Spotlight Vol. 8, No. 19: Election '09: Bloomberg's Agenda: Build a World City of Neighborhoods

by Hope Cohen, Associate Director, Center for Urban Innovation

Ever since his re-election on November 3, Mayor Michael Bloomberg's administration and campaign staff have spoken with a single voice about his determination to avoid the traditional pitfalls of a third term. He plans to bring new people with fresh ideas into city government. And indeed, the best third act for his mayoralty during a time of economic stress would be to focus policy on the challenges of making New York City work well at the level of street and neighborhood - a natural dramatic arc back to the concerns of Bloomberg's first term.

That first term showed that Bloomberg LP was not a fluke; he knows how to manage and lead a major enterprise. Bloomberg concentrated on hiring well and budgeting responsibly in an immediately post-9/11 New York. He demanded data to manage by and pushed 311 into existence, in pretty much record time for a government technology project. He fearlessly opened himself to ridicule and rebuke when he believed in the rightness of his causes, like taking control of the public school system and banning smoking from public places.

Bloomberg's second term, which greatly benefited from a financial boom, was about New York's position as a world city: issuing PlaNYC, the grand environmental plan for a "greater, greener" New York; emulating policy initiatives of rival world-city London (congestion pricing, video surveillance to fight crime and traffic); and pursuing ambitious rezoning/redevelopment proposals for huge, near-vacant swaths of the city (Hudson Yards, Willets Point, Coney Island).

But now that the city faces its worst fiscal situation since the 1970s (and without the backstop of solvent state and federal governments), the mayor needs to turn his attention from reforming vast physical tracts of the city to reformulating its budget and regulations. Basically, the mayor needs to shift focus from New York as world city to New York as city of successful and diverse neighborhoods - and reduce the costs of living and working here. Only by thriving on a local level can New York compete successfully on a global level.

For residents, the single most important cost consideration is housing, which is legendarily expensive here. Creating and preserving housing affordable to targeted populations was a major emphasis of Mayor Bloomberg's first two terms. Housing officials expertly exploited city, state and federal programs to finance construction and rehabilitation of homes and encouraged voluntary "inclusionary housing" programs to build apartments by piggybacking on the development boom in various neighborhoods. An extensive bureaucracy administers the array of programs, managing sophisticated financial instruments and complex processes for selecting beneficiaries.

Now that the economy has turned, this third term provides the opportunity for the administration to try another tack: addressing head-on the fundamental ingredients of New York City's high cost of housing - land values, congestion, labor, and the time and costs associated with New York's regulatory mazes.

The rezoning efforts of the first two Bloomberg terms increased the potential supply of land, but largely in undeveloped areas requiring significant investment in infrastructure. In his third term, the mayor should promote building on land already available, most notably the empty spaces between the huge towers of many large public housing projects. The existing zoning in these areas already allows more density, and since the land is publicly owned, its value can be leveraged for the greater good. Moreover, increasing the housing supply in this way offers the opportunity to enliven empty and forbidding landscapes with new economic, social and recreational activity.

Now is also the time to shore up existing neighborhoods that are struggling against an epidemic of foreclosures and associated vacancy and abandonment. Much as in the 1970s and '80s, creative approaches to preserving affordable housing can go a long way to saving neighborhoods under threat, and at much less expense, than constructing new.

City Hall must also grapple with labor costs - for infrastructure and other public works, as well as for housing - which are in many cases at least twice here what they are elsewhere. A truly worthwhile project for the mayor's third term would be to clean the inefficiencies out of construction. As a first step, shine a bright light on the work rules - the featherbedding, grandfathered roles, and entrenched practices that drive up costs and timeframes and keep out new (often minority) players.

Making construction more cost-effective would also benefit the city as it continues to invest in maintaining infrastructure, bringing to a state of good repair, and even expanding, critical transit, water and sewer systems. With the private sector struggling to finance projects, recessions are traditionally the best times for the public sector to get the most bang for its construction buck.

Meanwhile, the city needs to bring down the costs and hurdles of doing business in New York - not only for the sake of those running the businesses, but for those seeking jobs and services. And while Albany is ultimately responsible for many of the taxes and regulations strangling the city, the mayor has significant administrative leeway to improve things on the ground in the five boroughs. For example, although the structure of the confusing and counterproductive real property tax is set by the state, Mayor Bloomberg can relieve some of its disproportionate burden on businesses, renters, and utilities through ministerial actions. It is also completely within the city's power to amend the zoning rules that forbid much home-based business and other commercial activity in residential neighborhoods. And although it's up to the state to eliminate the city's unfair and anti-entrepreneurial unincorporated business tax, a request by the mayor would get the ball rolling.

Bloomberg's past efforts to maintain municipal services and improve public schools reveal that he understands the importance of retaining the middle class. Nevertheless, the Empire Center for New York State Policy's recent analysis of census data indicates that middle class New Yorkers have been leaving the city in droves. The exodus is masked by even larger numbers of immigrants, but the newcomers tend to be poorer, resulting in lower income tax revenues for the city and state. The trick is to keep them even after they achieve economic success. To be a great global city, New York must continue to attract newcomers, but also hold onto old-timers. This mission may not be as glamorous as the big "world city" projects, but it is certainly a lot less expensive - and at least as necessary.