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- Multimillionaires – particularly wealthy bankers – are abandoning New York City, John Aidan Byrne of the New York Post reported.
- New York City’s high cost of living is pushing them toward other states, such as Florida, Byrne reported.
- But New York City isn’t the only city rich residents are fleeing – an expensive housing market in San Francisco is also driving people away.
The cost of living in some cities is getting out of control – even for the ultrarich.
More multimillionaires, particularly those with Wall Street jobs, are expected to leave New York City this year, John Aidan Byrne of the New York Post reported.
“The massive bonus pool typical for city workers is under stress as more bankers and traders bolt for Florida and other states to escape New York’s punishing taxes and steep living costs,” Byrne wrote, citing experts who analyzed the latest compensation data from the state comptroller.
In 2016, New York lost $8.4 billion because of residents – many of them wealthy bankers – moving to other states, Byrne reported. Lower bonuses aren’t helping matters – the finance industry saw a dip in the average employee bonus by nearly 17%, and the comptroller expects another 9% decrease in 2019, Byrne wrote.
However, Alan Johnson, the CEO of the New York-based compensation consultancy Johnson Associates, told Byrne the data is based on the expectation of wealthy bankers moving, rather than a decrease in pay.
New York’s pricey real-estate market is also at play: It’s gotten so expensive that many buyers are forgoing apartments in the sky for basements, according to a New York Times article. With more space, some of these basements offer NYC dwellers more bang for their buck.
Perhaps that’s why the city has a surplus of exorbitantly expensive ultra-luxury penthouses. They’re not selling, and some real-estate companies are splitting these penthouses into two smaller, cheaper units to get them off the market, Business Insider’s Katie Warren reported.
San Francisco’s high cost of living is also pushing people away
But New York isn’t the only city where pricey real estate and a high cost of living are driving wealthy residents away. In San Francisco, low supply and high demand for homes is driving housing prices to new heights, Business Insider previously reported.
In San Francisco, a median-price home sells for $1.6 million, Melia Robinson wrote in 2018. It’s so expensive that only 12% of households can afford homes there, according to Robinson. And nearly 60% of tech workers can’t afford homes in the area – and that’s on a six-figure salary.
The housing market could get even more expensive soon, thanks to a potential rise in its millionaire population if several tech startups go public as expected this year, Nellie Bowles of The New York Times reported.
Meanwhile, Chicago, Los Angeles, and Detroit are the three most popular metro areas residents have been abandoning in the past decade for a variety of reasons, according to 24/7 Wall Street.