Report Shows Extensive Small Business Struggles, Ways City Government Can Help
Mayor visits business (photo: Ed Reed Mayor's Office)
When the pandemic first spread through New York City in March 2020, Karen DiPeri stared at a list of events that her hospitality service company, HMG Plus, was scheduled to facilitate. HMG typically staffs corporate events — serving hor d’oeuvres, bartending, cleaning up afterwards — and as the city began to shut down, the company’s future grew uncertain. On HMG’s back-end software, active upcoming events show up in green. But as client after client canceled, DiPeri watched the orders turn into a stream of black text until nothing was left to plan.
The pandemic was “devastating” for HMG Plus, DiPeri said. After the cancelations poured in, she could hardly get out of bed for a week. HMG Plus lost all of its business for a time. While HMG received two federal Paycheck Protection Program (PPP) loans, aimed at ensuring that companies could keep paying their employees, it did not qualify for other relief programs. Pandemic funds directed toward the hospitality sector — like the federal Restaurant Relief Fund and the city’s Shuttered Venue Operators grant — often did not account for HMG’s niche in the industry as a staffing service.
Now, as vaccinations climb, HMG has started up again: staffing “welcome back” events and weddings, coordinating cocktail hours and plated dinners. The business, which once employed close to 500 freelance service workers, is now working with about 15% of that team. Many former staff members left the industry for good. “I think a lot of them felt blindsided and quite scared for their future,” DiPeri said.
There are thousands of stories like HMG’s. One year ago, as COVID-19 regulations constrained limited movement and business operations and decimated tourism, a wave of stores and restaurants shuttered, and one fifth of New Yorkers found themselves unemployed in the early months of the pandemic. Many small local businesses are straining to recover from the pandemic’s devastation.
In 2015, the city’s Department of Small Business Services (SBS) estimated that New York City had nearly 220,000 small businesses with under 100 employees. According to the Opportunity Insights Economic Tracker, which defines small businesses based on the federal government’s revenue standards, the number of small businesses in New York City has decreased by 44.7% since January 2020, and the total revenue brought in by small businesses has decreased by 57.7% during that time frame.
A new report from Columbia University’s School of International and Public Affairs (SIPA) and Department of Biomedical Informatics puts these widely-felt trends — and their nuances and consequences — into more specific numbers.
Of the small businesses surveyed for the report, 35% closed down during the first three months of the pandemic. During the phased reopening period that followed, only 14% of small businesses were able to start back up with full capacity; 60% of restaurants — and 25% of other small businesses — laid off employees.
The report calls for a more coordinated, systematized effort on the city’s part to connect small businesses with resources — starting with developing a clearer picture of the status and needs of New York City’s small business community.
“I think what’s disconcerting about this problem is that we’ve got a lot of intermediary organizations who could be helping government better understand what is happening on the ground,” said Ester Fuchs, a lead researcher on the report and Columbia’s Urban and Social Policy Program director. She pointed to business associations, Business Improvement Districts, and Chambers of Commerce that can help the city more thoroughly survey the small businesses community. “We have a capacity to understand what’s going on, and we’re not using it.”
The city should mobilize data to cater pandemic recovery policies to “what small businesses are saying they need,” Fuchs argued — including more cash and rent aid, and to a lesser extent, help with health code compliance.
The report aims to jumpstart the process of surveying and listening that Fuchs calls for. It emerges amid relatively sparse data on New York City’s small business landscape, even from before the pandemic. The survey is not comprehensive; researchers collected data from 366 New York City enterprises with 100 or fewer employees, including HMG Plus. The dataset skews heavily towards Manhattan businesses, which comprised 56.8% of respondents. (Given the severe drops in tourism and in commuting to major jobs hubs like Midtown and Downtown Manhattan, the borough’s businesses have in some ways been uniquely impacted.) The percentage of Minority and Women-Owned Business Enterprises (MWBEs) surveyed — 45% — does resemble New York City’s overall distribution.
One of the report’s key recommendations is to run a citywide “census” of small businesses, which would provide a unified and comprehensive set of information about how local small businesses are faring. With more data, the city will be able to determine which businesses need aid most urgently, and what kind of assistance they could most benefit from, Fuchs said — allowing the city to build a strategic roadmap for the coming months.
