Gotham Gazette

The Place for New York Policy and politics


After the Meltdown: New York's Future

Photo (cc) Jim Frazier
How will recent economic ups-and-downs affect New York City in the long term? The picture may not be so dire.

It is no exaggeration to say the short-term economic outlook is cloudier today than at almost any time in decades. The recession is already worse than anticipated. It is worldwide, it has structural roots as well as cyclical ones, and while it emanates from the financial sector, it reflects fundamental imbalances among consumers and in the broader economy.

So far, New York City has seen relatively modest job declines concentrated in finance and a small number of other areas. The city and its immediate suburbs have lagged the nation in terms of aggregate job losses that have been taking place for nearly a year. However, most regional economists expect the city to catch up very quickly, and by the middle of next year, the pace of our job losses likely will exceed the national average.

The coming months will pose real hardships for many New Yorkers, particularly low- and moderate-income families. Unemployment will rise, public services will suffer, and the mortgage foreclosure problem will undercut struggling neighborhoods. Despite the difficult times ahead, though, with the right government actions, New York City has a good chance of emerging from this turmoil in fairly good shape.

The Short-Term Outlook

Current forecasts call for New York City to lose 150,000 to 175,000 jobs by the end of next year. This would be about a 5 percent drop. That's less than during the downturn earlier this decade when we lost 240,000 jobs, and much less than in the downturn of the late 1980s to early 1990s that was much worse in the New York region than in the nation as a whole. New York City lost 10 percent of our jobs then. Of course, no one knows how steep or long the current downturn will be. Only four or five months ago, most forecasts predicted job losses about half of what they are now.

Through September, the city's finance sector lost a net of about 10,000 jobs, a little over 2 percent of the total. Following the financial market meltdown in the last half of September, not only did credit markets freeze up but the bottom dropped out of consumer confidence and spending. New York is feeling the effects of a recession that has spread across the globe.

New York's job losses appear to be accelerating. Finance sector employment will fall sharply - it could lose as many as 50,000 or 60,000 jobs in New York City, 10 percent to12 percent of the total. This will be accompanied by a substantial decline for many of the businesses that fill so many of Manhattan's buildings: professional and business services, corporate headquarters, media and technology. Hospitality and retail will suffer. And construction activity over the next two years will decline by 20 percent or more. With its concentration of financial and other export-oriented businesses, Manhattan's job base will contract much more than the employment levels in the other boroughs.

After the Recession

Economists know even less about what the recovery will look like than what we know about how bad the downturn will become. We expect to see a profound structural shift within the finance sector and in the relation of the finance sector to the broader economy and to government. This likely will mean that, for at least the next few years, the finance sector will not be as large as it was in 2007. Its presence in New York City could permanently shrink by 10 percent, if not more.

For the intermediate- and longer-term, though, New York's prospects remain fairly bright. We are in a much better position than we thought we were right after 9/11 when many feared that large commercial centers like New York City would no longer be viable in a time of terrorist attacks. Now, we face an energy-constrained world where New York City's overall energy efficiency and reliance on the most extensive mass transit system in the U.S. is a great asset.

Our dense concentration of business gives us a big leg up in terms of the productivity and profitability of many sectors - professional services, media, information technology, design and engineering. In most of these areas, the "value added" (the net dollar value created by business) per employee far outpaces the national average. Our cultural offerings surpass most cities in the world. The quality of life in the city has steadily improved.

New York City's many attributes are recognized in the 2008 ranking by Foreign Policy magazine in their Global Cities Index. New York City ranks as the Number 1 City To Do Business In out of 60 global cities. Of the five factors considered, New York ranked highest in business activity and human capital, second in political engagement, third in cultural exchange and fourth in information exchange. If you're worried about New York City's future in a world where we've seen "The End of Wall Street as We Know It," post those rankings next to your desk. Our recovery may be fitful, but New York City will continue to be a magnet for top entrepreneurial and creative talent the world over.

Government's Role

As many assets as the city has, New York's economic future depends heavily on effective national policies to foster genuine economic recovery. What happens in Washington, D.C. over the next several months is probably more central to the well being of New York City than at any other time since the days of President Franklin D. Roosevelt. Unprecedented actions have been taken, and unprecedented taxpayer resources have been committed to stabilizing the financial sector. It hasn't been stabilized yet, but the focus is there and the resources are at hand.

At least two other things also need to be done.

First, we have to stabilize the housing sector. It's paralyzed now. Prices have declined by 25 percent and are headed further down. We have to stem the flood of foreclosures and put a floor under housing prices. Millions of mortgages have to be renegotiated, losses have to be taken, bundles of mortgages have to be unbundled.

Second, the government must craft a robust macroeconomic recovery program to stem the current downward spiral. Usually, rising home sales, new construction and the related purchase of new appliances and furnishings pull the economy out of a downturn. Given the deep slump housing is in, that is not likely this time. The economy needs a big stimulus to turn the economy around and to substitute for the push a recovering housing sector normally provides.

To accomplish this, our leaders need to confront the forces that will say we can't let the federal deficit get any larger. We need to listen to John Maynard Keynes and not Pete Peterson. (Peterson, a prominent financier, is a leading advocate of the position that a looming federal deficit is the biggest barrier to long-term prosperity.) An effective economic recovery program might take 3 percent, 4 percent or 5 percent of Gross Domestic Product ($400 billion to $700 billion). Even so, that is far less than we have poured into the financial markets, and unless we're willing to make this additional investment, the money we've directed to saving the financial markets won't even be effective.

New York City's recovery won't get underway until we have a national program in place to deal with the other roadblocks remaining from the bursting of the housing and derivatives bubbles and to restore consumer confidence and spending.

This national economic recovery program needs to include:

-- A better targeted stimulus, including state fiscal and Medicaid relief, extended unemployment benefits, and increased aid to low-income populations;

-- A robust program to invest in infrastructure that funds ready-to-go state and local government projects (schools, sewers, roads, transit systems, etc.) and includes a major investment in green jobs to promote residential and commercial building retrofits and alternative energy development.

-- A universal health insurance program that covers the uninsured, finances health care in a sustainable way and helps small businesses provide affordable coverage to their employees.

We also need policies at the local, state and regional level to support, not undercut, these initiatives. We have to make sure we don't reinforce the downward economic spiral with damaging state and city budget cuts. Hopefully, we will come out of this downturn with an economy whose prosperity does not depend on debt and whose growth is more energy-efficient and sustainable. Sustainability means lessening our severe income disparities as well as achieving a better long-term environmental balance. If we have the right national policies, New York City will do well.

(This column is based on remarks Parrott gave at a Nov. 12 economic forum sponsored by McGraw-Hill and Zetlin & DeChiara LLP in association with the New York Building Congress and other organizations.)

James Parrott is deputy director and chief economist of the Fiscal Policy Institute ( He has been studying and writing about the New York economy since he landed in New York City a quarter century ago. 


Stated Meeting: Trendy, Endangered Neighborhood Rezoned

Photo (cc) Wally Gobetz
For more photos from the Lower East Side, click here.

New York City's most "endangered neighborhood" was rezoned by the City Council today in an attempt to stave off gentrification and boost affordable housing.

The rezoning of the Lower East Side, a neighborhood of tenements turned trendy boutiques and hipster havens, will limit building height and spur development of affordable housing. The City Council approved the rezoning by a vote of 42 to 0.

In addition to the rezoning of the Lower East Side, the council also approved legislation clarifying regulations for broken parking meters and a bill that requires the police department to file quarterly reports on firearm trafficking.

Protecting the Neighborhood

The Lower East Side has been the longtime New York magnet for large immigrant populations, from German to Chinese, packed with infamous overcrowded tenements.

