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Could a Public Works Program Save New York City's Economy?


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Could the reinvigoration of the New York economy come from public works? (photo: Ed Reed/Mayor's Office)


Somewhere around a million New Yorkers are out of jobs and billions in tax revenue has evaporated as New York City bears the brunt of possibly the worst disaster in its history. The coronavirus has been devastating the city’s people, their way of life, and their livelihoods. As elected officials and experts look to the future, when the pandemic eventually subsides, they must plot a path out of the crises that will remain.

New Yorkers will need jobs, and once the city is running again in some form, it will need its infrastructure to bear pace. As a growing number of experts and elected officials has suggested, large-scale public works and jobs projects could be the solution, marrying twin needs by putting people back to work while rebuilding and reimagining the post-pandemic urban landscape.

Public works are a tried and true method to inject adrenaline into the economy after a period of significant disruption. In the depths of the Great Depression, President Franklin D. Roosevelt’s New Deal in 1933 created the Public Works Administration, or PWA, which pumped $4 billion over nearly 6 years – the equivalent of about $79 billion today when adjusted for inflation – into the construction of public buildings, dams, sewage plants, hospitals, roads, highways, and more. In 1935, it was followed by the Works Progress Administration, which provided employment to more than 8.5 million people over eight years to work on infrastructure construction projects while also funding arts and culture and more. The WPA received nearly $5 billion to accomplish its goal, nearly $99 billion in today’s dollars.

New York City, under Mayor Bill de Blasio, has taken stabs at large infrastructure projects and creating jobs, with a four-year, $67.2 billion capital program and the “New York Works” jobs and workforce development plan to create through city intervention 100,000 “good-paying jobs” (at least $50,000 annually, according to the mayor) by 2027. But those efforts have in some ways lacked ambition and have now been hobbled by the budget crunch currently facing the city because of the coronavirus. The city has postponed many planned infrastructure investments, and was already struggling to get momentum behind the jobs program.

Federal intervention -- desperately being sought to the tune of hundreds of billions of dollars by de Blasio and other elected officials in New York and across the country -- could help not only in keeping infrastructure plans on track but could also fund broad educational training programs, including some with social services components.

“New York has significant infrastructure needs, so a public works program could be a real boon to the city, not only to get New Yorkers back to work but to take care of some of our enormous challenges like climate change,” said Jonathan Bowles, executive director of the Center for an Urban Future, an urban policy think tank.

Those needs are indeed dire, and were well before the city’s economy came to a grinding halt. New York City sorely lacks affordable housing, an issue de Blasio has sought to tackle with a much-criticized 300,000-unit, 12-year plan. The building stock of the New York City Housing Authority, the public housing agency home to more than 400,000 New Yorkers, has been crumbling from disinvestment over decades and needs roughly $40 billion, with its maintenance and repair costs projected to rise to about $68 billion over the next eight years. The state authority that runs the city’s subways and buses was finally on a more focused path to address much-needed upgrades and repairs, but that $50-plus billion vision has been derailed after the pandemic plunged the MTA into fiscal chaos.

Many neighborhoods in the city desperately need more school seats, park space can be at a premium, and as Bowles’ organization showed in a 2014 report, “Caution Ahead,” many of the city’s public buildings, roads, bridges, water and sewer mains, and subway signals were more than 50 years old. The report said the city would require $47.3 billion over five years to bring infrastructure to a good state of repair. Last year, CUF published an update to the report that noted progress made on water and sewer infrastructure and road surfaces by the de Blasio administration, but also found that other areas had worsened, with state-of-good repair funding gaps increasing for the Department of Education, Department of Parks and Recreation, and the New York City Housing Authority, among other agencies.

Though the question of funding underpins everything, several local elected officials have been raising the idea of a massive program to build infrastructure and create jobs to ameliorate the city’s unemployment crisis, while injecting money into the local economy and building, repairing, and improving city infrastructure.

City Council Member Helen Rosenthal, a Manhattan Democrat running for city comptroller in 2021, is calling for a program modelled on the WPA. Council Member Mark Levine, a Manhattan Democrat whose leadership of the Council’s health committee has propelled him toward the front of the current crisis, has called for a $1 billion investment in the creation of a 15,000-strong “public health corps” to directly fight the coronavirus and provide a raft of related services to its victims.