Looking ahead to the post-pandemic recovery, the report issues a resounding call for more cash and rent assistance from the city to go directly to small businesses. Small businesses’ largest barrier to recovery, according to the report, is overcoming the dramatic revenue loss they faced during the pandemic.
When asked about their most critical needs, a majority of small businesses (63% of those surveyed) said more cash flow. Restaurants expressed an especially strong need for both cash and rent assistance, with nearly three-quarters naming each of those forms of government aid as one of their immediate needs.
The report reflects a broad dissatisfaction with the city’s small business aid efforts during the pandemic. It observes “a disconnect between policy proclamations and implementation,” causing small businesses to grow “increasingly frustrated with the lack of government responsiveness to their needs.” Of the surveyed small businesses, 49% rated the city as having done a “poor” or “very poor” job responding to the pandemic.
Shaina Coronel, a spokesperson for SBS, wrote by email in response to Gotham Gazette inquiries that “we have already fulfilled many of the recommendations made in this report – having connected over 5,000 businesses to $147 million in loans and grants.”
Much of the aid available to small businesses over the course of the pandemic has come from the federal government, including the PPP loans that helped HMG Plus, and the Restaurant Revitalization Fund and Shuttered Venue Operators Grant that HMG did not qualify for. The city’s role in pandemic recovery efforts has largely been to connect businesses to federal and state resources, including through a hotline and one-on-one grant application assistance. (The city cannot borrow money or raise taxes on its own, so it must rely on the federal and state governments for such measures, especially the federal government for major cash relief, which came for city government as well.)
In the upcoming fiscal year 2022, which begins July 1 of this year, the city plans to create and bolster a number of legal and cash assistance programs for small businesses, according to Coronel. These initiatives include a $100 million Small Business Recovery Loan program, which aims to assist 2,000 businesses (particularly in neighborhoods hit hardest by the pandemic) with low-interest loans of up to $100,000; a $100 million Small Business Grant Program, which will target businesses in entertainment, food, and hotel industries as well as businesses in low-to-moderate income neighborhoods; and an existing legal aid program for businesses, which will receive $10.4 million.
Restaurants were hit particularly hard by the pandemic. About half of the surveyed restaurants — 52% — closed down entirely during the “lockdown” period between March and June of 2020, and nearly all of those restaurants lost revenue streams entirely during that period. Three quarters of restaurants surveyed that remained open in some capacity during lockdown experienced at least a 75% decrease in revenue. These severe income losses led to a cascade of unemployment. According to the report, 60% of responding restaurants laid off employees, compared to 25% of other small businesses. Of the surveyed restaurants, 35% furloughed employees (compared to 18% of other small businesses) and 33% cut employee hours (compared to 21% of other small businesses).
Meanwhile, technology companies fared by far the best over the course of the pandemic. They were most likely to remain open and financially stable. While a minority of other small businesses transitioned to completely remote operations during the pandemic, 77% of technology companies ceased all in-person activities.
On average, MWBEs received smaller amounts of cash assistance than other small businesses. They also received significantly less rental assistance. Only 37% of responding MWBEs received rent aid, compared to 59% of other businesses. And MWBEs received rent deferrals half as frequently as other small businesses, at a rate of 7% compared to 14% of those surveyed.
While they received less government aid, minority- and women-owned small businesses tended to fare better than other small businesses, according to the Columbia SIPA survey. Only 22% of MWBEs closed down during the lockdown period, compared to 46% of other businesses. This positioned MWBEs to emerge from lockdown with more resilience. They laid off employees at three quarters the rate of other small businesses, and they furloughed employees two thirds as frequently. And MWBEs that remained open during lockdown were less likely to experience dramatic losses of revenue than other small businesses.
According to Fuchs, these stronger outcomes for minority and women-owned small businesses might be due to the overrepresentation of businesses owned by white men in commercial districts, which suffered an intense loss of traffic as many offices transitioned to remote work and tourism declined. In contrast, minority- and women-owned small businesses are more likely to be located in residential neighborhoods, where they found stronger community support and ongoing local activity.
MWBEs “took advantage of their neighborhood ties,” Fuchs explained, and survived the pandemic with “ingenuity and creativity.” Still, MWBEs had disproportionately less access to government support compared to other small businesses. “Given the right support, they seem like they have a really good chance of rebounding,” Fuchs said.
