Fitch Fairfield County strong
Connecticut may be losing population, but Fairfield County is gaining residents and much of that is coming from nearby New York City.
A recent study by Fitch Ratings of U.S. Census Bureau data shows that Fairfield County gained more than 2,500 residents in net migration from New York City from 2011 to 2015, including 1,038 from Bronx County. Fairfield County had positive net migration from each of the five New York City counties during that time span.
Overall, Connecticut gains a significant number of residents moving in from New York state each year, peaking with a 12,136 net migration in 2015.
The study also showed that Connecticut has lost population every year from 2013 and 2016. Fairfield County, however, has gained population each year, and had 949,921 residents in 2017, up from 942,865 in 2013. Hartford County, by comparison, saw its population fall from 899,765 in 2013 to 895,388 in 2017.
Joseph Fontana, an associate director in Fitch Ratings’ corporates group, was the lead analyst for the study. He said Fairfield County’s strengths, such as high personal income, wage growth and disposable income, should continue to make it a desirable destination for New Yorkers looking to relocate.
“There are strong underlying economic trends that will support growth in Fairfield County going forward,” he said.
Fairfield County’s low property taxes, relative to New York City and adjacent Westchester County, is another draw.
“That’s a factor,” Fontana said. “People want to be in an area where they can avoid taxes as much as they can, especially with the new tax laws and their limited ability to deduct state and local taxes from federal taxes.
“Residential real estate (in Fairfield County) has been pretty good,” he said. “There has been strong growth in wages and median household income. That’s really driving the residential real estate market in Fairfield County.”
The southwestern part of the state has outpaced the rest of the state in other economic measures as well. The Danbury labor market area has the state’s lowest unemployment rate at 3.7 percent. The Bridgeport-Stamford labor market area has an unemployment rate of 4.4 percent, which absorbs towns with high rates, such as Bridgeport (6.4), Ansonia (6.2), Stratford (5.6) and Derby (5.5).
A growing number of millennials are fleeing the big cities in search of the traditional American dream of homeownership in the suburbs, the Fitch research shows. Older millennials who had previously shunned the suburbs in favor of the work-live-play aspect of the cities, are now seeking homes in the suburbs.
“Millennials are trying to strike a balance between commuting and affordability; and being away from the city, but not too far,” Fontana said. “The white-picket fence is a necessity to them, too, especially as their families grow. The dream of owning a home is not dead for millennials and Fairfield County has the comforts of a suburb, but with New York City proximity.”
Fairfield County also offers good schools, upscale shopping and a lower cost of living, compared to New York City, he said.
Jim Fagan, Cushman & Wakefield’s managing principal for the Connecticut and Westchester markets, has seen a similar trend. He said there is a large demographic of people between the life stages of graduating from college and starting a family. That population flocked to city apartments during that stage.
“That process is starting to mature. They moved into apartments 10 years ago and the birthrate was low for years, but now they are starting families,” Fagan said. “These families can’t afford to live in the city. If you’re in Manhattan and you have a few kids, you’re dead broke.
“Connecticut and Westchester are made for families,” he said. “There’s access to Long Island Sound, fantastic schools and all the amenities of a suburb close to New York City.”
Fagan said as the millennials move to Fairfield County the commercial real estate market will continue to improve. Fitch numbers show that Fairfield County has a vacancy rate of 23.6 percent, up dramatically from the 13.9 percent vacancy rate in 2007. It has climbed steadily over the years as the country recovers from the 2008 recession, corporations rethink their space requirements and technology reduces the need for many employees to have an office.
Fagan sees companies following their talented millennial workers out to the suburbs and taking space in office buildings throughout Fairfield County, particularly along major transportation lines.
Fontana said Fairfield County often represents a “flight to affordability” for companies looking to escape the high rents of New York City. Conversely, he said, many companies looked to New York City following 2008 as a place they believed to be a recession-proof area.
While slightly elevated from pre-recession years, New York City continues to enjoy a low vacancy rate of 8.3 percent. The city’s vacancy rate hit a post-recession high of 11.6 percent in 2009. The rate was 5.7 percent in 2007, according to numbers provided by Fitch.
The recovery from the recession has been stronger and faster in Fairfield County in comparison to the rest of the state. A look at population numbers show that every county in the state has lost population since 2013, except Fairfield. In addition to Hartford, Litchfield and New London counties have lost significant population.
It’s a good thing for the state that Fairfield County continues to gain population as it pays more than one-quarter of the state’s taxes, with a hefty amount of that coming from Greenwich. A strong Fairfield County economy is essential in keeping that money flowing north.
Fontana said the economic indicators appear strong in Fairfield County and he sees the momentum continuing in a positive direction.
“It’s a function of where we are in the cycle. We are nine or 10 years out from the start of the recession and things are positive,” Fontana said. “I see continued positive growth. A deceleration will come, though, but that’s normal.”
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