Escape From New York and San Francisco

Some people will never leave New York and San Francisco.

These two cultural capitals will always attract the attention of investors, entrepreneurs, newcomers, tourists, and storytellers, across the country and around the world. I wish them all the best, truly.

However, plenty of us are thinking of leaving and going somewhere away from these two cities, away from the sky-high rents and miserable commutes, away from the dissonance of stratospheric wealth next door to subterranean levels of poverty. The New York Times writes that the gap between the rich and the poor in Manhattan is the widest in the United States. Meanwhile, in San Francisco, you can make a six-figure income and still qualify for “low income” assistance programs.

Some local newspapers are taking note that more and more residents are escaping New York and San Francisco for more manageable cities. Let’s take a look at what’s motivating people to leave New York and San Francisco today, why the future for these two cities looks even bleaker, and where people — maybe even you — are headed.

Why Are People Leaving?

Typically, financial concerns top the list of reasons why people are leaving New York and San Francisco. The real estate market is just one signal of how fundamentally strange things have become in these two cities.

Imagine yourself with a million-dollar budget for a new home; put another way, imagine you’re shopping for a home that’s 4x more expensive than the typical American home. Your $1,000,000 wouldn’t even reach the median sales price for a home in either San Francisco or New York.

Right now, a cool million buys you a 1,000 sq. ft. shack by the highway in San Francisco or a 7,000 sq. ft. parking lot out in Brooklyn (mid-October 2018):

That’ll be a million damn dollars for either, sucker.

Meanwhile, in Chicago, the third-largest city in the nation: the Coonley House, a 6,000 sq. ft. Frank Lloyd Wright masterpiece, a home that has its own Wikipedia page, could be had for just $1,300,000. That price, coincidentally, lands just under the median sales price in either New York or San Francisco: $1,322,000.

The Coonley House, exterior
The Coonley House, interior


Rents are also sky-high in New York and San Francisco. According to Zumper, the typical rent for a one-bedroom apartment in New York is $2,850; in San Francisco, you can expect to pay $3,650. The typical rent for a one-bedroom is $1,010 for the country as a whole, or right around a third of the cost of these two coastal cities. Meanwhile, a one-bedroom will set you back $600 a month in Detroit, Michigan.

Commutes in New York or San Francisco are also absurd. Statistics from the U.S. Census show the average commute time in New York City at 40 minutes. Put another way, New Yorkers spend 30 more minutes commuting, every day, than the average American citizen, or 120 additional hours in a year. Yet these figures do not tell the story of the increase in “super-commuting” citizens, poor souls who spend more than two hours commuting, every day, usually because they cannot afford to live any closer to their jobs.

By the way, those jobs? Many are leaving New York and San Francisco because employers also find these two cities too expensive for their businesses.

It’s clear that the Wall Street financiers in New York and the cash-flush venture capitalists and startup lottery winners in San Francisco have their place. But what about the rest of us? Sure, we can hold on by our fingertips, we can stretch our budgets, we can sacrifice and spend and never save. But can we do that forever? Do we want that future? And what will that future be like, anyway?

A Dimmer Future

Reasons for leaving San Francisco and New York grow only stronger when we look into the future. Foremost among the motivations: climate change.

Guardian graphic. Source: Nature climate change, Mathew E. Hauer

Simply stated, climate change threatens coastal cities most. Absent any eleventh-hour Hail Mary consensus from the nations of the world, the seas will rise, the planet will warm, and people will have to move in an unprecedented mass migration due to climate change.

Climate change will transform every pattern that contributes to the stable operation of our civilization: heat extremes will hurt the vulnerable and make summers in southern American cities unbearable. Water supplies will shift and run dry in places. Some crops may flourish but many will have to be grown in new places, if they can be grown at all. Seas will flood neighborhoods of major cities. All the while, the least fortunate among us will bear the greatest pain from these changes. It is not hard to imagine New York and San Francisco directing their limited resources to protect first the enclaves of the rich and powerful while other neighborhoods suffer.

Before climate changes come to pass, however, another change threatens to transform the economic dynamics of our country, particularly the dynamics of the housing market: the aging and death of the Baby Boomers.

from CityLab

Boomers, for the most part, own their homes and have their wealth tied to their real estate holdings. For now, Boomers are “aging in place,” but at some unknowable point the future, this generation will start to sell or transfer their real estate valued over $30 trillion by some experts.

What will their children and grandchildren do with this wealth? Will this wealth drive prices in New York and San Francisco even higher? Will this wealth turn into a mirage when undesirable, old houses flood markets in undesirable, low-density suburbs? Even Fannie Mae, the nation’s leading mortgage lender, does not know what to expect, save for the unexpected.