Barbara Askins, the president of the 125th Street Business Improvement District (BID) in Harlem, who helped with the Columbia survey, suggested that other subsets of the small business sector need more attention: street vendors and businesses that operate from homes or offices rather than storefronts. The pandemic provides an opportunity to revisit licensing and regulation procedures for “informal markets” like street vendors, she said, especially as restaurants’ outdoor dining setups have changed the way sidewalk space is used. The city was already on the verge of the first significant expansion of street vendor licenses in many years. Meanwhile, the “Open Restaurants” program has been cemented into law.
Despite losing nearly all of its revenue, HMG Plus has managed to stay afloat with income from a sister company, the Academy for Hospitality Arts, which created new COVID-19 readiness and compliance officer training courses suited for the pandemic. HMG also sent some employees to assist with the New York State Department of Health’s vaccine rollout.
But DiPeri, HMG’s president, worries about the hospitality industry. She worries that if New York’s office culture does not revive, there won’t be as much of a place for HMG’s niche in the corporate event landscape, indicative of other businesses and sectors that could struggle.
Mark Fox, who oversees the Ragtrader, a Midtown restaurant serving American cuisine, has had a similarly challenging year. His restaurant reopened temporarily between June and December of 2020, before shutting down when the city stopped permitting indoor dining last winter. The restaurant once employed 75 people, Fox said; for most of last year, it employed 5. The Ragtrader could only open up at the end of March of this year, after receiving a second PPP loan.
In highly commercial Midtown, the effects of small business closures have been palpable. “Restaurants provide the vibrancy that makes it attractive to hold an office in New York City, to visit New York City, to come to New York City for a show or a concert. Shuttered streets and empty restaurants does not help the economic recovery of the city,” Fox said. He hopes that as COVID-19 restrictions peel back and more small businesses reopen, the neighborhood will begin to bounce back. For now, he said, the public is beginning to recognize restaurants as “intrinsic to the stability and growth of the city from a curb appeal standpoint.”
Now, the Ragtrader is earning about 65% of pre-pandemic revenue, and is back to around 45 employees, according to Fox. Starting wages at the Ragtrader are above minimum wage, at $19 per hour excluding tips, but in keeping with a national trend among restaurants, hiring more people has remained difficult.
The staffing shortage has been difficult on Fox’s employees, he said, who have had to pick up the slack. “They’re overextended and working longer hours.” He urged customers to come in with patience. “When you have to wait that extra minute for a waiter, or the restaurant closes an hour earlier than it used to, just bring some empathy, because these people are stressed and stretched.”
Despite these challenges, Fox sees a glimmer of hope for the restaurant industry as vaccinations spread and customers begin to feel safer eating indoors. “We can see a sense of relief and enthusiasm in our guests,” he said. “Where before there was hesitancy and fear, there’s an exuberance that’s beginning to permeate."
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by Laura Glesby for Gotham Gazette
@GothamGazette
Can the Next Mayor Save NYCHA? Democratic Candidates Offer Varied Plans for City's Crumbling Public Housing
NYCHA (photo: governor's office)
The New York City Housing Authority, home to more than 400,000 New Yorkers, is falling apart. Long plagued by mold, lead paint, structural cracks, and failing elevators, boilers, and locks, the authority of over 177,000 units in 335 developments across the five boroughs is in need of a staggering $40 billion in physical repairs over the next ten years and faces an immediate operating budget deficit of about $300 million.
Long the victim of official neglect, NYCHA has become a focal point during the tenure of Mayor Bill de Blasio, who came into office with a significant focus on improving conditions at public housing. But while devoting more resources the current mayor has let some of his most ambitious plans stall while also facing investigations, lawsuits, and the appointment of a federal monitor. The Democratic candidates running to replace de Blasio in this year’s election have staked out varying positions on how to address problems in the nation's largest public housing provider. Some -- like Eric Adams, Shaun Donovan, Kathryn Garcia, and Ray McGuire -- have supported multiple major reforms currently on the table or in motion, while others -- like Dianne Morales, Scott Stringer, Maya Wiley, and Andrew Yang -- have focused more on pursuing direct federal aid.
