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The Place for New York Policy and politics

Citizens Union

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Can Obama Help Save New York?

Gotham Gazette

The Place for New York Policy and politics

Citizens Union
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Can Obama help Save New York?

As Barack Obama takes office today, many New Yorkers have high hopes that change has come -- and it will be change for the better. Much of that hope springs from excitement surrounding the first African American president ever and the first one in decades with urban connections. And in this overwhelmingly Democratic city, where Obama beat Republican John McCain by a four-to-one margin, there is a palpable hunger for new ideas and attitudes.

Like most Americans, New Yorkers want action too -- particularly on the economy. The recession has hit New York, the home of Wall Street, hard, with rising unemployment, job losses and slowdowns in all types of businesses. As a result, the state faces a $15 billion deficit over the next 15 months and the latest projections show the city government, thought to be on firmer ground, peering into a $4.3 billion abyss.

City and state leaders, along with fiscal experts and ordinary New Yorkers, hope Obama can help. At his State of the City last week, Mayor Michael Bloomberg rolled off a number of initiatives that called for some federal dollars, including a proposal to revamp the city's air traffic control system and a pilot program that offers jobs to struggling students if they stay in school. (For more on the mayor's State of the City, see A Recovery Package From Bloomberg.)

Highest on the city's wish list may be federal dollars for infrastructure. "Our cities have to be a central focus of any recovery plan," Bloomberg said recently. Any federal funding should first go to our urban environments, Bloomberg added, especially for bridges, roads, trains and tunnels.

Other New Yorkers have their own ideas. Here several experts offer their views about the proposed economic stimulus package and what the new administration can do to help lift New York -- and the nation -- out of the economic crisis.

Paying Attention to Cities By Jonathan Bowles
After years of federal policies neglecting urban areas, Barack Obama has sent some encouraging signals that he understands their importance. Certainly, New York could use a helping hand. The director of the Center for the Urban Future lays out some ideas for what the president could do to aid New York.

An $825 Billion First Step By James Parrott
The stimulus package proposed by Congress is key to halting the economy's downward spiral but it will not solve all our problems. Economist James Parrott of the Fiscal Policy Institute looks at what the package would do -- and what more needs to be done.

Using the Crisis to Prevent the Next One By J. Mijin Cha
The current turmoil can help us reduce our dependence on Wall Street and create good "green collar" jobs that help fuel a resurgence of the middle class. The director of campaign research at the Urban Agenda explains how.

Infrastructure Investments that Make Sense By Carter Craft
As big as the stimulus package may be, the country has to invest the money wisely. An urban planner offers some novel ideas for New York projects -- from recycling grease to ferries for freight.

From Gas-Guzzling Cars to Clean Buses By Charles Stone
Simply lending funds to struggling auto companies won't spur economic growth. Instead, an economist suggests, the government should create a voucher program to deploy the resources of the auto companies, spur investment -- and help the environment.

Previous Articles
A Federal Stimulus for City Parks By Anne Schwartz
Advocates hope that President Obama and Congress will recognize that funding parks would not only improve the quality of life and the environment but also spur investment and raise real estate values.

Stimulus Money: The Downturn's Silver Lining? By Graham Beck
The stimulus package could offer more federal funds for transportation projects. The MTA is making its list, but there are sure to be lots of restrictions -- and competition



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Gotham Gazette

The Place for New York Policy and politics

Gotham Gazette is published by Citizens Union Foundation and is made possible by support from the Robert Sterling Clark Foundation, the John S. and James L. Knight Foundation, the Altman Foundation,the Fund for the City of New York and donors to Citizens Union Foundation. Please consider supporting Citizens Union Foundation's public education programs. Critical early support to Gotham Gazette was provided by the Charles H. Revson Foundation, Rockefeller Brothers Fund and the Alfred P. Sloan Foundation.

Fast, Not Fancy -- And In Midtown, Not Downtown

By Dick Netzer

It is terribly important that whatever is to be done to rebuild Manhattan be done rapidly. The rebuilding must not be delayed--or stopped dead--by the usual New York acrimony about every aspect of every really large project. The city's economy has been hurt badly. The longer Manhattan is in a state of suspended animation waiting for the architects' perfect plan to be approved and actually implemented, the more unlikely complete economic recovery will be. More firms and jobs will be lost forever. The city and state fiscal difficulties will grow worse. And many of the economic opportunities that were suggested by the city's economic successes in the late 1990s will never come to pass.

