Affluence Killed New York, Not the Pandemic

AP Photo/STRF/STAR MAX/IPx 2020

 

Connecting state and local government leaders

COMMENTARY | The city is in the midst of a reckoning—not simply because of the coronavirus, but because of what it had already become.

The first thing you noticed, if you had lived in the city for any length of time, was how silent it went. New York has a constant background sound, like the galaxy has constant background radiation, and New Yorkers use it to situate themselves, much as astronomers use radiation to fix our place in the universe. Most of the time you’re not aware of it, maybe noticing only when it grows weakest, in the small hours of the morning when you can distinctly hear from all the way across the city the clanging of train cars as they move underground, or the lonely wail of truck brakes out on the street.

[Read: The struggle for the urban soundscape]

In the early days of the Covid-19 pandemic, the background noise of the city became weaker than any living person can remember. Researchers at New York University, measuring the drop in volume, found it to be as many as five decibels. The constant sound of the city—made up of countless cars, trucks, trains, construction sites, sirens, whistles, phones, aimless Con Ed drilling, assorted ruckuses, conversations, laughter, shouts, curses, televisions, music played too loud, and dogs barking too long—has returned now, but what does it portend? What will New York be like after the pandemic?

The New York Post has made out that the city—or at least the Upper West Side of Manhattan—is on the verge of panic, as mothers and children flee for safety to President Donald Trump’s white “suburban dream,” while criminals run amok and homeless people and drug addicts fill local hotels.

“A mad rush for the exits as New York City goes down the tubes,” proclaimed an editorial in the Post, which also reported that moving companies are enjoying “the busiest summer ever.”

The New York Times was right behind, publishing an article about all the national chain stores and restaurants that were shut down by the pandemic: “Retail Chains Abandon Manhattan: ‘It’s Unsustainable.’” The prominent national chains that the Times reported were fleeing New York included Kate Spade, Subway, Le Pain Quotidien, Victoria’s Secret, the Gap. Giants such as Brooks Brothers, Lord & Taylor, J.C. Penney, and Neiman Marcus—an anchor of the city’s grandiose new development at Hudson Yards—have filed for bankruptcy, while restaurants such as Shake Shack, Chipotle, and Veggie Grill are struggling to keep their head above water. Michael Weinstein, the head of Ark Restaurants, proprietors of Manhattan’s Bryant Park Grill, told the Times that “he will never open another restaurant” in the city.

“There’s no reason to do business in New York,” Weinstein said. “I can do the same volume in Florida in the same square feet as I would have in New York, with my expenses being much less.”

In another Times piece, the reporter Dana Rubinstein made an almost despairing plea for leadership in the face of “waves of death and joblessness, hunger and economic depression—all at a scale rarely rivaled in New York City history.” Citing an array of leaders from New York’s 1975 fiscal crisis, “all of whom set the city on a course to solvency and growth,” Rubinstein warned:

“If wealthy New Yorkers cut bait and flee, or if corporate titans with global reach drastically diminish their footprints in the financial and cultural capital of the United States, New York City’s tax base could erode, potentially undermining the city’s ability to fund the schools, food pantries and public housing on which so many New Yorkers rely.”

[Read: The high cost of panic-moving]

Some feel that the situation is even more dire—that New York has reached a point of no return.

“Now it’s completely dead,” James Altucher, a comedy-club co-owner, wrote in an online jeremiad that the Post rushed to reprint. Hasn’t New York experienced worse things? “No, it hasn’t,” Altucher insisted. Hasn’t it always bounced back before? “Not this time.”

The reason, according to Altucher, is “bandwidth,” now available at more than 20 megabits a second, which means that “people have left New York and have moved completely into virtual worlds.” Thanks to faster bandwidth, “everyone has choices now … You can live in your hometown in the middle of wherever. And you can be just as productive, make the same salary, have higher quality of life with a cheaper cost.”           

Such calamity howling can’t be dismissed out of hand. Each closed store means dozens, even hundreds of jobs gone, at least in the near term. The recent surge in crime and disorder is a real problem—the city has experienced a 79 percent increase in shootings and a 29 percent spike in murders this year. Some 90 percent of the victims are people of color, most of them poor and working-class. Having a president who approvingly retweets the call of an internet troll—a failed New York actor and hairstylist—to “leave Democrat cities” and “let them rot” doesn’t help anything.

Yet the ways in which pundits and politicians are talking about restoring New York is precisely what made it so susceptible to this crisis in the first place: Their big idea, implicit in Rubinstein’s cri de coeur, is to keep the richest, most powerful people happy. “If we could get every billionaire around the world to move here, it would be a godsend,” former Mayor Michael Bloomberg said in 2013. Now Governor Andrew Cuomo is set on stopping those billionaires from moving away; he came out preemptively against proposals to help the city by taxing the wealthy, claiming, “I literally talk to people all day long who are now in their Hamptons house … or in their Hudson Valley house or in their Connecticut weekend house … They’re not coming back right now. And you know what else they’re thinking? If I stay here, I pay a lower income tax, because they don’t pay the New York City surcharge. That would be a bad thing if we had to go there.”  

The city is indeed at a moment of reckoning—not simply because of the pandemic, but because of what it had already become.

After the fiscal crisis of 1975, New York and its economy were restructured around tourism, high finance, luxury retail, and real estate. On the glittering surface, things had never looked better. By 2019, New York was richer than it had ever been before, its population at an all-time high and its forests of glass towers rising ever higher. Nearly 65 million tourists a year were flocking to the city—more than six times the number who came when the city teetered on the edge of bankruptcy.

