A Review of the DeBlasio Administration: Spot Zoning, Unjustifiable Restrictions, and the Soft Corruption of New York’s Land Use Regulations, and Other Regulations

What would I have spent my career doing if I had stayed at the New York City Department of City Planning, instead of leaving 21 years ago?  Nothing good, based on what I know, and it’s a good thing I got out when I did.  New York City is gradually becoming a giant co-op board, with different rules based on who you are, and who you pay.  There are plenty of obsolete and unjustifyable restrictions and exclusions on the books, many dating from the early 1960s when city planners decided the city would have to become a second-rate suburb to survive.  And as I increasingly discover, any rules at all are optional for those on the political inside.

In fairness, New York City has never been a place of simple, fair rules strongly enforced against everyone.  The trend of pretending to be tolerant and open because you only oppose the businesses and buildings the lesser people might patronize, not the people themselves, not only pre-dates the DeBlasio Administration, it goes back hundreds of years.  In the 1850s, according to the book Gotham, snobs wanted to prohibit the sale of alcohol on Sunday, the only day off for working class Irish and German immigrants to gather in their pubs and beer gardens for a beer.  “Reform” mayor Fernando Wood gave them the rules they wanted, then used selective enforcement as a source of graft.  Astute reformers noted that Wood’s anti-vice crusades were highly selective.  His men rounded up streetwalkers but left brothels alone, raided the grubbier gambling dens but not the fashionable establishments, and bypassed Sunday saloonkeepers who voted the right way.

Still, the trend toward regulation by special deals for the special people got worse under special interest-backed Mayor Bill DeBlasio, and based on who is contributing money to whom, and what even 21^st century “progressives” are like, the trend toward different rules for different people is likely to continue to get worse.

Sold Out Futures by State: Debt and Infrastructure for FY 1972 to FY 2019

The federal government just passed a $ 1 trillion “infrastructure bill” that, for a while, will increase the amount of federal funding for infrastructure.  Most of the actual spending, however, will be continue to be done by state and local governments, just as has been the case in the past.  The modest increase in spending, adjusted for inflation, is intended to address a backlog of needed projects.  But federal funding is only one source of money for state and local infrastructure.  State and local taxes are another, and bonds, usually paid off over 30 years, are a third. 

The extent of infrastructure varies from place to place.  In rural areas the only public infrastructure might be a county or town road, supplemented by power supplied by a rural electrification co-op, and telephone and postal service cross-subsidized by those in cities.  Instead of paying for public water, sewer, and solid waste collection, people provide these for themselves.  In cities, on the other hand, there may be mass transit, public sidewalks, airports, seaports, public water, sewer, solid waste collection, and in some places public electric utilities.  So do low-density rural states spend less on, and receive less in federal funds for, infrastructure?  Do states with low past infrastructure spending also have low debts?  How are the estimated $1.4 trillion infrastructure spending shortage and the $3.2 trillion in state and local government debt distributed around the country?  Read on and find out.

The MTA: Why Always the Most Expensive, Interminable Way?

A couple of, well, decades ago, the MTA started planning MetroNorth service for the time when East Side Access opened and many Long Island Railroad trains would be going to Grand Central Station.  This could provide an opening for MetroNorth trains, at least those on the Hudson and New Haven Lines, to go to Penn Station.  The tracks are already there, so this should be relatively simple and cheap right?  

Wrong.  After 22 years of planning, and the expenditure of however many $millions or $tens of millions on staff and consultants, the MTA might finally spend $1.6 billion to add a few stations to the New Haven line as part of the Metro North to Penn project.  Perhaps there will be service in another decade or two.

If there wasn’t such operational inefficiency involved, however, MetroNorth service to Penn Station could start next spring for no money at all.  How?

“Affordable” Phonies Make Life Unaffordable for the Serfs

According to Merriam Webster online, affordable means able to be afforded: having a cost that is not too high.  And among New York’s Democrats and progressives there is always talk of having government policies make something affordable:  affordable education, affordable health care, affordable housing, affordable transportation, etc.  And yet observing 40 years of public policy in New York, I can think of only a handful of examples of policies that have actually made life, or a better life, less costly for the public at large.

When one examines the totality of public policies enacted in so-called Blue States, you see that the goal actually seems to be to make many things more expensive.  

Sometimes for reasons I agree with.  A developed country (and I’m not sure ours is) shouldn’t be making goods and services more affordable in the short run by making them more expensive, more dangerous, or more misery-inducing for the community as a whole, in the long run.  That’s what the builders of the “affordable” Surfside condo in Florida did by cheaping out on the building structure.

https://www.wsj.com/articles/behind-the-florida-condo-collapse-rampant-corner-cutting-11629816205?mod=trending_now_news_1

But mostly for reasons that would be impossible to justify if openly admitted.  To make some workers — those who work for the government, or are paid funded by government programs — richer compared other similar workers, at the expense of making those other similar workers pay more and become poorer.  And to make it more expensive to live in politically influential “liberal” communities, ensuring the less well off, their burdens and troubles, will be somewhere else.  The result is hypocrisy.

