Affordability isn’t one thing, it’s many — and the city’s biggest problem is the flight of families.
If you can make it here, you can make it anywhere. But with the cost of living on the rise, the hurdle to making it in New York seems higher than ever. Zohran Mamdani tapped into that sentiment on his way to winning the mayoralty in 2025, with affordability at the heart of his campaign. But though Mamdani’s core of support skewed young, educated and childless, it is middle-class families — in need of larger spaces and costly childcare — upon whom affordability burdens fall the hardest. These days, more and more of them are opting out of the city altogether.
To make New York a place where families can “afford to live and afford to dream,” as he promised on his way to Gracie Mansion, the mayor and other City and State policymakers first need to recognize the scope of middle-class family discontent and its economic genesis. Since 2020, married couples with kids have been leaving the city en masse. Taken together, New York’s migration and economic data reveal a city in the throes of a Great Decompression, with middle-class families finding themselves pushed out.
The family exodus can be observed most acutely by isolating the city’s population of young children, those under the age of 5. Manhattan, the Bronx, Brooklyn, Queens and Staten Island saw their populations of young children fall by 14.4%, 10%, 9.9%, 8.2% and 4.8%, respectively, from April 2020 through July 2024. Counted together, the five boroughs displayed a 9.9% decline. These figures are part of a wider national pattern, but New York is prominent among the biggest losers, with the counties of New York, Bronx and Kings making up three of the top 20 large urban counties nationally by percentage decline.
Looking back further shows that the pandemic and postpandemic trend is not an anomaly, but an intensification of a long downward trajectory. Since 2000, the city’s population has risen about 7% and now stands around 8.6 million, but the population under age 18 is down by 15%. While falling birth rates are one cause, families picking up stakes and leaving the city is another. Based on the U.S. Census Bureau’s 2021-2024 American Community Survey samples, I estimate that about 89,000 married couples with children under 18 left New York City for its suburbs or other parts of the country, while only about 17,000 such families moved in. The estimated number of children in the departing families exceeded the number in the arriving families by more than 100,000.
Middle-class migration
This exodus is worrying in aggregate, but the composition of the change is most telling. New York’s family migration imbalance is starkest in the middle class.
Among married couples with children whose incomes fit into the New York metro area’s middle three income quintiles — covering families from the 20th to the 80th percentiles — about 5.7 families moved out of the city for every one that moved in during the 2021-2024 period.Among the same sort of families whose incomes fit into the metro area’s top 5%, by contrast, about 2.1 families departed for every one that arrived. The contrast is even starker when excluding the pandemic-skewed 2021 sample. Over the 2022-2024 period, 4.9 families in the middle three income quintiles departed for every one that moved in, whereas the ratio among families in the top 5% was just 1.4 to 1, suggesting that the city remains relatively attractive for families at the top of the income spectrum.
Propelling this trend is that middle-class incomes have lagged behind the growth enjoyed by New York’s highest earners, an economic dynamic that I call the Great Decompression.
Over the past half century, incomes for workers across the skill spectrum, nationally and in New York, have risen, but they’ve done so at markedly different rates. Globalization and the information technology revolution have delivered hefty returns to workers in tradable service industries and middling wage growth to workers in production industries and nontradable local services — sectors offering jobs in retail, jobs with the city government or schools and jobs in construction and maintenance, for example.
This has reversed the country’s mid-20th century trend of income convergence, whereby lower- and middle-class incomes rose faster than those at the top.
In one sense, New York’s economy has been a proverbial tide lifting all boats. During the past half century, as American Enterprise Institute scholar Scott Winship has written in these pages, New Yorkers at all points on the income distribution have enjoyed a rise in prosperity. Winship finds that since 1970, “the income distribution in New York City has shifted upward, leaving fewer people with living standards as low as was typical in 1970.”
Back then, only 38% of New Yorkers lived in households with income exceeding $67,625 (in inflation-adjusted terms), while today 58% of New Yorkers do. Moreover, in 1970 only about 5% of New Yorkers lived in households with income exceeding $130,000 (inflation-adjusted), compared to more than 35% today. As Winship puts it, “The dominant trend for economic well-being — in New York City and elsewhere — is the continued rise in living standards as measured by inflation-adjusted incomes.”
But runaway income growth near the top of the distribution has complicated the upward climb in average living standards. In New York, with its dense ecosystems for high-skill, high-earning professionals in fields like finance, media and technology, the different pace of income growth is much more noticeable than it is nationally.
I find that since 1975, the median earned income among New York City’s prime-age workers has risen from $44,000 (inflation-adjusted) to $65,000, a healthy 48% increase. That 48% gain is matched, more or less, for workers below the median income too. Moving up the income deciles from the median, though, starts to show the top pulling away, with each decile above the median reflecting a progressively stronger increase.
For workers at the 90th percentile, earned income has risen from $85,000 (inflation-adjusted) to $200,000, a much-more-than-healthy 135% increase. The ratio between the city’s 90th percentile income and its 50th percentile income, to use a common convention, has thus shot up from 1.93 in 1975 to 3.08 today.
Competition amid constraint
Fast income growth for high earners is not in and of itself a problem, but, when families are competing for goods and services in sectors where supply isn’t keeping up with demand, the results can be a problem indeed. This is where Mayor Mamdani’s affordability outlook runs into trouble. He talks about affordability as though it’s one thing felt almost equally across the income spectrum (with the exception of the very rich). But affordability means dramatically different things to differently situated New Yorkers.
