New York City's MTA Crisis Could Be "Catastrophic" For Housing Market Tyler Durden Tue, 09/01/2020 - 23:00
Readers may recall New York City's MTA proposed drastic transit cuts and higher fares after losing an astonishing $200 million per week after a collapse in ridership following the virus pandemic. As a result, the transit authority is preparing for a "doomsday scenario" to include a 40% reduction in service for both commuter trains and busses, a move that would result in longer travel times and make commuting a nightmare.
A reduction in NYC's transit system could be nearing if Washington doesn't pass another coronavirus relief package. Both Republicans are Democrats have stalled for at least a month in agreeing on the dollar amount of the next round of stimulus, already resulting in a dangerous fiscal cliff that could soon jeopardize the nation's economic recovery.
If transit cuts are seen, the effects could be devastating to the city's economy, said Bill Rudin, CEO of Rudin Management, and chairman of the Real Estate Board of New York, who spoke with The Real Deal.
"The ability to move people effectively, expeditiously, efficiently is critical to our economic engine," Rudin said.
The latest mobility trends report via Apple shows people using NYC public transportation on Sept. 1 continues to remain halved of what it was before the virus.
One look at Time Squares on Tuesday afternoon and foot traffic remains dead - the city is still a "ghost town."
Nicole Gelinas, a senior fellow at the Manhattan Institute, focused on transportation and infrastructure policy, said the transport authority "could not persist very long in continuing full service with just a fraction of their fare and toll revenue."
Gelinas said, "I do think they need more money from the federal government and also need to look at rational cost-cutting."
Drastic cuts to the city's transit system could slow the economic recovery in the metro area as the velocity of people moving around, transacting, and or just doing business that uses public transportation be much slower than pre-virus times. Longer travel times would undoubtedly lead to continued ridership losses and more future cuts to service.
Scott Rechler, chairman and CEO of RXR Realty, who is also chairman of the Regional Plan Association and a former MTA board member, claims transit cuts "would be catastrophic for the real estate industry," as well as the city's overall economy.
Already, real estate prices in Manhattan are pressured as folks and businesses are leaving the borough for rural communities amid depressionary unemployment, virus pandemic, social unrest, and surging violent crime.
If Congress can't agree on the next round of stimulus in the near term, NYC's MTA could undergo transit cuts, resulting in a chain reaction that would cripple the city's already limping recovery.
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