Now a Mecca of counterculture, the neighborhood has been largely taken over by developers and boutiques. Out-of-scale buildings along its main corridors, including East Houston, sparked a community-based drive to limit certain types of development, starting seven years ago, said Councilmember Rosie Mendez, who represents most of the area.

"This is something the community conceived of," said Mendez. "This will ensure that our community remains a low-scale community."

As a result, 111 blocks of the neighborhood were rezoned, allowing for larger scale development along the area's wide streets, such as East Houston and Delancey, and smaller development on its residential corridors. All building heights will be limited to 80 feet, said officials. The area stretches from East 13th Street to Grand Street and from Avenue D to East of the Bowery.

Until this week, support for the plan within the council and among the members that represent the district, was shaky. According to an agreement between the administration and Councilmembers Mendez and Alan Gerson, dated today, the new zoning could provide more than 456 new affordable apartments -- thought to be the linchpin for gainig council support.

The actual construction of those homes, though, depends on whether a developer would take a height or density bonus, which would allow a building to be larger, in exchange for providing affordable housing.

The city's Department of Housing Preservation and Development has promised another 105 affordable units in the area.

The city will also work with the council members and the Lower Manhattan Development Corp. to allocate approximately $10 million toward the creation of new affordable housing in the area.

Outside of the Lower East Side, residents, particularly of Chinatown, have expressed concern over developer harassment, fearing gentrification could spill over into adjacent neighborhoods with less strict zoning requirements. The administration and the council members agreed to allocate $100,000 to groups that work on anti-eviction and harassment issues in the area.

Gerson also said the administration agreed to "fast-track" rezonings in adjacent neighborhoods to preserve their character as well.

Not everyone agrees that these measures will protect the community.

"What is this separate Chinatown plan really mean?" asked Josephine Lee, coordinator of the Coalition to Protect Chinatown and the Lower East Side, which opposed the rezoning. "There is not going to be any community left to fight for when they do this Chinatown plan."

Lee said the coalition plans to file a lawsuit against the city charging the rezoning is discriminatory.

Meter Makeover

Ever park at a broken meter and think you're getting free parking?

Technically, anyone who parks at a malfunctioning meter can only do so for one hour no matter how many hours an adjacent working meter may allow you to stay. No one, though, knows about the rule, says the council.

About 40,000 tickets are issued annually for parking at broken meters, said Councilmember Simcha Felder, the bill's (Intro 812) prime sponsor.

The legislation, which was approved by a vote of 42 to 0, will allow drivers to park at broken meters for the maximum allotted time in that immediate parking zone.

Police Reporting

The council also approved legislation (Intro 492-A) by a vote of 42 to 0 requiring the police department report how many arrests, per precinct, are from possession of firearms or trafficking of firearms.

Commercial Development Incentive

Any New York City business that receives tax abatements should be on their best behavior.

A bill (Intro 860), passed the City Council by a vote of 42 to 0, revises the tax abatement program to penalize certain companies with a history of violations with the city. If someone who receives a tax break has violations, such as asbestos or environmental hazards, and does not correct them within 180 days, their benefits would be suspended.


Queens Development Plans Approved

After much debate and opposition, the City Council Thursday approved a plan to develop Willets Point, a polluted industrial area of Queens. To win support, the administration agreed to provide more affordable housing on the site and to protections for local businesses. 

The McCain-Obama Mismatch on Urban Policy

How do John McCain and Barack Obama compare on urban policy and what will it mean for New York and other large cities? Obama's campaign has a detailed set of principles and proposals that differ markedly from previous Democratic policy. McCain, on the other hand, has no explicit policy for cities, but several basic concepts are implicit in his platform, and some of his energy and environmental proposals are similar to Obama's.

Obama Goes From City to Metropolis

Unlike the Carter and Clinton administrations, which put forth (modest) policies to aid central cities like New York, the Obama campaign instead deals with metropolitan regions as a whole. This represents a major break with Democratic Party policy since the civil rights era. The War on Poverty and Model Cities programs focused federal resources on central cities, while the recommendations of the 1968 Report of the National Advisory Commission on Civil Disorders (the Kerner Commission) further called attention to the neglect of central cities.

After World War II, the nation's suburbs grew dramatically, and today some 80 percent of the U.S. population lives in large metropolitan regions. Most of that population is in suburbs, with central cities representing the smaller part of these giant regions. While suburbanites may not think of themselves as "urban," they are now part of a much larger urbanized area that may be lower in density than the central city but bears little resemblance to a small town or rural fringe.

Over the last two decades, presidents of both parties have shifted the focus of national urban policy from central cities to suburbs. Congress gained a suburban majority, and the nation's de facto urban policy became the promotion of home ownership, particularly in newly urbanizing regions. Home ownership levels increased, though only marginally (and have now begun to decline as a result of the mortgage crisis). But we now know that owning a home by itself does not necessarily mean progress for individuals or households, especially if homeowners resort to sub-prime mortgages because of their low incomes or redlining.

A far cry from the apocryphal call for cities to "drop dead" (widely attributed to a Republican president), the Obama platform explicitly states that cities should be seen not as the problem but as the solution. But he means the metropolitan regions, not the central cities. With this in mind, his specific solutions include: creation of a National Infrastructure Reinvestment Bank funded to the tune of $10 billion over 10 years; regional clusters for economic innovation; business incubators; workforce training; and green technology and green jobs.

Obama's platform still offers something for the older central cities. In housing and community development, areas of considerable concern to central cities like New York, Obama would restore rent subsidies and public housing operating funds that were cut under the George W. Bush administration - actions that might help the New York City Housing Authority balance its budget and prevent privatization. He would restore and increase Community Development Block Grant funding and create 20 "Promise Neighborhoods" that comprehensively deal with poverty. The Obama platform supports homeland security and community policing but requires police to be attentive to issues of accountability and brutality. Broader economic policies such as increasing the minimum wage and Earned Income Tax Credit are also listed as part of Obama's urban policy.

Obama addresses the "livability of cities"-- particularly public health and environmental concerns -- by calling for efforts to combat inefficient low-density suburban sprawl through "smart growth" around higher density urban centers. Smart growth has been a major goal of urban planning professionals in the nation.

"Our communities will better serve all of their residents," says the Obama campaign, "if we are able to leave our cars, to walk, bicycle and access other transportation alternatives." This could lead to federal support for recent efforts by the New York City Department of Transportation to improve the bicycle and pedestrian infrastructure. In the Senate, Obama sponsored the Healthy Places Act requiring federal agencies to evaluate the health impacts of urban policies.

McCain on Housing, Energy and the Environment

Perhaps the closest that John McCain comes to an urban policy is his Homeownership Resurgence Plan. In the second presidential debate McCain called for government to buy up and renegotiate fixed-rate mortgages for households struggling to meet their monthly payments. (Obama counters that, under the recent bailout legislation, the Treasury Department already has the ability to do this

Mortgage rescue would be good news for New York City neighborhoods facing exceptionally high rates of foreclosure. However, McCain's plan has a loophole that could affect its ability to rescue victims of predatory lenders that were particularly active in places like New York. The McCain plan requires beneficiaries to "prove their credit worthiness at the time of their original loan" and to have made a down payment. Predatory lenders have been especially active in minority neighborhoods in central cities, where they actively went after borrowers who did not make enough to pay their inflated mortgage and purposely confused or lied to them about the long-term costs and terms of the mortgages.

McCain's energy policies could help improve the environment in cities like New York. He promotes the development of hybrid and zero-emission vehicles, energy efficiency in government buildings, retrofitting private homes for energy efficiency and green jobs. He advocates the development of alternative fuels, including nuclear, biofuels and clean coal.