Nevertheless, the need for swift action on NYCHA repairs is urgent. According to a 2018 report from the fiscal watchdog Citizens Budget Commission, "[w]ithout dramatic changes within 10 years nearly 90 percent of NYCHA’s housing units could be at risk of deteriorating past the point at which it is cost-effective to repair — a crisis from which NYCHA and the City might well not be able to recover."
NYCHA's needs are not in question but how to pay for the solutions, and to what extent revenue should be tied to major changes at public housing, has been a source of controversy. The current roadmap of reform is de Blasio's "Blueprint for Change," which calls for funding through a number of mechanisms for which candidates to replace him have expressed varying levels of support, opposition, and a desire to revise.
Of the eight candidates considered frontrunners for the Democratic nomination for mayor, two have particular experience with public housing: Donovan was a commissioner of the New York City Department of Housing Preservation and Development under Mayor Michael Bloomberg and Secretary of the U.S. Department of Housing and Urban Development then budget director under President Barack Obama, where he helped design one of the key public housing programs being debated in New York City today. Garcia, long de Blasio's sanitation commissioner, was also an interim chair of NYCHA in 2019 to help steady the ship amid major scandal. Stringer, meanwhile, has made NYCHA a focus of his audits as comptroller, and Adams has been no stranger to public housing as Brooklyn Borough President.
Despite conditions at NYCHA and its dire future without a massive influx of funds, public housing has not been a dominant issue in the Democratic mayoral primary. As voting nears -- early voting is June 12 to 20 and primary day is June 22 -- the Democratic mayoral candidates have offered varying degrees of specificity around their NYCHA rescue plans.
NYCHA’s Current Plan and Hope for Federal Aid
The Blueprint primarily calls for creating revenue and repairs through two programs: Rental Assistance Demonstration (RAD), a federal initiative (created under Donovan when he was HUD secretary) to repurpose Section 8 housing subsidies for public housing, and a proposed New York State Public Housing Preservation Trust, which would be created through state action and funded with bonds backed by federal subsidies. The city is also looking to move ahead a number of “infill” development projects through which NYCHA leases unused or underused land to private developers to build new housing, a process that creates more housing, some of it under rent-regulated, and provides a revenue stream to the authority.
Another tool at NYCHA's disposal and part of the current plan is selling air rights, which allows developers to build higher. Those air rights can be sold as of right to adjacent properties, and city planners have been exploring the possibility of selling them to noncontiguous properties, which would require zoning changes.
Under the current plan, RAD, one of the more controversial avenues, would fund repairs for about 62,000 units, about a third of the city's public housing stock. RAD relies on a technical maneuver that converts public housing from the federal Section 9 to Section 8 voucher program, allowing them to be operated by private management companies, both for-profit and not-for-profit, while ensuring they are still owned by NYCHA and receiving federal funding. The program keeps rents capped at 30% of resident income but limits reporting on repairs and removes units from the oversight of the federal monitor appointed to address NYCHA's myriad problems. While RAD has been well received in some complexes where it has already been implemented and led to better resident services, renovations, and improved conditions, some tenants' rights groups and elected officials have raised alarms about privatization and threats of displacement via more aggressive eviction efforts.
Repairs and upgrades of the remaining 110,000 or so units, according to the Blueprint, would be paid for through the preservation trust, which does not entail privatization of any kind and has not seen much opposition. But the proposed trust hit a snag this past week when its sponsors in the State Legislature said they would hold their bill until the 2022 legislative session in order to gather more feedback. The news came after lawmakers revised the bill last month to limit the trust's reach to only 25,000 units, with the possibility to annually request a higher cap from the Legislature, though it lacks details on how that process could unfold.
"After consultation with public housing residents, the New York City Housing Authority (NYCHA) and other stakeholders...we have decided that further conversation, outreach, and negotiation are necessary before advancing legislation on this topic," read a joint statement from the sponsors, State Senator Brian Kavanagh and Assemblymember Steven Cymbrowitz, released June 2.
For the first time in many years, there is new hope that major federal dollars could flow to NYCHA that are not tied to RAD, which Donovan has said was a compromise program to get Republicans to dedicate any funding toward public housing. With a Democratic president and slim Deocratic control of both houses of Congress, some believe a major but potentially fleeting opportunity is at hand.