[Read: We’ve seen New York’s white flight before]

Beneath that glittering surface was a lot of emptiness. Even before the coronavirus, almost a third of the apartments from East 49th Street to East 70th, Fifth Avenue to Park, were occupied for only two months a year or less. Similar economic dead zones were scattered throughout the city—what Tim Wu, a law professor at Columbia University, has labeled “high-rent blight,” wealthy neighborhoods where whole blocks of businesses closed their doors because they couldn’t come up with the runaway rents.

Nor did affluence help the city shed its social dysfunction. In 2015, the poverty rate was still at nearly 20 percent—one-third higher than it had been in 1975—and nearly half of the city lived in near-poverty, defined as a household income of $47,634 a year or less for a family of four. Homelessness was already at a record level before the pandemic, as rents on new apartments reached an average of $5,000 a month. Public amenities, such as the subway system, had noticeably deteriorated.

Then the coronavirus struck, and the tourists stopped coming. The superrich, who had been driving much of the (uneven) boom, split town. People couldn’t work. But the landlords still expected the same extortionate rents: $264,000 a month for the Gap’s flagship store at Rockefeller Center, $937,000 a month for the Victoria’s Secret at Herald Square.

“In the prime real-estate areas, all the stores rely on having half international tourists and half local tourists or those from the local neighborhoods,” Thiago Hueb, the founder of a jewelry chain who had already planned to close up shop on Madison Avenue before the pandemic, told the Times. “The avenue is no longer what it used to be.”

And yet, here we are, still talking about the need to retain the wealthy and “corporate titans with global reach.”

“They don’t want to come back to the city,” said Kathryn Wylde, the president of the Partnership for New York City, a business lobbying group composed of corporate CEOs. “It’s hard to move a company, but it’s much easier for individuals to move. It’s a big concern that we’re going to lose more of our tax base than we’ve already lost.”

Former Mayor Rudy Giuliani asserted as well that “many of my friends [are] leaving. And they are basically upper-middle-class and wealthy people. They are the tax base of the city … I always ask [liberals]: ‘Why do you attack rich people so much? Don’t you realize you need them to pay for the poor people?’”

This is a tautology that has become a vicious circle. The more New York has allowed working people and small businesses to be driven out of the city, the more it has come to depend on the very wealthiest—people and firms with the wherewithal to move if they don’t get the subsidy or tax break they demand.

New York never got over its beggar’s mentality from the ’70s; even at peak affluence, it was still tossing huge, needless subsidies to corporations and developers in exchange for fanciful promises of job creation. The Hudson Yards development, for instance, cost New York $6 billion in taxpayer subsidies. Yet more than 90 percent of the office workers there were simply relocated from offices in Midtown Manhattan, just a few blocks away.

I can’t remember the first time I heard that cities were over because of some technological development. It may have been in the late ’70s, when fax machines first came into wide use. Now we have telephones and faxes! Who needs cities? New York’s demise has been predicted by many—myself included.

[Molly Jong-Fast: The new New York will be better]

As bad as the pandemic is, the city has seen more terrible days: in the Great Depression, in the draft riots of the Civil War—even in the Revolution, when a third of the city burned, and more Americans died on the British prison ships in Wallabout Bay than in all the war’s battles combined. New York recovered from all those other crises, and it will recover from this one.

Crime will subside again once New York’s Finest stop sulking in their precinct houses over the Black Lives Matter protests. Many well-off New Yorkers who fled to their second home will return. The home-ownership rate in the city today is more than 33 percent, almost half again as high as it was in the ’70s (and more than five times what it was at the start of the 20th century). Few will walk away from the classic six that cost them $10 million, and move to Tenafly. Even now, at least five new luxury high-rises are shooting up into the sky on the Upper West Side, just between 91st and 96th Streets.

But the tumult raises the question of just who the city is for, and how it should serve its people. In the past, New York has repeatedly made bold gambles to renew itself, to adjust the city’s power relationships and find new ways to draw goods, capital, and above all, creative and hardworking people to itself.

During the Great Depression, for instance, New York received an enormous percentage of the aid that the New Deal pumped into American cities. That was because the city had overthrown the corrupt Tammany machine and elected Fiorello La Guardia mayor, and La Guardia and his fellow reformers would oversee badly needed, shovel-ready city-improvement projects, work that Washington could trust would be done honestly and efficiently. The jobs and the revenues this work generated were then pumped into public amenities that made New York a great working- and middle-class city, as well as a world capital.

This is the challenge that New York will have to face after the pandemic, to get back to that city for working people. Bandwidth, schmandwidth—if New York is a safe, vibrant, affordable place to live, people will come here and find a way to make a living. That’s what the real battle for New York is going to be about. It will mean once again changing the city’s power relationships: reining in the landlords, ending the giveaways to developers and companies that are dying to come here already, and pouring money back into the city’s tattered public services, to help working people survive and prosper.

Or as La Guardia once wrote, “Too often life in New York is merely a squalid succession of days; whereas in fact it can be a great, living, thrilling adventure.” It’s time to start on that adventure again.

Kevin Baker is a writer who has lived in New York since 1976, and the author, most recently, of The Fall of a Great American City: New York and the Urban Crisis of Affluence.

NEXT STORY: School House Rocked: How Covid-19 Could Change the Way We Teach and Test

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