While there are some important differences between the two candidates on energy and environment, Obama also supports alternative fuels. Both candidates' policies would likely help reduce pollution from transportation in urban areas. However, to the extent that their programs emphasize use of alternative fuels and encourage auto use, they could exacerbate global warming and other long-term problems related to auto dependency in metropolitan regions. Obama mentions transportation alternatives, but it remains to be seen whether this would go beyond the current token support by federal, state and local governments for reducing auto use, such as striped bicycle lanes instead of protected lanes, or building more sidewalks in the suburbs that are rarely used.

Whither HUD?

Obama's platform includes two administrative changes aimed at implementing his urban proposals. First, he would create a White House Office on Urban Policy that would report directly to the president. And he would revive the federal agency in charge of housing and urban policy - the Department of Housing and Urban Development. President Lyndon Johnson made HUD a cabinet-level agency in 1965, but President Richard Nixon reduced the agency's responsibilities and Ronald Reagan severely cut the agency's budget. Most support for the direct construction of new low-income housing ended in the 1980s.

When Republicans led by Newt Gingrich controlled the House of Representatives in the 1990s, they came close to abolishing HUD as a Cabinet-level agency. It survived to implement the HOPE VI program, which subsidized the demolition of public housing and, in the most dramatic case, led to the abandonment of public housing tenants in New Orleans after Katrina. Since the 1980s, HUD has been wracked by several corruption scandals. Obama pledges to restore HUD programs "to their original purpose" - though he has not made it entirely clear what he means by that.

Neither of the two candidates has explicitly acknowledged the failure of the current urban policy that single-mindedly promotes homeownership. But if history is not to repeat itself, both parties might do well to explicitly acknowledge the needs and problems of urban renters - that means the majority of New Yorkers -- and redefine the "American Dream" as a stable job, a rent-controlled apartment and a safe, walkable urban environment.


See: McCain and Obama: Who's Best For the Cities? By Neil Pierce
and On Urban Issues, Obama, McCain are True to Their Parties

Tom Angotti is Professor of Urban Affairs and Planning at Hunter College, City University of NY, editor of Progressive Planning Magazine, and a member of the Task Force on Community-based Planning. 


Brooklyn's Retail Boom

Photo by Julia Vitullo-Martin
The Ikea-bound Water Taxi shuttles between South Street Seaport and Red Hook.

How does a thriving, growing locality retain the attractive, small, independent businesses that helped make it distinctive while permitting - even encouraging - the entry of large, inexpensive, national chain stores to serve customers' everyday needs? That retail conundrum confronts otherwise prosperous urban communities throughout America - not to mention Manhattan. Now, across the East River, Brooklyn appears to have quietly solved the puzzle.

And can this be done without converting a unique area into Generica (the definitely pejorative term for "Generic America," meaning all those features, like strip malls, that are identical no matter where you go in the country)?

Brooklyn's answer seems to be yes, promoting a "my way" kind of thing with its retail sector - big stores and small, chains and independents, ordinary and idiosyncratic, garish and subtle, high end and low, traditional ethnic, cool retail, small handicrafts, hip entertainment, etc. Statistically Brooklyn still looks "under-retailed" compared to Manhattan, says The Real Deal, since Manhattan has 52.2 square feet of retail space per capita, and Brooklyn has only 10.8. But downtown Brooklyn and Williamsburg are starting to compete hard and successfully.

If Brooklyn were an independent city it would be the nation's fourth largest. Instead, it's been until recently a junior partner to Manhattan, which has always been far richer though smaller. But for the last few years Brooklyn has been going through a startling economic resurgence that included the addition of some 660,000 square feet in retail space last year alone -- versus 33,000 square feet in 2006, according to Marcus & Millichap Retail Research.

Destination Shopping

Photo by Julia Vitullo-Martin
Cafes and boutique stores are springing up in once-remote Red Hook.

So many Manhattanites head across the bridge that you could easily conclude that Brooklyn has become New York's destination shopping borough. It certainly looks that way from the crowded deck of the Water Taxi that carries passengers bound for Ikea from Pier 11 at the South Street Seaport to Red Hook. Once docked, shoppers keyed up by the stirring trip through the harbor, can head into Ikea - perhaps the most spectacularly situated big box store in America - or make the 10-minute walk to the Fairway supermarket, located on the waterfront in renovated 18th century warehouses.

But the startling part is that Brooklyn seems to have developed its industrial waterfront into a retail mecca while still nurturing its great ethnic heritage -- old and new. Its traditional neighborhoods have never lost their top rankings as foodie capitals -- Greenpoint for pierogi, Carroll Gardens for cannoli, Canarsie for fish, to name the obvious -- even as new ethnic immigrants have enlarged the feast. Thus, a few blocks south of Ikea, past the long-unused grain silo (soon supposedly to be a concrete factory), lies one of the culinary treasures of New York: the Red Hook food vendors, who in good weather serve horchatas, pupusas, huaraches and other Latin treats in the Red Hook Park ball fields at Bay and Clinton.

It’s true that the losses of beloved mom-and-pop stores vex many neighborhoods, as a photographic exhibit, “Counter/Culture: The Disappearing Face of Brooklyn’s Storefronts,” documents.

Yet an extraordinary number continue to thrive, particularly those that have “a real niche,” Jonathan Bowles, director of the Center for an Urban Future, told the Daily News. “The businesses that get hurt when chains move in are the ones that don't change with the times," said Bowles. "They don't update their inventory to appeal to the new constituency; sometimes they have signs that are decades old."

Many experts think that, in addition to providing diversity on the retail scene, smaller retailers provide tangible benefits. Civic Economics, a Chicago-based economic analysis and strategic planning firm, argues that local business owners keep more profits in the community offering better service.

Attracting Stores

Anther part of the story is the entire CoolTownStudios sensibility, which seeks to promote natural cultural centers and gathering places and finds its very epitome in Brooklyn's Dumbo (Down Under the Manhattan Bridge Overpass, the small area between the Manhattan and Brooklyn Bridges on the East River). Excellent restaurants, bookstores, bars, small manufacturers, and music and art venues are sprinkled through the former industrial area that was forlorn until the late 1980s. Dumbo reaped an average price per square foot in the second quarter of 2008 of $917, says the Real Estate Board of New York, making it Brooklyn's most expensive neighborhood. Second was Brooklyn Heights at $834. All those high-paying residents are good for retail.

Robert Walsh, a Brooklynite who is commissioner of the city's Department of Small Business Services regularly detours through Dumbo on his morning run. "Dumbo's developer," he says, speaking of David Walentas, "really knew how to get the retail he needed. When he saw a business proposition he liked, something that would improve the neighborhood, he'd offer the owner or entrepreneur a bargain rent. The result is that you're now you're looking at one of the most successful retail areas of New York."

Walentas laughs on being told of Walsh's theory. "There wasn't anything in this neighborhood when we bought in but a little tertiary manufacturing that was going out of business. We needed to make the streets attractive for condos. My wife went to a gym in the Heights, where she spotted Peas & Pickles Grocery, an excellent market. We offered them two years free rent to open here and a very low rent after that. We made them money and they made my neighborhood."

Walentas relates a series of anecdotes about daring, young entrepreneurs with a vision - Jacques Torres Chocolates, Mikey's Hookup - and his willingness to subsidize them, at least in the short run. ("It's not forever," he adds, just in case there's any misunderstanding.)

And while his company, Two Trees Management, hasn't rented to any Generica chain -- Dumbo's Starbucks is in someone else's building - Walentas regards Ikea as "great," asking why should families have to go to New Jersey, when Brooklyn had all that vacant industrial land sitting on the waterfront? "Middle-class families just want to stay in the city," he says. "They want to shop where they live."

