city's budget/finances are screwed. (See the link above about Carolina Panther owner David Tepper and what happen to NJ when he moved to FL)
Why do the uber-wealthly live in certain places? They have a business there that makes them uber-wealthy and they run it. It is that simple.
But if many of these business go virutal, or many of their employees are WFH, it makes it a lot easier to relocate those businesses. These uber-wealthy owners can move to better weather, more tax friendly states (like Tepper). This is about their legal residence where they pay state/local taxes, not a second/third/fourth home they may vacation in.
The point is a lot of cities are highly dependent on uber-wealthy staying. That is why Cuomo is begging them to come back to NY (link above). Tax them more and the city becomes even more dependent on them and worse off if they leave.
So, Chicago can tax Griffin or Sam Zell more, but they both run financial services firms that are humming along fine with 100% of their employees WFH. It has never been easier for them to move.
If both were to leave (again if) it blows a hole in Chicago's finances.
Finally ... Google their philanthropic activities in each city. For instance, half the Art Institute of Chicago is named after Griffin. The Chicago Museum of Modern Art on Chicago Ave is financed by Zell. The new Lincoln park lake front running/biking path was paid for by Griffin.
They are so wealthy that can not only pay more in taxes, they also spend 10s of millions on civic and cultural projects as well.
Be more worried about them leaving then taking more of their money (FYI - Griffin grew up in FL which is why he has two homes there. He would be perfectly happy living there. Don't tempt him)
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If both were to leave (again if) it blows a hole in Chicago's finances.
If you understood how municipal finances work, or where cities like Chicago get their revenue, you wouldn't be peddling this.
To be clear, the city could rather have people like Griffin as residents than not. But their tax contributions are far down the list of why. The truth is if Griffin were to pack up and leave tomorrow, the impact on Chicago's finances would be a drop in the Lincoln Park Lagoon.
Cities get their revenue from two primary sources: property taxes and consumption-related taxes/fees, i.e. sales taxes, tourism/entertainment taxes, motor fuel taxes, vehicle fees, water/sewer bills, etc.
Griffin does pay a huge property tax bill - $1.3 million - but most of that doesn't go to the city, and the amount that does is infinitesimal to the overall property tax levy. And if Griffin splits town tomorrow, he still has to pay that property tax bill until he sells the home to someone else ... who will then pay that property tax bill. So Griffin bailing really doesn't effect city's property tax base at all.
As for other revenue sources, unless Griffin smokes 75 packs a day, owns a fleet of 300 vehicles, buys his Grey Goose by the truckload, rents a floor at the Peninsula every night and has toilets that never stop running, his consumption-related taxes aren't vastly greater than those of any other city resident.
To reiterate, Chicago would rather have Griffin than not. But if he leaves, it won't be anything close to the financial ruin you're trying to sell.
There's been nothing stopping Griffin from leaving for the last 20 years. He hasn't because he doesn't want to. He likes the city and the outsized influence he has on it.
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If you understood how municipal finances work, or where cities like Chicago get their revenue, you wouldn't be peddling this.
To be clear, the city could rather have people like Griffin as residents than not. But their tax contributions are far down the list of why. The truth is if Griffin were to pack up and leave tomorrow, the impact on Chicago's finances would be a drop in the Lincoln Park Lagoon.
Cities get their revenue from two primary sources: property taxes and consumption-related taxes/fees, i.e. sales taxes, tourism/entertainment taxes, motor fuel taxes, vehicle fees, water/sewer bills, etc.
Griffin does pay a huge property tax bill - $1.3 million - but most of that doesn't go to the city, and the amount that does is infinitesimal to the overall property tax levy. And if Griffin splits town tomorrow, he still has to pay that property tax bill until he sells the home to someone else ... who will then pay that property tax bill. So Griffin bailing really doesn't effect city's property tax base at all.
As for other revenue sources, unless Griffin smokes 75 packs a day, owns a fleet of 300 vehicles, buys his Grey Goose by the truckload, rents a floor at the Peninsula every night and has toilets that never stop running, his consumption-related taxes aren't vastly greater than those of any other city resident.
To reiterate, Chicago would rather have Griffin than not. But if he leaves, it won't be anything close to the financial ruin you're trying to sell.
There's been nothing stopping Griffin from leaving for the last 20 years. He hasn't because he doesn't want to. He likes the city and the outsized influence he has on it.
If you understood city finances you'd understand what utter garbage this post is.
Earlier you promised to stop trolling. So live up to it and go away for good this time.
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If you understood city finances you'd understand what utter garbage this post is.
Earlier you promised to stop trolling. So live up to it and go away for good this time.
Uh....he's right. Per usual, you are not.
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Landlords in NYC are getting worried that NYC is dying .... and they are going bankrupt.