When Democrats and progressives say “affordable” what they really mean is “subsidized.”  Part of the cost is paid for by someone else, so it seems to be more affordable.  But since fiscal resources are not unlimited, even in New York City where we have the highest state and local tax burden and the most debt, the subsidies for “affordable” health care, education, transportation, housing etc. only end up going to the fortune few.  And many if not most of those few often turn out to be among those were already fortunate.  For the rest, somebody has to pay after all.  Often those who are already burdened by policies to make things more expensive – policies that lead to the need for subsidies to begin with.

The MTA (and New York State and the New Federal Infrastructure Plan): Five-Plus Decades of Investing in the Suburbs and Disinvesting in the City

The era of large-scale federal infrastructure investment, from the 1950s through the 1970s, coincided with the era of suburban development and urban decline.  I don’t think that was a coincidence.  Cities had paid for their own infrastructure with local money, were still paying bonds for that infrastructure, and it was aging. The federal government then paid for brand new, up to date infrastructure for suburbs, and for rural areas that became suburbs, with taxes collected in part in cities, even as urban infrastructure declined.  Federal investment was limited to new infrastructure only at the time.  Most older central cities never recovered, and those that did only began to do so in the early 1980s, after the Reagan Administration cut federal investment and added local flexibility to how it was used.  More of it was then used to fix existing infrastructure, not just subsidize new suburban and exurban development.

Now it is 50 to 70 years later and the infrastructure of the suburbs is aging.  And because of lower densities, and thus more liner feet of road, water pipe, and sewer pipe per taxpayer, it will be more costly to replace with local taxes.  Some in the Strong Towns movement believe the suburbs are facing the sort of infrastructure decline the cities faced 50 years ago as a result. 

https://granolashotgun.wordpress.com/2016/01/12/teachers-pipes-and-pavement/

An issue that will be most acute in private communities responsible for their own local infrastructure, where people live so they can control who walks on their streets and not share a tax base with pre-1960 neighborhoods. Who will pay up when private sewage treatment plants fail and have to be replaced?  Did you hear about what happened at that collapsed Florida condo, where residents had argued for years about paying for fixes before disaster struck?

The older generations who live in these suburbs are used to getting things, but not fully paying for them.  The “I’ve got mine jack,” tax cut generations.  And here we have another federal infrastructure bill, enacted by suburban and Sunbelt Baby Boomers according to their preferred lifestyle, a lifestyle that poorer Millennials cannot afford and the global environment cannot sustain, to be paid for by those Millennials in the future, because most of it going to funded by soaring federal debts. With higher levels of governments (federal and state) making the choices as to how even the future money of city residents will be spent, how will New York and other older cities fare this time?

As an analogy this post will compare the suburban and city projects that the MTA promised in the Program for Action, released in early 1968 when it as formed, with the system expansions and maintenance of existing infrastructure that actually took place in the five-plus decades since.  And go from there.

Rebenchmarked Current Employment Survey Data for 2020: New York City Was Clobbered Last Year, But the Long Term Data Is Still Very Positive

The U.S. Bureau of Labor Statistics released rebenchmarked annual average Current Employment Survey data for 2020 and prior years on March 15^th 2021.

https://www.bls.gov/sae/publications/benchmark-article/annual-benchmark-article.htm

More than any other year, there is reason to take the data with a grain of salt.  State departments of labor faced the challenge of collecting the data during a pandemic, while working at home.  An appointee of Mr. Transparency, Donald Trump, was in charge of the Bureau of Labor Statistics, during an election year.  The BLS was hacked by the Solar Winds computer virus late in 2020.  And this data source is most inaccurate during sudden shifts in the economy, due to the need to guesstimate the number of workers employed in new businesses and businesses that closed but were not surveyed.  Large revisions often follow and the unemployment tax records roll in.  There was more than one sudden shift, many businesses closed, and some opened in 2020.  That said, many people worked to produce the best data they could under the circumstances, and this post will discuss what it shows.  

It shows the biggest year-to-year private sector wage and salary job loss for New York City since at least 1950, and perhaps ever.  A job loss that was larger, on a percentage basis, than any U.S. area of any size save the state of Hawaii.  A job loss that was significantly larger than had been reported prior to rebenchmarking.  And yet there is another way to look at the data. New York City still had more private wage and salary jobs in 2020 than it had in any year prior to 2014 – and a boom in self-employment is on top of that.

The Extraordinary Privilege of Private Passenger Cars in Metropolitan New York

What makes the transportation system of Metropolitan New York unique in the United States, and perhaps in the developed world?  You might think it is New York’s extensive rail mass transit network, including both heavy rail (subway) and three commuter rail lines. But similar networks exist in other older major U.S. metro areas such as Boston, Philadelphia, Washington, Chicago, and San Francisco, and many global cities have even larger rail transit systems, compared with their populations.

