Jun 6, 2018
Welcome to this Special Edition of Our News Report.
We are celebrating our 1 year anniversary with this special report on Brooklyn, local development, the economy and how the borough is being shaped for the next 100 years.
Thank you for listening, reading and being a part of our mission here at Brooklyn Made.
Over the past year, we’ve been so lucky to have enjoyed a booming audience of intelligent and caring people who want to learn more about Brooklyn, support local businesses, serve their neighbors and invest in making this borough even better for tomorrow and the next generation.
We’re so grateful to have helped so many local businesses and entrepreneurs gain more visibility and credit for their dedication, and connect them with so many who have benefited from their help.
It’s also been so exciting to see how many of you have invested yourselves in building up the community, and have been rewarded well for your efforts.
Over the last 12 months, we’ve brought together much of the best of Brooklyn in our Brooklyn Made Blog, Podcast, and Resource Website.
If you haven’t had a chance to fully explore it yet, today is a great day to do it:
● The Brooklyn Made Show features many local business owners and experts, including great artists, designers, architects and renovation specialists.
● Our New York Real Estate Newscast tracks what’s happening in the local market, and where the investment opportunities are.
● On our Vendors tab, you’ll find great local merchants from home services contractors to finance professionals, home automation consultants, and local furniture stores.
● In our resources center, you’ll find our recommended providers for filing your own business, identity protection, creating a website, and finding a coworking space in Brooklyn.
● With network thousands of listeners, readers, viewers, and connections interest in our Brooklyn updates, we also offer exciting advertising opportunities for you to get your own venture in front of locals. Just pick up the phone and ask us how we can help.
Whatever you do, don’t forget to share the things you love best about Brooklyn Made with others. Send them a link by email, and share it on your social media. We’re all better when we work together. Our email address is Contact@BrooklynMade.Blog.
Coming Up in this Show…
In this special anniversary edition we’ll be celebrating Brooklyn, how far we’ve come, and looking ahead at what’s next.
● The next 100 years in Brooklyn
● Comprehensive Economic Development Strategy (CEDS)
● Our shared goals of retaining, attracting, and future proofing Brooklyn businesses, equipping locals for future jobs and enhancing vitality in neighborhoods
● Recent successes and existing business
● The challenges Brooklyn and Brooklynites face ahead
● Our need to be proactive in shaping the future
● Plans and ideas submitted by hundreds of local business experts and entrepreneurs on how we can craft a sustainable and successful borough for everyone
Before we dig into the data and unveil some of what’s planned for Brooklyn, the opportunities, and how you can play a part we’d like to take a moment to acknowledge and thank everyone that has been a part of this.
That definitely includes you. Because without you, your loyalty and shares we wouldn't be able to have the impact we do.
It definitely includes our whole production team. Without whom none of this would be possible either. We are constantly working to improve the experience, but couldn’t do it without our video and audio team, designers, writers, and editors. That includes all the great people who work so hard at our vendors making, improving and maintaining the framework of our sites and podcasts too.
Special thanks to all of the local Brooklyn business owners, entrepreneurs, and leaders who have generously shared their insights, tips, knowledge, and workings with our audience too.
We could spend an hour listing them all, but some of the most recent include:
For the data and research we’ll be covering in this special report we also thank all those involved in participating, contributing their ideas, and compiling the information.
● The Brooklyn Chamber of Commerce
● The United States Economic Development Administration
● Brooklyn Alliance Capital
● All of the Elected and Appointed Officials who gave their time
Where are We at Now?
So, before casting a vision for the future and the opportunities we have, where are we right now? Where is Brooklyn at?
How are we doing, not only in terms of attracting development, trendiness, and high property prices but in terms of growth, strength, sustainability, equitability and creating a resilient destination?
Private employment has grown 5 times faster than population growth between 2010 and 2016 to 596,000 jobs. Of course, that comes on the heels of the weaknesses and losses that may have been experienced around 2008. Some worry that this job creation has also been focused on few concentrated areas, and has mostly been low wage jobs which don’t offer stability or long-term prosperity for workers.
Between 2010 and 2016 Brooklyn’s population grew by 35%, to 2.629M residents. The share of residents with higher incomes may be larger now, but there may still be significant gaps between job openings for higher paid jobs and skills.
Brooklynites are far more educated than before. As of 2016, 45% had a bachelor’s degree or higher. That compares to just 29% in 2012. The percentage of households with an income over $75,000 has grown from 28% to 38% as well.