New York Landlords Press Finance Bosses to Speed up Return-to-Work and Save City
https://www.bloomberg.com/news/articles/2020-08-20/nyc-landlords-press-finance-bosses-to-speed-return-and-save-city
A loose coalition of New York’s top property owners and managers is busily working the phones, pressing many of the city’s biggest employers -- including powerhouses like Goldman Sachs, Blackstone and BlackRock -- to speed up the return of workers. Their argument: It’s safe, and the eateries and shops that make Manhattan special can’t hold out much longer. Some are calling it the patriotic thing to do.
“I’ve been really pushing the CEOs to bring people back into the office,” said Jeff Blau, the head of Related Cos., the developer behind the Hudson Yards project. “I’ve been using a little bit of guilt trip and a little bit of coaxing.”
The reaction for now has been lukewarm.
Behind the desperation lies fear of a vicious spiral. The longer commuters stay home, the more local businesses will disappear, and the less reason there is for anyone to return. Executives and firms who’ve made a fortune developing and owning the city’s towers are facing the prospect of a significant slump in demand and prices for offices and residential units. But the ramifications extend to all New Yorkers, Blau said.
“I am watching the city decay as nobody is here,” he said. “Now is not the time to abandon the city and expect it to be in the same way you wanted it when you get back in a year from now.”
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NYC is not going to die... not even close what a stupid line of thinking.
And I get called a doomer :o :o :o :o :o
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Another option:
Don't allow uber-wealthy to occur in your society. Have a more even distribution of wealth across all classes. Then you don't have to make the upper end pay a larger share of taxes. Maybe focus on labor as opposed to capital.
You reap what you sow, hey?
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You reap what you sow, hey?
A bird in the hand is worth two in the bush, hey?
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A bird in the hand is worth two in the bush, hey?
Iz wut it iz, aina?
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Iz wut it iz, aina?
That dog won't hunt.
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Very well said. I’d further pose that...move things forward. And these are people I will sit on a 2 hour flight with and chat nonstop. It’s just a different relationship cadence
Pretty much agree with everything you outlined Wags.
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You reap what you sow, hey?
Care to expand?
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NYC is not going to die... not even close what a stupid line of thinking.
And I get called a doomer :o :o :o :o :o
Depends on what you mean by "die"
I think they mean they need NYC to be so disirable that companies will willingly pay over $100/sq foot in rent and recent college graduates will pay $4k/month in rent just to live in the city.
So ... when does NYC return to this level of desirability for both companies and employees?
(to head off a question, if you read the article, or talk to anyone in Manhattan, it is not remotely close to this level of desirability now.)
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Depends on what you mean by "die"
I think they mean they need NYC to be so disirable that companies will willingly pay over $100/sq foot in rent and recent college graduates will pay $4k/month in rent just to live in the city.
So ... when does NYC return to this level of desirability for both companies and employees?
(to head off a question, if you read the article, or talk to anyone in Manhattan, it is not remotely close to this level of desirability now.)
Who are you speaking to? Cause when life returns to semi normalcy, it’s still gonna be one of the worlds great and most famous cities and all the pull that brings.
And it’s WAYYY premature to talk about desirability when government still has restrictions on everything. Talking about people about their perceptions and feelings about NYC into the future while we are still in the grips of a pandemic is like making assessments on the city’s future while the rubble at Ground Zero was still smoking.
The people that are eager and ready to leave/not return usually didn’t want to be there to begin with (parents with kids often) but were forced to due to professional situations. FWIW, I know dozens of kids that moved to NYC post college, all parts of Manhattan over the last 5 years, and none of them are paying $4K for rent. My GF is in a gorgeous studio+ in a new build in Hell’s Kitchen for $3200. Not to pretend NYC isn’t expensive as hell, but ridiculous exaggerations don’t help.
And NYC could experience an “exodus” that leads to a 10-15% correction in rents and would be just fine
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Depends on what you mean by "die"
I think they mean they need NYC to be so disirable that companies will willingly pay over $100/sq foot in rent and recent college graduates will pay $4k/month in rent just to live in the city.
So ... when does NYC return to this level of desirability for both companies and employees?
(to head off a question, if you read the article, or talk to anyone in Manhattan, it is not remotely close to this level of desirability now.)
When? I'm not sure has dropped off. What you're describing seems like empty housing, and a bottoming out of the real estate market.
My estimation is that people will always want to live in NYC, and the market will continue to trend upward instead of downward. Will Covid cause a small blip? Sure, but I'd lay dollars that in 1 year we will see ATH's for home prices and rent in NYC.
https://www.noradarealestate.com/blog/new-york-real-estate-market/
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The key to any return to normalcy is to break up with Rona. When that happens, expect occupancy rates in NYC to return to normal. Why? Because it is NYC.
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Waitin' on dat sustainable livable wage check from Uncle Suga, hey?
