The following remarks were made by Scott Rechler, Chairman and CEO of RXR Realty and Chair of Regional Plan Association, at the 2017 RPA Assembly on April 21, 2017.
This is a special event for me because it is my first RPA Assembly as Chairman. I am incredibly honored to serve in that role and to speak before you today. And I want to thank everyone for not only attending the Assembly, but to welcome you to the greatest city and urban region in the world. There is no other place that is as well-positioned for the 21st century, idea-based, globally-connected economy than the New York City region.
Because the most important ingredient for success in today’s idea-based economy is Talent. And, New York City is an absolute magnet for talent. The best and brightest from all around the world want to be here. In fact, at no other time in this City’s history have more people wanted to live here, work here or visit.
Today, a little over eight and half million people call New York City home and in the coming decades this figure is expected to surge past nine million people. We are experiencing record job growth and a record number of tourists with over 60 million people visiting last year. New York is where people want to pursue higher education. We have more college and graduate students in New York City than there are people living in the City of Boston. In turn, this talent has attracted some of the biggest and fastest growing companies in the world, such as Google, Amazon, and Facebook, all seeking to hire the best and brightest.
We have created a virtuous self-reinforcing cycle where talent attracts companies, companies attract talent, and so on, and so on.To share an example, Spotify, a tenant of my company occupies 125,000 square feet in one of our buildings. Last year, the CFO flew to New York to tell us they needed 400,000 square feet.
Why? Because they couldn’t get the talent that they needed in Europe so they turned to New York City – the world’s capital for talent.
We didn’t reach this enviable position by accident. We got here because we had leadership that acted to enhance our city's quality of life and public safety, which led to this economic vitality. Building off what began under the Dinkins Administration, Mayor Giuliani was instrumental in reducing the surging crime that had taken over New York City in the early 90’s.Shortly after 9/11, Mayor Bloomberg led a city-wide renaissance by investing in higher education, infrastructure and parks, and creating whole new neighborhoods.Governor Cuomo has continued on this path by pursuing over $100 billion in infrastructure investments, building a new LGA airport, a new JFK, and a new Tappan Zee bridge.Similarly, Mayor DeBlasio has made addressing the City’s affordable housing crises his top priority.
While there is no better time to be here in New York City, today it’s important that we remember something that Bill Gates said about success:
“Success is a lousy teacher. It seduces smart people into believing they can’t lose.”
So, let’s not forget, New York can lose. Right now, we’re facing two major challenges that threaten our cycle of success.
First, we have become a victim of our own success -- We have a growing capacity, affordability, and supply issue. There is no question that we have a shortage of affordable housing at all levels. Programs like 421a may spur some development of affordable housing, but the numbers of units these programs will create will hardly make a dent in the overall need.
Because of its basic geography, New York City cannot solve this problem alone. We have to think about more regional solutions – solutions that involve selectively and thoughtfully spreading density to less dense areas outside of New York City, particularly around our existing commuter rail stations. Many of these stations are completely surrounded by parking lots that could easily be converted into thriving, walkable, and more importantly, affordable communities.
Beyond affordable housing, there is a shortage of affordable, modern office space. After years of little activity, we are seeing an increase in office space in Lower Manhattan, Hudson Yards and Midtown East. However, it’s not enough to meet long-term demand and very little of it can be considered affordable. We also have a shortage of affordable space for those local retailers that add so much unique character to our city. Just walk down any city street and you’ll see one vacant store front after another where our local retailers have been priced out.
Similarly, as I mentioned earlier this morning, our infrastructure is terribly antiquated and maxed out like never before. How much longer will we be able to rely on 100-year-old tunnels under the Hudson River? Our subway system can't handle the increased demand and our city streets are more congested than ever. And, to paraphrase our favorite Vice President, LaGuardia resembles an airport that you’d more likely find in the third world rather than the financial capital of the world.
We must also remember that while today is a great time to live here for some, it is extremely challenging for many others. Our City’s success has not reached everyone. It is critical for the economic vitality of our region that all New Yorkers have equal access to the benefits created by our region’s thriving economy.
But this isn’t our only problem. The second big risk to our virtuous cycle is the detrimental policies that are being put forward at the national level. The Administration has called for the elimination of the federal program that funds the most important transportation project in the region, the Gateway rail tunnel under the Hudson River. The elimination of this program would stop this critical project literally in its tracks and put our region’s economy, not to mention the safety of thousands of commuters, at risk.
But as concerning as this is, what’s most alarming for me, not just as a New Yorker, but as an American, are the short-sighted immigration policies that are being pushed in Washington. These policies are the exact opposite of what New York City and our country are about. This shift is not only profoundly disturbing at a basic human level, but it would also have a devastating impact to this region’s vitality.
It is not hyperbole to say that New York City’s rebirth over the last three decades has been built on immigrants. Over the last 30 years our City’s population grew by 1.1 million people. Without immigrants, it instead would have shrunk by 223,000 people. Walk down any street in New York City and the odds are that 4 out of every 10 people you see will have been born abroad.
And, don’t forget that these harsh policies don’t exist in a vacuum. We’ve all heard the divisive rhetoric directed at immigrants. We can’t be so naïve as to believe that this language has had no impact on how we treat one another. Last year, New York City reported a 24 percent increase in hate crimes, reversing a trend of fewer hate crimes in recent years. People want to live here, work here, and visit not only because they want to be a part of the energy of the greatest city in the world, but because they also want to be a part of the character and diversity that makes New York City so unique.
What kind of message does this send to the best and brightest who want to come here?
In short, these are the best of times for this region. But to channel Charles Dickens, these can easily become the worst of times. And we must do everything possible to ensure that they don’t, because right now we’re at a tipping point.
If people can't find housing that they can afford, talent will flee. If people are regularly delayed on their commutes or stuck in a tunnel for over three hours (like they were last week), talent will flee. If companies don’t have confidence in our infrastructure, if they can't find affordable, modern office space, they will locate elsewhere. If people no longer feel comfortable or welcome here, talent will flee. If we fail to act, we will go from being a magnet for talent to one that repels talent.
I mentioned the quote by Bill Gates earlier, but I’m also fond of another quote, particularly given my background in real estate, “Success isn’t owned. It’s leased and rent is due every day.”
Many of us in this room can remember what New York City was like in the early 90’s. Time Magazine had on its cover a rotting apple and questioned whether our City’s days were numbered.
None of us can become complacent. We have to act together, as a city and as a region, to address all of the issues that threaten our vitality. We have to do everything within our power to protect our future and to ensure we remain a beacon to the rest of the world.