For families with children, as Liena Zagare and Connor O’Brien highlighted for the Manhattan Institute this year, markets for family-size housing and childcare are the two cardinal challenges. Survey data and interviews suggest that many departing families think the city has done poorly at providing for these needs.
The numbers back up their conclusion. Housing is much costlier relative to incomes than it was just a few years ago, let alone a generation ago.While observing rents in New York City is notoriously difficult, fair-market rent — the estimate from the federal Department of Housing and Urban Development (HUD) of 40th percentile gross rents among recent movers for standard-quality units within a metro area — shows the trend. New York's three-bedroom unit fair-market rent (FMR) increased from $1,322 in 2005 to $2,324 in 2019 to $3,644 in 2026.
Complicating this a bit, HUD’s current geographic grouping includes Putnam, Rockland and Westchester counties in its New York values. These counties have proportionally few three-bedroom rental units, but in order to isolate FMR for the five boroughs, I used HUD’s methodology and ZIP code data to estimate city-proper 40th percentile rents. The result for the most recent year is an even higher FMR proxy of $3,710.
That cost increase — a near trebling over two decades and an increase of about 50% since just before the pandemic — has trounced family income gains for the middle class.Using census data, I estimate that New York’s 40th percentile income for married couples with kids rose from $51,500 in 2005 to $79,800 in 2019 to $101,500 in 2024. On paper, these family income gains — about 100% over two decades and more than 20% since before the pandemic — seem substantial. But they have not kept pace with New York’s tight housing market.
Childcare, a necessity for families in which both parents work, completes the one-two cost punch. According to the state’s Office of Children and Family Services (OCFS), the median annualized cost for a spot in a daycare center across the five boroughs for a baby is about $21,500. Childcare data haven’t been tracked thoroughly for as long as housing data have, but OCFS records indicate costs have risen on par with incomes, mitigating families’ nominal income growth.
Imagine a New York family expecting their third child. Let’s assume they’ll have two kids in public elementary school and a baby in daycare.If the family wanted to move from a two-bedroom to a three-bedroom place in the city, per HUD findings, they would encounter a fair-market rent of about $44,000 per year. Combined with the OCFS figure, the family’s housing and childcare costs alone would climb to over $65,000 — virtually untenable at the 40th percentile family income of $101,500, setting aside taxes and transfers. While there’s nothing novel in pointing to the lower costs suburbs offer, the comparison is still worthwhile. Imagine that New York family looks across the Hudson to New Jersey. In the region encompassing Bergen and Passaic counties, HUD’s three-bedroom FMR is $2,835 — $800 less per month than in the city. I have run an additional analysis for the Bergen-Passaic statistical area as well, using the same recent-mover methodology I applied to the five boroughs of New York. I estimate the three-bedroom FMR proxy to be $2,880, making it $830 cheaper per month than the five boroughs.
Average center-based infant care in Bergen County and Passaic County, meanwhile, comes in about $100 less per month than in the city. In other words, a family can save about $900 per month — $10,800 annually — on these two core budget items alone by leaving the city. It’s no wonder that about 42,000 married couples with kids decamped for the suburbs between 2021 and 2024.
A related consequence is that the spatial distribution of affluence and disadvantage has shifted markedly in the past half century, especially as middle-class families have left areas that were once mixed-income. While the city has always had pockets of wealth and poverty, nowadays geographic divisions among the classes are sharper than ever before.
To boost the middle class, build
Because of the structural nature of the Great Decompression — rooted in technological, industrial and global economic change — no municipal policies can fully mitigate its effects. The cost-of-living difficulties middle-class families face are in large part a product of the city’s success. New York is the global epicenter of several high-productivity industries and thus finds itself in a competition spiral that pressures the middle class out.
Childcare, in particular, may prove intractable, notwithstanding Mayor Mamdani’s campaign pledges. New York’s high-skill economy will continue to pull wages higher for caregivers, and thus prices for parents seeking childcare, a paradox known as the Baumol effect. While the City can spend to provide free childcare, doing so merely shifts costs to the tax base; it doesn’t fundamentally lower them.
Yet if New York wants to become more hospitable to middle-class families, there is a lever at hand: expanding the housing supply.While housing in the greatest city in the world will never be cheap, it is the confluence of the city’s rising proportion of high earners with its multidecade aversion to new housing construction that has resulted in rental bidding wars. As Eric Kober explained in the Bigger Apple newsletter in August, the genesis of the City’s housing supply failure is its 1960s zoning paradigm that poorly anticipated the population gain that has transpired. To the extent that the City has built new housing, it generally hasn’t been the kind that growing families want.
These days, our hypothetical middle-class family hoping for another room for the kids will implicitly come up against a higher-income household hoping for another room for a Peloton or a home office. The City’s net rental vacancy rate of just 1.4% is the brightest red flag, as Tahra Hoops identified for Vital City in August. “In a city with roughly 2.36 million rental apartments,” she notes, “fewer than 34,000 of them are available.” There simply isn’t enough housing stock on the market for middle-class New York families to find the types of places they want.
While there’s no perfect demographic ideal to chase, a city that families can call home is one that will be economically and culturally the richest in the long run. The children that the city can retain will grow into young adults with deep New York ties and networks, making them a promising font of entrepreneurship and creativity in the future. With the Great Decompression showing no signs of slowing, the only way New York can hold onto its middle-class families — and hopefully welcome more — is by matching its overall economic strength with a corresponding housing expansion.