President Biden's infrastructure plan calls for a roughly $40 billion federal investment in public housing nationwide with much of it likely to come to NYCHA, given its size. A proposal backed by Rep. Nydia Velázquez and Senate Majority Leader Chuck Schumer would raise Biden's target to $80 billion with half or more earmarked for New York City. But after years of divestment, getting the full funding from the feds has become a holy grail and a moonshot for officials, residents, and many hopefuls on the campaign trail. Negotiations over a major federal infrastructure bill are ongoing and its fate remains unclear.
The other side of the financing coin is management and accountability for the authority. Like its predecessor plans under de Blasio, but with new elements, the Blueprint also calls for changes to NYCHA's governance and operations, namely that maintenance and repairs be decentralized and carried out by individual property managers, rather than through NYCHA headquarters. Doing so would create a more responsive and transparent system for making repairs, said Victor Bach, senior housing policy analyst at Community Service Society, an advocacy group for low-income New Yorkers.
"The next mayor needs to integrate NYCHA into [their] affordable housing plan," said Bach. "It's more than just appointing a deputy mayor," which CSS supports, he told Gotham Gazette. "It's actually setting NYCHA targets for all of those concerns...We would want metrics for NYCHA preservation, homeless reduction and the like," to evaluate any housing plan.
"To be at NYCHA and try to plan for the future...in a way that allows the authority to restore and sustain decent living conditions for residents means you have to plan independently, in a sense, on the assumption that Washington may or may not come to the rescue," Bach said.
Here is what each leading Democratic candidate for mayor is proposing for NYCHA:
Eric Adams
Adams, the Brooklyn Borough President, has proposals to fix NYCHA as part of his larger housing plan and has expressed positions on some key issues like RAD and infill. He has proposed selling NYCHA's air rights to the tune of $8 billion, which would be used for repairs. He wants to boost transparency in capital projects with real-time reporting on spending and the status of repairs -- both for individual apartments and whole buildings -- through an online dashboard.
Along these lines, Adams also proposes a so-called "NYCHAStat" system, modeled off the NYPD's CompStat, a citywide crime tracker and police department accountability system, which his campaign website said would help the authority take "a data-driven approach to asset management." Adams' NYCHAStat appears to be focused on the quality and integrity of public housing but the plan on his website doesn't provide specifics on what types of measures would be tracked. He has said his administration would deploy more surveillance drones to conduct building inspections at NYCHA and beyond.
Adams supports RAD, as long as tenants are engaged in the decision to convert developments to private management. He has said he would invest in free legal counsel for tenants going through a PACT to Preserve process -- the city's version of RAD -- and give tenants veto power over conversions. He is also supportive of infill development.
“I think that we should utilize the infill buildings,” Adams said in a 2019 interview on the Max & Murphy podcast. “I believe that all of this should be done with a conversation with the NYCHA residents." At a forum in March of this year, he reiterated that position and suggested locating current NYCHA residents in the newly-built units and opening apartments at NYCHA to new residents.
Adams would seek federal funds to speed up lead remediation in NYCHA buildings. He wants to provide rent relief to households impacted by lead poisoning, and "ensure real accountability for any officials who are found to have misled tenants and the public about the extent of the problem" (that could be a long list of city government veterans, including high-level officials). Under his plan, the housing authority would "skip contracting procedures" and select any local company licensed to do lead remediation and paying prevailing wages. Adams would cancel rent for affected families until remediation is complete.
Adams has not committed to investing additional city funds into NYCHA, according to an analysis of campaigns from the Association for Neighborhood Housing and Development. He is calling for “tens of billions of dollars” in federal funds for NYCHA.
Shaun Donovan
Donovan has the most experience of any candidate working in the weeds of affordable and public housing as the former housing commissioner under Bloomberg and -- as he is more fond of discussing -- as housing secretary under Obama.
As mayor, Donovan would "fully adopt and aggressively implement" the current administration's "Blueprint for Change" plan to rehabilitate NYCHA and reform its governance structure, according to his campaign website. He will also pursue the policy recommendations outlined in United For Housing's "From the Ground Up 2021" plan to invest $4 billion annually in affordable housing, including $1.5 billion a year for public housing, with funding ideally matched by the state. Donovan has said he would allocate up to $2 billion a year to NYCHA from the city capital budget, up from the $248 million planned for 2021.
