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The Wall Street Journal.

New York Rebounds
September 11, 2006


On the fifth anniversary of the terrorist attacks on the World Trade Center, New York City is doing extraordinarily well—an outcome that was predicted by very few analysts on Sept. 12, 2001.

Today the city is thriving, as the standard economic indicators show. People are pouring in from all corners of the world, increasing New York's permanent population by at least 134,000 since 2000. Tourism and travel are up, with hotel occupancy at 84.7%, according to PKF Consulting.

The Federal Reserve Bank of New York's index of coincident economic indicators (payroll data, earnings, unemployment, and hours worked) climbed rapidly from a cyclical low in 2003 to reach a record-high level by early 2006. The city has added 57,900 jobs this year, putting it on track to add nearly 100,000 jobs in 2006, according to the Bureau of Labor Statistics. More New Yorkers are seeking work, says BLS, causing an uptick in the unemployment rate to 5.7% in July, even as the city added 7,000 jobs that month.

New York looks good and feels good because New Yorkers got up from the rubble, started rebuilding and rallied to save their city. It's worth pondering how they did it.

To begin with, they chose the right mayor in Michael Bloomberg, at the time a political tyro. September 11 had been primary day, and it was common wisdom that one of the two Democratic candidates would be mayor. But they bickered and fought, as if 9/11 hadn't happened. After the mass murder of thousands of their fellows, New Yorkers were in no mood for pettiness. They were tired of acrimony, and voted that November for the Republican Mr. Bloomberg, who had stayed quiet, promising little beyond good management.

What he went on to deliver were improved services, including an even safer city, and "de-racialized politics," says Ester Fuchs, professor of political science at Columbia University and an adviser in his first term. The de-racialized politics may now be part of the local Zeitgeist. "He made it harder," argues Ms. Fuchs, "for other pols and community activists to play the race card. A few tried, but it just didn't resonate the way it once did."

Gone from center stage are the Rev. Al Sharptons and other purveyors of racial hatred. In their place are rising young politicians, like Bronx Borough President Adolpho Carrion, who are educated, intelligent and inclusive, lobbying for their neighborhoods without attacking other races or ethnic groups—or justifying the politics of grievance.

Perhaps more quickly than anyone else, including professional analysts, Bloomberg officials saw in early 2002 that the seemingly overbuilt city was attracting new residents and jobs. Where were they going to go? "The mayor told us to look for every place where we can channel growth, to accommodate the new New Yorkers who find the city so desirable," recalls Amanda Burden, chairman of the City Planning Commission. "In neighborhoods where there's public transportation and access, we embraced density, which is a great thing. Density brings vitality, diversity, affordability and street life."

Bloomberg officials persuaded the City Council to approve an unprecedented 65 rezonings, many in formerly derelict areas, to prepare for the growth that did indeed come. Upzonings in natural corridors were often paired with downzonings in neighborhoods lacking public transportation—good planning partnered with shrewd politics.

The mayor's willingness to embrace development in areas with strong infrastructure threw into relief the shattered infrastructure downtown. The World Trade Center had been a crucial transit hub and, as the first lead planner for the rebuilding effort at Ground Zero, Alex Garvin, notes, "When the subways work, the city works." When the subways don't work, New Yorkers worry—and neighborhoods decline.

The Transit Authority, with some combination of what former TA manager Hope Cohen calls "intense bureaucratic attention and political will," got the transit hub at the World Trade Center site rebuilt and reopened, under budget and before schedule. "We announced we were going to do it by the first anniversary, and we did," says Ms. Cohen.

Mr. Garvin points out that "reopening the subway station meant downtown was functioning again." With the trains running, downtown returned to a semblance of normalcy, its restaurants, shops and offices open for business. Many businesses are still struggling, particularly retail stores—downtown's ongoing sore spot—but the street traffic they need is slowly coming back.

Perhaps most important, New Yorkers didn't do it by themselves. For once, Washington devised the right programs—programs that were sensible, shrewd, flexible and time-limited. Aggressive but temporary subsidies attracted residents back downtown, filling the apartment buildings that had been half vacated after the attack. Some $8 billion in federal tax-exempt Liberty Bonds encouraged private investment in new construction, both residential and commercial. As city housing commissioner Shaun Donovan says, the feds targeted both the supply of housing by bolstering investor confidence through Liberty Bonds and the demand for housing through subsidies. One result is that lower Manhattan is now the fastest growing residential market in New York. There was no sense of long-term dependence or presumption of New York as a hapless victim—just some immediate aid while it was needed.

But it wasn't only the government rallying around the city. Thousands of ordinary citizens paid their way to New York to be of assistance, showing New Yorkers they cared, clearing the tons of debris, and doing what they could to begin the reconstruction of downtown—which started almost immediately, the peculiar problems of Ground Zero aside.

"All these people who had come to help us made us see it was going to be all right," says Mr. Garvin. "We never expected it. But we saw we weren't alone." A spontaneous outpouring of love had replaced the horror of the terrorist hate. In the end, that might have made the crucial difference.

Ms. Vitullo-Martin is a senior fellow at the Manhattan Institute.

©2006 The Wall Street Journal


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