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Taxing NYC's Soul


Taxing NYC's Soul

August 15, 2004
Urban PolicyNYC

New York's second-largest borough—never a hot place to work or a cool place to live, nor a symbol of urban blight—doesn't get much notice. But Queens is in many ways is the most successful outer borough, far more adept at blending neighborhood living and a thriving commercial life than the rest of Gotham or most other cities.

Buttressed by a new generation of immigrants, Queens's economy is more diverse and less susceptible to wild swings than the rest of the city's. Unemployment is substantially lower than citywide; labor-force participation is substantially higher. Though nearly half its residents are foreign-born, Queens can seem like Anywhere, USA: It boasts the largest number of owner-occupied homes in the five boroughs and the most two-parent families.

What accounts for Queens's success is exactly what makes it so often overlooked: It gets its vitality from immigrants pursuing a better life by practicing such old-fashioned middle-class virtues as hard work, family involvement, assimilation and civic participation.

No place in Queens ever descended into the disarray that overwhelmed the South Bronx or central Brooklyn in the late 1960s and '70s, because even as its middle class and business community were decamping, a new generation of New Yorkers—Koreans, Taiwanese, Caribbean blacks, Pakistanis, Indians and Eastern Europeans—starting settling in Queens, seeking the same middle-class life the borough had always offered.

Of course, many urban neighborhoods have foundered rather than prospered on immigration. What makes Queens successful is that its new immigrants have revivified its middle-class neighborhoods and civic institutions with the strong middle-class values and aspirations they brought with them.

Take downtown Jamaica, once again a major shopping district. The area began to suffer in the early 1960s from rising crime, suburban competition and the city's sales-tax hikes. White-collar jobs evaporated; by the late 1960s, the once-bustling shopping area was described as "totally deteriorating."

But then the Jamaica Chamber of Commerce sparked a series of revival projects, including New York's first special-assessment district, in which local businesses chip in for better street furniture or increased security or sanitation. Merchants along 165th Street kicked in thousands for a new pedestrian mall, and they nudged the city to tear down the El that darkened the street.

Slowly, change came, as minority and immigrant shop owners opened for business beside the established retailers . Today, downtown Jamaica is thriving. Unlike virtually anything else in a major city, it attracts shoppers from hundreds of miles away to its stores selling everything from hip-hop- and reggae-inspired clothing to ethnic beauty products and folk art.

Key to the revival has been a sharp crime drop. Last year, the precinct recorded just over 2,000 crimes—down 80 percent from the worst years.

Also key was the renewal of the surrounding residential areas of Southeast Queens, which filled up with a new generation of Caribbean blacks and black middle-class families fleeing urban decay in other parts of New York. Thanks to their efforts, Southeast Queens today boasts one of the city's most vibrant commercial districts and flourishing residential neighborhoods, housing much of New York's black middle class. Today, more than half of all blacks in Queens own their own homes.

The population of civil servants, blue-collar workers and entrepreneurial black immigrant business owners earns family incomes well above the citywide average—in some neighborhoods averaging more than $70,000 a year. What accounts for the success? "Most of the families here are dual-income families," explains Jack Thompson, head of the Cambria Heights Civic Association. "This is a community of people who work."

What happened in Southeast Queens has repeated itself all over the borough. In Flushing, Asians sparked the renaissance.

Though many cities segregate residential from commercial neighborhoods, in Flushing these two intermingle. The area's 260,000 residents live side by side with businesses that employ 50,000 people, earning about $2 billion a year in wages. Thanks to this ceaseless activity, Flushing barely noticed the tough times that slowed the New York economy in the last three years.

"We opened Prince Center [an 80,000-square-foot office building off Main Street] in the middle of a recession and still couldn't accommodate everyone who wanted space," says Wellington Chen, an architect and urban planner who emigrated to the United States in 1971 and has worked in Flushing for 20 years. "There has been no recession here."

Other parts of the picture? Queens still has a healthy a blue-collar base of local manufacturing, wholesaling and construction jobs that gives it a diversity that the city's larger economy lacks. And the Queens tradition of large-scale lives on at the College Point Industrial Park, where units of big-box retailers Target and BJ's Wholesale Club are among these chains' highest-grossing stores.

The sum of all these parts is an economy consistently more stable and vigorous than the city's as a whole. The borough consistently added jobs at a faster pace than Gotham as a whole throughout most of the 1990s, even faster than Manhattan for part of that period. And when the recession hit, Queens lost jobs at a slower pace. Today, its unemployment rate is about two percentage points lower than the city's overall rate.

And despite headlines about Manhattan as a magnet for young, hip workers, Queens accounted for 40 percent of the city's population increase during the 1990s—adding 278,000 residents, a 14.2 percent gain.

Of course, Queens's importance does not lie merely in the success of its neighborhoods or in its self-contained economy. The 345,000 Queens residents who work in Manhattan staff the companies that are the heart of Gotham's economy. They form a larger contingent than from any of the other three outer boroughs and nearly as large as that from all New York's suburbs combined.

These residents also make an enormous contribution to New York's fiscal health. They pay about $1.4 billion a year in state and city personal-income taxes; property owners pay $2.1 billion in taxes, more than any borough except Manhattan. The borough's high concentration of middle-class families bears much of that burden: 217,000 or so families earning between $40,000 and $100,000 a year pay about half of Queens's income taxes.

Without them, New York—like so many other cities—would be much more a place of just the rich and the poor, and the burden on the rich to support city services would be even greater than it is now. Ever more of them would leave the city or avoid its high taxes by establishing dual residences elsewhere—which is how cities decline.

But City Hall's recent leftward lurch seriously threatens Queens's future. In echoes of the complaints of the late 1960s, Queens voters are grumbling that they are being held up to support Gotham's extravagant municipal spending. They note that officials justified 2002's $1.8 billion property-tax hike by saying that the city's homeowners pay lower property taxes than those in the suburbs—a point that ignores the fact that Gotham homeowners also pay a personal-income tax that suburban homeowners don't pay.

For some in Queens, the tax increases evoked echoes of the Lindsay years, when the administration of a liberal Republican mayor who hobnobbed with the Manhattan elite seemed unsympathetic to middle-class homeowners.

What particularly rankled the citizens of Queens was Mayor Bloomberg's insouciant refrain during the budget debates that New York will always be a high-cost city, with high taxes that are both inevitable and easily affordable. "The debate was about homeowners versus Manhattan's elite," says Corey Bearak, vice president of the Queens Civic Congress, a coalition of nearly 100 community groups—and, he complains, the Manhattan elitists who man the Bloomberg administration "just don't like homeowners."

Queens businessmen grumble that the city's mad dash for revenues to close its budget gap—including papering the borough's commercial districts with parking tickets—fell heavily on them and showed disdain for their concerns.

The citizens of Queens were much wiser than John Lindsay, as the de cline and revival of Queens—and of New York—makes clear. Let's hope that the Manhattan elites don't try to ride roughshod over the values and interests of the borough again. It won't be just Queens that suffers.

Adapted from the Summer issue of The Manhattan Institute's City Journal, where Steven Malanga is a contributing editor.