Finally, the influence of capital in America continues to drive some very strange behavior. In our cities and towns, small businesses shut their doors — or never open them in the first place — as multinational corporations secure control of more and more of the economy. In New York, shuttered storefronts tell the tale of the toxic combination of finance and speculation in real estate.

Williamsburg, Brooklyn — one of New York’s most covetable, and emptiest, neighborhoods (photo from New York Times)

In San Francisco, we find what might be the strangest outcome of all: homes that earn more, every hour, than people — many times more, in fact. Take San Jose, California: according to Curbed SF, while the minimum wage in San Jose is around $13, homes appreciate more than $90 every working hour. In San Francisco, the average home earns over $60 for every working hour. Of course, this is great news if you already own a house — and it’s not great if you’re looking to make a home for yourself in the Bay Area.

Although it is impossible to know exactly what the future will bring, it seems certain that we can count on change, and in New York and San Francisco, some of this change seems likely to be for the worst.

Where Can We Go?

Thankfully, there are alternatives to New York and San Francisco.

Although there are signs that Americans are moving less, other signs indicate that Americans are leaving major cities for others. According to Redfin, New York and San Francisco lead with the highest net outflow of residents. More and more companies are welcoming, even encouraging, remote work, enabling employees to leave coastal cities.

Where are people moving? According to the same Redfin report, cities like Phoenix, Sacramento, Atlanta, Las Vegas, Portland, and Austin are receiving the most coastal expats. These cities are still relatively large, with many options for entertainment, dining, and activities, without the eye-watering price tags and soul-crushing commutes of San Francisco and New York.

Other reports share similar candidates for movers. The USA Today highlights cities like Breckenridge, Colorado, Vineyard Haven, Massachusetts, and Key West, Florida, as top destinations for moving Millennials. Forbes Magazine points to Jacksonville, Florida and Nashville, Tennessee, among others, as top destinations for Americans overall.

Breckenridge, CO, Key West, FL, and Nashville, TN

Other sources spin stories about the revitalization of the nation’s Rust Belt. CNBC describes Millennials as “flocking” to Rust Belt cities like Mansfield, Ohio, and Benton Harbor, Michigan, to escape the costs and pressures of New York and San Francisco.

Providers of lists of “Best Places to Live” are also putting their bets on smaller cities away from the coasts as the best destinations for those Americans looking to move to a new city. US News is betting on Colorado Springs, Colorado, Fayetteville, Arkansas, and Huntsville, Alabama. likes Ann Arbor, Michigan, Naperville, Illinois, and Plano, Texas. Meanwhile, Time Magazine is all-in on Frisco, Texas, Ashburn, Virginia, and Carmel, Indiana.

Frisco, TX, Colorado Springs, CO, and Ann Arbor, MI

Though the full picture remains murky, it seems possible that we’ve reached a turning point for the fortunes of New York and San Francisco, a turning point that might allow other American cities new opportunities for growth. Some people are trading the opportunities that New York and San Francisco provide — the best restaurants (if you can afford them), the best jobs (if you can compete and commit your life to them) — for the opportunities that other cities provide — a home of your own, a tolerable commute, and smaller, tighter-knit communities.

Maybe we should do the same?

Confronted with an untenable present and certain change of uncertain form in the future, it seems more important than ever that some of us escape the gravitational pull of cities like New York and San Francisco and establish a resilient network of cities across the country, ready to address the known and unknown unknowns of our shared future.

As City Observatory observes, we face a shortage of cities. We need cities, across the country, to grow, to build, and to provide the foundation for the future. Changes in taxation, distribution, and zoning have to take place at local, state, and federal levels to enable the kind of robust and attractive growth our cities need to provide a better future, for everyone. We need to act to encourage new jobs in new cities. We need to build more housing, in every city, to accommodate newcomers and current residents alike. We need to tell the unique stories that every city has to tell: simply saying “It’s cheaper!” won’t be enough to catalyze the kind of change we want to see.

Right to left, top to bottom: Denver, Nashville, Chicago, Charleston, Savannah, St. Louis, Portland, Austin, Detroit

Rather than an apocalyptic hellscape of American Have-Nots forever barred from entering the glistening coastal citadels of New York and San Francisco, let’s instead build a vibrant patchwork of hundreds of cities, each unique and each strong, providing opportunity and joy for Americans of all means.

I’m interested in exploring these cities — all cities, in fact, even New York and San Francisco — and telling their stories, through subjects both quantitative and qualitative. Subscribe here if you want to follow along and reach out to me if you want to chat.

Thanks for reading!

Cities, mobility, and product leadership in New York City

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