Tri-State Regional Economy May Encourage Relocation Opportunities
The tri-state regional economy encompassing New York, Connecticut, and New Jersey may encourage future relocation opportunities. This area includes large swaths of southeastern New York, as well as parts of the Hudson River Valley. It also includes the western end of Long Island, northern New Jersey, and southwestern Connecticut.
This large and dynamic metropolitan area accounts for nearly 10% of the United States entire Gross Domestic Product (GDP). Within the state of New York, the city of New York serves as the center of activity. As a result, commuting patterns across the area reflect the draw of New York City as an engine of job growth.
Tri-State Regional Economy: Industries
Several industries maintain a major global presence in New York City and throughout the metropolitan region, including:
Annually, the overall tri-state regional economy produces goods and services valued at $1.5 trillion. This is more than most other nations, placing this region within the world’s twenty largest economies.
Tri-State Regional Economy: Housing
The cost of living in New York City is 148% of the US average, making it the most expensive. The largest component of this cost of living is the cost of housing. Demand for housing near employment centers tends to drive up its cost. The tri-state regional economy reflects significant differences in housing costs. These costs often vary widely based on several factors including proximity to New York City, access to transportation networks, variety and availability of the local housing stock, amount of household goods to move, local neighborhood amenities, and overall desirability of the location.
Median Home Values (reported by Zillow/October 2019)
New York City/Manhattan: $1,190,800
Hudson River Valley/Sleepy Hollow: $730,800
Western Long Island/Hempstead: $375,300
Northern New Jersey/Englewood: $381,200
Southwestern Connecticut/Stamford: $284,800
Apartment Rents (reported by RentCafe/October 2019)
New York City/Manhattan: $4,336
Hudson River Valley/Sleepy Hollow: $2,046
Western Long Island/ Hempstead: $1,877
Northern New Jersey/Englewood: $2,322
Southwestern Connecticut/Stamford: $2,459
Industry Growth Leads to Outsize Commuting Patterns
The tri-state regional economy is highly diverse. This diversity benefits the area’s overall growth, as job seekers can easily find opportunities. Commuting patterns reflect the status of New York City as the region’s engine for jobs. The state of New York taxes income that commuters from New Jersey and Connecticut make from jobs they hold in New York. As a result, the New York state government gains significantly more tax revenue.
Nonresidents account for approximately 15% of total income taxes owed to New York, in the amount of $6.2 billion. Of this $6.2 Billion:
- New Jersey residents account for $3.1 Billion, 50% of the total
- Connecticut residents account for $1.2 Billion, nearly 20% of the total
Financial Impact on Commuters in the Tri-State Regional Economy
Due to differences in tax rates and other factors, the financial impact on commuters into New York may be difficult to discern. Some states give credit for taxes paid to other jurisdictions. However, the state of New York does not offer any credit for commuters.
New York City generates a large number of high-paying jobs, and wages for many occupations are higher in the city than elsewhere around the tri-state regional economy. Residents in New Jersey and Connecticut who obtain jobs in New York City may initially look at the cost of a train ticket or a few added toll costs as their only additional expense. However, the true costs may include:
- Parking costs at transportation system lots
- Train, subway, or bus ticket costs
- Car maintenance costs for driving to lots or into the city
- Toll costs
- Automobile insurance costs
- Extra tax liability to New York State government
- Extra tax liability to New York City government
- Higher costs for food and drinks purchased in New York City
- Increased taxes on goods purchased in New York City
- Higher costs for employee’s share of employer-provided benefits
- Loss of time for family and social obligations due to increased length of commute
- Increased exposure to occupational stress factors such as crowds and noise
- Higher tendency to develop stress-related illness
Some estimates of the true costs of commuting indicate a cost of $795 or more for each mile someone lives from their job. Assuming someone’s job is at 14 Penn Plaza, 225 West 24th Street, in New York City, estimates from these locations following the fastest route using Google maps might indicate the following:
New York City/Manhattan: 2.9 miles, $2,305.50
Hudson River Valley/Sleepy Hollow: 28.8 miles, $22,896.00
Western Long Island/Hempstead: 27.3 miles, $21,703.50
Northern New Jersey/Englewood: 14.7 miles, $11,686.50
Southwestern Connecticut/Stamford: 40.5 miles, $32,197.50
Relocation Opportunities in the Tri-State Regional Economy
Relocation Outside the Region
Employers that have large numbers of workers who commute into New York City should determine if the company can benefit from relocation. Advances in technology permit many functions to be easily and seamlessly performed regardless of location. Many firms based in New York City or that have significant operations there have embarked on similar initiatives, hoping to leverage technology while reducing costs. Relocation may include global destinations such as the country of Poland or domestic destinations such as Salt Lake City, Utah.
Relocation Within the Region
Even within the tri-state regional economy, relocation might be local in nature. It may include moving corporate functions from New York City to New Jersey or Connecticut. Alternatively, it may include moving those functions from these states to New York City. For example, Diageo is relocating from Norwalk, Connecticut, to New York City, to help the firm find a stronger base of employees with marketing talent. Wright Investors’ Service is relocating from Greenwich, Connecticut, to Shelton, Connecticut, because many of the firm’s employees live in that area and the move will help the company reduce long in-state commuting patterns. Credibility Capital relocated from New York City to Newark, New Jersey with the aid of a significant state incentive in the amount of $6.5 million.
What Should Employers do About the Tri-State Regional Economy?
Companies in the tri-state regional economy should examine their need to maintain operations in a specific location. For example, some companies have operations that function in a distinct location such as the New York Stock Exchange. There may be opportunities to utilize relocation for operations that support the positions that remain tied to this location. As a result, both the organization and many employees may benefit from reduced direct and indirect costs related to commuting patterns
Companies should also work with a qualified and experienced Relocation Management Company (RMC). RMCs can help companies design a robust talent acquisition program. Also, RMCs can help a company design an industry-leading relocation program that will give them a competitive advantage in the market for highly skilled employees.
Industry Benchmarking Studies Help Employers Compare Their Relocation Program
GMS has recently published several Industry Benchmarking Studies to help employers learn whether their company’s relocation program is designed following industry-specific best practices. There are many benefits to a corporate relocation policy benchmarking. For example, employers can learn how their relocation program compares to those offered by competitors in their specific industry.
Companies that relocate to gain access to a base of talent with knowledge and skills should review their relocation program to ensure that at a minimum it matches what competitors provide. RMCs may provide specific recommendations to help the company’s relocation program excel in talent acquisition based on specific industry practices.
Industry best practice is to schedule a relocation program and policy review every 12 to 18 months to ensure your company maintains its competitive position. This review will also help your company learn about how the relocation industry is evolving to meet increased employee demands. Importantly, it will also include a review of commuting costs and patterns in the tri-state regional economy.
GMS’ team of corporate relocation experts has helped thousands of our clients understand how to leverage relocation in the tri-state regional economy to gain benefits, reduce costs, and attract and retain talent. Our team can help your company by using industry best practices to design your relocation program. This will increase your company’s ability to attract and retain new employees.
GMS was the first relocation company to register as a .com. The company also created the first online interactive tools and calculators, and revolutionized the entire relocation industry. GMS continues to set the industry pace as the pioneer in innovation and technology solutions with its proprietary MyRelocation™ technology platform.
Global Mobility Solutions is proud to be named and ranked #1 Overall, and #1 in Quality of Service by HRO Today’s 2019 Baker’s Dozen Customer Satisfaction Survey.
Contact our experts online to discuss your company’s interest in learning more about relocation opportunities in the tri-state regional economy, or give us a call at 800.617.1904 or 480.922.0700 today.