Ryan Avent hopes that New York City will take this opportunity to refocus its policy on the non-financial industry: introducing revenue raising measures like congestion pricing, and making it possible to build a lot of new affordable housing. This is a nice wish list. But it's obviously from an outsider. Any native New Yorker can tell you that the financial slump has made these things less likely.
For starters, pressure for congestion pricing comes from Wall Street people and other pricey professionals. They can afford to pay for it. The political pressure against it comes overwhelmingly from low-and-middle income types, and small businesses in the outer boroughs who do delivery in the city. There are a number of areas, mostly in Queens, where the planned subways were never built out because the Great Depression halted the financing. The land-use patterns that built up there are basically suburban, and natural selection means that the people who live there now do so because they like that lifestyle--indeed, as I understand it, have systematically blocked any mass transit development that might challenge it. The result is that they basically don't have any way to get to work except drive or ride the bus for several hours. And they have councilmen who are very sympathetic to their pleas.
So with finance losing the political heft that comes from providing something like a third or more of the city's tax revenues, the pressure for congestion pricing goes down. In fairness, so does the need for it; traffic in New York has been noticeably lighter than it was a year ago the last few times I've visited.
Likewise, it's hard to overstate just how far left and economically illiterate most of New York City's council members and state representatives are. The politically powerful head of the transit union was, the last time I checked, an actual communist. The financial industry was the closest thing that New York now has to a vibrant business community, and with its power ebbing, so is the only remaining natural check on the left's worst instincts. That's why there's a very good chance that the State Legislature is going to halt stabilization decontrol and renege on the phase-out deals it made with developers in exchange for building stabilized housing--and thus even more thoroughly ensure that no one in the City of New York builds any multifamily housing except luxury flats that no one will be tempted to control. Though they won't be building anything at all, for a while--the credit crisis is shutting down a lot of projects in the area.
Richard Florida is more optimistic about the future of my birthplace than I am. In my grimmer hours, I wonder how much of the broad urban renaissance can be sustained absent the credit bubble. Easy money makes even distressed property look good, and brought an influx of young urban homeowners who put pressure on the political system. As they flow out, will we be back into the territory of the ungovernable city?
Copyright © 2010 by The Atlantic Monthly Group. All rights reserved.
Sorry - just couldn't finish reading this article. Any time a fool (of any sort) uses such drivel as "it's hard to overstate just how far left and economically illiterate most of New York City's council members and state representatives are", making a gross derogatory generalization about a group of people, then does not have the decency (or integrity) to at least link to sites proving his/her statement, the writer loses all credibility.
(Yes, and I understand that I am making a similar gross generalization with my "any time" comment. However, I am making a personal statement about what I read and respect, not not globally smearing a group I don't agree with.)
Find me a set of links to respectable sites proving your generalization, and I'll read on.
Megan isn't really a fact or research based journalist Tom.
Tends to go with her gut.
Megan, why do you think the new urbanistas will "flow out?"
I'd think, given they difficulties of selling right and the unknown costs of energy and transportation in the future, they'd remain.
And I think you give the financial folks way to much credit for contributing to good urban policy; inversely, not nearly enough credit to middle-class urban dwellers. While living in Boston, I saw those traditional middle-class neighborhoods in a war against gentrification, and much of their political will bent in that direction. And it was a battle they had to fight without means. Might policies that prevent neighborhood takeover by those very-same rich financiers be behind much of your ridicule?
Megan – That’s so sad to read. Both of my parents grew up in the NYC of WW2, and to hear their descriptions, it sounded like an other Eden, filled with great and proud public institutions.
There was an article in the NYTimes about residental rents in NYC being down 20% in many cases. I'm sure the same is true for commercial rents.
I could see a police detective and a nurse practioner couple, who bring down 240k a year, thinking that they can live in Manhattan or Brooklyn rather than the wilds of New Jersey.
Also, as rents and property prices fall, business and individuals who hadn't been owners may end up with significantly more money in their pocket.
The same sort of thing is happening in Dallas. I worked in Minneapolis from 2001-2004, when the job market got bad for me in Dallas. Dallas now seems to be on track to be the Minneapolis of the mid-south. We even have our Hispanic woman lesbian sheriff and a school system in trouble but with a constituency that likes how it is.
It was the the city council people who represent Queens, like David Weprin, who helped squash "congestion pricing." Also those from Chinatown were vocal. A lot of small business owners can't afford manhattan rents and send their utility vans in the city to service Manhattan. As you said, the middle class.
