Total existing-home sales—completed transactions that include single-family homes, townhomes, condominiums and co-ops—rose 3.1% from December to a seasonally adjusted annual rate of 4.00 million in January.
Middle Class Workers, Not Millionaires Moving Out of New York
COVID, not taxes, drove 2,400 millionaire households out of New York in 2020-21. Yet New York gained 17,500 millionaire households in the same period, a 7x increase that belies tax migration theories.
ALBANY—While the Covid pandemic may have driven out a good number of millionaires and other high-income earners out of New York City and New York State, with the pandemic on the wane, the out-migration trends have reversed. A newly released report by the Fiscal Policy Institute reveals that the richest New Yorkers are now far less likely to move out of New York than middle-class residents.
The “Who is Leaving New York State” report noted that the out-migration numbers have returned to pre-Covid trend patterns where less high-income earners are leaving the state and a greater share of middle-class residents are looking for the exit doors out of the Empire State.
In addition, the Fiscal Policy Institute analysis found that most high-income earners out-migration during the pandemic was due to flight from New York City among those who could work from home rather than tax-related reasons. High-income earners are defined as the top 1% of New Yorkers—those earning +$815,000 per year.
After strong population growth during the 2010s, the state was hammered with significant population migration and decline due to the COVID-19 pandemic. “New York’s strong population growth in the 2010s was concentrated in New York City. The city’s 7.7% population growth through the decade accounted for more than three-quarters (76.5%) of the state’s total population growth. The Covid pandemic brought a sharp reversal to this pattern. Since 2020, the city has accounted for nearly all (93.9%) of the state’s population loss,” the report stated.
According to the report, during the height of the pandemic (2020-2022), New York State suffered a net domestic migration loss of 595,400 residents, with New York City contributing a net loss of 529,400 city residents to that total.
Among the report’s key findings were:
- Covid, not taxes, explained the high-earner migration out of New York in 2020 and 2021.
- High earner migration out of New York during Covid was temporary, and primarily driven by work-from-home and flight from New York City.
- In 2022—after two years of elevated, pandemic-induced out-migration—high earners’ migration rates returned to pre-Covid levels. While New York lost 2,400 millionaire households over the past three years (2020- 2022), New York gained 17,500 millionaire households in the same period due to a strong economy and rising wages.
- There is no statistically significant evidence of tax migration out of New York.
- High earning New Yorkers move out of New York State at one-quarter the rate of the rest of the population during typical, non-Covid years.
- Out-migration for those most impacted by recent effective tax increases (in 2017 and 2021) did not increase significantly in response to the tax increases.
- When New York’s high earners move, they are more likely to move to other relatively high-tax states.
The report noted that despite the press headlines and fears of the state losing high-income earners and revenue due to the pandemic, the state’s strong fiscal and economic outlook has minimized the damage.
“Despite out-migration by some high earners during the pandemic, the state’s total population of those earning over $1 million annually grew by about 30% during the pandemic. Thanks to federal stimulus policies, low interest rates, and a booming stock market, many high earning New Yorkers saw significant income gains during the pandemic. The state’s tax revenues also grew substantially during the pandemic and have remained relatively steady. Thus, not only is high earner tax migration largely a myth, but there is no need to fear for the state’s fiscal and economic future.”
FPI Director Nathan Gusdorf said of the report’s findings: “In order to address New York’s recent population loss, we must first understand who is leaving—and what is pushing them out the door. Contrary to conventional wisdom, the richest do not leave the state more frequently than other New Yorkers; rather, they typically leave at one quarter the rate of the general population in normal, non-Covid years. Additionally, the evidence dispels the myth that the rich are moving away in search of lower taxes. This analysis finds that tax hikes do not provoke any significant increase in high earner migration out of the state—and when high earners do leave, they are more likely to move to other relatively high tax states than to a low tax state.”
Gusdorf added, “New York is not struggling to retain the most affluent. New York is losing working and middle-class families. In the face of projected budget gaps, the city and state should avoid cuts to essential public services—which will only make life more costly for the working and middle-class New Yorkers who are already leaving the state at elevated rates.”
In connection with the report, the FPI conducted a statistical analysis of eight years of data from the U.S. Census Bureau’s American Community Survey (ACS), tax data from the IRS, and New York State tax data.