City Help for Retail

The retail boom would never have happened without the city's aggressive rezoning, which simultaneously sparked the residential boom, bringing in all those customers, and allowed commercial development in former industrial areas along the waterfront. Walentas says it took 20 years to obtain the rezoning of One Main Street to allow residential "even though Jesus himself couldn't have saved shipping and manufacturing in this neighborhood."

Even if the current financial crisis holds rents down in the short run they will surely rise over the long run. Still, rents are likely to remain substantially below comparable space in Manhattan. Circuit City at Triangle at the Junction -- the intersection of Flatbush and Nostrand avenues -- recently signed a lease for $100 per square foot, about half that for comparable space on Manhattan's West Side. Urban Outfitters is paying $90 per square foot on Atlantic Avenue, and Duane Reade signed at $50 per square foot on Myrtle Avenue, which the New York Times recently called "a crossroads of the gentrified and the ungentrified.")

The Bloomberg administration did something else that has been far less heralded than the rezonings: It figured out how to link up the local workforce with new retailers. This had two effects. First, it provided a crucial service. Second, it undermined community resistance to development by delivering a formerly elusive benefit - jobs.

In mid-2003, the Bloomberg administration quietly transformed the Department of Small Business Services from an old-fashioned, do-nothing, so-called employment center to an aggressive, private-sector oriented, human resources-like division that finds, screens and interviews candidates for the new retail jobs. Retailers say the agency has saved them enormous amounts of time and money. Modell's Sporting Goods, for example, staffed its new store on Fulton Street mostly from applicants interviewed at small business serves' office down the road at 9 Bond Street.

"We're a hometown sporting goods store," says Thomas Tilley, senior vice president for human resources. "We try to hire to and from the community, to be as local as possible."

Modell's looks for applicants who will be able to "communicate with the customer - people who listen well, are respectful and responsive." Tilley notes that Modell's keeps close track of costs per hire - which were reduced by about a third by small business services.

When the Fairway Market was planning its Red Hook store it was determined to hire from the neighborhood, says Ruth McGonigle, head of human resources. "We couldn't have done it without the city's help, screening and supplying over 500 people for us to interview. We took our chances on people who had absolutely no experience, but they struck us as being dependable, as having good attitudes. We hired 85 cashiers, and bused them for two weeks to other stores for training. We're very pleased."

Photos by Julia Vitullo-Martin
The Fairway Market site

Many residents of Red Hook complain about the traffic resulting from the new commercial development, but Sam Schwartz, Ikea's traffic consultant, says, "The horrible predicted jams never materialized. People are biking, schlepping, ferrying, busing - and some are driving. But there's been no discernible changes in the quality of traffic a few blocks away." Will this change as Ikea reduces the Water Taxi schedule, making trips by water far less convenient and trips by land an obvious alternative? Possibly.

Alexander Lopez-Bey, an ex-Marine and a lifelong Red Hook resident who works for Ikea, says, "Ikea gave jobs to the community. A quarter of the people in my building work here. They see the bigger picture. They don't want a life of sitting at home doing nothing. Now they receive a paycheck and good benefits. They're self-sufficient. They get training for the future and the opportunity to move up in the company. Ikea helps the individual get to the next level."

He says he's proud to work for a good employer who promotes from within and develops employee loyalty: "I look at all the shoppers who come here who don't know Red Hook and who are so surprised by how nice it is. You know, Brooklyn is the New Manhattan."

Getting through the Financial Crisis

The pace of "the ongoing transformation of the market" in Brooklyn may slow in the months ahead, warns Marcus & Millichap, due to "credit market difficulties" and the softening of the residential market. Total employment in Brooklyn is forecast to contract 0.2 percent, or about 1,000 jobs, versus last year when 1,000 jobs were added.

According to The Real Deal, brokers say that retail in Park Slope's Fourth Avenue, Williamsburg, Dumbo, and downtown Brooklyn remain strong, mainly because the surrounding residential market is strong. Ultimately, the most successful neighborhoods will be those that follow the Dumbo model of integrating commerce and residences.

Julia Vitullo-Martin is a senior fellow at the Manhattan Institute. 

Looking at the Record: Taxes and Homelessness

Three recent reports from the New York City Independent Budget Office cast light on the Bloomberg administration's record in two important areas: tax policy and homeless services. The studies find some modest administration success in cutting back on unnecessary city business tax breaks; a growing loss of city sales tax revenues from sales on the Internet; and administration failure in one of its top goals - reducing family homelessness.

With the Bloomberg administration giving short shrift to accountability measures called for in the City Charter, the IBO has, in effect, become the default choice for measuring mayoral performance. The mayor does issue accountability documents such as the Mayor's Management Report released earlier this month and the Annual Report on Tax Expenditures, but they tend to take a minimalist approach.

Curbing Commercial Tax Breaks

In its August Fiscal Brief, "With Changes to Commercial Property Tax Program, Breaks Will Not be as Costly for the City," the IBO looks at a little-known, but very costly commercial tax break, the Prog/ Industrial and Commercial Incentive Program, begun in 1984. As its title implies, it seeks to encourage business expansion by exempting the value of new construction from property taxes for several years. But the expense of the program has tripled over the past decade, and in 2008 it will cost the city $512 million in lost revenues, according to the IBO.

The Bloomberg administration successfully pushed for a state law (see bill S6366A) that took effect July 1 -- creating the new Industrial and Commercial Abatement Program -- intended to reduce the costs of the original program. It will tighten the eligibility rules for participation and reduce the benefits in the program, to counter the argument that much of the business expansion subsidized by the old Industrial and Commercial Incentive Program would have taken place without the tax break. City Council approved the state's action last week. (See related story.)

The city will not see the full savings from this change for quite some time, since businesses already in Industrial and Commercial Incentive Program get to keep their benefits for as long as 15 or 25 years, depending on their type of business. (Industrial development gets a longer break than, say, retail expansion.)

In addition, the program goes on with no clear evidence that it actually works. The mayor's own economic agency, the Economic Development Corp. did a study of the incentives in 2007 and estimated that more than three quarters of the projects that received the tax break would have gone forward without it.

The IBO, responding to program supporters who say the Economic Development Corp.'s estimate is too low, said its own study, "provides strong evidence that the incentive program benefited a far broader group with more generous benefits than might have been necessary to meet the policy goal of promoting industrial and commercial development."

The Internet and Lost Sales Tax Revenues

The IBO's August Fiscal Brief, "E-Commerce: Eroding City's Sales Tax Revenues," throws light on an emerging tax policy problem: the difficulty states and localities face capturing sales tax revenues from goods and services sold on the Internet. Under current federal law, the report said, "a state may not require an out-of-state retailer to collect sales tax on sales to its residents, unless the retailer also has some physical presence or nexus in the state."

But even with this limitation, the actual and potential revenues for the city from online sales are substantial. The IBO estimates that in fiscal year 2007 about $2.2 billion of $4.4 billion in e-commerce generated by city residents was taxable. That would produce about $82 million in sales tax revenues for the city, but $29 million of that was not collected in 2007.

In an effort to capture more of that money, a new state law that went into effect in June, according to the IBO, "attempts to force collection of sales taxes on certain electronic purchases." The law already has been challenged in the courts. If it survives the litigation, the state projects the city could generate more than $27 million in new sales tax revenues in the current fiscal year, and more than $60 million in new revenues in 2012.

The IBO report includes an interesting discussion of the arguments surrounding Internet commerce. There is a fairness argument on the side of conventional retailers since such merchants -- "brick and mortar" retailers -- must collect the sales tax. There is a fairness argument on the buyers' side, since lower-income groups, are less likely to have access to e-commerce and so more likely to pay the sales tax, further increasing the regressivity of this tax.

