Last week, entrepreneur and author James Altucher published an essay on LinkedIn saying that New York City was "completely dead." Altucher took aim at commercial real estate, noting that the Time-Life building only had 500 workers in it. He also pointed out that rents are falling and that his friends are leaving the city in droves, striking out for other cities and that his favorite restaurants have closed permanently.
The essay quickly made the rounds online, and thousands of New York denizens rushed to their city's defense, none perhaps more famous than Jerry Seinfeld, who penned an opinion piece in the New York Times stating that New York City is far from dead. He referred to Altuscher as a putz, and his passionate retort cited the city's energy and vibrancy. Seinfeld has been sheltering in place at his estate in Long Island that he bought from Billy Joel but also maintains a residence in the Beresford building on the Upper West Side along Central Park. In an editorial published in the Wall Street Journal two weeks ago, President Trump and Department of Housing and Urban Development Secretary Ben Carson said that liberals are fleeing the neighborhood.
Will the controversy help or hurt?
The urban exodus has been a popular media talking point in the wake of COVID-19. Rents have fallen in places like San Francisco, New York, and Boston. The fact that large companies in Silicon Valley, Seattle, and elsewhere have said that their employees can work from home until 2021 and beyond has had a tectonic impact on how many workers consider their next real estate moves. Suburban towns around New York City have seen prices and demand spike dramatically.
However, Seinfeld isn't the only person defending the benefits of cities. Some of the people who left New York City over the summer are planning to return. As New York City's COVID-19 numbers continue to trend downward, people feel more comfortable returning to the city. While Broadway and many other popular venues are closed for the season, some restaurants and venues have opened. The fierce pride that New Yorkers take in their city may well be galvanized by the current discussions of the city being on its last legs.
Not Altucher's first real estate salvo
This is not the first time that James Altucher has expressed controversial views. Anotheressay of his back in 2015 called owning a home "financial suicide." That post earned him a round of media interviews and the enmity of Realtors around the country. His next move after that was to spend several years living in Airbnbs around New York City after paring all his belongings down to just two bags.
This latest move may have less to do with Altucher's opinions about the city and more about his desire for publicity. Even though he has decamped to Miami, he still owns a comedy club in New York.
The Millionacres bottom line
New York and San Francisco may see rents drop, but these are two of the most expensive cities in the United States and a price correction is not entirely unanticipated. Cities rise and fall in popularity over time depending on a wide variety of factors. Right now, the combination of an easily-spread pandemic and urban unrest have made city life seem less desirable.
However, once a COVID-19 vaccine is widely available and the economy stabilizes, people may well miss the very qualities of a city that Jerry Seinfeld referenced: energy, excitement, and the opportunities that are available in an area like New York City. Amazon (NASDAQ: AMZN) is planning to bring more jobs to New York City, and Facebook (NASDAQ: FB) recently announced a 730,00-square-foot lease of a massive building near Penn Station. Manhattan may have some rough months ahead of it, but it's hard to bet against the city that never sleeps.