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The Post-Covid Urban Future

"We are gratified that MI’s ideas are reaching newer and larger audiences than ever before."—Reihan Salam, President, Manhattan Institute


The Post-Covid Urban Future

On September 17, MI senior fellow and Harvard University economist Edward L. Glaeser delivered the James Q. Wilson Lecture from … his home in Cambridge, Massachusetts. Our ability to carry on digitally underscored one of the central themes of Glaeser’s lecture: cities are once again at risk of seeing their economic models undermined by a combination of new technologies and poor governance. Just as the highways of mid-century enabled manufacturers to disperse across the country, remote work is weakening the place-based ties of knowledge industries. Layered over this technological revolution are near-term, Covid-related challenges—the trepidation that people feel toward mass transit, the enormous reduction of the in-person service sector, and the disappearance of quintessential urban amenities like plays, concerts, and other nightlife—and long-festering issues such as unaffordable housing, overgrown public sectors, ineffective schools, polarization over policing, and a political system dominated by narrow interests.

Taken together, these forces represent a threat to 21st-century urbanism, including in MI’s home city of New York. During the last urban crisis, MI helped American cities get back on their feet by showing what worked in the Big Apple. From Broken Windows policing to the charter-school movement, ideas developed by MI proved effective in New York and were then shared across the country. Now, through our newly launched New York City: Reborn initiative, we are laying out a new vision for what New York City needs to do to ensure that its best days remain ahead. Through research, policy journalism (including in City Journal), and public events, we intend to educate and inform New Yorkers heading into what will be an enormously consequential 2021 mayoral election. If New York can weather the current storm, reform-minded leaders in cities countrywide will heed its example.

Urban political leaders, who have embraced the most extreme position on issues ranging from public safety to taxation, are increasingly out of step with their constituents, who are interested in better government rather than more government. This was the resounding finding of polling that MI conducted this year. MI partnered with Echelon Insights and the Siena College Research Institute to conduct two polls of New Yorkers, asking them about the state of the city and their views on potential paths forward. The purpose of the polls was not to figure out what must be done—that is derived from our research and our principles—but to better understand how we might do it.

The major takeaways? New Yorkers are attached to some of their core public services (notably, the subway system and police force), frustrated by the performance of others (only 21% of New Yorkers are satisfied with the public school system), and incredulous about how such a mediocre public sector costs so much in taxes (75% of New Yorkers want to see their tax bill lowered). And among high-earning New Yorkers, who account for a disproportionate share of the city’s tax base, there is creeping interest in parting ways with Gotham: as of summer 2020, 44% of New Yorkers earning over $100,000 had thought about leaving the city in the previous four months. The results have helped us determine the priorities of New York City: Reborn and are shaping the larger conversation about the city; the polls were covered in 12 national publications, including the Wall Street Journal, National Review, New York Post, and Fox Business, as well as across local and national broadcast stations.

The chief problem that New York’s political leadership faces is that it has built a government that can support itself only when the city and country are at the top of the business cycle. In 2017, MI senior fellow and City Journal contributing editor Nicole Gelinas wrote a column, “De Blasio Is Spending NY into Trouble,” laying out the ways de Blasio was squandering New York’s economic boom and leaving the city unprepared for a downturn. Rather than modernize the city’s aged infrastructure, the mayor was using tax windfalls to fund an across the board wage hike for city employees, which raised labor costs 20%. In the years since, he has grown the city’s workforce by 20,000 employees. Gelinas did not foresee New York’s economy being derailed by a super-virus from a Chinese wet market, but she was certain that there would be some crisis and that New York’s fiscal house was not sturdy enough to meet it. Now the city is facing an estimated 6% budget shortfall—considering that 25% of private-sector jobs have been lost, this official estimate is almost certainly too optimistic— and its overtaxed citizenry has no interest in bearing the burden of chronic mismanagement. In a rerun of the 1970s, New York is once again counting on Washington’s generosity to secure its future. Put simply, MI does not believe that the world’s leading city should be in the business of begging for handouts.

The first place to jump-start an economic recovery is New York’s antiquated zoning code. In these dire circumstances, MI senior fellow Eric Kober, a longtime veteran of the NYC Department of City Planning, argues that reforming the zoning code is as close to a silver bullet as city leaders are going to find. Kober’s report “Barrier to Recovery: How New York City’s Obsolete Zoning Prevents Property Owners from Reusing Land and Buildings,” which was adapted for two op-eds in the New York Post, notes that the zoning code is loaded with arbitrary rules. Building owners are legally required to provide a certain number of parking spots to tenants, though the number of New Yorkers who use a car as their primary means of transportation has fallen dramatically since the rule was written in mid-century. The zoning code also dictates how large a hardware store can be relative to a grocery store, yet another remnant of a different era in city life. Condensing and rationalizing the zoning code would allow more taxpaying businesses and residents to call New York home. It should also be the first step in a broader liberalization of New York City’s land-use policies, which, as Kober has chronicled for City Journal, drive up the cost of living, push out families, and force low-wage workers into far-flung and overcrowded housing.