In fact, what makes transportation in metro New York unique is something that is in some ways the opposite of extensive mass transit.  The large share of its grade-separated, limited-access expressway system that is restricted to passenger cars only, and thus excludes trucks, other commercial and service vehicles, and mass transit vehicles such as buses.   Expressways – hugely expensive to site, build and maintain; hugely destructive when built through developed areas; lacking the property tax benefit provided by adjacent land uses; and destructive to the value and use of adjacent land – represent major commitments of social resources.   Having many of those expressways restricted to a limited class of road users is a unique and extraordinary privilege, one that puts proposals to allocate a greater share of the space on other mixed-traffic roads to bicycles, buses, trucks and other commercial vehicles in perspective.

To show the extent of this privilege, and its consequences, I asked Susan Zwillinger of 4CGeoworks (Pittsburgh) to produce a cartogram map of the Major Roads and Paths of Metro New York.  It is shown below.

The Coronavirus and Commercial Real Estate: In the Long Run Neither is the Real Threat to New York

The debt-driven U.S. economy was heading for a crash before the coronavirus even hit.   And in some metro areas, including New York, the excess concentration of economic activity during the past decade had sent the cost of commercial and residential real estate to unaffordable and unsustainable highs.  Moreover, the wealthiest generations in U.S. history are now over age 62, with later-born generations much poorer – and facing large costs from the past as well.  And now a once in a century pandemic has accelerated an economic and social crisis that was always in the cards.  None of this, obviously, is good.

With regard to commercial real estate, however, a market adjustment that some might see as a calamity is actually part of the solution. Lower housing prices would allow later-born generations to pay less for housing, offsetting some of their other disadvantages.  Lower residential rents might cause apartments to go through bankruptcy, foreclosure and workout, eventually causing existing asset holders to take losses on mortgage-backed securities.  But the lower building prices would allow future landlords to charge less and still make money, in turn allowing tenants to live better on their lower incomes.  Lower commercial rents could also cause the value of commercial mortgage-backed securities to fall.  But they would also make it easier to open a business, even if it doesn’t produce a high level of revenue per square foot right off the bat.  A market adjustment on the price and property value side, and private sector creativity, could forestall damage on the occupancy side, allowing buildings – and the communities they are located in — to be re-occupied and maintained, and the economy to re-boot.

And yet there is the possibility that things will turn out much worse for many parts of the country, including New York City.  I would divide the real threats into three categories: federal, state and local.

The Coronavirus and Commercial Real Estate: Will Previously Booming Central Cities Be Abandoned?

The 2010s were the decade of the booming superstar cities – Manhattan and Brooklyn, San Francisco and Silicon Valley, Los Angeles, San Diego, Boston, Washington DC, Austin, Denver, Seattle, Portland, central Los Angeles, and even Miami.  With spillovers to, and rapid gentrification of, places such as Queens, Jersey City and Hoboken, and Oakland.  Even the downtowns of otherwise economically struggling older cities and metro areas, such as Chicago, Detroit, and St. Louis had a revival.

These were the places the most ambitious and creative Millennials and booming TAMI (technology, advertising, media and information) firms just had to be.  They poured in even as real estate prices soared and crowding increased.  Young working adults were forced to share apartments, and even bedrooms, with roommates, were squeezed into less and less space at work, and saw their wages fall behind the price of necessities, wiping out their discretionary income and ability to save.  Rail transit lines became crowded and started to break down, and in less transit-oriented cities such as Austin, highway traffic increased and commutes got longer.  I called this the New Urban Crisis, a while before Richard Florida published a book of the same name about the same problems.

https://larrylittlefield.wordpress.com/2014/11/23/the-new-urban-crisis/

Meanwhile, suburban corporate office campuses were abandoned, and the value of suburban housing plunged, something that was partially disguised by the fact that highly indebted aging suburbanites would not, or could not, sell at market value.

Now the coronavirus pandemic has hit, businesses have shut down, the shared amenities that make city life so appealing – the restaurants, museums, concerts and other gathering places – are also shut down.  Well off people and young workers have fled the city in droves.

Everyone is buying houses and cars and looking to move away, those who sell houses and cars are saying.   Will the cities now be abandoned?

Public Amenities & Vices: 2017 Census of Governments Data

Over the years I’ve heard so-called conservatives try to make the case that the business sector is the foundation of the economy, while the public sector provides nice-to-have services that we may or may not be able to afford.  As if what the government does is the cherry on top of a sundae, perhaps desirable but not absolutely necessary.  There is a reasonable “conservative” case to be made about the relative value of services produced by the public and private sectors, but that isn’t it. The types of services that can’t fund themselves, and are in the public sector, include education, much of health care, most infrastructure and public safety.  And certainly aid to the needy.  The types of services that can fund themselves with sales in the private sector include alcohol, tobacco, other pleasurable but addictive substances, gambling, pornography, and prostitution.  Do we need less of the former, and more of the latter?

Perhaps the conservatives where thinking about the subject of most of this post:  Parks, Recreation, Culture, Natural Resources, and Libraries.  They have certainly been among the first services to be wiped out in NYC when money gets tight, along with services to keep poor children from being abused, neglected and killed.  But there was no fiscal crisis going on in FY 2017, the year of the latest Census of Governments, or in FY 2007 and FY 1997, prior Census of Governments years.  So how much was spent on these services then, in NYC and elsewhere?  This uses post Census of Governments data to find out.