It’s the End of the World as We Know It…

Published by Joshua Simons on

It is the beginning of the end of the Hudson Valley as we know it… again. As alarmist as this may sound it is also a familiar prediction to those of us who have lived here long enough. Successive waves of people moving to the Hudson Valley have remade small cities like Hudson and Beacon into ‘new Brooklyns™’ (if  New York Times articles are to be believed). Many Latinx immigrants have settled in Newburgh and Poughkeepsie, filling the void left by white flight and the economic woes of an increasingly service based economy. And now in the wake of the first wave of COVID-19, the gravitational pull of the great megalopolis to the south has reversed, and the region is again drawing people leaving the city. This wave of NYC expats will no doubt again reshape the Hudson Valley, for better or worse. How you feel about this will largely depend on who you are, and what you have to gain, or lose.

But it will also depend, greatly, on having a clear-eyed view of the context and extent of change we’re witnessing. This is the first in a series of posts that will study the data on in-migration, to better understand the pace of change, and to be able to make some broad predictions on the impacts of the new in-migration to the Hudson Valley from NYC post-pandemic. 

Before we look into the future, yes, we first need clearer context. 

COVID-19 alone didn’t create this wave of new arrivals; it is part of a long trend, the next chapter of NYC migrants moving to the region. For the better part of 30 years, following the economic devastation caused by massive layoffs by IBM in the 1990s, the Hudson Valley economy has increased reliance on visitors coming, spending their money here, and then going home. Antique shops catering to weekenders from the city popped up, the Culinary Institute of America ensured that the restaurant scene in the region remained vibrant, and our natural beauty attracted affluent urbanites north (with their weekend homes and their money). We — in the form of our tax dollars and policy approaches — banked on a future reliant on tourism. County boards advertised in NYC taxis, offering a “bigger playground,” and showed city dwellers our region in slickly produced videos as “the best of both amazing worlds.” It worked, a bit. Then in a few short months the global pandemic achieved far more than all of the ad agencies could over many years. It accelerated a northward migration of people from the City the likes of which hasn’t been seen since the cholera epidemic of 1832. And just like back then, it is people of means who are fleeing.

Ulster County was a hot real estate market prior to this year but the pandemic has escalated that trajectory. The National Association of Realtors reported on August 12th that home prices grew in 96% of metropolitan areas in the U.S. in the second quarter of 2020. Most shocking, of the 181 metropolitan areas tracked by the association, Ulster County’s 17.6% spike was the largest growth in the entire country for median home price since the beginning of the year. In 2017, the median home price was $213,000. Today it is $276,100.

Art via the Eviction Defense Network.

For the people buying homes here the price of a home in Ulster County is a steal. The average rental in Brooklyn right now is $3,398 per month; a mortgage on a $275,000 home is less than half of that. Mortgage rates are at all time lows. Yet many downstaters, desperate to leave NYC, don’t have to borrow. They are paying cash. These are affluent households. The global pandemic has drastically altered the paradigm for white-collar professionals. In an earlier time the long commute back to New York for work was a deterrent for moving this far north. With remote work a new norm, upper-middle-class professionals are no longer tethered to their desks and are free to leverage their NYC salaries in the Hudson Valley. And they are.

Meanwhile, for the people who already live here, it’s getting more difficult to stay in the Hudson Valley. The 2020 United Way ALICE Report for New York State found that 41% of households in Ulster County are already struggling to make ends meet. In the City of Kingston 57% of households live in poverty or below the ALICE threshold. For these households rising home prices mean rising rents, with wages within the local economy already not keeping pace with the cost of living. Before the pandemic, according to the U.S. Census, in 2017, in the region, well over a third of households (39%) with mortgages required 30 percent or more of income (a conventional affordable housing metric) to pay their mortgage. The numbers are even worse for tenants, a majority of which (58%) needed 30 percent or more of income to keep a rental roof over their heads. The post-pandemic exodus from NYC will surely make this exponentially worse. As landlords decline to renew leases, opting instead to raise rents and court a new wave of more moneyed tenants, the already tight rental and housing markets will constrict well beyond the means of the already struggling. More and more people are wondering where they will go. For them these forces, seen by some as revitalizing their communities, will only serve to force them out. They will be displaced — left on the wayside by circumstances far beyond their control.

