THE BRAIN GAIN: 2015 UPDATE How the Region s Shifting Demographics Favor the Lower Manhattan Business District
2015 UPDATE THE BRAIN GAIN: How the Region s Shifting Demographics Favor the Lower Manhattan Business District Since 2000, Lower Manhattan has emerged as the new epicenter of the region s vast and growing pool of high-value, knowledge workers as educated young and mid-career adults forego the suburbs in favor of the subway- and PATH-connected neighborhoods of Manhattan, Brooklyn and the cities along New Jersey s Hudson River waterfront. 1
2015 UPDATE THE BRAIN GAIN: How the Region s Shifting Demographics Favor the Lower Manhattan Business District Executive Summary Access to labor has always been among the most important factors in corporate leasing decisions. This is certainly true in the financial services, professional services, media, creative services, management, and information sectors that drive office leasing in New York City. Lower Manhattan was the original center of the New York City office market, but over the course of many decades some companies moved away from Downtown to areas surrounding Midtown s Grand Central Terminal and Penn Station, in pursuit of high-value workers who moved out of the urban core to bedroom communities in suburban New Jersey, Long Island, Westchester and the Hudson Valley, and Southern Connecticut. Since 2000, there has been a monumental shift in the population of these high-value workers in the greater New York metro region. Extensive residential development and dramatic neighborhood revitalization in Manhattan, Brooklyn, and New Jersey s Hudson River waterfront cities have attracted huge numbers of young, educated people, workers in the professional and creative fields that drive leasing in New York City who prefer apartment living and shorter commutes via subway, PATH, ferry, bike and foot to suburban life and lengthy commutes via heavy rail or car. Today, Lower Manhattan is surrounded by residential communities that have an increasing share of the region s high-value workers, while the far-off bedroom communities in Long Island, New York, and Connecticut have seen their shares shrink. This demographic shift has had a profound impact on the value proposition of a Lower Manhattan business address both dramatically improving the opportunity to attract the best and brightest workers to Lower Manhattan, and diminishing the allure of Midtown s commuter rail stations. Who are the region s high-value workers and where do they live? To answer these critical questions in 2012, the Downtown Alliance analyzed data from the 2000 U.S. Decennial Census and the 2010 American Community Survey for the population of the NY-NJ-CT-PA Combined Statistical Area (CSA), a broadly-defined region including 30 counties, looking at neighborhoods, or PUMAs 1 to determine: where people working in the fields of advertising, media, arts and entertainment, professional services, management, information technology, finance, insurance, and real estate live today versus 2000. Thought of together as creative and professional industries, these sectors account for the vast majority of office leasing in New York City. where college-educated adults, ages 18 to 44 live today versus 2000. This group includes recent college graduates, as well as people in young and middle adulthood, many of whom are married and raising families and likely contend with the decision of whether or not to live in the suburbs. The answer is loud and clear: the high-value knowledge workers who drive the region s economy the people companies want to hire increasingly live within a 30-minute commute of Lower Manhattan. The New York metro region s substantial population growth among the cohorts most important to the New York City office market was driven 1 PUMA stands for Public Use Microdata Area, geographically contiguous census tracts grouped together in population clusters of 100,000 or more. In this study, PUMAs provide the best opportunity to link data to identifiable communities in NYC, and also approximately match one or more towns and cities in New York State, New Jersey, and Connecticut. PUMAs are referred to as communities in this report. 2