Unfortunately, an American Community Survey shows that the percentage of Brooklyn residents living below the poverty line has risen too. That’s now at 23%. 5% or 135,000 are NYC Housing Authority residents. So, more people are making more money, but more people are poorer too.
The Brooklyn Economy
There does appear to be a lot of disparity in the Brooklyn economy. That could be a hurdle for long-term growth. Though by examining the fundamentals and making opportune investments and changes, we can create a more equitable Brooklyn. As they say “a rising tide lifts all boats.” Well, at least it should.
According to the Brooklyn Chamber of Commerce, only 34% of local residents also work in the borough. That’s compared to 73% in Manhattan. That may be a red flag in terms of sustainability.
Rapid population growth in recent years has sped up local economic growth. Yet, population growth could be slowing, and that could eventually have an impact on economic growth.
Long commute times, poor connectivity and real estate conditions can be blamed for being a barrier to attracting and retaining workers, and future workers. Infrastructure plays a big part in how jobs and incomes are spread out, or not, and what the future may hold for many Brooklyn neighborhoods.
According to Wikipedia, Kings County is not only the most populous in the state of NY but is already the second most densely populated in the US. On its own, as a city, Brooklyn would be the 3rd more populous in the country after LA and Chicago.
Brooklyn Employers & Jobs
The Brooklyn Chamber of Commerce report shows employment in the borough being dominated by healthcare, government, retail and accommodation jobs. It acknowledges a growth in knowledge industry jobs but maintains it is still a small share of the job market. Though tech, knowledge industries, and some new manufacturing are responsible for high wage growth. Social assistance and healthcare jobs reportedly grew by 36,000 jobs between 2010 and 2016, or by 23%. 75% of those jobs do not require a degree.
Retail and the food services and accommodation industry have produced some of the greatest employment growth over the last decade. Brooklyn has found itself as a hot shopping and culinary destination. Retail added more jobs in the same period than healthcare. New hotel development has been highly controversial, as is Airbnb. Some say hotel development in industrial areas has stolen manufacturing jobs. And new regulations to block development are going into place. Yet, others acknowledge these hotel developments have done a lot more for the economy than old industrial and manufacturing sites. Accommodation and Food Services employment grew by 73% in the same period and generated $2B in revenue in 2016 alone. In addition to 23 new hotels which are expected to be completed from 2016 to the end of 2018, home sharing like Airbnb has generated at least $157M in direct spending that we know about Probably a lot more.
Tourism spending is now up by $10B. Business visitor spending is believed to account for around 30% of this spending.
New apartments are being added too. Over 5,000 new residential units are planned for Downtown Brooklyn by 2022, and 10,000 in Greenpoint by 2019.
According to Industrial and Occupational data the top sectors by average wages paid in Brooklyn are:
1. Information jobs $100,000
2. Government jobs $95,500
3. Professional, scientific and technical $73,000
4. Manufacturing $52,500
5. Healthcare $49,000
6. Retail $37,000
7. Accommodation and food service $27,500
Food manufacturing added the most jobs in the manufacturing sector at 1,180 between 2010 and 2016. The most grow was in electrical equipment at 202%.
While larger firms with 500 plus employees have been responsible for the most employment growth in Manhattan, smaller employers with 0-29 employees have been responsible for the most job growth in Brooklyn. Wikipedia states that in 2000 91% of local businesses had fewer than 20 employees. By 2014 only 29% had less than 20 employees. More recently, 40% of all employment growth has been attributed to companies with less than 50 employees.
Construction is also a major employment sector these days. The rezoning of Downtown Brooklyn alone has generated over $300M in public improvement since 2004, along with more than $10B in private investment.
Brooklyn also now has over 35 coworking spaces like WeWork. Along with co-living trends, there appear to be many more freelancers and entrepreneurs in Brooklyn today.
The Real Estate Challenges
Brooklyn faces some real estate challenges.
Some owners and investors are enjoying today’s sky-high prices and rents and record amounts of equity. Yet, those same factors present some of the biggest risks and challenges for Brooklyn as well.
High real estate prices and property taxes, along with recent caps put on deducting property taxes can make it difficult to attract and retain workers in NYC in general. This, in turn, creates challenges for the profitability of businesses and the attractiveness of Brooklyn as a location due to the impact on the local talent pool and high wages which must be paid. That could limit quality jobs for existing Brooklynites who would like to stay.
The majority of Brooklyn employers are clustered around major transit hubs. The most active areas are within a half mile of a subway station.
While offshoring isn’t made as much noise about today, many companies are ‘nearshoring’. Meaning they are moving locations to domestic US cities with lower costs.