“My goal is to spur big thinking on this and help the public see the opportunity here by going big to make it safe to reopen,” Levine, who is running for borough president, told the New York Daily News.

“We are going to need to make the most intelligent [budget] cuts possible and look at the macroeconomic solutions, which involve more government spending,” Rosenthal said in a recent interview on the Max & Murphy podcast from Gotham Gazette and City Limits. “We have to build back in such a way to begin to address the economic disparities that have already existed.”

At the federal level, Congressional Rep. Alexandria Ocasio-Cortez of the Bronx and Queens has been a prominent voice for a Green New Deal, a major green infrastructure program that she championed well before the coronavirus made the idea all the more appealling to those looking to the federal government to boost the economy. Almost all of the city’s congressional delegation has signed on as co-sponsors. 

De Blasio has already announced several task forces and economic sector advisory councils to lead the city’s comeback from the coronavirus, including a “fair recovery” task force and one focused on racial inclusion and equity. Their suggestions are due to the mayor in a few weeks. Governor Andrew Cuomo has also convened his own reopening committees.

There are several underlying prerequisites to a massive public works program that experts say would be necessary for it to launch and succeed. Chiefly, they say any such program cannot begin without the federal government infusing billions of dollars into local projects. A successful strategy should also include job training and apprenticeship programs so that workers, particularly low-income workers who lack a college education, aren’t left in the cold once the infrastructure projects are completed, experts agreed.

Then there’s the question of which projects should be prioritized. Should the city build more mass transit infrastructure that can reduce people’s reliance on cars? Can New York City build new affordable housing while also bringing its public housing stock to a state of good repair? Resiliency projects to help withstand the ravages of climate change? Schools? Parks? Water infrastructure? Road and bridges? Community centers and libraries? And will public funding spur or in some cases even depend on private investment?

Will the federal government come through?
New York State and City both have massive capital infrastructure programs already underway. But the coronavirus has prompted recalculations. Mayor de Blasio’s latest budget proposal, created amid severe budget shortfalls, delays funding for several infrastructure projects, including his affordable housing program. The move will bring down immediate debt costs but could strain the city’s already overburdened and crumbling infrastructure, among other negative consequences. Without federal funding, the city will struggle to keep even current projects going, let alone launch new ones.

“It's in the interest of the federal government to see people back at work, but also to fortify the infrastructure, bridges, roads, school buildings and public housing,” said Bowles. “That's the job of the federal government. So it is their responsibility.”

Chris Jones, senior vice president and chief planner at the Regional Plan Association, noted in an interview that the New Deal programs were worth about 7% of the country’s GDP at the time, which would equal at least $1.5 trillion now. “They should be talking about something of that order of magnitude,” he said.

He pointed out that state and local governments are still in “survival mode” and that all efforts are focused on getting through the crisis as best as possible. “There’s certainly a lot the city and state can do but without a substantial amount of federal funding, it’s still going to be in the mode of trying to maintain a state of good repair, modernize where they can, and using every tool that’s available to do that,” he added.

But the wheels of government turn slowly and President Donald Trump has spent the last three years repeatedly expressing support for a major infrastructure plan, but never delivering one. In light of the pandemic, Democrats in Congress have been pushing for some infrastructure in the next round of federal stimulus funds, which has led to a degree of optimism that it could finally be achieved. But not everyone is convinced.

“Like in so many areas, Donald Trump has given lip service to ideas like infrastructure and never really shown the willingness to invest or to push the Republican Party to invest,” said Shaun Donovan, former Secretary for Housing and Urban Development under President Barack Obama, who worked on recovery efforts after the Great Recession prompted by the housing and banking crisis. “Unfortunately, I’m concerned that we may need to wait for Joe Biden to become president in order to get a significant investment in infrastructure,” said Donovan, who is considering a run for New York City mayor. 

“I don't trust Trump, or the Republican Party to craft a proper infrastructure plan,” said Vishaan Chakrabarti, an architect, former city planner, and associate professor of professional practice at Columbia GSAPP. 

