Companies located in New York’s financial district are opting for a mass withdrawal from the city, with several reasons encouraging them to move their offices.
The new economic and social landscape unleashed by the spread of the CCP virus is causing drastic changes and reorganizations of all kinds. New York City is seeing a forced transformation due to many companies, mainly in the finance sector, moving their offices to other places far from what is now known as Wall Street, the world’s largest financial center.
Already in 2018, in an interesting analysis, Bloomberg media anticipated that New York City’s financial services and professional industries are considering eliminating up to 20 percent of their footprint in the city.
In the late 1700s, when the Wall Street financial center took off, the new nation needed cash, and that’s where it found it. The proximity of the various financial agents, large banks, law firms, and other related professionals was key to information flow. As long as checks and money were physical, proximity was a determining factor for developing the economy.
With the advances in information technology from 1960 onwards, proximity ceased to be a conditional factor. Already at that time, we can see the first expansion of large firms in more remote areas, as was the case of Morgan Stanley, who moved to Sixth Avenue. Technology continued to advance, especially with the development of the Internet, and the configuration of urban spaces continued its metamorphosis.
No one imagined that a virus in the year 2020, accompanied by tax-obsessed local economic policies and a mayor who neglected public order, would generate an unprecedented mass exodus from the historical financial center.
Also, New York Democrats are seeking to tax stock transactions in the state. The bill proposes a tax of 1.25 cents on the sale of shares worth $5 or less and up to 5 cents for shares worth more than $20 per share. No wonder many hedge fund managers are leaving town for more hospitable places like Florida.
According to a study by the Partnership for New York City, which published the Zero Hedge website about 25 percent of employers are considering reducing their footprint in the city by at least 20 percent. About 16 percent expect to move their jobs out of the city.
Besides, companies expect only 10 percent of employees to return to their jobs this summer. That number is only expected to rise to 40 percent by the end of 2020.
The same report notes that the city’s economy could shrink by 13 percent this year. And in turn, the city’s tax losses could exceed $37 million over the next two years.
The future and urban reconfiguration of the city is uncertain. In large part, it will depend on decisions and political will to encourage, or not, companies to remain in their historical sites or redeploy to the rest of the country. their historic sites or to redeploy to the rest of the country.