People forget the price of goods and services would go up if all of those goods and services had to pay an extra $16 a day minimum (as they go in and out of the area) to deliver.
I am one of those who lives in Queens (and likes the safe, clean, great schools, I know my neighbors area) and drives. Parking under my employee plan is as cheap as the Express Bus and since there are no buses after 6pm (hello?)it makes sense. It's takes me 30 min vs. 1-1.5 hours (no stops, no set route to follow).
I work on "wall street" guys who were giddy about the pricing. They chuckled at me, "it's coming, get over it!" They take town car service the 40 blocks to work and the extra 8 bucks was not a problem. I was thrilled they were wrong.
More and more about the pain in NYC. I get it the world revolves around the new Rome. Anybody else had enough of the plight of New York? Its been way too expensive to live there. Wall Street has always had a very vain sense of itself. As if you couldn't do it some other place. Ahh I can hear the chorus of "YOU CAN'T DO IT SOMEWHERE ELSE!" Yes you can, London for one can do it, and has been doing it off and on for a couple years now. Bottom line everything is replaceable. So enough of the cry of NYC in this matter, our sympathy should not rest with a populace so tailored to the needs and wants of wealth.
I think the credit bubble drove the urban renaissance every bit as much as it drove the exurban mcmansion phenomenon. The collapse will not bring anything fabulous to NYC.
And here I thought you had nothing but fond memories of "Taxi Driver" city. Just think: Now that the investment banker scum are broken and banished, the upper west side can regain the authentic grittiness of your youth. Quaint bookshops. Squeegee men. Can't wait.
"Find me a set of links to respectable sites proving your generalization, and I'll read on."
I'm assuming "respectable" means sites that support your existing beliefs.
"Anybody else had enough of the plight of New York?"
I have. We should sell it back to the Indians.
Sprock-
Do you think they'd want it?
If we just sit on our hands long enough, we won't have to worry about NYC, it will become America's Venice, with canals (formerly of streets) between the towers.
Gondaliers in summer, silver skates in winter.
Megan, I still want to know why you expect an outflux from the city:
I'm certain you weren't talking of rising sea levels creating the flood.
In the end everything Megan writes comes down to her fear and hatred of the suburbs. This is a woman who literally can't spend the night in a single family home in the Washington suburbs without staying awake in terror all night. No kidding.
New York is going to become an ungovernable city, not because it is filled with let them eat cake liberals who demand enormous sums of public money and tax everything that moves to support it, but because some people in Queens refuse to support building some new subway lines. Yeah, that makes sense.
How about this future for New York Megan? No longer able to suck off the tit of Wall Street, New York City government is forced into fiscal sanity. No longer faced with obscene taxes and competing with wall street trash for space and resources other industries move into the great location that is Manhattan and the city is reborn? The Wall Street trash were able to take over the city because they were the only ones who made enough money not to care about the taxes. Because of that, the city was able to avoid reality and turn itself into a playground for the super rich at everyone else's expense. If they are gone, the city will either have to cut taxes or become something out of a Road Warrior movie. Perhaps I am an optimist, but I think after a lot of pain and knashing of teeth, they will chose the former. This of course will be a nightmare for Megan because people from exotic cultures like Queens and Statan Island might move into her beloved island.
Simple: middle class people will take a bath on their house and move into a tiny rental apartment before they will send their kids to the majority of urban schools. As those school systems now exist, when those people have kids, they *will* leave, and who will replace them if they can't get a mortgage?
Zic,
Considering that artic ice levels are now where they were circa 1979, I think New York will turn into the national prison in Escape from New York before it turns into Venice, all the prayers of the global warmists aside.
Yes, but London is the most expensive city in the world.
http://www.citymayors.com/economics/expensive_cities2.html
Spock,
Respectable = any site that shows where their figures come from, and where the figures can be confirmed.
I will admit to some bias - O'Reilly is completely untrustworthy, as is Limbaugh. But anything I get from Moore I double-check, too.
Megan, I doubt that enough of the new urbanistas will become parents all at once to make this happen. (Economic hard times + birth control = drop in birth rate.) Some, maybe, but not enough to bring about the desertion you're suggesting.
Tom Woolf, what sort of proof did you have in mind?
wow. this is perhaps the most boneheaded piece of dreck i've read in some time. i guess Megan's bit is to describe NYC to people who have no intentions of ever seeing it for their own eyes.
the kicker for me was this bit o'nonsense:
"The land-use patterns that built up there are basically suburban, and natural selection means that the people who live there now do so because they like that lifestyle--indeed, as I understand it, have systematically blocked any mass transit development that might challenge it. The result is that they basically don't have any way to get to work except drive or ride the bus for several hours."