The current crisis, however, may force the federal government’s hand. Trump has vacillated on statewide closures as he sees the economy hemorrhaging, and wants people back in the workforce as soon as possible. Infrastructure investment is also an issue of bipartisan consensus.

“The federal government will show up,” said Amy Chester, managing director of Rebuild By Design, an organization in New York formed to propose solutions to recovery from Hurricane Sandy, “because they need to ensure that our entire economy is rolling again and a big piece of that is usually on the capital spending and construction side, because it employs a lot of people.”

Which projects should be prioritized?
Those who spoke with Gotham Gazette had largely similar ideas for where an infrastructure program should be focused, but one thing they all agreed on was that any and all projects should prepare for the impacts of climate change.

As Chester pointed out, there are steps the city and state could take in the coming months. The fall election ballot will give voters across the state the chance to approve a $3 billion ecological restoration and flood mitigation bond act championed by Governor Andrew Cuomo. And the city’s capital program is still in motion, and should actually increase spending, Chester said, particularly with interest rates remaining low.

Carlo Scissura, president of the New York Building Congress, said the federal funding could quickly jumpstart “shovel-ready projects” like the expansion of the Second Avenue Subway, the redesign of Penn Station, the renovation of LaGuardia, JFK, and Newark Airports, to name a few. “You have to really prioritize what is ready, what can happen in the next six months to a year, and those projects should be the ones that really continue to boom and move forward,” he said.

Others expressed a longer and more holistic view. 

“For me, an investment in infrastructure has to meet multiple tests,” said Donovan, who also worked on the federal response to Hurricane Sandy, Hurricane Katrina, and the Ebola and Zika virus outbreaks. “While all of these disasters are different, they all share similarities in the sense that those who are most vulnerable before the crisis are hit hardest by the crisis. “We have to make sure that we're starting with infrastructure investments that are going to benefit the most disadvantaged, benefit people of color in New York City, and that has to be central to the way we're looking at the challenge because in many ways, the true measure of recovery will be how the most vulnerable are recovering.”

Donovan said the city needs to develop a “culture of resilience” so that every project, no matter how small, is planned with climate change in mind. And he spoke both of environmental and social resilience, noting that building infrastructure that promotes stronger social ties – parks, libraries, and the like – also helps bind communities during times of crisis like the present. Those communities can then respond faster and more cooperatively when the time calls for it.

“I don't think we should be prioritizing one over the other,” said Chakrabarti. “I look at these things like, ‘Where are places where we can simultaneously deliver great mass transit, housing that people can afford, schools that are great, and easily accessible health care.”

Chakrabarti noted that the 2009 federal stimulus after the Great Recession intended on a large infrastructure program but largely failed to realize long-term investments, instead choosing to favor shovel-ready projects. For instance, the push for a high-speed rail system was left by the wayside.

“High-speed rail didn't work out because it wasn't shovel ready,” he said, noting that the environmental review process and the strong lobby behind it meant that large projects like that could not be streamlined. “As a consequence, all of the stimulus money back in 2009-10 ended up being spent on things like filling potholes. We didn't get any lasting infrastructure out of it because of this shovel-ready problem triggered by this environmental review problem.”

An example of the kind of holistic projects that Chakrabarti envisions is the master plan for Sunnyside Yard, which he helped create for the city (his contract has ended). “That's a classic example where you're not prioritizing real infrastructure or housing. You're looking at it holistically, to do a bunch of things at once,” he said of the initial plan that would deck over a massive Queens railyard to build 12,000 permanently affordable homes, 60 acres of open space, a regional rail hub, new schools, libraries and other types of social infrastructure..

The priorities, according to Bowles, should be retrofitting city buildings to make them energy efficient and building more green infrastructure, fixing the “embarassing state” of New York City public housing developments, and building digital infrastructure for city schools.

New York State has already moved along this front. Last year, the Legislature and governor enacted the Climate Leadership and Community Protection Act, which some called a version of a Green New Deal for New York. It mandates strict new limits to curb greenhouse gas emissions and requires a broad expansion of renewable energy sources to replace the state’s energy consumption, with the expectation that thousands of jobs will be created along the way.