Although a national resolution of the e-commerce sales tax issue would make sense, federal action is unlikely, according to the IBO, given the fights among states over the issue and the reluctance of Congress to tackle it. In the meantime, several states have developed a Streamlined Sales Tax Project that is attempting, on a voluntary basis, to bring some conformity to each member state's policies on such sales. New York State is not a member of the project, but is active in its discussions.

Homeless Services Reform?

In another August IBO report, "Has the Rise in Homelessness Prevention Spending Decreased the Shelter Population?" the IBO's answer for families is, no or, more precisely, "So far it has not worked as planned." "So far" is four years after the mayor introduced a five-year plan to reduce homelessness in 2004.

City spending on homelessness prevention increased from $160.6 million in 2004 to $191.2 million, spread among several city agencies, in 2007. The city upped its expenditures on homeless shelters from $563.4 million in 2004 to $603.5 million in 2007.

Yet the number of families in shelters on June 30, 2007 was 9,162, according to the IBO, up from 8,712 on June 30, 2004. After an initial drop, the number of families grew by 15 percent over the past two years. The number of single adults in shelters did fall from 8,432 in 2004 to 6,813 in 2007, down 17 percent from a peak during that time.

The IBO report notes some evidence that one Department of Homeless Services prevention initiative may be working. The HomeBase program, now budgeted at $12.4 million, uses seven nonprofit groups that now serve 12 catchment areas in the city. Citing figures from the Department of Homeless Services, the IBO report stated, "Family shelter entrants from the original six community districts with HomeBase rose 6.3 percent between 2004 and 2007 compared with increases of 13.7 percent in demographically similar districts without HomeBase and 17.5 percent in all other districts.""

Not Measuring Performance

Beyond the numbers, though, the IBO's Homeless Services report noted the administration has not produced an annual report on the mayor's five-year plan since July 2005. "Without regular information," the IBO said, "it is unclear which programs the Bloomberg administration believes have been successful, what have been the major challenges, and whether current efforts and funding are adequate in order to make progress toward their goals."

Similarly, important tax policy issues like those explored by the IBO -- the e-commerce sales tax issue and the incentive program changes -- are not discussed in the charter-mandated annual Tax Expenditures Report published by the city's Department of Finance. The most recent city report, for fiscal year 2007 (updated in December 2007), makes no mention of the efforts to change the Industrial Commercial Incentive Program. It simply describes the requirements it and notes that in 2007 there were 5,771 property tax exemptions on the books, costing the city $409.5 million in lost revenues.

Yet Section 240 of the city charter says the tax expenditure report should include, among other things, "such data and supporting documentation as are available and meaningful regarding the economic and social impact and other consequences of such tax benefit." (Interestingly, the introduction to the 2007 report edits this requirement down to "data, as available, on the economic and social impact of city tax expenditure programs." The word "meaningful" is excised.) It includes no such impact data and documentation about the incentive program.

In fact, Part V of the 2007 tax expenditure report, which Section 240 says should include (for each tax benefit) "a listing and summary of all evaluations and audits of such tax benefit issued during the previous two years," has only one entry, a one-page summary of an Economic Development Corp. report required by Local Law 48 of 2005, on 631 EDC "Investment Projects," i.e., business tax breaks individually negotiated with corporations.

The pattern here, as with the semi-annual Mayor's Management Report, is to provide a lot of statistics, but little or no analysis. For instance, the homeless services section of the Mayor's Management Report for fiscal year 2008, said simply, "The average number of families with children in shelter each day rose slightly. While the number of families with children entering shelter has declined, length of stay for these families increased."

Citing the expansion of HomeBase, the report said, "Over 90 percent of the families and adults receiving DHS homelessness prevention services did not enter the DHS shelter system, demonstrating the success of the city's efforts to offer at-risk families and individuals alternatives to shelter." The report, though, made no effort to explain why, in light of this, so many people still find their way into the shelter system.

Glenn Pasanen, who teaches political science at Lehman College, has been in charge of Gotham Gazette's finance topic page since 2001. 

For Homelessness, Prevention is the Best Medicine

Mayor Michael Bloomberg publicly set a laudable and ambitious goal in 2004 to reduce homelessness in New York City by two-thirds by 2009. Four years later, with only one more to go in his term, homelessness continues to be a major problem facing New York City, with no end in sight. According to a report released by the Independent Budget Office, which I commissioned, this spring saw more homeless families living in shelters than when the mayor originally announced his plan's target numbers.

Achieving the mayor's goal, or even making significant progress toward it, requires a major reprogramming of the way we approach homelessness in New York City. The Independent Budget Office's recent numbers demonstrate that the efforts made to combat homelessness over the past four years have been largely ineffective. Something must change.

gotham gazette commentary: the views expressed here are the views of the author and do not necessarily reflect the opinions of Gotham Gazette or its publisher.

The mayor should use his remaining time in office to bolster proven, cost-effective prevention methods, correct punitive city policies that disadvantage homeless New Yorkers and, most importantly, treat our city's homeless crisis like what it really is: a housing problem.

Saving Families From Shelters

First, we should focus on the fiscally responsible ways the city can stem the tide of families entering shelter. Sheltering a family that has already lost its home isn't cheap. According to the Mayor's Management Report, in 2007 the average cost per day for each family in a shelter was $94.97. This same report cites that through 2007, the average homeless family remained in the shelter for 325 days, adding up to $31,000 for the family and to hundreds of millions of dollars a year total.

This massive sum could go a long way toward keeping families in their own homes from the start. Given our nation's financial troubles, we must now, more than ever, incorporate fiscal responsibility into all of our decision-making. On homelessness, this means putting money into proven prevention efforts and working to keep families in their homes, rather than hemorrhaging funds on expensive temporary shelter.

Just this year, the Department of Housing Preservation and Development lost $750,000 in funding for its anti-eviction legal services, and the Department of Homeless Services faced a $1.5 million cut to its anti-eviction services. These cuts represent poor fiscal decision making. A 1990 report by the New York State Department of Social Services demonstrated that every dollar spent on preventing a family from losing housing and avoiding shelter can save taxpayers $4 in the long run. The only way we can truly make progress on ending homelessness -- and fiscally sound progress at that -- is to simultaneously dedicate real resources to help families avoid the costly and disruptive need for shelter, and provide real solutions for families leaving shelters so they can find stable, long-term housing.

Making Housing Affordable

At its core, New York City's homeless problem is a housing problem. This spring, the New York City Rent Guidelines Board issued its 2008 Income and Affordability Study, which detailed that in 2007 evictions and possession orders rose more than 4 percent, and the proportion of cases awaiting trial that resulted in eviction rose to the highest level in 10 years.

We have seen this reflected in the number of families moving in and out of shelter in recent years. According to the Mayor's Management Report, the number of families with children entering shelter over the past three years has steadily increased: 8,027 families in fiscal year 2005, 9,167 families in fiscal year 2006, and 10,733 families in fiscal year 2007. Meanwhile, the number of families with children moving out of shelter and into permanent housing remains far lower and has steadily decreased: 6,447 families in fiscal year 2005, 6,193 families in fiscal year 2006, and 5,658 families in fiscal year 2007.

We must make the most of every available opportunity to create more affordable housing in New York City. If we are going to keep New Yorkers from being priced out of the city -- and from cycling through the shelter system -- we must compliment the mayor's homelessness reduction goals with an ambitious housing plan that ends giveaways for developers, requires on-site affordable housing wherever practical, and establishes tiered rental and homeownership opportunities that meet the real needs of an economically diverse New York.

