(Bloomberg Opinion) -- After adding more than 1.3 million inhabitants since the early 1990s, New York City has been shrinking since mid-2016. According to estimates released last week by the U.S. Census Bureau, the New York-Newark-Jersey City metropolitan area lost population in the 12-month periods ending July 2018 and July 2017 as well.
This raises an important question: Is New York shrinking because nobody wants to come here, or because there’s not enough housing to accommodate the people who do? It’s impossible to give a definite answer, but I thought it might be interesting to compare the population numbers with another important data series — payroll employment:
Even as New York City lost people over the past couple of years, it has been creating jobs at a faster pace than the U.S. as a whole, which saw 1.7 percent job growth in the 12 months ending last July.
Things look a bit different in the city’s suburbs, where job growth has slowed to well below the national pace yet the population has kept growing, at least a little.
The shift in economic activity from New York’s suburbs to the city that began about two decades ago seems to be continuing. But the shift in population has stalled, and even reversed a little. For the metro area as a whole, the result is now slowing job growth and shrinking population.
In a report last year on the city’s housing supply, New York University’s Furman Center concluded that:
The adult population and the number of jobs in the city have grown faster than the number of housing units since 2000. Household sizes are larger, and more households are severely over-crowded. Vacancy rates remain low, and the share of housing affordable to the city’s low- and moderate-income households fell significantly between 2000 and 2016.
The city has been the bright spot in the region’s economic picture for quite a while now. But I suspect that its failure to build enough new housing has started to crimp that growth.
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Justin Fox is a Bloomberg Opinion columnist covering business. He was the editorial director of Harvard Business Review and wrote for Time, Fortune and American Banker. He is the author of “The Myth of the Rational Market.”
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