Garbage.
For the record Megan, people object to subway lines because the bring crime. You make it sound like they do it because of some wierd objection to them. There is a reason why places like Georgetown and the Pallisades in Washington, DC for example don't have subways. It is because without them, they can keep the criminals out of their neighborhoods easier. I would imagine the good people of Queens really don't want to pay taxes to give criminals and panhandlers a publicly subsidized ride to their neighborhoods.
"it's hard to overstate just how far left and economically illiterate most of New York City's council members and state representatives are",
Megan what is this? Come on! You're better than this! Just write. And stop with all the hyperbole and grandstanding.
k1
ryanculver.blogspot.com
"Megan what is this? Come on! You're better than this! Just write. And stop with all the hyperbole and grandstanding."
Are you kidding me? This is a city that thinks rent control is a good idea. I think Megan called it about perfect. There are few more provincial and narrowminded people than the political class of NYC.
Please don't call Bloomberg's cordon-pricing scheme "congestion pricing." True congestion pricing varies by the amount of congestion. Cordon pricing does not, which means that, in the long run, it does little to reduce congestion. All it will do is raise money to funnel into New York's financially messed up transit system.
Marcus: You said
"The land-use patterns that built up there are basically suburban, and natural selection means that the people who live there now do so because they like that lifestyle--indeed, as I understand it, have systematically blocked any mass transit development that might challenge it. The result is that they basically don't have any way to get to work except drive or ride the bus for several hours."
Garbage."
No she's EXACTLY correct. Ever hear of Queens? Try to get from Whitestone or Glen Oaks or Queens Village, or Cambria Heights to Manhattan on public transport. A twenty minute drive (without traffic) can be a 1 1/2 to 2 hour nightmare via bus and subway. The subway ends at Main St. in Flushing or 179th St. in Flushing. If you want to try an Express bus, sometimes you have to walk 30 minutes to 40 minutes to get to that bus stop. Want a even more fun experience? Try getting from Staten Island to Queens, or even Brooklyn by public transport. You're ready to retire by the time you reach your destination.
Contrary to belief of many people not from NYC, and a bunch of idiots who are NYC residents and think the whole place consists of Manhattan and a few newly upscale areas of Brooklyn - just across the river from Manhattan, There are a LOT of NYC residents who do live in places that are disasters as far as efficient use of public transport.
Most people have absolutely no clue just how dependent NYC is on the profitability of the previously outsized financial sector of the United States. People talk about the revival of the 90s like it was some miracle of better government, but the revival of the city pretty much started at the same time that banking and finance started to bubble up higher than the country's overall economy. Those days are gone, and the pain is only just now getting started in NYC- just wait until later this year.
Marcus--about what Maxwell said, but maybe not so mean. A large percentage of upscale transplants to New York, and not a few native New Yorkers, believe that "New York" actually consists of Manhattan, Long Island City, Astoria, and about a dozen neighborhoods in Brooklyn. In fact, it is a lot more diverse than that, and there are a substantial number of neighborhoods in New York City which are not well served by public transit. For reasons John has outlined, the residents actively lobby to keep it this way--though I'd argue that this gives the rest of us no obligation to allow them subsidized use of the streets we pay for. (Well, "gave"; I'm no longer one of the rest of us).
Why is it called "congestion pricing"? Shouldn't it be called congestion taxation?
McCardle - hey Althouse lives in a single family home no problems. Man up.
Lemon-
That it may be. One day though, and I know this will make all you NYC folk so happy. The financial center of the world won't reside on Wall street, but in some Asian nation that China and India find acceptable. Ohhhhh!!!! "First they make our toys and one day they'll run global finance." Back to NYC and why I don't care about their problems right now, pick your overpriced designer store of choice, now realize that I can get something that lasts longer, looks better, and is cheaper. NY has basically lived off the extravagantly wealthy too long. Technology being what it is today has made the original market setup of 18th century England outmoded. Now you could demolish Wall Street, and run the actual market from building space and some quality computers. In short Wall Street's current form is unnecessary. It exists now simply because its already there and would be better suited for all if it were to decentralize.
Megan 3:11pm - who is LOBBYING for less public transportation? People in Queens aren't lobbying for less.
I haven't heard ANYONE discuss bringing the subway to College Point, Fresh Meadows, or any of the areas who use other means (such as the LIRR).
