The Way Forward

New York City’s “to-do” list demands leadership and cooperation

08 Sep 2020 | 12:51

Sure, we’ve been through hard times before. Fires, attacks, economic collapse. And, yes, New York has always come back better. History can be helpful, even inspirational, and confidence matters. “COVID-19 has shaken our confidence and tarnished our brand,” wrote Kathryn Wilde and Natasha Avanessians of the Partnership for New York City, a business alliance.

But #NewYorkTough is not a strategy for recovery, which is what we need now.

New York’s path forward demands a level of cooperation among the city’s disparate forces not seen since at least the 1975 fiscal crisis, elected officials, business leaders and students of the city’s history all say.

“Recovery will require unity and strength of purpose from New Yorkers,” Wilde and Avanessians wrote in a report on recovery strategies. “One thing is clear: returning to the pre-COVID-19 status quo is not an option. We are at a crossroads. The pandemic unleased political, racial and economic tensions that can either leave the nation’s largest and most important urban center in chaos or ... provide the impetus for working together for recovery and positive change.”

The city’s famous energy must be laser-focused on specific steps that will revive the opportunity, creativity and drive that make people want to be here. The phrase “strong leadership” comes up again and again in conversation about the city’s future. “Somebody who has the sense to put all these pieces together and say this is what needs to be done,” explained Manhattan Borough President Gale A. Brewer.

New York began the year 2020 as one of the great cities of the world – an economic powerhouse, a cultural hothouse and, perhaps most important, one of the world’s most effective engines of social mobility – receiving and uplifting millions of immigrants over the last two centuries.

The city can be all that again, its many devotees say. But to make it here we have to roll up our sleeves and get to work on these vital and interwoven goals.

COMMUNITY HEALTH CARE

New York City survived one of the worst bouts of COVID-19 anywhere on earth. To emerge from shelter New Yorkers need to feel safe that we won’t go through that again. Building back must rest on the strongest possible measures to keep the virus contained. Eventually there will be a vaccine. Even if it arrives record fast in the next few months, months more will be needed to deploy it and there may be New Yorkers who resist taking it, as they resisted measles vaccines just in the last year or two.

Recovery can not be held hostage to the creation, deployment or effectiveness of a vaccine. It does not have to be. A number of countries have successfully contained the virus in advance of any vaccine. We know how.

First, of course, are the now familiar personal rules: distance, mask-up, wash-up and stay home if you are sick. But there is much more to do as a community. Widespread testing and tracing is still not all it needs to be. Test results still take too long and one infected person in four is not completing conversations with tracers assigned to track down others they may have infected. Those contacts, in turn, have been even less forthcoming.

Personal discipline by each of us and a stronger test and trace system can hold the virus at levels low enough to restore confidence that it is safe to go back to work, school and New York life in general.

That life will not be exactly what it was before. Who would have thought that eating dinner in the middle of Amsterdam Avenue, nearly under the 18 wheels of big rigs, would be such a draw! That is the kind of adaptation that will get us through this. As the weather cools, that creativity will need to be focused hard on how to ventilate indoor restaurants, stores, offices, schools and other facilities so whatever virus is still circulating is quickly destroyed or swept away.

There is one more health measure essential to easing the danger of COVID-19. Virtually everyone who died here suffered from other conditions, what the doctors call co-morbidities. Most of those conditions are treatable, from diabetes and high blood pressure, to obesity and vitamin deficiency. Moreover, these conditions are more prevalent among the poor and people of color who suffered disproportionately in the pandemic.

“In a post-COVID-19 world, New Yorkers need to feel confident in the quality of their personal health care, the health of their community, and the capacity of New York City to handle the next pandemic or widespread health crisis,” said the report from the Partnership for New York. “This is not just a matter of spending more money. New York spends nearly 80% more than the national average per capita on health care. What is required is greater attention to a better integrated system of community-centered patient care, driven by policy and funding guidelines that ensure equitable health outcomes for all communities.”

THE JOBPOCALYPSE

The carnage to employment was shocking. In a few weeks in March, 900,000 jobs were wiped out, according to the State Labor Department. That is nearly one out of every four private sector jobs in New York City. The destruction was widespread. But it was also wildly uneven. Low-wage workers were cut loose in droves. Hotels, restaurants, tourism, movies and theater were all shut down, accounting for nearly half the lost jobs. One out of every two workers in the restaurant, hotel and tourism business was sacked. By comparison, banking, insurance and other financial services, a sector slightly larger than hospitality and tourism, cut fewer than one worker in ten as most were able to continue working from home.

The downturn here has been substantially deeper than the country overall, perhaps the necessary exchange for locking down earlier and harder. The climb back has been slow and again uneven. Overall about 225,000 jobs have been restored. The financial sector is within 20,000 jobs of its pre-pandemic employment of 477,000 in February. But restaurants and other eating places, which employed 277,000 New Yorkers in February, had only 149,000 workers this July.

