A 5-point plan to create New York City’s new economy
A 5-point plan to create New York City’s new economy
Countless stories in recent months, including from the Cassandras at the New York Post this weekend, lament the exodus of wealthy New Yorkers during the COVID-19 pandemic to places like the Hamptons and Palm Beach. One doomsday columnist in the Post fretted that 270 people are fleeing the metropolitan area daily, up from about 100 two years ago.
I’m in the camp of the anti-Chicken Littles, who don’t see the sky falling. Talk to people weathering the dull winter in the Hamptons, and you get the sense that many will return to New York City once the pandemic subsides and New York’s cultural attractions are back to full capacity. When restaurants and theaters and the Metropolitan Opera reopen, these fair weather New Yorkers will return in droves. Florida has always been an escape hatch for upper-class New Yorkers seeking to up their vitamin D diet in the winter months. We’ll see how many of them want to live there during the sweltering summer months.
But New York cannot be complacent that after the pandemic ends all economic activity will immediately return to normal. If the city and state government don’t adapt to the changes that COVID-19 has wrought, then New York City will continue to decline indefinitely and we will see more and more comparisons to the crises of the 1970s that left New York in tatters for almost two decades.
Here are some new policies and smart pivots that will hasten the city’s comeback.
- Focus on attracting ambitious people to New York from throughout the country and the rest of the world. New York aggressively recruited companies, residents and tourists in the years after the attacks of Sept. 11, 2001. Thanks in part to the work of agencies like NYC & Company, the quasi-governmental organization that markets the five boroughs’ attractions, the city was visited by 66.6 million tourists in 2019, nearly twice as many visitors as it received 20 years earlier.
New York City needs a similar agency created that works on recruiting the best and brightest to immigrate to New York to start their own businesses. Because of the prevalence of working from home and new technologies like Zoom, New York is now competing with places like Nashville, Miami and Austin to attract recent college graduates looking to embark on their careers. If we want the next Mark Zuckerberg to move here, we can help lure the tech entrepreneurs of the next generation through smart tax breaks and inexpensive incubation work space.
Or how about those life sciences or pharmaceutical companies that want to pre-emptively tackle the next big pandemic or climate change crisis? Come to New York – we can convert lots of excess commercial space into laboratories or science centers for the top researchers in the country.
Have you always wanted to own your own restaurant or neighborhood retail shop? Come to New York and we will take the lemons of our current restaurant and retail crisis and help you turn it into a tasty new lemonade. The city could negotiate a deal in which commercial landlords with empty storefronts grant three months of free rent to allow aspiring small business owners to pursue their dreams.
- Convert many B & C grade commercial office buildings into live-work spaces. The recovery from 9/11 has other lessons for New York today. When the Financial District was on the outs as an office hub and residents were reluctant to live near the site of the terrorist attack, the city created an incentive program to lure new residents. It leaned into the trend towards turning office buildings into apartment buildings. Now, the Financial District boasts three times as many residents as it did before 9/11.
Although it’s been a business failure, the founders of WeWork were right that this generation of office workers want their workplaces to be dynamic and fun. Gone are the days of dreary offices with rows of drab, cookie-cutter cubicles. Now that working from home has become normal, it’s time that we figured out how to mix work and living into a hybrid structure. Mixed-use office and residential buildings will solve a few crises at once: it’ll save hundreds of thousands of square feet of unwanted commercial space while it also creates desperately needed affordable housing.
The city needs creative zoning changes and tax breaks for landlords who create affordable housing out of unused office space. For those Millennials who want to work near their office and cut their carbon footprint, while saving valuable commuting time, this innovation will be a blessing.
- Create a free job retraining program that will allow those who lost their work in the COVID-19 economy to find work in the new economy.
Certain industries, including business travel, commercial real estate and small retail will probably be permanently downsized in the wake of the pandemic, as more white-collar workers work from home, more meetings with out-of-town clients happen over Zoom and more families do their shopping online. Some workers, many in low-wage job categories, will need to gain new skills and be aided by government-funded job placement programs.
This “labor reallocation” needs to be centrally planned and well-executed so that we don’t create a permanent underclass of unemployed or underemployed workers.
City and state government also has to focus on career training for the jobs being created in the new economy as part of our education system from high school through college. More skills-based high schools (formerly known as vocational schools), free community college training programs for those mid-career and CUNY and SUNY close coordination with the private sector will be crucial steps in making this work.
- Create a New Deal-style infrastructure and energy reform program throughout New York state.
It’s widely known that New York’s roads, bridges and city streets are overdue for repairs and reimagining. But infrastructure rebuilding is so much more: retrofitting our commercial buildings for mixed-use residential/work spaces; overhauling roofs and exteriors of buildings throughout the state to make them more energy efficient; doubling down on wind and other renewable energy sites around New York; hardening our economy, subways and ports against natural disasters like Superstorm Sandy or potential tornadoes or earthquakes.
Infrastructure rebuilding also means overhauling and modernizing the way our city and state government deliver services. The failures of state websites in coordinating vaccine distribution and the abysmal remote learning experience of public school students of all grades are just the most recent glaring examples of the ways the government is stuck with antiquated infrastructure.
We need to modernize our connectivity to all citizens through universal access to broadband and we need to reimagine how citizens can interface more effectively with all the services the government should offer. This will create more jobs, more productivity, more taxes and a healthier economy.
- Impose taxes on the super-rich and monetize city assets to pay for it. The above programs need to be funded. Whether it’s a wealth tax, a stock transfer tax, a pied-a-terre tax, or some combination of taxes like those, taking a small share of the portfolios of the wealthy global elite who call New York home, at least part of the year, would help tamp down New York’s extravagant housing costs and build a more broadly shared prosperity. The city should also hire a chief revenue officer to create alternative funding streams, such as selling naming rights to public parks and city-owned hospitals and healthcare clinics.
We are closer to the end of the pandemic and economic crisis than we are to its inception. Rather than getting bogged down in recriminations over who messed up or what went wrong, we need to shift our focus to solutions for the future. The window for meaningful reform is not wide open so it’s time to get to work now.
Our city, our children, our future depends on creative solutions to the “creative destruction” that has brought our city to its knees the past year. It’s time to get up, dust ourselves off and sprint towards a better New York of the future.