New York, NY – As work from home becomes more routine in the aftermath of the pandemic, retailers throughout the city will continue to take a huge hit, a new analysis by New York City Comptroller Scott Stringer reveals.
“Our analysis shows that the pandemic has fundamentally altered the way people work, with far reaching implications on the city’s economy and tax base,” the Comptroller said in a statement. “As remote work and hybrid work schedules keep many workers closer to home, small businesses in residential districts may see a boost from New Yorkers spending more in their neighborhoods. However, the loss of foot traffic and lower sales may be severely felt by small businesses in the city’s commercial districts.”
According to the comptroller’s analysis, spending near the office will be largely replaced with spending closer to home for the 3.7 million city residents who both live and work in New York City. Overall, city sales tax revenue is estimated to be reduced by $111 million annually as a result of increased work from home. While the loss in revenue is relatively minor when compared to the $7 billion in sales tax revenue that the city is expected to raise in 2022, the impact will be severely felt by the many small businesses that operate in the commercial districts which will face lower sales.
“We must ensure that all our small businesses get the support they need in this economy; that means cutting red tape and making government more user-friendly, helping immigrant entrepreneurs scale up to new markets, and closing the digital divide so that brick-and-mortar small businesses can effectively compete with larger online retailers,” Stringer added.
If the roughly 500,000 office workers who commute into New York City return to the office on a three-day a week basis, retail demand would be lowered by $1.6 billion annually with a resulting loss in tax revenue of nearly $146 million, the new report finds.