NYC Funeral Homes Find Ways To Stay Alive

Tuesday, August 23, 2016

Crain's New York, a business and real estate website, ran an excellent article last month on the challenges facing New York City funeral homes and cemeteries. As an introduction to people outside of the industry, Crain's succinctly sums up the obstacles and changes facing the death care industry right now. Keith Senko runs Senko Funeral Home in Williamsburg, a neighborhood of Brooklyn that has undergone a massive shift in the past 20 years. Property values have soared as a result of rezoning, making it one of the city's most expensive places to live. Senko discussed how he has seen competitors slowly go out of business, or opt to sell as they faced retirement, and what his funeral home has done to adapt to the changing market:

“I’ve done every kind of funeral under the sun: Wiccan, Apache, Blackfoot, Hindu, Buddhist—you name it,” said Senko, 58. But a couple of years ago, he got a call that surprised him. “They wanted to ‘check out’ our venue—I’d never heard that before,” he said. The caller said the deceased, a lifelong Manhattan resident, had been “extremely hip,” so the funeral needed to be as well."

The above incident is a familiar theme I have picked up on at conventions over the past few years. Sometimes it focuses on millenials, sometimes wealthy baby-boomers, sometimes it is the internet, or personalization. All of it amounts to a new world, with new technologies and new ways of living that are beginning to impact death care. Succinctly, Crain's writes:

The death-care industry is going through major shifts nationwide as customs evolve. Families are more spread out, so multiday wakes are less common. Cremation, which costs half what traditional services do, is becoming more popular. Consolidation by large conglomerates—Service Corp. International operates 36 funeral homes in the five boroughs—has further pressured independent operators. Funeral homes are still largely family enterprises, and many of the youngest generation are choosing not to undertake the job.

New York City is probably more the exception than the rule next to the rest of the country - it is the most dense city in the U.S., real estate is exponentially more expensive, population counts dramatically higher, and all of the challenges associated with city-living are amplified. The real estate market has been a significant player in the decline of funeral homes. When properties in desirable neighborhoods can go for $4 million dollars to developers that can essentially pay cash, it makes hard money to pass up even harder.

An unexpected force impacting New York City in particular is that the area has seen a sharp decline in its death rate. This runs counter to the uptick in the death rate that we are expecting to see in the next 10 years. A rising death rate is also different than more people dying, and we can anticipate the data changing as medicine improves, older people live longer and get healthier. The death rate will increase, and even has in a way, as the actual number of deaths was larger than the last time it was measured in 2014, but still:

Underlying all these pressures—the real estate boom, the rise in cremations, the changing neighborhoods—something more fundamental is buffeting the industry: New Yorkers just aren’t dying like they used to. New York City’s death rate has plummeted over the past 25 years, even as the population has grown by 1.2 million. The 53,000 deaths recorded in the city in 2014 were down from 76,000 in 1989. That’s a 30% drop in potential customers.

Crain's touches on cremation as well, and area cemeteries. We've discussed here at length cremation. And as a company with a mausoleum-specific product, we understand a lot of what drives decisions to invest in a community building. One of those reasons, especially in New York, is space. Many cemeteries in the 5-borough city limits only provides at-need services for in-ground burials. As for the rise in cremations, I think the article identifies things that aren't just specific to NYC, but to a lot of urban areas (especially now that more people live in cities than outside of them):

Some attribute the surge in cremations to relaxing religious mores and the fading of traditions. Families are more dispersed, so calling everyone home for a funeral is complicated, and people are reluctant to take days off. “You used to have a three-day wake with hundreds of people coming through. Now you don’t even get a one-day wake,” Dominic Cusimano, grandson of the original proprietor, said. He sold his building but still does funeral arrangements, sharing mortuary space with other funeral directors. “We’re here to serve the remnants of families who still want to do things traditionally,” he said.

Many say the cremation trend is simply economics. People are just more cost-conscious, observed Heyer, of Scotto’s, where cremations are about 30% of the business. One of the biggest funeral costs is the casket, which can be thousands of dollars. But funeral homes now offer rental caskets for wakes and funeral services; an interior box slides out at the crematory.

Readers likely know all of this first hand, and the takeaways remain the same: adaptability, personalization, service. But I think that specific case studies can be more helpful than abstract discussions on trends. And despite New York being uniquely large and dense, it can still provide some food for thought.