Governor Andrew Cuomo announced last week that restaurants could begin serving indoors again at the end of September, at 25 percent of pre-pandemic capacity. As a first step, restaurant owners welcomed the move, which they had been clamoring for. But few thought it would be enough to assure long-term survival.

Looming over New York’s job market is the question of how many government employees may lose their jobs as tax revenues fall. Ultimately, the most effective way to limit the damage from that ripple effect is to reverse the collapse of the private sector job market.

EDUCATION and TRAINING

One of New York City’s competitive advantages has been an educated, motivated workforce. Yet even before the pandemic, there was an increasing mismatch between the skills of New York workers and the jobs available. Addressing this disparity when unemployment was low would have been an opportunity to improve people’s lives. Today it is an urgent part of getting New York working again.

Leaders of 27 of New York’s biggest businesses, from JPMorganChase to Verizon, last month created the New York CEO Jobs Council, which is partnering with schools, colleges and training programs to prepare low income Black, Latino and Asian New Yorkers for “stable jobs” with solid career arcs.

The City University of New York presented its students with a “90 day upskill challenge” to sharpen their talents in fields like software development, health care administration, data analytics and digital marketing. “COVID-19 is definitely impacting our local job market, but companies are hiring- and will continue to hire as they adjust and adapt to the current situation,” the university said. “So don’t stress.”

But stress is everywhere as the daunting scale of the challenge becomes increasingly evident. The CEO council said its goal is to put 100,000 New Yorkers of color to work by 2030. That is about 1/8th of the 806,000 city residents listed as unemployed in July by the state labor department.

GOVERNMENT and REVENUE

Part of the challenge is that the crisis is far from over. With the virus contained but not eradicated, the health crisis is now also an economic crisis whose first wave eviscerated the private sector. That damage is only beginning to play through to government in the form of plunging tax revenue. Sales taxes are down, income taxes will fall and almost certainly the value of at least some New York City property, commercial and residential, will have to be lowered for tax purposes.

For example, the Borough President’s staff surveyed the length of Broadway in Manhattan and found 335 stores vacant, “a 78% increase in vacancies since my 2017 survey, which reflects both relentlessly rising rents and the pandemic’s devastating toll on businesses,” Brewer reported. An additional 75 storefronts were boarded up or carried signs saying the store was closed until further notice. The closures and vacancies were particularly acute between Union Square and 59th St., as office buildings along the way still sit nearly empty of workers.

Property taxes account for 46 percent of city tax revenue, by far the largest source. Commercial property owners paid about $12 billion in 2019 and owners of apartment buildings, coops and condominiums kicked in about $10.3 billion. Homeowners paid a bit over $4 billion.

This can sound bloodless. For many, the pressures of taxes, rent or loan payments are becoming unbearable. For now, evictions are blocked, but that only moves the challenge down the road or shifts it to landlords who then can’t meet their obligations.

Mayor Bill de Blasio has estimated city government will be $9 billion short this fiscal year, but the truth is no one can know for sure. The mayor has proposed covering the shortfall through federal aid, which is gridlocked in Washington, and borrowing, which the legislature has so far declined to sanction and is strongly opposed by the former Lieutenant Governor, Richard Ravitch, who warns against repeating mistakes that caused the fiscal crisis of the 1970s that he helped to resolve.

Ravitch has urged New York business leaders with ties to President Trump and Senate Leader Mitch McConnell to lobby them to approve aid to cities and states, much as business leaders helped in 1975 to reverse President Ford’s objection to federal guarantees for New York City loans.

But many in the business community say the mayor seems immobilized by his wait for outside help and needs to move quickly to stabilize police, sanitation and other core services.

“There is widespread anxiety over public safety, cleanliness and other quality of life issues that are contributing to deteriorating conditions in commercial districts and neighborhoods across the five boroughs,” 160 corporate executives and chamber of commerce leaders from the five boroughs wrote to the mayor last week. “We need to send a strong, consistent message that our employees, customers, clients and visitors will be coming back to a safe and healthy work environment. People will be slow to return unless their concerns about security and the livability of our communities are addressed quickly and with respect and fairness for our city’s diverse populations.”

OFFICE WORK VERSUS WFH

Labor stats don’t describe it this way, but office work is a key New York City industry. Manhattan’s towering business districts are built around it, transit systems are designed to bring people to and from it and thousands of other restaurant, retail and entertainment workers depend on it for their livelihood.

After six months of the greatest experiment in history at working remotely, two facts crucial to the city’s future are clear. The office is not dead and office work will change. The challenge is figuring out what those changes will be and then adapting the vast investment in buildings and transit infrastructure to those changes. Many corporate leaders and property owners express confidence this will happen, although they say it may take several years.

The city’s largest private employer, JPMorgan Chase, cast a strong vote last week for the importance of the office, telling groups of key employees they were expected back on September 21 unless they had a specific health or family reason why they needed to continue working from home.

One reason is the work of Daniel Buenza, professor of management at City University London, who compared the effectiveness of financial traders who worked from home to those who came in during the pandemic.

