Suddenly they’re everywhere.
Not long ago, the superrich were a knowable entity—as New Yorkers, we were on something of a last-name basis with them. There were so few of them that when we saw a Guggenheim or a Rockefeller on, say, a new hospital wing or atop a list of public-library benefactors, we felt a certain familiarity. We had at least a vague sense of who they were, what company they owned, or where their family had made all its money. And that’s as far as it went. Mostly, they stayed out of our way; the superrich were one minuscule subculture in a city that had better things to worry about.
But somewhere along the line, as great torrents of cash came pouring into Manhattan, it stopped being possible to ignore them. Never mind that the average two-bedroom apartment now costs $1.2 million. There’s a whole other stratum of wealth, where numbers have become abstract. Consider that Santiago Calatrava tower proposed last year for lower Manhattan; the entire building will be made up of $35 million apartments—$35 million each! Five years ago, not a single apartment in the city sold for that much. Many restaurants, shops, and service industries have reoriented themselves to this new unreality, like that place that serves $700 sushi and draws a breathless crowd every night.
For most New Yorkers, this is a maddening spectacle: Who are all these people? Where did they come from? When will things return to normal?
The lament that Manhattan has become a playground of the rich is usually uttered with a sneer (or sometimes a hopeless sigh). And yes, the more rich people there are, the tougher it is for everyone else to get by, to afford apartments and live the New York life they dreamed of. How wonderful is Central Park if you live an hour away by train? It’s almost as if the superrich have cordoned off much of Manhattan for their own personal use, distancing themselves from the workaday rich and building a social class all their own.
The effects, however, are not entirely bad. This island at the center of the world is where big money from all over comes to get coddled, buffed, managed, preserved, and deployed, or simply to hang out with other money. And as the superrich have created their own ecosystem, they have also helped forge a sophisticated $488.8 billion economy, driven by highly specialized services and full of opportunity. For a city that was never blessed with great natural resources—there are no oil reserves in Brooklyn, no veins of gold in the Bronx, and the weather sucks—their great wealth may prove to be to New York what oil is to Saudi Arabia: a power source of seemingly inexhaustible supply that provides a huge array of jobs and other benefits for nearly everybody else.
How many of the 2.2 million jobs in Manhattan are dependent on the superrich? There are plenty of obvious ones, like those of chauffeurs idling on Park Avenue in the morning, as well as the bankers who ride in the backseats. There are also the antiques dealers on Madison Avenue and the pedigreed interns at the auction houses, the officers at the major foundations, and, naturally, those hyperkinetic real-estate brokers jabbering into cell phones.
But the downward flow of money carves many indirect routes too. Consider, for example, the sommelier at a four-star restaurant who makes about $90,000, edging into six figures when Wall Street bonuses are up. This sommelier, let’s say, lives in one of those rapidly upscaling Brooklyn neighborhoods, renting a brownstone floor-through that, not so long ago, was inhabited by a $30,000-a-year secretary who feasted on Cup-a-Soup three nights a week. The sommelier’s extra spending gets spread all over the neighborhood—to the butcher who now sells grass-fed lamb from New Zealand, to the dry cleaner who charges a premium for removing the stains from his silk ties, and to the bistros on Smith Street that now have fancy wine lists (and sommeliers) of their own.
The paradox of money in New York is that it is at once the universal topic of conversation and a taboo. Personal spending is the subject of both relentless boast and discretion. As a result, some basic concepts—what it takes to be rich in New York, how many superrich people there are in the city, and precisely how they affect the economy—are shrouded in mystery. But with the help of some reluctant economists, I’ve tried to make some (reasonably) educated guesses.
First, how to define the very rich? Having $1 million in assets as of 2001 placed you in the top 7 percent of families nationwide, according to the Federal Reserve. In New York, it means you own an average co-op in Manhattan outright. “In the old days, a millionaire was someone who had a million dollars. Today, it’s someone who makes a million dollars a year,” says Stuart Becker, an adviser for high-net-worth individuals with J.H. Cohn LLP. And it’s probably what you need to take home—before taxes—each year to be considered rich in Gotham.
Nationwide, in 2001, 1.3 million households had a net worth of more than $5 million. Bill Fuhs, president of the newly formed New York Private Bank and Trust, estimates that in 2001, there were about 27,000 families in the U.S. with a net worth over $30 million. And an awful lot of them live in and around New York, perhaps up to 10 percent. The Forbes 400, which tallies the domiciles of Americans worth more than $750 million, lists 38 members living in New York City. But there are probably more. Industrialist David Koch (No. 43) is listed as living in Wichita, Kansas, though he owns Jackie Kennedy’s former apartment on Fifth Avenue. “I have a personal list which has 1,931 billionaires on it,” says Leslie Mandel, president of the New York–based Rich List Co., which tracks the wealthy. “There are 168 who say they live in New York, but that’s definitely undercounting.” Really rich people tend to be smart enough not to designate high-tax New York as their primary residence, if they can avoid it. Good old Dennis Kozlowski lived in income-tax-free Florida, but installed his $6,000 shower curtain in Manhattan.