If rebuilding is to be rapid, it cannot be an attempt to replicate exactly what existed in lower Manhattan at 8.00 AM on September 11. The rebuilding has to be consistent with what markets have shown over the past 50 years to be a powerful trend in the location of economic activity within Manhattan. We need to go with the flow, which is a shifting, rapidly at some times and more gradually at others, of economic activity from lower Manhattan to midtown. This reflects the fact that the only locational advantage that lower Manhattan has over midtown is that downtown is more convenient for subway commuters who live in Brooklyn. That was enormously important before 1930. It is a trivial edge now.

By 1960, the shift to midtown had become pronounced. A study for the Downtown Lower Manhattan project in 1961 documented how severe the shift in the 1950s had been, but-whistling in the dark-the study asserted that the trend could be stopped fairly easily (I as a consultant to the project was one of the whistlers).

There are winners and losers in such shifts, the biggest losers being the owners of land in the place that is the loser. A couple of men who shared the same family name-Rockefeller-were, respectively chairman of the Downtown Lower Manhattan and CEO of the Chase Bank, and governor of New York. They were persuaded that heroic efforts were needed to stop the trend. Lower Manhattan's office buildings were mostly obsolete and unattractive to high-end businesses not permanently tied to the securities markets, and one of its important transit links, the one that carried commuters from New Jersey and is now called PATH, seemed on its last legs, physically and financially.

So, the Port Authority of New York and New Jersey, a creature of the governors of the two states, was instructed to intervene, to take over, rebuild and finance the permanent deficits of PATH (which benefited residents of New Jersey) and to provide millions of square feet of Class A office space by building the World Trade Center.

This intervention was timely, and it worked, in the prosperous 1980s and 1990s, when the two booms in the demand for the services of the financial services industries provide enough business activity to fill up the World Trade Center and other new office buildings, as well as a substantial amount of new office space in midtown Manhattan.

Rebuilding lower Manhattan to pre-9/11 standards will require the construction of millions of square feet of office space, mostly at the WTC site (there is no other open land in Lower Manhattan) or on a massive new land fill, and a huge investment in restoring the lower Manhattan infrastructure to its previous capacity. That cannot be done rapidly, even if we could avoid the controversy about just what to build that is already raging.

Much of the destroyed infrastructure would not need replacing, if we accept that the lower Manhattan economy will be a good deal smaller than it was before 9/11. With many fewer people working in lower Manhattan, New Jersey commuters could be accommodated by an expanded ferry system, and the PATH line need not be rebuilt at all (the signs suggest that there may not be any part of the under-river tunnel that is salvageable). The 1 and 9 subway line south of Chambers Street could be abandoned. The Con Edison steam system in lower Manhattan may not be salvageable, and abandoning it might justify closing down the entire steam system which is obsolete, to put it kindly. Similarly, the telecommunications capacity that would be needed if the economy were restored to ante-bellum conditions would be smaller, thus making it possible to avoid replacing the heavy Verizon losses.

On the other hand, the destroyed office space can be replaced quickly north of 14th Street, and the infrastructure is in place, or can be gradually expanded. The zoning is consistent with the construction of conventional office buildings, and 30-story buildings would not be a hard sell with respect to zoning. Developers know how to assemble land, design and build such buildings quickly. No doubt there would be scattered local opposition-after all, there are New Yorkers who believe that anything built before 1960, however hideous and dysfunctional, deserves landmark designation-and no doubt the product would be an ample plenty of plain vanilla buildings. But if the demand for midtown space is there, the 14 million plus square feet of space in the WTC could be met with dispatch. It would be building fast, not fancy.

Of course, there have been heavy economic losses and terrible human losses. The losers need to be made whole, to the extent possible, with one exception-landowners. But it would be grotesque public policy to restore lower Manhattan to its pre-9/11 condition in order to compensate landowners. Gamblers win sometimes, and lose other times.

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Gotham Gazette is published by Citizens Union Foundation and is made possible by support from the Robert Sterling Clark Foundation, the John S. and James L. Knight Foundation, the Altman Foundation,the Fund for the City of New York and donors to Citizens Union Foundation. Please consider supporting Citizens Union Foundation's public education programs. Critical early support to Gotham Gazette was provided by the Charles H. Revson Foundation, Rockefeller Brothers Fund and the Alfred P. Sloan Foundation.

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