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New York City Real Estate Decline Causing Funding Gap

The decline in the value of New York City real estate is causing a new set of problems. The city faces a $8 billion funding gap as revenue declines mount due to the implosion of Wall Street.

The government of Mayor Mike Bloomberg is already cutting back on staff and expenses, but the latest numbers indicate much more may need to be done in order to avert an economic disaster.

“We don’t know how long the recession will last, or how deep it will be, but it’s clear that New Yorkers should brace themselves for possibly the worst fiscal crisis since the 1970s,” New York State comptroller Thomas DiNapoli said.

The news is already getting worse. November saw New York City shed 20,000 jobs, the worst numbers since the last recession in 2001. A loss of 175,000 jobs in the next two years is currently expected due to the increased layoffs emerging from the securities sector. Massive investor losses are causing investors to pull money from Wall Street, causing more rapid job losses for the area.

Add in the cuts coming from the state and there’s a smaller piece of the pie for the city to feast on. Bloomberg’s office has already acknowledged that their earlier forecasts are too optimistic and that they’ll be making adjustments again to the city’s budget in upcoming months.