“The banks that pressured their traders to come to the floor were better able to take advantage of the volatility during March,” Buenza explained by email. “In London, these were typically the Wall Street banks as opposed to their European counterparts.”

This finding was consistent with his new book on traders, “Taking The Floor,” which found that “informal cross-desk interaction, based on overhearing or an unobtrusive quick exchange, is difficult to replicate online.” Buenza said.

“One generalization,” he added, “is that office work is important in situations that are time-critical, fraught with uncertainty, and where communication has to be quick, rich, and cannot simply happen alongside formal reporting lines.”

It is certainly not a coincidence that both Facebook and Amazon made major commitments to New York real estate in the midst of the pandemic.

COMING and GOING

There has been great hand-wringing about well-to-do New Yorkers who ghosted town in the pandemic. Cuomo said he would cook them dinner to get them back, although the mayor emphasized his hope to raise their taxes.

Either way, the question of who leaves has historically been less crucial to the future of New York than the question of who comes, said Louise Mirrer, president and CEO of the New-York Historical Society. “The city’s history has been marked by moments when everyone said the city was finished.” She said each time this was proven wrong for two reasons.

In the immediate aftermath New Yorkers do rally to help each other. “What’s really characteristic of New York is that something unspeakably awful happens and almost instantly people translate their shock into service, into compassion. Behaviors people don’t necessarily equate to an urban center.”

Then, in the longer run, the city has been recharged again and again by vast waves of immigration. “Not only did it compensate for people leaving the city,” Mirrer said, “immigrants were willing to take jobs other people were reluctant to take.”

The city’s population fell by nearly one million in the 1970s, but has been rebounding ever since, or at least until 2016, when it peaked at 8.48 million. The population tailed off after that, declining to about 8.32 million before the pandemic.

A part of this was the sharp curtailment of migration to New York and the rest of the United States under President Trump. In addition to legal restrictions, the city’s high costs may also deter new arrivals.

StreetEasy, a real estate listing service, said that before the pandemic rents were rising most quickly in working neighborhoods crowded with new arrivals, like Corona, Elmhurst and Jackson Heights in Queens. Since the pandemic, rents have dropped considerably in well-to-do neighborhoods, where wealth offers choice, such as the West Village and Battery Park City, but merely flattened out in immigrant neighborhoods hardest hit by the pandemic, like Corona, Elmhurst and Jackson Heights.

“In the neighborhoods that escaped the pandemic’s worst impacts, historically high rents have begun to come down, and vacancy rates are rising,” reported Nancy Wu, an economist at StreetEasy. “Yet in the neighborhoods where COVID-19 was most strongly felt, the very opposite is true.”

With jobs curtailed and health endangered, there have been several reports of immigrants actually headed back to home countries where conditions feel better. Of all the uncertainties hanging over New York’s recovery, none are as significant, or as difficult to predict, as the one Mirrer asks: “Will we be able to depend as we have on the past on the influx of new people?”

LEADERSHIP MODELS

When Scott Stringer, the city comptroller, announced his campaign for mayor last week, he pledged to “bring leadership back to City Hall.” De Blasio still has a year and four months in office, but more than a dozen contenders are already fighting for his job.

The campaign offers a golden opportunity to focus public attention on key choices and even forge a consensus that will shape the city’s future.

Yet while the candidates debate the future they propose to start building in 2022, de Blasio remains responsible for the next 14 months, a period that will have lasting impact on the nature of the city’s recovery. There are many concerns about whether he will rise to the challenge.

“This mayor in general is just dealing with day-to-day,” said Manhattan Borough President Brewer.

The city’s history is full of leadership role models. There is of course Governor Hugh Carey intervening to stave off the city’s default in 1975. Or, in an earlier era, Mayor Fiorello La Guardia donning a civil defense helmet, planting victory gardens and rallying New Yorkers to the challenge of World War II.

But perhaps most relevant and least remembered is the frightening health scare of March 10, 1947. That was the day that William Le Bar, just returned to New York City from Mexico, died of smallpox. Health Commissioner Israel Weinstein decided to vaccinate the entire city. But there was not enough vaccine.

“Mayor William O’Dwyer held a late-night meeting of pharmaceutical representatives and virtually locked them in City Hall until they agreed to provide the needed vaccines,” according to an official history prepared by the City Health Department.

In one month, 6.35 million New Yorkers were vaccinated. In the end, there were only twelve cases of smallpox and two deaths. A potentially catastrophic epidemic was averted.

“Leadership is important,” said Louise Mirrer. “This is a time that calls on the most innovative minds in New York, of which there is a great collection.”

The city’s famous energy must be laser-focused on specific steps that will revive the opportunity, creativity and drive that make people want to be here.
“This is a time that calls on the most innovative minds in New York, of which there is a great collection.” Louise Mirrer, president and CEO, New-York Historical Society
It is certainly not a coincidence that both Facebook and Amazon made major commitments to New York real estate in the midst of the pandemic.