Updated: Apr 29, 2021
Albany, NY is a city of 98,000 (pending 2020 Census numbers) sitting along the Hudson River 130 miles north of New York City. It is the hub of the third largest Combined Statistical Area in New York State after NYC and Buffalo with nearly 1.2 million people. It is a center of government as the New York State capital, education (which rivals Boston on a per-capita basis), healthcare, and technology. It could also be one of many places that may be beneficiaries of a post-Covid economic and population resurgence.
For a variety of reasons, the Albany area can take advantage of trends that were either already present before Covid-19 that accelerated and those that were caused by the pandemic directly. If the work from home trend continues, at least for those who will have the option to, Albany stands to be directly affected by the much larger metro area 2 hours to our south by Amtrak, New York City. If 5,000 people leave NYC and move to Albany looking for cheaper cost of living, no one will really notice it there, but the effect would be very much felt on a city of 100,000. Obviously, not all of the people leaving New York will land in Albany itself. Many will go to the suburbs or exurbs downstate and here, or even Troy and Schenectady. But if even a small number of transplants end up here, our economic and societal situation will certainly change. Many who leave New York may end up wanting to live in an urban setting that is walkable, cheaper, and accessible by train if they need to be in-person for meetings and the like. The Albany-Rensselaer Amtrak station was the 9th busiest station before the pandemic, with the most passengers passing through it in the country for a metro with less than 2 million people. The proposed infrastructure bill being put together now (more on that below) includes money for Amtrak, with plans to expand service in and out of Albany.
Anyone who has been following real estate in Albany knows that prices have been historically high during the pandemic. The most recent recession has been backwards in that regards for most areas across the country, with home prices increasing while millions of people in the service and hospitality industries have been jobless. Many pundits think that small to medium sized cities like Albany will benefit from at least some people leaving larger cities like Boston and NYC.
There are other reasons that Albany (and other mid-sized Northeast cities) may see a quick rebound from the pandemic. The recently passed stimulus bill included funds for municipalities. Albany, with its structural recurring deficit due to its home as the state capital and the huge amount of tax-exempt property in the city like state offices, hospitals, colleges, and other uses, will have some breathing room for now. But the bigger shot in the arm could come from President Biden's proposed $2.1 trillion infrastructure package, which is poised to include billions of dollars for transportation improvements. One of the items included in it is $20 billion to 'reconnect neighborhoods' that were separated by highway building in the 1950s and 60s. Interstate 787 is a prime candidate for this as it cut off the downtown from the Hudson River. Albany has been gearing up for this with the recent start of construction of the project to convert a little used off-ramp from 787 into an elevated park.
We will have to wait and see if Albany, its region, and other small to medium sized metros fare in whatever the "new normal" is in the coming years. Every place is going to have to adapt to changing conditions in nearly all aspects of life and the economy. Those that can pivot quickly and nimbly will reap the rewards while those that drag their feet hoping for things to return to how they were may end up being left behind.