To provide a full cycle business environment a destination really needs a mix of incubation facilities, Class B and C commercial property, Class A property, manufacturing and back office and warehouse space and more than ever - fulfillment centers.
Brooklyn went through a sizable correction after 2008. A lot of commercial space has been replaced by residential properties and hotel development. With less inventory, commercial rents have spiked.
● Retail rents are up 30%
● Office rents are up 42%
● Industrial rents are up 70%
Much of the new growth in business in Brooklyn is in the ‘gig economy’. Solo business owners who are working for themselves. Often in freelance, new startups, and ridesharing services. These independent professionals can add hundreds of millions of dollars to the local economy.
However, if they desire to grow they can be hampered by both real estate costs and access to capital. They are often stuck between sources which won’t lend enough, and banks who won’t make smaller loans. Some help is coming in this area.
● The SBA Community Advantage
● Brooklyn Alliance Capital
● The Brooklyn Fund
● New sources of business lines of credit and merchant advances
Poverty is still a sizable problem in Brooklyn. Much of it is concentrated in areas further from subway stations, major employment centers, and education.
Although education levels have certainly risen in Brooklyn, poverty has still risen too.
Even though it is not a part of this report, this quirk should be alarming or at least a red flag. Many jobs and high growth jobs may no longer need higher education degrees. Massive student debt can also leave many individuals stepping out of higher education at a serious financial disadvantage, which may also limit their mobility.
Today more people live in New York City Housing Authority projects in Brooklyn than the entire populations of other well-known cities in the United States.
Brooklyn’s net population growth has been slowing since 2011. As of 2016 is was lower than the NYC overall average and lower than Queens.
High housing costs may have been driving out some strong workers. So, more than lacking education facilities, degrees or jobs, often the issue today is a gap between the skills the workforce has, and the skills and roles employers need to fill.
The Center for Urban Future conducted a study which reports 1 in 10 NYC jobs could be replaced with automation that exists right now. It is believed that nationally, 80% of jobs could be replaced by automation in the next few years.
In 2016 there was a gap of 59,100 jobs, suggesting one of the biggest problems is training and equipping Brooklynites with the skills they need for higher paying future-proof jobs.
Brooklyn is rich in culture and has 23 Business Improvement Districts and 10 Community Development Organizations all working to make things better. We’re seeing exciting new mixed-use developments that often combine retail and ‘affordable’ housing elements. Like what’s happening with the old Domino Sugar Factory.
There are still challenges too. Just as green space isn’t very evenly spread out through the borough, new investment and developments of the commercial real estate have been very concentrated in certain areas too. New retail space enjoyed the broadest delivery between 2010 and 2016. Office and hotel space was very restricted. Almost exclusively in trending neighborhoods in the northwest. Areas like Downtown Brooklyn, the Navy Yards, Williamsburg, Fort Greene and Red Hook have been some of the biggest beneficiaries.
This activity has also driven up apartment rental prices by 30%, changing the demographics and character of many areas. Brooklyn real estate has been so hot that it is now easily on par with Manhattan, despite longer commute times and distance to subway stations.
Internet access is clearly vital to small business activity, education, employment, and closing much of the disparity in Brooklyn. Yet, there is also much disparity in access to the affordable broadband internet.
Currently, there are many areas of Brooklyn where less than 20% of households have access to affordable broadband. Efforts are being made to better level opportunity and digital equity with affordable and free Wi-Fi access.
Sea level and climate change arguments aside, Brooklyn flood maps show a scary amount of property, development, and people at risk of flooding. Projections expect the most intense hurricanes will increase 50% as well, causing an increased risk of storm surge, wind damage, and flooding. Smart building and intelligent investment will be needed to protect capital invested and vitality.
A Quick History of Brooklyn
Breuckelen started out with Dutch settlement in the 17th century. The Brooklyn Bridge was completed in 1883. It finally became a part of the new consolidated New York City in 1898.
In the mid-19th century, Brooklyn began to get serious about urban development. Starting with the Kings County shore facing Manhattan. In the 1930s Brooklyn became a major industrial supplier to the nation. In the 60s the Bed Stuy Restoration Corporation was founded and became the first Community Development Corporation. In the 80s revitalization began. And in the early 2000s, Brooklyn attracted billions of dollars in investment and grew into a fashionable global trendsetting brand. Today it is famous for its art, shopping, innovation and for its fabulous real estate.
Where Are We Going?
In order for Brooklyn to thrive with people, employers, and great neighborhoods, we not only need great vision but concrete goals, strategy, tactics and to track the right metrics.
There are some common goals development organizations are working on that most of us can agree on.
