Possibly. It depends who leaves. If it's mainly people that are decently high earners and provide a lot of the tax base, it will be dark days for the city for awhile. Budgets will be cut as a combination of the tourism collapse and loss of income taxes will compound to create a crisis for the city. These things domino quickly as shops close, real estate taxes aren't collected, etc.
I think a lot of young people don't really understand how miserable the city was in many ways for about 25 years there before it had a renaissance the last 25 years.
I agree that a correction is needed. The rent is too damn high, to be sure.
Time Square was as filthy and sleazy as one would expect from exposed underbelly of the beast. It is definitely cleaner now, but there is a different repelling aspect to it. But the fact remains that outside of 42nd Street New York City had a genuine character and energy that off the charts and far removed from an open air market mass tourism destintation.
I sorely miss sitting in front of Fanneli's in Prince street and nursing a pint and chatting up _neighbors_; or catching the local music scene in Bowery or East Village; or walking gingerly past the 'made guys' on Mott Street while avoiding looking Gotti in the eye; or going to that run-down theatre on St. Marks or that other one near Kennedy Center. One could walk for hours those days without a single side-walk rage incident; and of course our brunch hangouts were accessible if we showed up reasonably early. (Brooklyn is kinda the Manhattan pre Guilliani Light and that is where I have self exiled.)
I mean, for God's sake, we used to have a Kid Robbot right on Prince street. Now that store is selling nail polish and makeup. Yes it is cleaner now, but damn I miss that New York.
I'm mostly hoping that a lot of the other millennials who have been waiting their chance are planning to skip town for some cheaper suburbs.