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Landlords in NYC are getting worried that NYC is dying .... and they are going bankrupt.
New York Landlords Press Finance Bosses to Speed up Return-to-Work and Save City
https://www.bloomberg.com/news/articles/2020-08-20/nyc-landlords-press-finance-bosses-to-speed-return-and-save-city
A loose coalition of New York’s top property owners and managers is busily working the phones, pressing many of the city’s biggest employers -- including powerhouses like Goldman Sachs, Blackstone and BlackRock -- to speed up the return of workers. Their argument: It’s safe, and the eateries and shops that make Manhattan special can’t hold out much longer. Some are calling it the patriotic thing to do.
“I’ve been really pushing the CEOs to bring people back into the office,” said Jeff Blau, the head of Related Cos., the developer behind the Hudson Yards project. “I’ve been using a little bit of guilt trip and a little bit of coaxing.”
The reaction for now has been lukewarm.
Behind the desperation lies fear of a vicious spiral. The longer commuters stay home, the more local businesses will disappear, and the less reason there is for anyone to return. Executives and firms who’ve made a fortune developing and owning the city’s towers are facing the prospect of a significant slump in demand and prices for offices and residential units. But the ramifications extend to all New Yorkers, Blau said.
“I am watching the city decay as nobody is here,” he said. “Now is not the time to abandon the city and expect it to be in the same way you wanted it when you get back in a year from now.”
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Landlords in NYC are getting worried that NYC is dying .... and they are going bankrupt.
New York Landlords Press Finance Bosses to Speed up Return-to-Work and Save City
https://www.bloomberg.com/news/articles/2020-08-20/nyc-landlords-press-finance-bosses-to-speed-return-and-save-city
A loose coalition of New York’s top property owners and managers is busily working the phones, pressing many of the city’s biggest employers -- including powerhouses like Goldman Sachs, Blackstone and BlackRock -- to speed up the return of workers. Their argument: It’s safe, and the eateries and shops that make Manhattan special can’t hold out much longer. Some are calling it the patriotic thing to do.
“I’ve been really pushing the CEOs to bring people back into the office,” said Jeff Blau, the head of Related Cos., the developer behind the Hudson Yards project. “I’ve been using a little bit of guilt trip and a little bit of coaxing.”
The reaction for now has been lukewarm.
Behind the desperation lies fear of a vicious spiral. The longer commuters stay home, the more local businesses will disappear, and the less reason there is for anyone to return. Executives and firms who’ve made a fortune developing and owning the city’s towers are facing the prospect of a significant slump in demand and prices for offices and residential units. But the ramifications extend to all New Yorkers, Blau said.
“I am watching the city decay as nobody is here,” he said. “Now is not the time to abandon the city and expect it to be in the same way you wanted it when you get back in a year from now.”
Most of the small businesses that have closed in NYC before and since the virus, have stated that its because they cannot afford their rents and that their landlords were being unreasonable in raising the rents. So lower the rents Mr Blau. Give back a little bit of that fortune. Its the patriotic thing to do.
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Equinox gym chain stopped paying their rent back in April in NYC. The CEO of Equinox's major investor is Jeff Blau. He said it was the patriotic thing to do.
https://commercialobserver.com/2020/04/equinox-wont-pay-rent-to-landlords-in-april/
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Who are you speaking to? Cause when life returns to semi normalcy, it’s still gonna be one of the worlds great and most famous cities and all the pull that brings.
And it’s WAYYY premature to talk about desirability when government still has restrictions on everything. Talking about people about their perceptions and feelings about NYC into the future while we are still in the grips of a pandemic is like making assessments on the city’s future while the rubble at Ground Zero was still smoking.
The people that are eager and ready to leave/not return usually didn’t want to be there to begin with (parents with kids often) but were forced to due to professional situations. FWIW, I know dozens of kids that moved to NYC post college, all parts of Manhattan over the last 5 years, and none of them are paying $4K for rent. My GF is in a gorgeous studio+ in a new build in Hell’s Kitchen for $3200. Not to pretend NYC isn’t expensive as hell, but ridiculous exaggerations don’t help.
And NYC could experience an “exodus” that leads to a 10-15% correction in rents and would be just fine
A frequent story in the news here in Connecticut is record breaking teal estate sales. It's driven by New Yorkers moving to Connecticut. Houses sell the day they go on the market.
In mid June the USPS reported 10,000 address changes to Connecticut from NY from the start of the pandemic. It has only
way increased since then.
That being said I can't wait for NYC to open further so I can visit. It's been too long.
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https://www.nytimes.com/2021/03/29/nyregion/remote-work-coronavirus-pandemic.html
Turning office space into low income housing? Looks pretty grim for NYC.
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MKE ain't no trivin' metropolis now, aina?