1. Future Proof Employers & Attract New Ones - so that all sizes of ventures can start, grow and thrive now and in the long-term
2. Improve Brooklynites Incomes - by equipping them with skills for today’s jobs and businesses with a talent for tomorrow
3. Enhance Neighborhood Vitality - so that there are housing, transport, and amenities available and Brooklyn businesses still have a good customer base
Some of the indicators and metrics we may be able to use to gauge success include:
● New jobs and jobs paying over $50k per year
● New business starts in targeted industries
● New commercial space and commercial hubs
● Higher education program completions
● Lower worker turnover
● A decreased gap between available jobs and unemployed workers
● Increased percentage of residents with access to transit
● Increased number of residents with fast and affordable internet
● A higher percentage of residents and businesses protected from flood, weather and utility interruption risk
● Percentage reduction in rent-burdened households
● New mixed-use developments in underserved neighborhoods
● A higher percentage of public open space assets to residents and proximity
● Reduction in pedestrian deaths and injury
● High social and economic activity
How do we achieve improvement in these metrics?
The CEDS proposes the following strategies and tactics.
For employer attraction and retention we can:
1. Unlock new commercial development and office space
2. Leverage public assets to support new commercial property development
3. Reduce costs of doing business with new tools - like reforming property taxes and regulation and increasing access to capital
This may include:
● Redefining manufacturing zones for more businesses
● Expanding the industrial development fund
● Rezoning transit accessible commercial districts
● Expanding convention and meeting space
For workforce development we can:
1. Create education and workforce development programs to match future jobs
2. Co-locate education facilities with new commercial development
This may include:
● Repositioning publicly owned vacant land
● Redeveloping New York Housing Authority property
● Expanding training for data science and cybersecurity industries
● Better systems for educational institutions to keep updating curriculum
● Helping students with financial costs
For infrastructure we can:
1. Implement smart transport technology throughout the borough
2. Leverage connectivity to expand economic opportunity
3. Strengthen investments and assets with resilience to climate change
This may include:
● New rail projects (BQX, X-Line, Utica, South Brooklyn and Red Hook)
● New ferry service
● Expanding bicycle usage
● New internet service architecture
● Implementing storm surge barriers
● Public-private partnerships for creating green spaces
For housing and neighborhood quality we can:
1. Use smart city technology to improve delivery of municipal services
2. Increase density to add more housing opportunities
3. Preserve and strengthen retail corridors
4. Create new open space in underserved neighborhoods
This may include:
● Cloud-based tech for sustainability and efficiency
● Rezoning to create more residential housing opportunities
● Incentivizing affordable retail space and eliminating permit requirements
● Creating a new park at the Brooklyn Queens Expressway
The CEDS highlights several areas for making these efforts in project clusters for maximizing impact and acting as a catalyst for current and future growth.
These new commercial centers are designed to form a ring around Downtown Brooklyn.
● Downtown Brooklyn
● Brooklyn Wellness District
● Broadway Junction
● Coney Island
● North Brooklyn
● Extension of the BAM Cultural District from Flatbush Avenue to Brooklyn College
Implementation of these tactics will take time and a lot of different organizations to pave the way for removing regulatory and economic blocks and adding investment.
State, city and federal organizations would be involved, in addition to private investment.
Various parts of these plans have different timelines:
Short-term (0-5 year) projects include:
● Creating new education and workforce programs
● Reducing the cost of doing business
● Implementing smart city and transportation technology
● Increasing housing density
● Preserving and strengthening retail corridors
Medium term (5-15 year) projects include:
● Unlocking new commercial real estate development space
● Leveraging public assets for new commercial development
● Expanding transit infrastructure
● Leveraging connectivity for a more economic opportunity
● Creating new open spaces
● Fostering cultural innovation
● Strengthening investments and assets from climate events
Long-term (15-30 year) projects include: expanding the educational infrastructure.
What Does it All Mean?
So far we’ve covered an enormous amount of information about Brooklyn. How far it has come, where it could go, the big plans serious organizations have for the borough for the next 100 years. As well as the challenges facing Brooklyn and its residents and businesses today.
We’ve learned about:
● The Brooklyn economy
● Brooklyn employers
● The jobs
● Workforce development
● The real estate challenges
● Neighborhood challenges
● Challenges for renters
● Internet connectivity
● Weather risks
● Brooklyn’s History
● Tracking success Metrics
● 4 strategic goals to act on and invest in
● Key questions to ask and solve
● Potential solutions
● The benefits of unlocking commercial development
● The benefits of leveraging public assets
● Strategies for reducing the costs of business
● Practical methods for tackling future workforce development
● Uses for smart transportation technology and expansion of infrastructure
● And housing and neighborhood quality
So, what does it all mean?
