About 24,000 New Yorkers have lost their lives to the coronavirus.
The city’s unemployment rate is 16 percent — twice the national average. And just 10 percent of Manhattan workers have returned to the office, putting into question the value of the city’s prime office stock.
Personal income tax revenue is projected to drop by $2 billion this fiscal year.
Only a third of hotel rooms are occupied, and Manhattan apartment vacancies crept over 5 percent in August for the first time in at least 14 years.
Those are the figures that best tell the impact of the coronavirus outbreak on New York City, which is facing structural challenges not since the fiscal crisis of the 1970s, according to the New York Times.
One stark example: Shares of Empire State Realty Trust, the REIT that owns the Empire State Building, have fallen by 50 percent this year.
“We’re on the verge of a tragedy,” Richard Ravitch, the former state official who helped New York City with its financial recovery in the 1970s, told the Times.
Sales tax revenue fell 35 percent in the second quarter and 15 percent so far this year, according to the Times. Income tax revenue is also expected to drop for the next few months.
The third pillar of the city’s revenue — property taxes — is the most stable, though property tax delinquencies have already risen and landlords are gearing up to challenge their assessments.
Ravitch is calling for sweeping budget cuts and the establishment of a financial control board. The city, facing a $9 billion revenue shortfall, has explored the option of deficit spending, and reportedly wants the state to authorize up to $5 billion in borrowing.
But the Times notes that deficit spending may not cure the city’s ills — meanwhile, it cannot count on the state for support, as the state is facing its own $14.5 billion revenue shortfall. And federal help has been hard to come by.
“It’s clear there are going to be hits for years to come, you can’t deny that,” Bill Neidhardt, the press secretary for Mayor Bill de Blasio, told the Times. “We’ve been calling for a stimulus, and Washington has done what they do, which is nothing.” [NYT] —Hiten Samtani