Flawed City Policies

Over the years, I have praised the initiative this administration has taken in creating New York City's own housing subsidy programs for homeless New Yorkers. The mayor has correctly recognized that the cavalry is not coming from Washington, and we cannot rely entirely on federal subsidy programs to house the city's homeless population. But the deeply flawed housing subsidy programs the city administration has created have disproportionately steered shelter clients into dangerous apartments managed by slumlords. Additionally, the Work Advantage program only lasts for two years, leaving many families high and dry before they can afford their full rent. At the same time, the city has refused to open up public housing and federal Section 8 housing vouchers to the homeless. This is an irrational approach to federal programs that could be incredibly effective as part of a multi-faceted approach to preventing and addressing homelessness.

The city's under-investment in prevention, combined with its misguided approach to federal assistance and the unrealistic inflexibility built into the city subsidy programs, has caused homelessness to skyrocket in recent years, drawing us further from the mayor's ambitious goals.

Many of the tools to address this crisis are already at our disposal; it is simply a matter of being open to breaking with the past, and learning from programs and policies that have not been successful over the last four years. On Sept. 23, I will chair an oversight hearing to examine the city's past and current approach to achieving the target of reducing homelessness by two-thirds by 2009. I look forward to a serious discussion in the coming months on how we can work together to prevent homelessness and permanently house homeless families in New York City.

Bill de Blasio is a member of the City Council from Brooklyn and chair of the General Welfare Committee. He also is a candidate for Brooklyn borough president.


On Track to Ending Homelessness

As founder and president of The Doe Fund and its award-winning Ready, Willing & Able transitional work program, I have worked for more than two decades as an advocate and service provider to end homelessness in New York City. Quite frankly, I was appalled by last month's report by the New York City Independent Budget Office and the reactions to it. Sadly, many advocates have long histories of criticizing homeless policy rather than working to bring about positive change. I can say without reservation that no mayoral administration has been more proactive, innovative, forward-thinking, and successful than Mayor Michael Bloomberg's at tackling the challenges of homelessness.

gotham gazette commentary: the views expressed here are the views of the author and do not necessarily reflect the opinions of Gotham Gazette or its publisher.

Since Bloomberg took office, I have been approached by organizations and individuals from cities around the world dedicated to ending homelessness. With rare exception, they have come to see New York City as a worldwide leader in homeless policy innovation. The comprehensive nature of the Department of Homeless Services' programs - providing work opportunities and employment counseling, adding more Safe Havens for chronically homeless people, helping tenants avoid eviction, offering rental assistance - is simply unmatched. And these represent just a small fraction of the services the city provides.

Perhaps the most visible success of this administration has been the reduction in street homelessness: the most obvious sign of homelessness in New York City. In a departure from past policy, the Department of Homeless Services engaged some of the most well-respected service providers in the city to create a network of street outreach teams. These teams work 24 hours a day, 7 days a week, talking to, listening to and meeting with people day after day, eventually convincing them to come inside for help.

This active engagement has led to an extraordinary 25 percent drop in the number of people living on our streets in just three years, based on the city's annual HOPE count. In other words, since 2005, 1,089 individuals - approximately one person per day - have taken the first step to change their lives for the better.

Shelter Successes

Just as impressive has been the department's success in reducing the shelter population, moving a record number of people into lives of independence. In the four years since Bloomberg announced his homelessness reduction plan, the department's daily report shows the shelter population for single adults has dropped from nearly 8,500 to less than 6,700 - a 22 percent reduction that speaks for itself.

The Department of Homeless Services has accomplished this feat largely by recognizing that the adult shelter population is not a single block, but rather a reflection of the diversity of our city. By supporting individualized programming to serve this diverse population - ranging from work-centered programs like Ready, Willing & Able, to long-term supportive housing for truly disabled individuals - the department is working closely with service providers to encourage independence wherever possible.

In addition to these major successes with individuals, the department is continually developing new initiatives to help families with children. No longer must they endure the inhumanity of the old Emergency Assistance Unit, where they often would languish for days or weeks at a time waiting for help. More recently, homeless services established Advantage New York: a program providing rental assistance, matched savings, and connections to more housing than ever before. The department's Daily Report demonstrates that Advantage New York - now in its second year of existence - has helped reduce the number of families with children in shelter by 5 percent in the past 10 months alone.

Innovations like these will be allowed to flourish as a result of last week's settlement between the city and the Legal Aid Society on the 25-year old McCain litigation. As a result of great strides by the Bloomberg administration, the plaintiffs in this case - which had created more than two decades of judicial oversight of the shelter system - were finally able to agree that the Department of Homeless Services, rather than the court, is best suited to create and administer services to families with children. Now that the case has come to an end, with all parties agreeing to what is best for families facing homelessness, the city can move forward and continue developing novel solutions for some of the most vulnerable New Yorkers.

Finally, the Department of Homeless Services has made enormous strides in the area of homelessness prevention, including a program that provides decentralized services to people in their home neighborhoods. Known as Homebase, this brand-new program was enormously successful in its pilot communities, giving families and children the services they need. This success has led the department to expand the initiative citywide, which is expected to save the city tens of millions of dollars that can be better spent within the community by helping people stay in their homes and out of shelter.

The Bloomberg administration's five-year plan is the most comprehensive, ambitious and innovative enterprise ever undertaken by any mayoral administration. It has led to the development of new and more humane methods of dealing with each segment of the homeless population and has been made a top priority throughout the city. Rather than criticize this administration, we should support it and work hard to help realize its important goals.

George T. McDonald is the founder and president of The Doe Fund, Inc., a homeless services provider that operates the Ready, Willing & Able program.  

Handing Out to the Homeless

photo of volunteers distributing soup
Photo Courtney Gross/ Gotham Gazette

The smell of hot soup spills out from three white vans marked with the Coalition for the Homeless emblem. Inside, bread, milk and oranges are stacked high enough to feed a small brigade. Volunteers stand by, waiting for the "go" sign to set off to their respective routes across the city.

One van will go to the Bronx. Another to Upper Manhattan and one more will head south. The volunteers gather every day -- same place, same time, maybe not exactly the same faces -- to make sure the city's unfed and unsheltered get a meal.

It's just before 7 p.m. on a Tuesday night, and I skipped dinner to see what it's like to feed somebody else.

I climb into one of the vans with James Taylor, a driver-slash-mechanic; Susan Humphlett, a speech pathologist; and Chelsea McGrath, a student at the New School. We have four destinations, circling Lower Manhattan, from Madison Square Park to an empty parking lot in Chinatown. At every stop, lines of 10, 20, 30 or more twist between park benches or cement barriers -- dozens of homeless and hungry New Yorkers waiting for dinner on us.

New Yorkers like Juan Ayarde, whose 60th birthday was swiftly approaching, who had lost his Bronx house in a fire and has been living on the streets ever since. He still maintains an affable, nonchalant demeanor. He avoids the city's shelters because they're "overcrowded" and calls our first stop his home of the moment. It's the heliport -- a landing pad for high-flying executives turned hangout for the city's homeless near 34th Street.

The van whirls around the parking lot, reversing toward the group, who are primarily men. It stops. Everyone jumps out with handfuls of plastic bags in tow, ready to distribute to the crowd.

Chelsea and Susan head to the back, prop open the doors and start handing out small soup containers and tiny milk cartons. They smile and greet each "client" -- as they call them -- telling them to have a "good night" as each one departs with a warm meal. Some hang around, leaning against the cement railing, slurping spoonfuls of soup. Others just slink off.

"Excuse me," I hear in a Spanish accent from behind. A man in a red shirt, black hat and khaki shorts approaches. "Do you know where I can sleep, but not in a shelter?" he asks.

"Ummm..." I reply. My voice trails off as I look to Susan for guidance.