overwhelmingly by the changes that occurred in the areas immediately surrounding the Lower Manhattan central business district. Meanwhile, the balance of the 30-county region defined separately as the rest of New York City, the rest of New Jersey, Long Island, Westchester and the Hudson Valley, Southern Connecticut, and Pike County in Pennsylvania contributed far less to the region s total net growth, and in some cases actually lost population of college-educated adults age 18 to 44 and those working in creative and professional fields. These geographic growth trends strongly suggest a shift in the preferences of the region s high-value workers, who are increasingly opting out of the suburban lifestyle and emphatically favoring urban living. The implications for Lower Manhattan are clear: with an extensive network of multi-modal transit, Lower Manhattan is exceptionally well-positioned to take advantage of its proximity to the region s fastest-growing, talent-rich communities, and today companies eager to attract the best and brightest of the region s labor force have every reason to set up shop in Lower Manhattan. Key Findings Growth of the region s creative and professional workforce is concentrated around Lower Manhattan. Communities surrounding Lower Manhattan show the fastest growth of college-educated adults ages 18 to 44. Lower Manhattan's 30-minute commute area leads the region's growth of college-educated adults ages 35 to 44. The Downtown Alliance released these initial findings in 2012, using available census data reflecting the period between 2000 and 2010, which illustrated the huge gains in the number of creative and professional workers as well as college-educated adults in the residential areas within a 30 minute commute of Lower Manhattan. Using demographic data, the Downtown Alliance successfully demonstrated that Lower Manhattan's superior access to high value workers is a key advantage for a Lower Manhattan business address. Findings from the 2010 data revealed: The fast-growing communities and towns surrounding Lower Manhattan posted large population gains among people working in creative and professional fields. Nine of the region s ten fastest growing communities are within a 30-minute subway or PATH ride of Lower Manhattan. As a result, today places like Park Slope, the Lower East Side, and Jersey City s Newport-Grove Street area contribute more of the region s creative and professional workforce than Scarsdale, New York; Fairfield, Connecticut; and Huntington, Long Island. At over 557,000, the 2010 population of creative and professional workers living within a 30-minute commute of Lower Manhattan outranked the populations of Long Island (298,000), Westchester and the Hudson Valley (226,000), Southern Connecticut (211,000), and the rest of New York City (457,000). Lower Manhattan s 30-minute commute area was the only part of the region to grow its share of workers in creative and professional fields over the last decade. The number of educated adults ages 18 to 44 within a 30-minute commute of Lower Manhattan jumped by 172,000 people, skyrocketing 32% to reach over 717,000 in 2010. Contrast this with the rest of the 30-county region, which posted a net gain of only 6%. 3
This rapid growth in and around Lower Manhattan was due in large part to those in the higher age bracket of 35 to 44 years whose population in this area grew by 44,000, or 24%. By contrast, the more suburban areas of the region barely held onto their population among this age group, posting a net gain of just 3,100. IN THE NYC METRO REGION At over 717,000, the 2010 total population of college-educated 18 to 44 year-olds living within a 30-minute commute of Lower Manhattan outranked the populations of Long Island (327,000), Westchester and the Hudson Valley (247,000), and Southern Connecticut (236,000). If these growth trends continue, it will not be long before the educated population aged 18 to 44 of the area surrounding Lower Manhattan outranks that found in all of Long Island, Westchester, and the Hudson Valley, and Southern Connecticut combined. 2015 UPDATE Data newly available in 2015 further validates this trend. 2 A fresh look at the most recently available data now shows that these trends have continued and even strengthened. The population living within a 30 minute commute area has seen continued growth in college educated workers and accelerating growth in creative and professional workforce. More than 750,000 college-educated adults are within a 30 minute commute of Lower Manhattan, a 39% increase since 2000. More than a half million people working in creative and professional industries live within a 30 minute commute, an 18% increase since 2000. New data demonstrates that demographic shifts have continued since 2010, resulting in an increasing share of New York City Metropolitan Region's high value workers living within a short subway, PATH, ferry, or bicycle commute to Lower Manhattan. 30 Minute Commute Area 25% 24% of COLLEGE- EDUCATED ADULTS of CREATIVE & PROFESSIONAL WORKERS live within a 30 minute commute of Lower Manhattan 2 2015 update based on the 2013 American Community Survey the most recent data available as of the publication of the report. 2010 and 2013 data represents American Community Survey 3-year estimates. 2000 data was made available through the decennial census. From 2010 to 2013, new PUMA boundaries were established by the Census. Assistance in comparing 2000 to 2013 data using new geographic names and boundaries was provided by Frank Donnelly, Geospatial Data Librarian and Araby Smyth, College Assistant of Newman Library, Baruch College, City University of New York. 4
