The astronomical cost of living and less-than-competitive tax rates have not hampered New York’s ability to attract millennials and young professionals.
The city’s culture, coupled with its relatively robust employment opportunities, keep the fires of younger demand stoked.
But while the greater New York area may be an ideal spot to start building a personal and professional life, the region as a whole may not be as desirable for those looking to enjoy their twilight years.
Financial service company, Bankrate just released a report that ranked each state in terms of its benefits for retiring residents. The state of New York finished last.
The study took into account data about health care quality, tax rates, weather, cost of living and crime rate, among others.
“New York is the worst state for retirement, owing mostly to the nation’s highest tax burden and a very high overall cost of living,” said the report. “West Virginia, Oregon, Arkansas and Louisiana comprise the rest of the bottom five.
“The trouble with New York is that everything costs more. Way more.
“Manhattan, for example, has the highest cost of living than any other U.S. city, and neighboring Brooklyn has the 4th highest. The average apartment in Manhattan costs $3,984 — four times the national average. Even in Brooklyn, it’s two-and-a-half times above average.
“A round of bowling in the city costs $12.55 (nearly three times the national average), and even a standard haircut ($22.08) is twice as expensive.ˮ
Adding to retirees’ financial burden are high tax rates. New York has the highest state and local tax burden of any in the nation, at 12.7 percent, far higher than the national average of 9.5 percent.
Despite the challenges, there are seniors who wish to move to Manhattan, some of them returning to the urban surroundings in which they were raised before moving out to the suburbs.
“What I’m finding is that the baby boomer generation is either renting, or they’re selling their long-term home outside of New York City,” Rachel Altschuler told Brokers Weekly. Altschuler is one half of the Altschuler Bartolucci team at Douglas Elliman.
Altschuler said that while they may be looking to downsize after parting ways with suburban life, senior shoppers are sometimes caught off guard by the reality of what they can afford.
“They’re going from 5,000 s/f (elsewhere) all the way down to 1,000 s/f in New York City, which is tough for them,” she said.
Calling it a “Catch-22,” Altschuler noted that her older clientele are often intrigued by the upfront affordability of co-ops, but their financial war-chest may not be stocked well enough to pass through the vetting process that goes hand in hand with those properties.
Forced to narrow the search to either the rental or condo markets can sometimes lead to a change of heart.
“Condos are more expensive and they may not be able to pay that much more,” said Altschuler, who has seen potential senior clients opt to cancel their plans to either move or remain in the city due to these challenges.
While some may be deterred, the demand is not evaporating.
“They are mostly moving to the Upper East Side or Brooklyn,” Altschuler’s partner, Nadia Bartolucci told Brokers Weekly. “(They’re moving) into the new developments in Brooklyn in Cobble Hill and Boreum Hill.”
Bartolucci said that downtown Manhattan is failing to attract new senior residents but the previously mentioned neighborhoods have continued to be a draw, especially for those looking to downsize.
Jay McDermott, area president of Northern New Jersey for K. Hovnanian Homes agreed that the Tri-State remains a draw for seniors who can find the right place to settle down.
“There’s absolutely demand,” McDermott said while discussing the Greater New York Area’s appeal to older residents.
“They want to stay close to family and friends and not necessarily move to another part of the state, or worse yet, out of state,” he said.
“Many of these buyers also have winter retreats, if you will, in Florida. Many of them are snow birds, but for the majority of the year, they want to stay close to their family and friends.”
McDermott’s focus, New Jersey, finished just outside the bottom ten in the Bankrate standings, coming in at 40th. In addition to the high cost-of-living that the state shares with its neighbor on the opposite side of the Hudson, a lack of available land adds to the frustration for seniors looking for property, according to McDermott.
K. Hovanian Homes combats that issue by building community living spaces that are designed specifically for older adults who wish to remain in the area when it’s time to downsize.
“For us, when we look at communities like Four Seasons at Great Notch, Four Seasons at Ridegmont, and Four Seasons at North Caldwell, all three of these projects really cater to upscale senior living,” McDemott said.
While these Northern New Jersey communities offer a multi-family experience, similar to what is available in the more urban New York environment, the company produces a single-family experience in Central and South Jersey, where the squeeze on land is less gripping.
McDermott said that K. Hovanian’s projects in those markets still offer community benefits, such as a clubhouse and other common areas, but due to adequate space, they can offer individual homes on separate lots that are a convenient size and lay out for senior residents.
While New Jersey may only be a stone’s throw away from Manhattan and the boroughs, there are still seniors who wish to spend their retirement in New York.
However, while they may want to remain near their younger loved ones who are building their lives in the heart of the metropolis, or simply want to remain in their hometown, a startling amount are simply unable to withstand the high cost of living.
A report that was released earlier this month by LiveOn NY found that more than 100,000 low-income seniors spend an average of seven years on housing waiting lists.
“This report confirms what many older New Yorkers have known all along: that the crisis of affordable senior housing is bad, and is getting rapidly worse,” Council Member Margaret Chin said. Chin is chair of the Council’s Committee on Aging. She said, “With the number of seniors growing at a faster rate than the population as a whole, our City must act now to maximize the amount of safe, accessible and affordable housing built in our neighborhoods. Clearly, our seniors cannot afford to languish on waiting lists for an average of seven years.
“That is why I am asking my Council colleagues to join me in supporting the Administration’s affordable housing proposals to confront the crisis that is plaguing our City’s seniors.”
Bobbie Sackman, director of public policy for LiveOn NY, said, “To say that the need for affordable housing for low-income seniors is ‘through the roof’ is an understatement.
“With over 100,000 older New Yorkers confirmed to be on waiting lists averaging seven years – with the total number likely over 200,000 – it is obvious the city has a responsibility to pave the way to building more affordable housing. LiveOn NY supports Mayor de Blasio’s ZQA plan because it would streamline the development process, make it more affordable to build, and make use of underutilized parking lots attached to senior buildings which are, by law, only for the building’s residents.
“LiveOn NY looks to City Council to allow ZQA, as proposed, to pass. The development process to build affordable senior housing must be made more rational and efficient so seniors don’t have to wait so long. Without the passage of ZQA, these lots will sit undeveloped and seniors will keep waiting.”