She takes over, pulling him aside, showing him maps, brochures -- I imagine the quintessential how-to guide on making it without a home on the streets of New York City. "We have a lot of information," she tells him.

I think: "Thank God it's summer," wondering what an icy winter would be like sleeping along the East River.

An Increase or Not?

"There's definitely been an increase (in population)," James tells me once we hop back in the car, heading further downtown. He's been on the job for seven years, the length of the Bloomberg administration, and during that time, he's seen more people come out for the coalition's services.

Is that because of an increase in the homeless population or is the coalition spreading its outreach? Trying to decipher the homeless stats really depends on who you ask and where you look.

Last week, the Bloomberg administration released its latest management report, which said street homelessness -- those people not in the shelter system who instead take up residence under bridges or on park benches -- has significantly decreased -- a drop of about 25 percent between fiscal year 2005 and fiscal year 2008. Elsewhere, the numbers have increased since 2004 when the administration first committed to cutting the homeless population by two-thirds.

Figures, from the number of families entering the shelter system to single adults, are all on the rise, according to the management report. In fiscal year 2005, 17,245 single adults entered the shelter system. In fiscal year 2008, it was 18,303.

A recent report by the Independent Budget Office found the homeless family population had actually increased, from 8,712 families in 2004 to 8,848 in 2008. In 2007, there were 9,162 families in shelters, according to the report.

Onward: Chinatown

On Tuesday, there are more than 34,000 homeless individuals in the city, and scores of them are lined up in a parking lot in Chinatown not far from the Manhattan Detention Center.

There is a line for men, from recently released prisoners to -- based on the smell of one's whiskey-soaked breath -- substance abusers to those who just have bad luck. There is another line for women, a vast majority of Asian decent. Some may not be homeless, per say, but impoverished, Susan and Chelsea explain.

The lines are self-segregated.

It's the biggest, and toughest, stop of the night.

I walk down the line of men first. Naikim Ahmadzai calls for my attention.

Tall -- gargantuan even -- with shaggy dark hair and a gap where his front tooth should be, Ahmadzai starts to tear as he describes his past.

"Tell the U.S. government to leave homeless people alone," he barks, while walking to a bench.

To ease his anger, I tell him that I'll try.

Not everyone there is as disgruntled -- some are just dining. Ernesto Bol, who at 34 years old has been homeless for four months after his most recent girlfriend kicked him out, lounges on the wall encasing the Centre Street parking lot. He has slept on subway trains, but there isn't a hint of melancholy. He has only one explanation for his situation: "I fall in love too much," he says whimsically.

Once the crowd departs and everyone seems well fed, Susan, Chelsea and James slam the van doors shut and hop back in. Onward.

Not so fast.

"Wait," says James. "We got one more guy."

A tall black man, dragging a small suitcase behind him, makes his way over. James gets him a meal. He doesn't want to miss anybody.


A Lasting Impression


Back in the van, I ask if anyone ever gets depressed being exposed to so much poverty every week.

"No," they all reply.

"Sometimes you can just get a bad night," said Chelsea, who had to volunteer as a requirement for a class on urban homelessness. Once the class ended, she decided to stay on and help.

"People don't want it in their neighborhood," James explains. Residents close to their stops, they say, complain to the police, arguing the vans only attract more homeless people to their neighborhoods.

"They are gonna be like, 'We don't want you here,'" said Chelsea. "And pretty soon, it won't be anywhere."

That is what is frustrating, they agree.

Chelsea and Susan start crumpling up plastic bags in the back of the van as we head downtown. Separating them first, will make it easier to hand them out once we arrive at our next stop. Their routine begins to set in: just another Tuesday night on the town.

Calling It A Night

Talk of health and work begins to subside when we swing by the South Street Seaport, where a handful of men wait -- patiently. Nearby, you can hear music from a local outdoor event. A few of the men tell us to check out the parties if we have time.

One attempts to finagle extra servings. "Well, if we give some to you, someone else isn't going to get any," reasons Susan, who has been volunteering with the coalition for about eight months.

The conversation -- just like at any other dinner table, under a roof or not -- turns to politics. One man asks the women as he grabs his meal, "You think Obama will come out on top?"

"I do," answers Susan.

Frank, a regular at the coalition van whose long gray beard and ankle-length coat is recognized from afar, saunters up. "I'm a vet, thank you very much," he tells Chelsea and Susan. Frank says that every time, they explain.

Whether it's Frank or more recent regulars, like a middle-aged father with two young children, the volunteers said that after awhile, the faces become familiar. These are New York's chronically homeless -- those who can't seem to get back on their feet.

We careen up Third Avenue, approaching our final stop for the night.

Nearing 9 p.m., the van pulls up along Madison Square Park. It kisses the curb in front of a 24-hour Fitness, where Chelsea residents can sprint on treadmills inside.

Another group lines up. "You're very generous," says one man, after accepting one of the final meals of the evening.

Susan gives the last of the milk containers to the remaining men camped along the benches across the street. The van doors shut -- until tomorrow.


Fighting Homelessness in Miami

Local governments throughout the country are grappling with way to help homeless people and get them into homes and off the streets. One of the more innovative programs is in Miami-Dade County. In this article, two officials with the Miami-Dade County Homeless Trust describe the area's efforts to combat homelessness.

About 15 years ago, roughly 8,000 homeless people roamed the streets of Miami-Dade County. Homeless encampments greeted downtown visitors and tourists leaving on cruises through the Port of Miami . Hundreds of homeless people lived under highway overpasses. It was a sad reality.

Community leaders and county residents decided they should and could do something about it. In 1993, Miami-Dade County became the first - and it remains the only -- community in the U.S. where voters approved a food and beverage tax for the specific purpose of providing services to homeless people. Because of the investment, homelessness in Miami-Dade County has been reduced by 87 percent.

gotham gazette commentary: the views expressed here are the views of the author and do not necessarily reflect the opinions of Gotham Gazette or its publisher.

The Special Tax

Here's how it works. A 1 percent tax is added to the bill at establishments with a liquor license that make more than $400,000 per year in revenues. The tax, originally projected to generate $6 million, produces approximately $13 million a year.

In conjunction with the tax, the Miami-Dade County Homeless Trust, which is made up of a cross section of community leaders, administers the proceeds, implements a homeless care plan and advocates on behalf of the county for state and federal dollars.

Prior to the establishment of the Homeless Trust and the tax, only 700 homeless beds existed in the area, none of which them permanent housing. Today, over 5,000 emergency, transitional and permanent supportive housing beds have been developed, with an additional 1,000 new housing units in the pipeline.

The Homeless Trust and its Community Homeless Plan have been hailed as national models for their progressive approach to addressing homelessness. The one-of-a-kind dedicated tax as a source of funding, as well as the unique public-private partnership, have drawn the attention and funding of government, private agencies and foundations, which has enabled the trust to secure more than $300 million in local, state and federal funding.

Getting Homes for the Homeless

One of the Homeless Trust's most successful initiatives includes outreach for chronically homeless people. Once these people are identified, they are placed, with priority given to the person who has been on the street the longest. This concept builds upon an initiative launched by New York Homeless Commissioner Rob Hess when he served in a similar capacity in Philadelphia. It has reduced Dade County's chronically homeless population on the street by over 50 percent during the last three years.

The trust also implemented a "Housing First model" where homeless families are screened and placed directly from the street or emergency shelter into permanent housing with a rent subsidy that declines over time. Previously, funds were allocated to transitional housing, meaning that families remained housed in temporary settings for up to two years and then were placed into permanent housing. The Homeless Trust took local funds previously utilized for transitional housing for Housing First, serving three times as many people in the process.