Tell me, when did they last propose expanding the subway lines in Queens?
And they are just getting started on the 2nd Avenue Subway and that took decades.
The reason I drive is the lack of express buses at night, there is no bus after 6pm and then the route's are ridiculous. However, my big stink about Bloomberg's congestion pricing was that he was promising more service, but they never deliver. I thought, create the service, then maybe I would be on board. But it's just another tax they will waste.
Oh, and I think even if we had a more convenient subway - I am in the middle of several different lines, but it is what used to be a "2-fare" zone. Most people - especially the women - would take the the Express bus as it's more comfortable and you know everyone.
Sorry to ramble - the phone rings and I lose my place.
While living in Boston, I saw those traditional middle-class neighborhoods in a war against gentrification
The mere fact that you write about gentrification as though it was a bad thing means that you'll need to explain yourself in much greater detail before I have a chance of understanding you.
I always thought that "gentrification" was the process of having bad, poor, unsavoury neighbourhoods turn into nice, safe, good ones.
Tell me, when did they last propose expanding the subway lines in Queens?
Politicians don't generally propose doing things that the voters are overwhelmingly against. That's pretty much Megan's point, really.
I'm not too worried about my city. A slowdown will be good for NYC, although I don't think that property prices are going to plunge here like many are predicting. While you are in trouble if your are trying to flip your property in the next year or two, or if you are bringing a new development to market, New York is still a fantastic place to live, and without the huge yearly property value increases, families that would otherwise move will stay here. Yeah, the days of the $50m hedge fund manager are over, and our tax base will take a hit in the short to medium term, but I don't see any other urban community offering the culture, diversity etc. of New York.
The big change will be that upper middle class families (as opposed just the rich) will be able to raise a family in Manhattan. And, "prime" Brooklyn may actually be affordable to middle class families. Even though I work on Wall Street and want to keepy job and bonuses, some economic sanity will be great for this city.
The politically powerful head of the transit union was, the last time I checked, an actual communist.
Oh, goodness, not a COMMUNIST! Seriously, are you a refugee from the 1950s or something? Nice scare tactic there. I wish I could get to the point of your original post, but all the hyperbole is distracting me.
"Yeah, the days of the $50m hedge fund manager are over, and our tax base will take a hit in the short to medium term, but I don't see any other urban community offering the culture, diversity etc. of New York."
Michael Bloomberg said recently that the top 40,000 filers in NYC pay 50% of the city's taxes, and the bottom 30% of filers have negative effective income tax rates. Based on that, I'd expect quite a hit -- especially if the state raises its income tax or if (when) federal income taxes go up, encouraging more high earners to decamp.
As for the city's "diversity", I am reminded of two things. The first is sitting outside at a cafe in an upscale residential neighborhood in Manhattan and noticing how, except for the occasional delivery person, ethnic diversity was limited to mainly whites and Asians. The second thing is an essay that appeared in the New Jersey section of the NY Times a while back, about a woman who admitted she finally met a diverse group of people after she moved from NYC to a rural part of NJ. Since there are so many people in NYC, she explained, it was easy to find people with the same interests as her (yoga, Thai food, whatever), but in the sticks she got to know neighbors who were different from her and from each other in more ways.
Maxwell:
You are so full of crap. I used to take the bus/subway from Queens Village into Manhattan(12th St area) all the time. It hardly ever took over an hour. Maybe 75 minutes at the most. And yes, that includes taking the bus to the subway station at 179th St.
doctorpat, yes, that's one way to view gentrification; spruced-up neighborhoods with happy new families moving in. They love it.
But the neighborhood's previous residents, who typically can't afford to live there anymore, don't always appreciate the change so much. I lived in one building in the Back Bay that was being converted to condos and had one tenant who refused to leave. During the time we were there, the building was set on fire twice. I don't know if it was the owner or the tenant -- each blamed the other -- but it was definitely a war between them, and the arson threatened our safety.
Dr. Pat - gentrification also, sometimes, means wealthy yuppies moving into already reasonably nice and safe, but cheaper, middle and lower middle class neighborhoods and driving up all the property prices and taxes, and replacing the local greasy spoon with a vegan thai-fusion restaurant with $20 main courses. I'm not sure that's necessarily a bad thing, but it's not exactly slum clearance.
Anyhow, the line between neighborhoods that are bad, poor and unsavoury and those that are nice, safe and good (but low income and cheap) is often in the eye of the beholder. Hence the frequent resentment of older locals, who see themselves, good upstanding citizens, as the "unsavory" targets being squeezed out, rather than thinking of their neighborhood as being "saved" from a criminal element by generous yuppies who come bearing Starbucks.
