Lower Manhattan (photo: Edwin J. Torres/ Mayoral Photo Office)
New York’s post-pandemic comeback has been the subject of near constant debate and conversation among city leaders. Among the areas of the city home to the most uncertainty is Lower Manhattan, a hub of business and tourism where leaders are adjusting to new commuting and international travel patterns and strategizing about affordable housing and uses of public space.
Jessica Lappin, the President of the Alliance for Downtown New York since 2014 and a former New York City Council member, recently joined Gotham Gazette’s Max Politics podcast to discuss what recovery looks like for Lower Manhattan, changes in progress, and major challenges and opportunities for the present and future.
Chief among those trends is that some of the office towers in the Lower Manhattan central business district sit mostly empty on work days as remote and hybrid work schedules have proliferated since March 2020 and the onset of the pandemic, which has a significant impact on the local economy. But, activity has ramped up and there is a lot to be hopeful about, Lappin said.
“The first thing I say to people is there is definitely kind of a different feel on the streets today than there was six months ago or twelve months ago,” Lappin told Ben Max, Gotham Gazette executive editor and host of the podcast. “It feels different in a good way, the streets are increasingly more crowded and more dynamic.”
As a central business district, Lower Manhattan has suffered tremendously by the massive drop in commuting during the pandemic, Lappin acknowledged, but the area’s high population density from its residential areas helped fill in some of those gaps.
The Alliance for Downtown New York -- which runs the Lower Manhattan business improvement district, advocates for policies to improve the area, and provides services including hospitality, sanitation, and security -- recently released its first quarter report, which indicates that though office vacancy rates remain high, commercial leasing activity is growing and rents are at a historic high.
Though the first quarter is never the best quarter, Lappin noted, it was the second strongest quarter the Alliance had seen since the start of the pandemic, in large part thanks to increased tourism. With hotels seeing better room rates and bookings, she called the rebound “promising” and mentioned that hoteliers have been pleasantly surprised by the return of business travelers and tourists alike. “We’re already seeing tourists coming back to the city and the truth is if you’re coming to New York you’re coming downtown,” Lappin said, “and that wasn’t true ten or fifteen years ago.”
Noting the $4,400 a month median residential rent in Lower Manhattan, Lappin said, “That is a strong sign that no matter where you’re working or what your work schedule is like, people are choosing with their feet and their pocketbooks to live in this neighborhood.”
Along with her optimism and list of exciting projects in the area, Lappin noted “quality of life” and “bread and butter” issues as her principal concerns for Lower Manhattan right now and in the near future. She wants residents, visitors, commuters, and others to have clean and safe streets and to be able to rely on subways that run well, she said. The Downtown Alliance she runs does a lot, she said, but can’t replace what the NYPD or sanitation departments do. In particular, Lappin mentioned a strong desire to work with the city on a pilot program to containerize residential trash.
“We are still an incredibly safe city when you look at the history and the numbers,” Lappin explained, harkening back to her childhood in a very different and more dangerous time during the ‘70s and ‘80s in New York City. But, she said, there are still very real issues that need to be addressed as the city recovers.
On pandemic workplace trends, Lappin said she finds it hard to imagine the return of a five-day-a-week, 9-to-5 culture, but that that doesn’t mean people won’t come back into offices more than they are now. “We’re going to have fits and starts in terms of the disease and people’s attitudes and people’s desires,” she said, adding that she has heard from both the employer and employee sides that it is difficult to mentor and maintain a robust talent pipeline without at least some significant in-person office work.
Though there are many companies that have downsized office space and will continue to do so, Lappin mentioned that some financial technology (fintech) companies have expanded, adding that she doesn’t worry long term for the health of the business district because new companies will come in and backfill office space. “There’s a reason why this business district formed, because you can get here from anywhere,” Lappin said, mentioning the various train and ferry routes that lead downtown.
That doesn’t mean that the neighborhood can remain stagnant though. Lappin mentioned the need for evolution, saying, “I hope there’s more creative thinking that comes out of this — what are the needs we’re facing and how can we make those transitions?”
That evolution may look like an emphasis on arts and culture programming in the area and drawing in more and more native New Yorkers for day trips to Lower Manhattan. This last point was part of a conscious marketing effort on the Alliance’s part during the pandemic to make the neighborhood a destination for New Yorkers when people weren’t traveling nationally or internationally and wanted to experience New York. In some ways, it was a bonus for New Yorkers looking to explore that international and national tourism was down.
