People that still have a job in New York aren't going to quit them to join startups in large numbers. It costs a lot of money to live in New York. Most developers on Wall St. could afford to move there only after they got the job offer. To join a startup, they'd have to completely downgrade their standard of living, which is a hard thing to do - take it from someone that left banking to go back to grad school for a C…
In my experience, NY startups pay developers 80% of wall street salaries. 80% of 100k is easily enough to live on in NYC.
That depends on which section of NYC you want to live in.