I say this as a serial leading edge gentrifier myself. The neighborhoods I move into may be run down and low income, but they are rarely actually unsafe. My rent tends to becomes offensive, and I move on, around the same time that the last Dar es Salaam cocoa butter an incense bodega has lost its lease.
I share Megan's pessimism for the fate of NYC, incidentally.
I never heard that Wall Street was providing the pressure for congestion pricing. I had always thought it was groups like Transportation Alternatives, architects, environmentalists and well-traveled people who have seen dramatic effects in London (and they are dramatic).
New York is back to relying on Law and Medicine as its stable high-paying industries. New York Presbyterian hospital is now closer to the # 3 spot on the city's biggest non-government employers. Medical billing is one of the cities growing jobs. And lawyers are back on-top in the money making game.
Not Wall Street, the industry; but Wall Street, the cluster of professionals who make their living off it, directly and indirectly. Politically, it was a fight between Manhattan professionals and their support staff and vendors in Queens, with some Brooklyn hipsters joining in out of principal. Or so it seemed to me when I lived there--it certainly describes all the panels and events I went to on the topic.
I get it, you guys are NYers, and hence renters. That makes sense. In my part of the world, most people are property owners, even in the dodgey suburbs. We DREAM of rich hordes coming in and sending property prices through the roof.
The significant questions for New York City's leaders will surround what industries they can help to expand and create new economic activity. Through the 60s, New York City was actually the manufacturing center of the United States, with well over 500,000 people actually engaged in industry. Hard to believe it today,to be sure, but there was a substantial light industry concentration in the 40s between 3rd avenue and the UN. New York City drove it away with tax policies that were based on the naive belief that manufacturing couldn't move and could be marginally taxed very aggressively. And they moved.
In the 70s and 80s the city drove the non-financial headquarters industries away through high taxes and poor services. It became impossible to easily rotate middle management into headquarters slots. Subway deterioration affected workforce reliability. The departure was helped by the availability of cheap commercial space in areas like Texas,space created in the s&l crisis. By moving the headquarters cut the business costs and the housing costs of their employees.
Now the financial industry is about to depart en masse.Why should Bof A keep high cost Merrill employees in New York City if there is space for them in Charlotte? Amex knows that a move across the river to New Jersey will substantially improve its bottom line.And the other intellectual industries may follow right behind. There is little need for the advertising and media business to be in New York City when everything but lunch is actually done on line. As NBC affiliates have proved, it is possible to produce television in northern New Jersey.
New York City will have to reinvent itself at a time when its critical tax payer base is being eroded, both by layoffs and by the end of the bonus era. The process is not likely to be a pretty one,but the city will have a substantial installed base of commercial office space to exploit.
But New York City lacks some comparative advantages that it enjoyed in the past. When mainframes required consistent availability of power and water, New York's infrastructure was a huge comparative advantage. When mobilizing large numbers of employees in one place was important, then the subway was a critical advantage. The question now is what are the comparative advantages for the future. It works well with a carbon tax model for climate change and less well on cap-and-trade.
One can now be almost anywhere and succeed. Hedge funds can be in Greenwich,not Wall Street. Videoconferencing makes face-to-face relatively less important. So what will be New York City's comparative advantages?
Maybe we need a contest about them!
Not Wall Street, the industry; but Wall Street, the cluster of professionals who make their living off it, directly and indirectly. Politically, it was a fight between Manhattan professionals and their support staff and vendors in Queens, with some Brooklyn hipsters joining in out of principal.
Ah, we should clarify then that this class of people includes Mayor Bloomberg, of course. And he identified the decline of the FIRE economy way back in 2003, I believe, by putting together plans to triple NYC tourism over the next 20 years. If bankers buying condos in the sky is no longer going to prop-up NYC, then outsiders must. The congestion pricing plan and the subsequent plan to ban northbound and southbound midtown traffic are more of a favor to the tourism industry than they are to the truck drivers and outer borough delivery people.
Wall Street itself never cared about the issue. Their passion outside of their earnings was actually philanthropy. Lehman Brothers sponsored a new ER for NYP Downtown Hospital. Dick Fuld sponsored a gallery in Moma. The Lehman Brothers Foundation built a school in Harlem and encouraged employees to donate to the foundation's fund. As Jon Corzine and Mike Bloomberg can attest, fortune and philanthropy on Wall Street can pave the way to political power.