2015 UPDATE: Metro-Area College-Educated Adults, Ages 18 to 44 The Region's Growth of College-Educated Adults Ages 18-44, 30-Minute Commute Area +214,785 of the Region (Net Change) +185,681 College-Educated Adults have continued flock to the communities in proximity to Lower Manhattan since 2010. of NYC of New Jersey Long Island Southern Connecticut Westchester/ Hudson Valley Key Findings Within a 30 minute commute of Lower Manhattan, there was strong steady growth in the population of college educated adults aged 18-44, with the addition of more than 43,000 from 2010 to 2013. Since 2000, the population of college-educated adults aged 18-44 living within a 30 minute commute of Lower Manhattan grew by 39%. +214,785 +132,944 +36,809 +19,158 +3,745-6,975 College-Educated Population Ages 18 44, by Geography, 30-Minute Commute Area (+) 5,000 People of NYC of New Jersey ( ) 5,000 People Long Island Southern Connecticut Westchester/ Hudson Valley By contrast, the growth of the college-educated population tapers off significantly as one looks further from Lower Manhattan and in the farthest parts of the region, the college-educated population was either stagnant or declining since 2000. Total, 2013 759,115 606,344 805,508 335,482 236,506 246,471 Net Growth, % Growth +214,785 +132,944 +36,809 +19,158 +3,745-6,975 +39% +28% +5% +6% +2% -3% The result is that now 25% of the region's college-educated adults age 18-44 live within a 30 Share of Region, 2013 25.4% 20.3% 26.9% 11.2% 7.9% 8.2% minute commute of Lower Manhattan. Share Gain/Loss +4.4 +2.0-2.7-1.0-1.1-1.5 5
2015 UPDATE: Metro-Area Residents Employed in Creative and Professional Industries The growth of the creative and professional workforce living within a 30 minute commute of Lower Manhattan accelerated since 2010. Key Findings Creative and professional workers have been flocking to areas in and around Lower Manhattan since 2000, and this trend accelerated between 2010 and 2013, when the data revealed that the 30 minute commute area saw an influx of more than 23,000 such workers. Since 2000, 90,000 additional creative and professional workers live within a 30 minute commute of Lower Manhattan, a gain of 18.5%. Over that same time, other parts of the region had very modest population growth among the creative and professional workforce, especially Long Island and farther out parts of New Jersey which actually lost creative and professional workforce. The area surrounding Lower Manhattan now accounts for nearly 24% of the regional creative and professional workforce. 100,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0-10,000 Growth Among Creative and Professional Industries, by Geography, 90,549 30-Minute Commute Area 30-Minute Commute Area 2,139 Southern Connecticut The Rest of NYC 290 Westchester/ Hudson Valley of New Jersey - 3,467-5,676-6,650 of New Jersey Westchester/ Hudson Valley of NYC Southern Connecticut Long Island Residents Employed in Creative and Professional Industries by Geography, Long Island Total, 2013 580,348 450,336 706,077 223,898 208,923 292,190 Net Growth, % Growth Share of Region, 2013 Share Gain/ Loss 2000-2013 +90,549-5,676-3,467 +290 +2,139-6,650 +18.5% -1.2% -0.5% +0.1% +1.0% -2.2% 23.5% 18.3% 28.6% 9.1% 8.5% 11.9% +3.0-0.8-1.1-0.3-0.19-0.7 6
Growth of the Region s High Value Knowledge Workforce within a One-Seat Ride The trends are even more impressive when looking at the population directly connected to Lower Manhattan by a one seat ride via subway, ferry, or PATH. 10 5 More than 1/3 of the region's creative and professional workers are within a one-seat ride. Over 38% of the region's college-educated adults age 18-44 have a direct transit connection to Lower Manhattan. College-Educated Adults within One-Seat Ride Creative and Professional Workers within One-Seat Ride Total, 2013 1,144,657 864,246 Net Growth, +320,294 % Growth +38.9% +13.5 Share of Region, 2013 38.2% 35.1% Share Gain/Loss +6.4 +3.2 +102,627 1 7 4 3 8 6 2 9 12 Subway Lines 6 Ferry Stops & 12 Routes 2 PATH routes to NJ The findings are clear. Now well into the second decade of the new millenium, strong demographic trends are proving their staying power and further cementing Lower Manhattan as the epicenter of a high value workforce. 7