In order to make the neighborhood even more desirable, Lappin said the Alliance hopes to expand on green spaces on the water, add bike lanes, and continue to explore other changes to how land is used. But, Lappin expressed hesitation about closing more streets to vehicle traffic, saying logistically there are not as many alternative routes for neighborhood residents and that there have been complaints from residents and business owners when it has been tried in some places. She does want to improve the already-pedestrianized area around the New York Sock Exchange and to build on grants for small businesses including one of particular success during the pandemic that paired retailers who relied largely on foot traffic with expert social media marketers to help bring in revenue.
Returning once more to housing, Lappin mentioned that, although the hotels have rebounded more quickly than they expected, she would still like to advocate for more flexibility to convert hotel rooms to affordable or supportive housing, but lamented the zoning issues that come into play and make such projects nearly impossible. She agreed there has been slow movement at the city and state levels on zoning changes to make conversations more feasible, but chalked it up to how government works.
Speaking on a proposed housing project set to be built at the World Trade Center site, Lappin called herself a pragmatic idealist, saying she hoped to push for the greatest number of affordable units possible, while acknowledging that it helps no one if it doesn’t get built at all. She said the push from some to see it built as fully affordable housing is not realistic.
She also said the state should look to extend in some fashion the expiring “421-a” development tax break that helps encourage some affordable housing in new, largely market-rate buildings.
“There has to be a real discussion, if policymakers want to see more affordable housing,” said Lappin, a former City Council member very familiar with housing and zoning debates, “then you have to create some mechanism to incentivize people to do it. That's just the system that we live in.”
[LISTEN to the full conversation: Max Politics Podcast: The Future of Lower Manhattan]
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by Anna Kaufman
@GothamGazette
Back to the office (photo: Michael Appleton/Mayoral Photography Office)
New York, the business capital of the United States, if not the world, is facing major questions about its post-pandemic recovery based on economic, workplace, and workforce trends. While the city’s major employers have for the most part done very well throughout the pandemic, some sectors are still struggling and remote work has altered the landscape in terms of office occupancy. This has raised questions about the city’s economic recovery given everything from reduced subway ridership and the many economic reverberations from less full office buildings to the value of those buildings and the related property taxes that the city relies on.
Mayor Eric Adams and Governor Kathy Hochul have been vocal about encouraging businesses to bring their employees back to the office more often, noting how important that commuting is to the bottom lines of the city, state, Metropolitan Transportation Authority (MTA), and many local businesses.
Kathryn Wylde, the President and CEO of Partnership for New York City, a leading nonprofit business organization representing hundreds of the city’s largest employers and top business-people, recently joined Gotham Gazette’s Max Politics podcast to discuss the interests of the city’s business community and its outlook going forward.
“We’re going through a period of profound change,” Wylde told host Ben Max, Gotham Gazette’s executive editor and the podcast host. “The biggest problem is the overall insecurity about the state of the Manhattan business districts” she said, attributing some of this insecurity to fear around criminal activity, particularly on the subway which is essential to many workers’ commutes. On top of that, Wylde referenced the so-called great resignation and increasing covid burnout as sources for possible workplace unrest.
“There’s a whole level of uncertainty among companies and employees, among New Yorkers in general, there’s a lot of uncertainty about what the future holds,” she said, asserting that if the city can reinstate a feeling of safety, cleanliness, and ingenuity things will improve, but “if that deteriorates over the summer then we’re in trouble.”
The Partnership recently released a survey of Manhattan’s big employers meant to take the temperature on return-to-work trends. It showed that a 100% return where workers are in their offices five days a week is not on the horizon, but that there has been some increase in how often workers are at their desks, often in Lower and Midtown Manhattan towers, and possibly more to come in September. As of late April 2022, the study shows, 38% of Manhattan office workers were at the workplace on an average weekday.
The longer remote work has gone on, the harder it is to get people back to the office, Wylde said, attributing some of this to “human inertia” and some to lingering covid and crime fears. Pre-covid more than 80% of Manhattan employers required workers to be in office five days a week, Wylde said, now 78% offer a hybrid model allowing work from home. The shift has major impacts on the central business districts, including the restaurants and other small businesses, as well as the MTA, which runs the subways, buses, and commuter rails.
High-profile attacks on the subway have raised additional commuting fears, Wylde said, which creates more uncertainty across the board. The city has seen an increase in subway ridership but has recently hit a pandemic-era plateau as hybrid work models have appeared more cemented.