Low demand housing models, which have less complicated application processes and fewer requirement than most housing programs, allow chronically homeless clients to be met at their own level. The program places people directly from the street into their own apartments. While abstinence from substances is a goal, it is not a requirement to remain in the program. Client service plans are individualized. Thus, people engage in services as they become ready. People who fail to meet their goals are not discharged as that would just serve to render them homeless again. All of these programs have had tremendous success with nine out of 10 people remaining in permanent housing.

A Homeless Helpline serves as a one-stop program for families facing eviction. Services include rental assistance and legal services. Prevention funding has increased six-fold over the past two years. Miami-Dade County has established additional partnerships and provides referrals for housing counseling services.

Tackling Other Homeless Issues

As a result of these efforts, most food programs on the street, which can result in unsanitary conditions and leave a trail of litter, have stopped. Groups wishing to feed the homeless now use indoor program sites, which have been funded in large part by the Homeless Trust. While it may appear to be a humanitarian effort, Feeding people on the streets serves to enable people's homelessness.

More recently, the trust has tackled a recent outbreak of violence against homeless people. In response to beatings and killings of homeless people by young people in South Florida, it implemented an annual weeklong homeless educational program together with Miami-Dade County Public Schools for grades K-12. The homeless violence prevention program features homeless children talking about their experiences and Miami Heat basketball star Alonzo Mourning, who sends a strong message to young people about not doing harm to those who are homeless.

It Takes a Community

The county's success comes from the ongoing public dialogue and leadership, which includes Miami-Dade County Mayor Carlos Alvarez, the Board of County Commissioners as well as community, business, educational and religious leaders, homeless service providers and formerly homeless people. The results are easy to see on the county's streets and evident from its success stories.

Two years ago while working on a homeless programs story, Rachel Jones of National Public Radio interviewed J.C., a chronically homeless man in Miami Beach. J.C. sat in his wheelchair wearing a Santa Claus suit. He was barely coherent, often intoxicated and carried vodka bottles in the wheelchair pouch. His dull blue eyes watered, and he cried about his dog, which was killed while he was on the street. His feet were covered with staph infections and flies. Then, the Homeless Trust convinced J.C. to go into the low demand housing programs.

Today, J. C. is still on Miami Beach's Lincoln Road. Only instead of sitting in a wheelchair, he rides a bicycle. His blue eyes are now bright. He bursts with pride when he talks about living in his own apartment on the beach, which is paid for with a combination of the food and beverage tax and federal Department of Housing and Urban Development funds. J.C. is still in the low demand program, where he is under the care of a mental health professional. He has gained 30 pounds, has a new dog and has been clean and sober for six months at the time of publication. J.C. serves an example of what a community can accomplish when it bands together to help homeless people.

David Raymond, is executive director of the Miami-Dade County Homeless Trust, and Ronald Book is chair.


Getting Families Out of Shelters and Into Homes

Homeless families won the right to shelter, enforceable in the courts, this past week. It was a huge victory - 25 years in the making. The settlement of the litigation, originally brought against the Koch administration, came on the brink of a trial at which homeless mothers were poised to testify in open court about their recent treatment while attempting to get into emergency shelter.

In short, they and their children had to sleep on the streets, in subway stations, parks, laundromats and all-night fast food restaurants. Coming on the heels of a damming Independent Budget report last month, the last thing city officials wanted was graphic sworn testimony on the toll Mayor Michael Bloomberg's homeless policy had taken on mothers with vulnerable children.

gotham gazette commentary: the views expressed here are the views of the author and do not necessarily reflect the opinions of Gotham Gazette or its publisher.

The other looming backdrop is near record family homelessness in New York City. How did we get into this mess and how do we work our way back out of it?

The Bloomberg Record

Four years ago, Bloomberg committed to reduce New York City homelessness by two thirds over five years. His ambitious goals were praised by a wide array of advocates, service providers and community groups. But many remained concerned that the mayor did not commit sufficient housing resources to the problem and had failed to craft the policies needed to achieve his goal.

In recent years, those fears were sadly realized as the Bloomberg administration stumbled through a series of flawed approaches to homelessness - from the administration's decision to cut off homeless New Yorkers from federal housing assistance, beginning in autumn 2004; to the disastrous "Housing Stability Plus" program, which the city finally abandoned in early 2007; to the deeply flawed "Work Advantage" program which replaced Housing Stability Plus; to the city's ongoing and accelerating use of illegal boarding houses to shelter homeless adults living with mental illness and other disabilities.

Most troubling, New York City's homeless population has risen dramatically in recent years. Every night since Bloomberg took office, more than 30,000 homeless New Yorkers have resided in shelters, a higher number than at any point in the 1980s or 1990s. In June, over 8,600 homeless families with more than 14,000 children bedded down each night in municipal shelters, only slightly fewer than when the mayor unveiled his plan four years ago.

The Independent Budget Office's recent report documented the clear failures of the mayor's plan. In short, four years after Bloomberg announced his proposal for reducing homelessness, New York City's homeless population is dramatically larger than the targets in the plan. In fact, more New Yorkers are homeless than when Bloomberg took office.

All in all, the current decade has proven to be the worst for New York City homelessness since the Great Depression of the 1930s.

Last week's historic legal settlement codifies an enforceable right to shelter for homeless families along with specific enhancements in intake procedures by the Department of Homeless Services. But intake - the front end of the shelter system - is only half of the equation. If New York is to see real reductions in the number of families residing in shelters each night, the city must make substantial changes in its approach to housing homeless families.

Reducing Family Homelessness

The Independent Budget Office's findings and rising family homelessness should serve as a call to arms. They should spur Bloomberg administration officials to abandon their failed homeless housing policy and to embrace proven, cost-effective solutions to radically reduce homelessness in New York City.

Perhaps most importantly, the mayor and administration officials remain mired in the false notion that family homelessness is a behavioral problem, not what it primarily is: a housing affordability problem. Thus, addressing it must involve proven, housing-based solutions.

Following is a summary of immediate steps the city can take to change course and genuinely reduce family homelessness:

-- Target Federal Housing Aid to the Homeless: In late 2004, the Bloomberg administration cut off homeless New Yorkers from longstanding priority for federal housing programs, including Section 8 vouchers and public housing. In January 2007, Bloomberg announced that the city would give out 22,000 new Section 8 vouchers - none to the homeless.

Reversing the city's misguided policy will move thousands of homeless families to permanent housing - and save city taxpayer dollars spent on emergency shelter.

-- Repair the Flaws in Rental Assistance Programs for the Homeless: Over the past four years, the city has created two flawed rental assistance programs for homeless New Yorkers. The "Work Advantage" program has unrealistic, one-size-fits-all time limits that cut off rental assistance to struggling families after two years - regardless of a family's circumstances. In contrast, acclaimed studies by the Vera Institute, the National Alliance to End Homelessness and academic researchers have found that long-term, flexible housing assistance - like the federal Section 8 voucher program - enables families to move from shelter to their own homes and helps them stay there.

The city should repair the flaws in the "Work Advantage" program and ensure that families in need are guaranteed housing assistance after the time limits.

-- Expand Homelessness Prevention Services: The annual cost of sheltering a homeless family is $33,000. In contrast, prevention services, which help keep struggling families in their homes, cost a fraction of that amount. The Independent Budget Office found that, while the city spends more than $650 million annually on shelter, it spends less than $200 million on homelessness prevention. The recently adopted budget actually cut legal services aimed at preventing homelessness and other prevention programs by more than $3 million.

The city should expand homelessness prevention legal services, the Homeless Prevention Fund, and other prevention programs.

Patrick Markee is a senior policy analyst for the Coalition for the Homeless. Mary Brosnahan is the coalition's executive director.


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