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Remote work is costing New York City $12.4 billion per year, as employees spend roughly 30 percent fewer days in their Manhattan offices than before the pandemic.
That staggering number comes largely from Manhattan employees choosing to stay home from spending money on food and entertainment at businesses around their offices, representing thousands of dollars per person that would previously have poured into local economies. without spending.
Those lost sales are also depriving the city of valuable tax dollars, leading to a budget crisis for New York City which has infrastructure like the transit system also fighting for lost fares. of the passengers, in grave danger.
Although the problem is present in cities across the United States, the situation is particularly pronounced in New York City, which has seen daily sales on certain days as much as 10 percent lower than in other cities, according to Bloomberg.
Even though some offices have seen employees return in greater numbers Tuesday through Thursday, commuters in Manhattan remain sparse on Mondays and Fridays, leading to a staggeringly low percentage of sales on those days compared to 2019.
The Wall Street subway platform was deserted on a Friday. Offices are still scarce on Fridays
In New York City, working from home has led workers to spend $4,661 less per year on average on food, shopping and entertainment in their office neighborhoods.
Those numbers are much higher per employee in major cities across the country, including Chicago, where workers spend $2,387 less per year, and $3,040 in San Francisco.
While overall spending has increased across the country since 2019, Mondays and Fridays in Manhattan still pale in comparison to the rest of the country.
Spending in the US on Mondays is up nearly 25 percent since 2019, but in Manhattan it’s up just two percent. On Fridays in the US, spending was also up just under 25 percent, but in Manhattan it was only up 11 percent, according to Bloomberg.
Those numbers are strongest in New York City outside of Manhattan. While Monday spending rose just 2 percent in Manhattan, the Bronx saw a 28 percent rise, Queens saw a 21 percent rise, and Brooklyn rose 18 percent. And on Fridays, the great city of New York has seen a 20 percent increase in spending.
Even with stronger numbers for the outer boroughs, the city as a whole suffers from Manhattan’s significant loss of tax revenue.
“If you pay less income tax in New York City,” Comptroller Brad Lander told Bloomberg, “then it’s hard to figure out how to capture enough value to maintain subways and invest in schools and keep the city safe and clean.” and all”. the things that really matter.
Last year, New York City Mayor Eric Adams ordered all city workers back to the office for five-day work weeks and pleaded with the rest of the city to do the same.
“It’s about time,” he said last year. ‘New York City can’t run away from home.’
Commuters on the Wall Street subway platform on a Tuesday morning, when the commuters are at their busiest
On average, by the end of 2022, office attendance in New York City had only reached 43 percent of its level before the pandemic struck.
Tuesdays saw some of the highest occupancy levels for the week at 51 percent of pre-pandemic levels, while Fridays saw a drop to 23 percent.
Bloomberg found that at eight of Manhattan’s most prominent office buildings, foot traffic was down 45 percent from pre-pandemic levels on Mondays and 52 percent on Mondays.
With those numbers still dwindling, experts say real estate values could drop as much as 40 percent, costing about $5 billion in lost taxes. That equates to about a percentage of the city’s annual budget.
Adding to those problems is the number of subway riders, which has only reached 64 percent of its pre-pandemic levels. That loss is expected to translate to $2 billion per year in fee losses through 2026.
“That’s a big hole that will have to be plugged with new taxes and lower spending,” Columbia University professor Stijn Van Nieuwerburgh told Bloomberg.