Looking forward, Wylde said it will be important to understand both the city’s economic strengths and weaknesses. For example, she said, residential real estate values and rents are higher than ever, but some high earners (and thus high taxpayers) are deserting the city in response to comparatively high income taxes. But, she noted, a previous Partnership survey indicated some 70% of employees are committed to being part of the recovery of New York, while over 50% of companies intend to increase or maintain their headcount in the city.
As for commercial real estate and fears around the need to keep office tenancy up, Wylde seemed to think this was more cultural than financial. “Honestly, Ben, commercial real estate, large office real estate, their tenants paid their rent even though their offices were empty. So don’t shed any tears.” she said, adding, “the problem they had was with the retailers, that’s where the gap is, not with the major office employers.”
While the recent Partnership survey indicated that companies would be more likely to push for employees to return to offices more often if their peer companies did the same, Wylde said, “Honestly it’s not the companies that will drive the return to office, it’s the employees.”
Right now businesses are trying to listen to their employees and build spaces that are ideal to work in. Midtown in particular has struggled, Wylde said, given how much commuting to the offices there used to happen from outside the city, and many employees now get more hours to their day at home when they aren’t making the long trips on Long Island Rail Road or MetroNorth. Like others, Wylde also noted that the quality of the office space is a factor, and that the newer spaces see more workers voluntary seek to come into the office more often.
“There has to be a reality of things being comfortable,” Wylde said, with additional reference to homelessness and public safety, particularly in Midtown commuter hubs like Penn Station, Times Square, and Grand Central.
Wylde is particularly supportive of Mayor Adams, a Democrat just a few months into his term, backing his governing thus far, and commending both him and Governor Hochul for putting “real resources” behind policing and mental health care. Adams is fulfilling his campaign promise to “lead from the front,” Wylde said, arguing it’s important to unite behind the mayor in his efforts to increase public safety and improve both quality of life and the economic climate in the city.
As for recent criticism of Adams’ early travel outside the city to “sell” New York to other regions, Wylde said crime and homelessness are a national problem and it’s important for New York leadership to take a look at how other mayors are handling these challenges. The need to sell New York is a real one, she added, saying: “there is no doubt that our International brand has suffered.”
Asked about the city’s larger future, including around economic and housing development, which Wylde has an extensive background in, she said she hopes to see a return of community-led organizations that support and pursue pro-community development infrastructure. Many of the community-led organizations are now anti-development or driven by political activism, Wylde said, arguing that a return of those groups who have credibility with the community and expertise in development would be crucial.
Wylde expressed confidence in the new mayor and City Council, as well as Mayor Adams’ pick to lead the Department of City Planning, former City Council Member Dan Garodnick, to pursue more flexible zoning, affordable housing, and economic development. “We’ve got a lot of positive activity going on,” she said.
[LISTEN to the full conversation: Max Politics Podcast: NYC Economic and Workplace Trends, with Kathy Wylde of Partnership for New York City]
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by Anna Kaufman
@GothamGazette
City Hall (photo: Benjamin Kanter/Mayoral Photo Office)
New York City’s controversial tax lien sale program, which helps the city collect unpaid property debt, expired at the end of February and a majority of City Council members now say they will refuse to reauthorize it.
The city government uses the tax lien sale program, created in 1996, to sell unpaid debts on property taxes and sewer and water bills to private entities, which pay the city about 75 cents on the dollar. Those private lien servicing companies then tack on fees and interest, adding to homeowners’ already significant burden and sometimes leading to foreclosures and property auctions. The program disproportionately affects low-income Black and Latino homeowners, a fact that elected officials and housing advocates have repeatedly criticized.
In a letter to Mayor Eric Adams being sent on Tuesday, 31 members of the 51-seat City Council are expressing opposition to reauthorizing the tax lien program in favor of more equitable alternatives.
“Instead of collecting property debt itself, the City has essentially privatized collection through the lien sale,” the letter reads. “This has enriched Wall Street investors and hedge funds, who collect on these debts by imposing predatory and prohibitively steep fees and fines on primarily low income, senior, and Black and brown homeowners.”
In 2020, the city canceled its tax lien sale because of the COVID-19 pandemic and questions about its impact on communities of color. But the sale resumed last year and in December, the city sold liens from property taxes and related charges on more than 2,800 properties (though it did not sell water and sewer liens).