Improving the quality of life in cities will require a new and more effective approach to urban homelessness. Over the last decade, the street homeless population increased by 18% in San Francisco, 35% in Seattle, 50% in Los Angeles, and 59% in New York, injecting disorder into these cities’ business districts, mass transportation systems, and residential neighborhoods. But street homelessness is more symptom than sickness. Until cities commit to addressing severe mental illnesses and drug addictions among this population, the expensive, ballyhooed programs that their leaders have advocated will provide middle-class jobs to service providers and little else.

Unfortunately, instead of addressing the underlying causes of street homelessness, city governments have decriminalized behaviors associated with street living (encampments, drug use, shoplifting) and poured ever more money into social services. New York City has ramped up its spending on homelessness such that, in 2019, the city spent $55,000 per homeless New Yorker. Over the last three years, MI partnered with the late DJ Jaffe, an outstanding scholar of mental health policy and advocate for the severely mentally ill, who worked alongside senior fellow Stephen Eide to argue for a paradigm shift in how we think about the homelessness. Jaffe came to this cause—which would be his life’s calling—when he and his wife took over the care of his schizophrenic sister-in-law, revealing all the ways New York State’s services fail the seriously mentally ill.

Across his career and during his time at MI, Jaffe fought to increase hospital capacity for the seriously mentally ill, renew the civil commitment process, and shift mental health dollars away from wellness initiatives and toward the treatment of debilitating diseases. Jaffe’s efforts secured some important victories; in New York, he was an indispensable part of the campaign to pass Kendra's Law and was a muckraking critic of Mayor de Blasio’s ThriveNYC initiative. At the national level, he mounted a campaign against the Institutions for Mental Disease (IMD) exclusion, a provision in the 1965 Medicaid law that prohibits states from funding care for mentally ill adults so long as those adults are in hospitals or treatment facilities with more than 16 beds. After Jaffe presented on the topic in December 2019 at the White House’s conference “Transforming Mental Health Treatment to Combat Homelessness, Violence & Substance Abuse,” the Trump administration announced its intention to ease the exclusion. Jaffe’s work will endure through these accomplishments, his path-breaking writings, and the countless mental health advocates inspired by his example and touched by his kindness. Over the past several months, MI has been building on Jaffe’s proud legacy by responding to the threat that Covid-19 presents to the homeless population. Trying to prevent the spread of the pandemic within a community that is disconnected from information, in generally poor health, and plagued by drug and mental health issues is an extremely tall order. Senior fellow Stephen Eide, however, offered a plan of action for New York and other similarly situated cities in his report “Homelessness and Covid-19: Assessing the Response and Planning for the Reopening.” Thankfully, as Eide noted in a National Review oped, the worst-case scenarios have thus far been averted, but he is keeping close watch and intervening in the public debate as needed.

It is hard to envision a growth agenda for New York City that doesn’t include an overhaul of its public transportation system. Already plagued by long wait times, overcrowded cars, and a sclerotic pace of new building and repairs before the pandemic, the system must also survive the fallout of Covid-19, which has deterred many New Yorkers from using public transportation. In an op-ed for the New York Times, Nicole Gelinas invited readers to imagine New York City if it did not find a way to narrow the gap of the MTA’s predicted $14 billion shortfall across two years: the results, she wrote, would be service cuts to the subway and bus lines, more crowding on the remaining trains, further exodus in response to that overcrowding, and fare hikes for those with no choice but to continue riding New York’s more crowded and less convenient public transportation system. Rather than proceed down this path of cascading failures, the MTA can begin a long-overdue reform project.

New York’s subway system is famously shoddy compared with those of peer cities in Europe and East Asia, but even heavy rail networks elsewhere in America put Gotham’s public management to shame: New York spends four times more than any other American rail system on maintenance per track mile. Now the MTA faces an estimated $3.2 billion shortfall. Improving service while cutting costs is no easy feat, but as MI fellow Connor Harris points out, the MTA has been so poorly run for so long that there is some low-hanging fruit to be picked. In his policy brief “Five Cheap Ways to Improve NYC Subway Operations,” Harris enumerated some of these no-brainer fixes, including moving more of the track maintenance work to the overnight hours to bring down costs and installing platform barriers on subway tracks to keep people and objects off the tracks. His research formed the basis of two op-eds, appearing in City and State and the transit-oriented publication Streetsblog.

American cities are at a crossroads, and the obstacles strewn in their path are formidable. But we should have faith that urbanites can see when ideas are failing all around them. Beset by soaring housing costs and failing schools, by rising crime and oppressive taxes, cities are struggling to succeed despite their governments. As the realities of poor urban governance increasingly come to light, people in cities may find a renewed openness to MI’s research and ideas. As the Wall Street Journal’s James Freeman wrote in his feature on MI’s research, “America’s biggest city may now be home to a rising number of budding conservatives who’ve been mugged by the reality of leftist governance.”


Top photo: Orbon Alija/iStock