What role will the private sector play?
Perhaps the one area where there seemed to be disagreement among the experts Gotham Gazette talked with was the degree of involvement for the private sector in the success of a public works program. 

Where government investment goes, private investment naturally follows. “Any dollar that the city spends is going to have a multiplier effect,” said Chester. “We just need our public investment to step up and do it in ways that are going to ensure that our communities are going to be enhanced for the future.”

Scissura said public projects should work in conjunction with private investment. “Even with the federal government, we should be doing public-private partnerships,” he said. “I don’t think it’s one or the other. You get federal investment. You do public-private partnerships. You get bonds. You do everything all at once.”

Chakrabarti scoffed at the idea. “The severity of the COVID crisis, especially in New York City, is 40 years of neoliberalism coming home to roost. It's 40 years of underinvestment or no investment in public goods,” he said. “For instance, why did it take so long to close our schools? Because our schools also act as homeless shelters.”

Public-private partnerships, he said, have failed to maintain the city’s infrastructure or meet the pressing needs of its population. “It’s not clear to me that the private sector actually delivers these things more efficiently.”

Will there be a pipeline for jobs and training?
Bowles argued that any infrastructure program should be supplemented with apprenticeships and job training, to create new skilled workers who can continue to be employed after projects are completed. But that’s something that New York City has struggled to do even in good times.

The city’s workforce development plan, produced in 2014, de Blasio’s first year as mayor, has mostly been shelved. It was meant to invest $60 million annually by 2020 to connect low-skill workers with entry-level jobs and workforce training, and $100 million annually by 2020 to help middle-skill workers. By November 2017, only $6.4 million had gone to the first program while the second had received only about half the announced funding.

De Blasio’s jobs plan, New York Works, was announced in 2017 and meant to create 100,000 “good-paying jobs” in ten years. By June 2019, it had only directly produced 3,725 new private sector jobs, raising questions about whether the city’s investment of hundreds of millions of dollars was an efficient use of its funds, though officials said they expected it to move slowly initially given its focus on developing useful space for jobs to flourish, like renovations at the Brooklyn Navy Yard and the creation of a life sciences center.

The New York City Economic Development Corporation, a nonprofit quasi-agency that leads the city’s main job creation programs, is focused, as is all of city government, on the response to the coronavirus. “Once we move past the worst of this public health crisis, job creation will be key to making up what we lost,” said Chris Singleton, an EDC spokesperson, in a statement. “Whether these jobs are in the public or private sector, we'll do everything we can to get New York back to work - and building a fairer and better city for every New Yorker.”

Experts who are already preparing for that fairer and better city agree that it can only be achieved if the economic recovery is focused in part on bolstering the workforce through training and investment in the city’s public university system, CUNY, by maintaining the city’s quality of life to prevent urban flight, by focusing on low-income communities of color that are hardest hit by the virus, and promoting small businesses, particularly those owned by women and people of color.

Council Member Rosenthal is optimistic that the federal government will provide the necessary infusion of funds that the city needs to leverage to bolster its economy. “I think we have to assume that the federal government is going to come through with aid to New York City and so we shouldn’t be holding back on spending money today...,” she said in the recent interview on the Max & Murphy podcast. “First, I’d ask the Economic Development Corporation to target the best industries, public-private partnerships, to invest in job training programs. Similarly, perhaps through the EDC public-private partnerships, to create a local WPA-style program to get people to work today and rebuild our infrastructure. We’ve got crumbling NYCHA buildings. We have to prepare our communities for the physical impact of climate change.”

Bowles said any program should include apprenticeships, training, and “ladders for people that get a chance to work on these projects to build skills for careers.”

Gary LaBarbera, the head of the Building & Construction Trades Council of Greater New York, said that “New York needs an economic stimulus – now more than ever – and large-scale public works projects are always a reliable economic driver for middle-class workers and for New York’s economy.” He said “large-scale infrastructure projects create thousands of good jobs and economic benefits” and that they will “no doubt...be a major component” of New York’s recovery from the coronavirus crisis.

***
by Samar Khurshid, senior reporter, Gotham Gazette
     

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