“The tax lien sale is an ineffective and harmful mechanism that disproportionately affects low-income, Black and brown, immigrant, and senior households, and it needs to end,” said Council Member Sandy Nurse, who co-authored the letter with fellow Democratic Brooklyn Council Members Crystal Hudson and Jennifer Gutiérrez as well as Shekar Krishnan, a Queens Democrat. “While this letter is indeed a clear statement that a majority of the Council will not reauthorize the lien sale, our goal is to work with the Administration to implement an equitable and just alternative. We believe we have created some strong proposals with advocates and we hope to present to the Mayor a good path forward.”
According to a spokesperson for Nurse, the Council is working with experts and grassroots groups on various alternative proposals to help reduce property tax delinquency and help homeowners manage debt – such as redirecting at-risk properties to non-speculative stewardship models including community development corporations, nonprofits and community land trusts – but they have yet to finalize what those proposals will be.
“The tax lien sale is a Giuliani era relic that pushed Black and brown homeowners into cascading debt and tenants into further blighted conditions because of bad landlords,” said Council Member Krishnan. “It placed the profit of debt collection companies and private investors above the restoration of our neighborhoods. It has no place in our city today.”
“I’m proud to stand with a majority of the New York City Council in this critical moment to demonstrate our values: that we will not stand for a re-authorization of the tax lien sale, which benefits private profit to the severe detriment of Black, brown, senior, and low-income homeowners,” said Council Member Gutiérrez. “I’m hopeful that the Adams administration will work with us to devise alternatives to our property tax collection and uplift communities that have long suffered from undue pain and neglect.”
There’s broad support for replacing the tax lien sale program. Both Mayor Adams and Speaker Adrienne Adams have criticized it, though the speaker was not among the signatories of the letter.
The mayor, during his campaign for City Hall last year, called for eliminating the program. “There is enough evidence that the annual lien sale has not been a just or an effective debt collection program,” his housing platform read. “A real recovery is not balanced on the backs of the generational wealth in Black and Brown communities. Our focus should be on reinvesting in historically marginalized communities, and there are a number of promising models we will consider to replace the lien sale and do just that.”
Mayoral spokesperson Jonah Allon said in a statement, "Mayor Adams has consistently advocated for overhauling the lien sale to ensure the city can continue to collect debts while helping homeowners — particularly Black and Brown homeowners who have been disproportionately impacted by the pandemic —retain ownership. In alignment with the mayor’s vision, the administration is in the process of adding safeguards that protect low-income homeowners and minimize foreclosures. We look forward engaging with the Council on our plan, and preserving the equity and intergenerational wealth that homeowners throughout the five boroughs have worked so hard to build."
The mayor hasn’t offered any proposals yet and a Lien Sale Task Force created through legislation by the City Council last year could not come to a consensus on viable alternatives. But the task force did release a list of ideas that were presented to it and made a few recommendations, including raising the threshold for lien sale eligibility and raising the income threshold for deferring property tax payments.
"With the expiration of the tax lien sale earlier this year, we now have the opportunity to preserve generational wealth and protect the homeowners – mostly Black and brown older adults – who have been preyed upon since the inception of the lien sale," said Council Member Hudson, in a statement. "It is exciting to know that after generations of this predatory program, we now have the chance to provide real solutions and resources to the homeowners who need them most...We hope the Administration sees this letter for what it is: a call to uplift and protect our communities and build the just and compassionate City we desperately deserve.”
As the Council members noted in their letter, the lien sale program exacerbates the racial wealth gap in the city and harms communities that have already historically suffered from racist policies and practices “such as redlining, blockbusting, benign neglect and planned shrinkage, and general underinvestment.” They pointed out that City Council districts with the most lien sales in December were District 27 in Queens, Districts 37, 41, and 46 in Brooklyn, and District 49 in Staten Island, all of which are predominantly communities of color.
The city collected about $145 million from the December lien sale. According to a report from the NYU Furman Center, the program brought in $1.3 billion in revenue for the city between 1997 and 2015. By comparison, in the current fiscal year, the city’s general property taxes amounted to $31.2 billion. Most years, lien sales take place in the summer.
“We are committed to supporting alternatives that address our shared values and principles of keeping property tax delinquency low; preventing displacement; curbing speculation; improving housing conditions for tenants; promoting community ownership; and preserving and developing truly affordable housing and public space,” the letter reads. “This moment is an opportunity to make widespread change that will positively affect Black and brown communities and our City at large.”
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by Samar Khurshid, senior reporter, Gotham Gazette
@samarkhurshid @GothamGazette
Note - this article has been updated with a statement from a mayoral spokesperson.