Indeed, employment held up well during the recession, declining by less than 2 percent over a brief period in early 2009, and has averaged a nearly 3 percent annualized growth rate since then. Job growth has been particularly strong at retailers, hotels and restaurants, and also service firms ranging from advertising to engineering. That said, the employment picture does have some difficulties. For example, there is concern over some well-paying health sector jobs given the financial strain at Long Island College Hospital and Interfaith Medical Center and the pressure to close those institutions. Brooklyn’s economic vitality is also reflected in the commercial real estate market, as both office and retail vacancy rates have fallen steadily over the past few years. In fact, office vacancy rates are now lower in Brooklyn than in Manhattan. The strength in the housing market is also evident, with the median home price up by roughly 10 percent in each of the past two years, and the rental market has shown similar strength. 2  BIS central bankers’ speeches  However, these increasing prices also raise two other issues that acutely afflict many in Brooklyn and New York City more broadly: housing affordability and poverty. Despite Brooklyn’s economic renaissance and growing affluence, a large swath of the Borough’s population – one in four residents – still lives in poverty, and many struggle to pay their rent or mortgage. Even with the strong pace of job creation, Brooklyn’s unemployment rate has remained high, averaging more than 9 percent in 2013.
There are also continued financial challenges for families here as indicated by the New York Fed’s measures of credit conditions. As of the end of 2013, average debt per person was about $ in Brooklyn – little changed over several years. At the same time, the Borough’s delinquency rate on that debt is now 11.6 percent, much higher than the state average and more than double the national average. What’s more, the mortgage crisis continues to take a toll on local homeowners. As of the end of 2013, more than 11 percent of mortgage debt in Brooklyn was 90-plus days delinquent, again significantly higher than the New York State and national delinquency rate. I also want to make a few comments about the impact of Superstorm Sandy. While areas of the New York City metropolitan region were hard hit by the storm, the devastation was particularly severe along the waterfronts of Brooklyn – and in particular in southern Brooklyn and neighborhoods like Red Hook. We saw and heard about the devastation of the storm from many of those affected, including a number of our own employees as well as other residents we met at a series of assistance clinics we organized in response to the storm. Those already living close to the edge financially were particularly vulnerable as were the City’s public housing residents. Still, Brooklyn’s economy showed resilience: while employment did drop in November 2012, it bounced back strongly the next month and accelerated during the spring of 2013, reaching new highs.