What Bloomberg Should Do Next: De-Regulating New York

Julia Vitullo-Martin, December 2005

This is the first of two newsletters offering an agenda for the mayor’s second term.

Whatever New Yorkers thought they were doing when they first elected Mike Bloomberg mayor in November 2001, they certainly didn’t think they were voting for a man who was going to remake the face of their city. He didn't look or sound like a revolutionary, and no one had reason to think he was one. Mainly he was regarded as a caretaker who would preside over a city much like the one he inherited from Rudolph Giuliani. Yet he has effected the most extensive rezonings in New York history—58 actions, large and small, covering some 4,300 blocks, that will determine the city's growth for decades to come. (The previous record number of rezonings was eight between 1999 and 2001.) Developer Paul Travis says, "He's been very fortunate in his timing. Who knew that the city, once so anti-development, was ready for a market mayor?"

But here’s the thing: important as his rezonings have been in freeing up the market to rebuild huge sections of New York, he has essentially ignored other governmentally driven market impediments. Indeed, far from reining in the city's regulatory bureaucracies, as he had promised in his first campaign, he has permitted them to grow in strength and authority, adding millions of dollars in costs to residential and commercial developments. These costs are passed on to tenants, helping to push up the astronomical rents that are a constant drain on New York's economy.

PRIORITY: STREAMLINE ENVIRONMENTAL REVIEWS

Protecting the environment is undeniably important. But the costly, disruptive, duplicative, and time-consuming environmental review process doesn't do that. Instead, environmental reviews—one mandated by the state, the other by the city—have become the weapons of choice for disgruntled activists who want to halt a project, whatever its merits. And citizens aren’t the only ones who use environmental reviews to slow down or stop projects. Agencies that don't like a development can also use environmental reviews "to delay and bleed," in the words of Frank Fish, a principal with the environmental review firm of Buckhurst Fish & Jacquemart, Inc.

Perhaps even more importantly, the process has become so politicized that only favored projects are likely to make it through while routine, small, much-needed housing and commercial development projects languish, particularly in the boroughs and unfashionable neighborhoods in Manhattan. A particularly notorious though little known example of this is a tiny shopping center in Staten Island that no one cared about except the owner and a few neighborhood activists. The environmental review took three years, during which the owner endured only costs with no income. The outcome was that he was required to provide six additional parking spaces–six spaces that he would willingly have given from the start in exchange for avoiding the environmental review.

Perhaps the delays wouldn't matter, if environmental reviews actually enhanced the environment. But they don't, and they won't. They are not implementation plans. They announce the problems, but they don't correct them, nor do they force developers to do so.

Reconsider the scope of what must be reviewed. Environmental reviews now cover the universe, with the result that the issues that matter the most to neighborhoods, such as traffic, often get buried in hundreds of pages of incomprehensible data.

Eliminate one of the duplicative reviews. No other major city in the country has New York’s double system—environmental review by both city and state. Frank Fish advocates eliminating the city review. Zoning lawyer Howard Goldman advocates eliminating the state review. But on this they agree: eliminate one.

Establish a mandatory timetable similar to the one mandated under the city’s Uniformed Land Use Review Procedure (ULURP), with the provision that a lack of review by the government entity implies approval. This would put the city in line with upstate procedures, where an agency has 30 days to respond under the state’s subdivision rule. Environmental Impact Statements in the city are supposed to take 45 days, but no time frame is ever enforced.

New York Law School Professor Ross Sandler points out that under ULURP, the City Council must act within 50 days, or its inaction is treated as approval. If the charter can be that tough with the council, he argues, it surely can be that tough with agencies reviewing Environmental Impact Statements.

City Hall should monitor agency extractions. It should pay attention to what reviewing agencies, like Parks or Landmarks, are doing in its name. Many agencies routinely refuse to sign off on regulatory permits until they get a program extraction, that is, requiring an owner to pay for a new park or to restore a landmark. In general, the incentives for city agencies are for delay.

Hold the fort on environmental review expansion—City Hall is going in the opposite direction, requiring the Board of Standards & Appeals to write up and justify itself when it states that something has no impact. This is potentially disastrous since BSA functions as the major release valve for small projects. And since a rezoning request triggers the environmental review, the review should assess the difference between an as-of-right development and the proposed development—rather than, as now, review the impact of the entire project.

WHAT’S NEXT

Halfway through his first term, Mayor Bloomberg reorganized and appointed a new director to his Office of Environmental Coordination, with the promise that environmental reviews would be analyzed and reformed. Little has changed, even though the mayor has substantial power, through his executive orders, to implement virtually every reform on the table.