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April 4, 2024

Regional Visit Shows Housing Affordability, Infrastructure as Top Issues for Businesses and Communities on Long Island

On February 28, New York Fed President John C. Williams traveled to Long Island to hear from local stakeholders about economic conditions in the region. Long Island is part of the Federal Reserve’s Second District, which, in addition to New York State, includes Northern New Jersey; Fairfield County, Connecticut; Puerto Rico; and the U.S. Virgin Islands. During the daylong visit, President Williams met with government officials, business owners, and nonprofit and community leaders. Here are the key themes that emerged in the day’s meetings and discussions.

Aging Population and Labor Shortages

Worker shortages are a significant issue on Long Island, with nearly a third of businesses identifying hiring and compensation as top concerns in the 2023 Long Island Economic Survey. Factors driving worker shortages include an aging population, a lack of affordable housing, and a high cost of living. Business leaders noted difficulties in attracting workers to Long Island and recruiting employees with specialized or technical skills. Despite these challenges, companies have innovated by leveraging partnerships with local universities, cross-training employees, and opening satellite offices in attractive locations.

Meanwhile, stakeholders in higher education reported a looming “demographic cliff” resulting from the aging population and declining numbers of high school students. Those factors, together with rising costs of higher education and learning loss during the pandemic, have combined to result in lower enrollment levels for colleges. Education leaders also reported a general sense that younger generations may be less inclined to pursue traditional college and graduate degrees, and they worry that these trends will impact the future of the labor force on Long Island. One stakeholder emphasized the importance of remaining creative in designing educational programs to attract students and develop adequate workforce pipelines.

To take one example, Hofstra University is seeking to ameliorate labor shortages by developing programs and degrees that align with jobs and skills needed in the region. To address a nursing shortage, Hofstra leveraged its strategic partnership with Northwell Health—one of the nation’s largest health systems and the largest private sector employer on Long Island—to provide nursing students with guaranteed opportunities for clinical placement and expedited paths to employment via a program that runs from a bachelor’s degree through a doctorate. The university’s newly constructed Science & Innovation Center, which houses the Hofstra Northwell School of Nursing and Physician Assistant Studies and the Dematteis School of Engineering and Applied Science, utilizes state-of-the-art technology, artificial intelligence, and simulation labs to help students develop both interpersonal skills and technical skills to remain competitive and fill critical workforce gaps.

Wastewater Treatment and Economic Development

Long Island is one of the most densely populated regions in the country without centralized wastewater infrastructure. Municipal officials in Suffolk County say adequate wastewater treatment is an economic development issue and contributes to the housing shortage by presenting challenges in the construction of both single and multifamily homes. Further, stakeholders noted that inadequate wastewater management systems threaten the cleanliness of Long Island’s 1,000 miles of coastline, which are key to the region’s robust tourism industry. In order to meet environmental and economic development goals, officials in Suffolk County proposed an amendment to the Water Quality Restoration Act, which includes a November ballot referendum to increase Suffolk County’s sales tax by one eighth of one percent to help fund the $4 billion plan to expand and consolidate the county’s sewer system. Half of the revenue raised from the tax would go to wastewater treatment facilities and half would help homeowners replace individual septic systems.

President Williams with Long Island business leaders at the Cradle of Aviation Museum in Garden City.


Due to its geography and transportation challenges in the region, Long Island has been the focus of multiple New York State-funded projects with significant investments into train and highway infrastructure. Suffolk County officials highlighted plans to develop Midway Crossing, a $2.8 billion initiative to connect the Ronkonkoma train station—one of the Long Island Railroad’s busiest—to MacArthur Airport. The development, which would link the two transportation hubs for the first time, would include a hotel and convention center, sports arena, and retail and commercial components. It would also leverage Long Island’s history in scientific research and engineering by including academic and research institutions and designating facilities for the creation of a life sciences cluster outside of New York City.

In the bigger picture, the Long Island Railroad is the busiest commuter railroad in North America, and Long Islanders must travel through New York City to get on or off the Island. For these reasons, congested transportation networks are a top concern for regional businesses. One business owner even reported that some potential job candidates do not want a position that requires driving, despite challenges in the area of public transportation. Separately, a representative of a nonprofit referred to the lack of transit options to reach food pantries.

Fragmentation of Government

Stakeholders said government fragmentation is a contributing factor toward the high cost of living and lack of affordable housing in the region. Long Island’s newly developed Zoning Atlas points to 1,200 different zoning districts across the two counties. Stakeholders noted that while many Long Island residents want access to affordable housing, they oppose denser housing in their neighborhoods. This has contributed to the affordability crisis, as housing inventory on Long Island remains exceptionally low, and many looking to purchase homes are priced out due to high demand.

At a meeting of community development leaders, several participants from local nonprofits noted that many well-known areas of wealth overshadow the needs of Long Island’s low- and middle-income populations. They explained that because Long Island is a high-cost region and the federal poverty line does not consider regional cost differences, many individuals in need on Long Island are ineligible for government benefits. One meeting participant noted that after providing a raise to an employee who receives government benefits, the employee had to reduce their hours to part-time to continue receiving essential assistance for their family.

Two of Long Island’s key challenges—a shortage of affordable housing and difficulty providing services for lower-income residents—are not unlike those seen elsewhere in the Second District, yet these difficulties are amplified due to the relatively high cost of living.

Watch Shawn Phillips and Andrea Grenadier from the New York Fed’s external engagement team reflect on what they learned during the visit.

Andrea Grenadier is an associate director of external engagement in the Communications and Outreach Group at the New York Fed.

Joelle Scally is a regional economic principal in the Federal Reserve Bank of New York’s Research and Statistics Group.

The views expressed in this article are those of the contributing authors and do not necessarily reflect the position of the New York Fed or the Federal Reserve System.


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