The loss of Amazon's Long Island City HQ2 plans cost the city more than jobs and tax revenue
The loss of Amazon's Long Island City HQ2 plans cost the city more than jobs and tax revenue
New York just lost 25,000 jobs and over $27 billion in tax revenue with Amazon cancelling its Long Island City HQ2 plans. The numbers are staggering and worth reflecting on.
To think that Queens would be a headquarters for one of the world’s leading and most innovative companies would have once been unthinkable. There is plenty of blame to go around, but one thing is for sure: the consequences of this missed opportunity will be felt for decades to come.
Distressingly, this is happening at the same time the State’s budget shortfall is in the billions; the City is having to cut back on key programs for the first time in Mayor de Blasio’s tenure; and NYCHA housing and the subway are in embarrassing and unacceptable shape.
The City and State simply cannot go on like this.
Our local lawmakers need to more carefully weigh how one set of decisions will adversely affect another.
Just as Amazon’s departure will reduce the State and City’s budget capacity to pursue bold programs that make our City a desirable place for people to live and work, other laws will also unnecessarily harm our government’s fiscal standing and City’s overall economy.
Take for example a recent proposal to eliminate the MCI program, which creates an incentive for Rent Stabilized building owners to make vitally important capital improvements to their buildings rather than band-aid-like repairs. That program while sometimes flawed; provides thousands of jobs for skilled contractors, plumbers, electricians, and carpenters. The loss of that program could easily match Amazons departure in job loss and economic activity!
Getting rid of the MCI program and adding other needless regulations will push compliance costs even higher and disincentivize or outright stop—owners from investing in their buildings. Many will be forced to sell their buildings—and not to other local property owners, but to large hedge funds and sovereign wealth funds that are already the largest land owners in the city.
Ultimately, that means legislators are creating a class of enormous property owners with no connection to New York City’s neighborhoods – the same problem many legislators had with Amazon in the first place.
Moreover, and perhaps most importantly, for those old enough to remember, the City’s housing stock has improved by leaps and bounds since the 1970s, something the entire City benefits from. We should all be proud of how much the situation has improved. One only needs to look at the dismal state of government-controlled NYCHA housing, or the MTA, to see what happens when frequent capital improvements are not made.
According to the NYC Housing and Vacancy Survey, in 1978, 25 percent of NYC residents used to live on a block with a building that had broken or boarded windows, and only 56 percent of buildings were rated good or excellent quality. After spending tens of billions of dollars over several decades on improvements and repairs to apartments across the City, in 2017, only six percent of NYC residents are now living on a block with a building that had broken or boarded windows and 76 percent of privately-owned buildings are rated good or excellent quality. The MCI program was a huge reason for this drastic improvement.
Clearly our neighborhoods have benefited immensely from New York’s small property owners’ commitment to the City. Our members have invested billions in the City, they have paid more than their fair share of taxes, and many have been a crucial part of the fabric of the City for decades. Some of our elected officials wanted to placate the loud, yet small number of activists that rejected the promise of 25,000 good paying jobs. Now our economy and fiscal health of our government will pay the price. Don’t let perfect be the enemy of good and work with small building owners to solve New York’s housing needs.
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