There’s an Exciting Future Ahead for Brooklyn
There are some cities and destinations on the map which may have peaked and have failed or ceased to be as relevant and vibrant as they once were. There a lot of people just along for the ride and perhaps very short-sighted planning.
Brooklyn has long been a rising star. It is already one of the most famous and exciting destinations on the planet. With the participation of many great minds and organizations, their commitment and funding, this may just be the beginning of Brooklyn’s story. There is an exciting future ahead.
One in which Brooklyn becomes an even more important financial center, trendsetter, global destination for visitors, investors and students. A model for sustainable development and an inclusive society which offers a great quality of life to its residents and workers.
If we can implement plans like these we can expect to see:
● A cutting-edge workforce
● Innovative and strong businesses and employers
● Low unemployment
● A global center for industry and finance
● More arts and entertainment and fashionable food
● More retail and vibrant commercial centers
● Better public transportation
● Less poverty
● An engaged community
● More mixed-use developments
● Better land use
● More opportunity
It’s an exciting place to live and the future is even brighter.
The Need to Participate
Of course, in order to realize all of this, and to avoid falling off the track as some places have, and as parts of New York have been threatened with due to high taxes, costs, lack of innovation and great disparity, it is going to take a lot of participation.
We can’t just sit back and hope someone else will do it all.
We can’t just hope that thousands of others will commit themselves, their time, money and lives to creating and supporting a greater Brooklyn. Not without support.
If they aren’t encouraged and supported why would they continue. Especially since it does require some work and sacrifice to conduct studies like this and work to get the enrollment of politicians and government organizations and the buy-in of the public.
The great news is that we all have a role to play in the future of Brooklyn. We each have an opportunity to play a role, and it would be a shame if we miss out on that.
This applies whether you were born here and grew up here all your life, are returning after college, migrated here from the other side of the world or another state, or live somewhere else and just want to invest in this place you love so much, and a model that could be used to create more great smart cities around the world.
How can we participate?
Whatever your strengths, talents, passions, and careers are, there are ways to be engaged. This can include…
● Volunteering at agencies working to improve Brooklyn
● Getting involved in organizations which are conducting studies and strategizing future developments and planning
● Becoming a member of the Brooklyn Chamber of Commerce
● Voting and engaging at every level of these decision-making processes
● Donating to local projects
● Starting and building local Brooklyn businesses
● Helping advance workforce development and education
● Supporting smarter transport and connectivity
● Investing in local real estate and smart commercial property developments
● Financing intelligent developments
● Shopping locally
● Engaging in the community and making a Brooklyn a friendlier and more enjoyable place to live as we go about our everyday lives and business
The Potential Benefits of this New Brooklyn
There are clearly many benefits to living in, participating in, working in, and investing in Brooklyn as these future plans unfold over the next 5 years and 100 years.
It means living in one of the most exciting world cities on the planet.
It means making a great contribution to history and creating a legacy for future generations, here, around the world, and perhaps even ultimately for societies, we plant on other planets.
There will certainly be the pride of ownership of your stake in Brooklyn. Whether that is educating others, being employed in a valuable career, building a great local business, helping to shape the landscape, or owning and investing in Brooklyn real estate.
This can sound like a lot of work and sacrifice. For many, it will be. Yet, that doesn’t mean all of these investments and efforts won’t be highly rewarding and profitable either.
Launching and sticking it out with a business here could prove to only become increasingly profitable as these plans are implemented.
Raising a family here and being involved in the community can pay many dividends.
Directly investing in new commercial developments and operating housing or mixed-use properties could deliver some of the best financial returns you can get, while playing a role in creating a far more prosperous Brooklyn. Something which will not only increase your own net worth, income, and financial freedom but can have a positive impact on your entire family, friends, future heirs and the world.
We hope you are as excited about the future of Brooklyn and what we can do to make a difference today as we are.
Perhaps you want to get behind some of the ideas and plans we covered today. Or maybe you have better ideas to contribute. We’d love to hear from you!
Leave us your comments. Post to our social pages. Or email us.
Maybe you already own a local business or are working on a project and we can feature you on Brooklyn Made. Or maybe you know someone who has been working hard and should be featured on the show. Send them our way!
Once again, we’d like to thank each of you for listening, reading, being involved, sharing and engaging. We look forward to another 100 years of Brooklyn and can’t wait to see the role you all play, along with Brooklyn Made over the next year.
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