Whereas the previous post -9/11 migration pattern of upper-middle class people being priced out of NYC was motivated by wanting to raise their children outside of the city, or deciding to retire from the rat-race and enjoy the respite of the Hudson Valley or simply the churn of market forces, the current wave is driven by something else… fear. While some choose to ride out the pandemic in their weekend homes or short term rentals (some even going so far as to Airbnb for months at a time), others are just now realizing that the bulk of their work can be done from anywhere, and that they can stay for good. On top of the lower cost of living, proximity to the city, and expansive access to nature without having to give up the comfort of urban amenities, the Hudson Valley offers them something else: relative safety from the global pandemic (or future pandemics for that matter).

While this inclination to seek the safety of the exurbs following a major disaster is reminiscent of the aftermath of 9/11, there are clear indicators that this wave of migration from New York is going to be far larger, and the impacts much greater. While it is in some ways easier to comment on how the character of the place is changing, it is important to know and understand the human toll this trend will take if left unchecked. Affordable housing was already far too scarce before the pandemic. All of this is only going to get worse. Gentrification is the other side of the revitalization coin. And we need good data and analysis to inform intervention if we want to mitigate the harms, whether intended or not, by the new, wealthier arrivals.

Before we can get into who will be affected and how, we need to understand the scale of the phenomenon. It also stands to reason that since the Hudson Valley is a large and diverse area, this pattern of inmigration will not affect all locales in the same way. The next dispatch in this series will use the post 9/11 migration pattern to the Hudson Valley from NYC to estimate the scale and duration of the current exodus from the City, and make some predictions about who will move where, and how this will impact property values and the overall economy. Future posts will look into the racial-ethnic elements of this migration pattern and the human toll of gentrification. There are winners and losers in all of this. There is also the opportunity to leverage public policy to lessen the toll, but left unchecked many people will no longer be able to afford to call the Hudson Valley home.


2 Comments

Perry Goldschein · September 3, 2020 at 9:00 am

Thanks Joshua – this post is on a topic of tremendous interest to those of us living here in the Mid Hudson. We hear about these types of trends a lot, and even occasionally get anecdotal evidence but rarely much in the way of quantitative. Population numbers and real estate prices are quantitative, but would love to read about other data supporting this great migration, and further anecdotal evidence from those migrating our way about reasons and plans for the future. Often what we do read or hear about is contradictory. For example, regarding population, there was a credible piece in a local magazine less than a year ago citing our region’s stagnating or declining populations that was expected to continue – only Orange County was seeing growth or expected to continue to grow. What’s the reality before, now, and moving forward, I can help but wonder?! Look forward to BenCen’s further takes on this soon.

    Joshua Simons · September 3, 2020 at 10:19 am

    I am working on a follow up piece that gets into the data in more detail. The primary source I will be relying on is IRS tax return data for people that filed tax returns in NYC one year, and in the Hudson Valley the next. This inmigration trend is a reality. It existed pre-COVID, but the pandemic has thrown rocket fuel on the fire. The declining population trend is actually true, but not mutually exclusive with the influx of people from NYC. We have a housing shortage in the region, particularly affordable housing. The demographics of people coming from NYC are different from those that are leaving. Setting aside retirement age people who move to warmer climates like Florida or Arizona, households that get priced out of the market in the Hudson Valley are for the most part much larger than the households that are coming here. In general well off households are smaller than less well off households. As an example, from 1980 to 2010 in Orange County there are only three municipalities where the average people per household has increased: The City of Newburgh, The City of Middletown, and the Town of Monroe. Most other municipalities in Orange County saw a more than 10% decrease in the average size of the household.

    Future posts on this topic are going to include analysis of the IRS data, census data, MLS (Real Estate) data, and other sources to help better understand the trend, and make some predictions on the scale, and hotspots in the region that will impacted the most. We will also be getting into the pros and cons of this, who will benefit, and who will be negatively impacted. If you are interested, I wrote an article with a Colleague of mine, Leonard Nevarez, at Vassar about the dual trends of migration to the Hudson Valley (Latinx immigrants and people from NYC) in the post 9/11 era. TYhe current research I am doing about the pandemic induced migration form NYC builds off of it. The article was published in City & Community, and can be read online for free here: https://www.asanet.org/sites/default/files/attach/journals/mar20ccfeature.pdf

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