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