Notes on New York

The Big Apple had a pretty good 2025, but …

It’s a new year and a new mayor here in New York. So I’m going to be parochial today and talk about the state of America’s biggest city.

Here’s what you should know: New York is doing remarkably well on several fronts. Crime is down, and the city is as safe as it has ever been. The city’s economy has defied predictions of doom and staged a strong recovery. And the major policy experiment of 2025, the congestion charge on vehicles entering lower Manhattan, has been a huge success.

Yet there is a big problem afflicting New Yorkers: affordability. Not surprisingly, it’s the issue that Zohran Mamdani won on.

So let’s talk about what has gone right for the city some of us think of simply as “The City” and the challenges Mamdani faces.

Welcome to the hellscape — not

Many Americans, especially but not only on the right, have an apparently unshakable belief that New York is a crime-ridden hellscape. For example, two years ago you-know-who asserted that MURDERS & VIOLENT CRIME are hitting UNIMAGINABLE RECORDS.

Given this widespread perception, it’s startling to look at the facts. Murders in New York City, which were already low by historical standards, fell 20 percent in 2025. And here’s what they look like over the long term:

Source: Vital City and NYPD.

That’s right: Murders are down to 1950s levels. Because the city’s population has grown, the murder rate per 100,000 people is even lower than it was in the 50s.

Once you factor in New York’s relatively low number of auto accidents per capita — because so many people take public transit, which is much safer — it becomes clear that New York has a lower rate of violent death than almost anywhere else in America.

This low death rate, in turn, contributes to New York’s high life expectancy, which according to provisional data reached 83.2 years in 2024, about 4 years higher than the national average. That’s a complete reversal from the situation as recently as 1990, when New York’s life expectancy was 4 years less than the national average. This is a huge achievement if you believe, as I do, that not being dead is an important element in the quality of life.

Both low crime and high life expectancy can be attributed in part to immigration. New York’s foreign-born population hit a low point in 1970, when immigrants were only 18 percent of the city’s residents, a share that rose to almost 40 percent by 2010, where it remains. Contrary to everything MAGA says, there’s overwhelming evidence that immigrants are less likely to commit crimes than the native born, even when, like many New Yorkers, they come from what Trump calls shithole countries.

In case you’re wondering, that spike in murders in the late 1980s didn’t come from immigrants, it was caused by the crack cocaine epidemic.

Immigrants also have higher life expectancy than the native-born, partly reflecting the fact that healthy people are more likely than the less healthy to migrate. So New York’s large foreign-born population raises its average life expectancy.

Foreign-born workers have also buoyed New York’s economy — an economy that has staged an impressive post-pandemic recovery.

Wall Street abides

Remember this, from The New York Post?

As it turns out, not so much. What’s really remarkable, and contrary to many predictions that high taxes and regulation would lead the financial industry to decamp to Florida or Texas, is the recovery in demand for office space in New York’s central business district (lower Manhattan.) Nationally, office vacancy rates are still elevated thanks to the rise of remote work, and that’s true of New York too. But vacancies have declined much more rapidly in New York than in other major cities. As a report from New York’s comptroller’s office says, “Manhattan has clearly pulled away from the pack”:

What’s the secret to New York’s economic durability? Probably it has to do with the reason Manhattan is the nation’s financial center in the first place: The importance of face-to-face interaction. Financial firms have their offices in lower Manhattan, even though it has the nation’s highest rents, so they can easily hold meetings with other financial firms. And because New York’s business model is all about face-to-face meetings, it’s less easily replaced with Zoom calls than, say, business in Houston.

I wrote in November about the example of Trump supporter Ken Griffin’s Citadel, which made a big splash by moving from Chicago to Miami, but has now rented a lot of space in lower Manhattan.

True, there were a number of Wall Street voices proclaiming that they would flee the city if Zohran Mamdani were elected mayor. Strange to say, those voices mostly went quiet after he was.

Econ 101 works

On January 5, 2025, New York finally did what economists and urban planners have been urging for many years and imposed a fee on vehicles entering lower Manhattan.

Contrary to what many people seem to believe, congestion fees aren’t a left-wing idea or an attack on The American Way of Life. They’re straight Econ 101.

The logic runs as follows: Someone who chooses to drive into a congested area makes traffic worse and thereby imposes a cost on everyone else driving in that area. Yet potential drivers have no incentive to take these costs imposed on other people into account. Charging a fee helps align private and public interests, inducing people who have good alternatives to driving to use those alternatives, while making traffic faster for those who must drive.

In fact, New York’s $9 fee is very low compared with estimates of the social costs imposed by driving into lower Manhattan, which can run to $100 or more.

Despite this clear logic, the prospect that New York would actually implement textbook economics inspired hysterical opposition, with claims that it would create huge hardships and destroy the city’s economy. The Trump administration has repeatedly attempted to kill the program, and is still trying, even though it’s really hard to see why New York’s traffic policy should be a matter of federal concern. But as Curbed put it, “one thing [Trump] loves is the opportunity to stick it to anyone who’s earnest about activist good government.”

Indeed, back in October Trump announced that he had “terminated” the long-delayed project to build a new rail tunnel under the Hudson River, although this assertion — while it helped Democrat Mikie Sherrill win the New Jersey governor’s race — may have been empty showboating.

It will be hard to kill the congestion fee now, however, because it has been a striking success. Traffic speeds have increased. Pollution is down. The fee is generating a large amount of revenue for the city’s transit system. And predictions that it would be bad for business have proved completely wrong. Foot traffic in lower Manhattan is up, and so is overall spending in the city:

Source: Bloomberg

So New York’s congestion fee has been a big win for the city and also a win for policy driven by economic analysis over policy driven by knee-jerk opposition to government.

Affordability

There’s a lot of good news about New York, which offers a remarkably good quality of life these days — if you can afford a place to live. Which is, of course, the city’s biggest problem. Last summer the West Side Rag ran an article titled “The Upper West Side: A Neighborhood for Independent Minds.” My immediate thought was “Yeah, independent minds who can afford to pay $1700 a square foot for housing.” Other neighborhoods are cheaper, but no place in New York is affordable for typical families.

Mamdani is pro-housing-construction, surrounding himself with YIMBYs (yes in my backyard.) Several changes to the city charter that will effectively liberalize home construction also passed in November. The City Journal declared that the election marked the rise of the “left-YIMBY.”

Policy aside, one good omen is that developers have figured out a number of “architectural hacks” that are enabling a boom in conversions of office buildings to residential use.

Will New York start to become affordable again for the middle and working class? We’ll find out over the next few years.

MUSICAL CODA