Donovan's commitment to de Blasio's "Blueprint" is not surprising, given he pioneered RAD during his time at HUD. But Donovan has said the de Blasio administration did not have to pursue RAD deals with for-profit corporations and that he would focus more on not-for-profit building management.
The Blueprint calls for about a third of the city's public housing stock to be converted under RAD. Much of the rest of the restoration funding would come from the proposed Public Housing Preservation Trust, which requires state legislation to create. Donovan supports the trust and has said he has the state and federal connections to push it through -- a common refrain of his campaign. Even with RAD and a preservation trust, NYCHA could still face a shortfall of billions of dollars, which Donovan says he would make up with annual investments from the city's coffers and other federal funding streams.
Donovan has expressed support for infill development to raise revenue and create new housing. To save on operating costs, he wants to speed up energy-efficiency upgrades, which he says could also mean jobs for residents and a step towards the city's climate goals.
Donovan also wants to reform the governance structure of NYCHA to give residents greater control and reduce political influence. He has proposed expanding the NYCHA board and appointing tenant representatives and making the chief executive officer an appointee of the board rather than of the mayor. He also wants to decentralize property management and give individual developments greater control over their budgets.
Broadly, Donovan would place public housing under the purview of a deputy mayor for housing opportunity and economic development, along with homeless services, education, children's services, and housing.
Kathryn Garcia
Garcia, a longtime sanitation commissioner and briefly interim NYCHA chair under de Blasio, has expressed strong support for the city's Blueprint for Change, which she says is in need of execution not revision.
"NYCHA doesn’t need another plan," reads her campaign website, a conceit she's delivered many times on the campaign trail. "Residents have seen plan after plan after plan, including three plans under the de Blasio administration. Waiting around amounts to demolition by neglect."
"We know what needs to be done," she has said: fixing heating and water systems, which means hiring more plumbers, repairing elevators, abating mold, and so on.
Garcia supports RAD as a central component of the Blueprint and has also expressed tempered support for infill development. In an interview on the Max & Murphy podcast she said infill projects “would not be my first priority. My first priority would be to do the traditional RAD program as well as the plan that [NYCHA Chair] Greg Russ has come up with to use these vouchers and finance off of them. But I certainly would not turn away an opportunity that would generate money for NYCHA residents. Anything we can do to be creative, to generate money for them I think is very important.”
According to the Association for Neighborhood and Housing Development, Garcia has not committed to investing additional city funds into NYCHA's capital budget.
“This allows us to leverage federal money. We don’t have to use more city money,” she said of current NYCHA plans, at a March forum. “We have tried going to the federal government since the Carter administration,” she pointed out, “we've always come up empty.”
On a broader level, Garcia wants to bring homeless services under the same deputy mayor in charge of housing, NYCHA, and economic development, which she says would eliminate siloing and conflicts among the city's housing goals.
Ray McGuire
McGuire, a former top Wall Street executive, wants to see NYCHA capital improvements prioritize security cameras, locking doors, and high speed internet connection in every development. His website, which outlines his NYCHA proposals as a piece of his broader housing platform, says his administration would provide annual updates on the status of capital projects.
To pay for the $40 billion capital need, McGuire supports RAD and other elements of the Blueprint for Change on a per-development basis, with significant input from residents. His platform says residents will be able to select their building management, should it be privatized, and be given access to legal services.
McGuire said he would allocate an additional $1.5 billion a year in city funds to NYCHA repairs. He would "sell or transfer" NYCHA air rights for private development to raise additional revenue, according to his website.
He also wants to increase services like youth and senior programming in NYCHA community centers and work to clean up shared space on campuses. The administration would target career opportunities and workforce development toward residents as part of the rehabilitation.
Dianne Morales
Morales, a former nonprofit director, has adopted the goals of the proposed federal Green New Deal for Public Housing Act, sponsored by Rep. Alexandria Ocasio-Cortez and Sen. Bernie Sanders. The rough outline of the plan includes investments in workforce training, upgrades for energy efficiency and water quality, power infrastructure like solar rooftops and windows, recycling and waste-reduction, and disaster preparedness. Her plan for NYCHA, part of her broader housing plan, includes those goals but few specifics on making repairs.
Morales has taken one of the hardest stances of any candidate against the city's current plan to repair and reform NYCHA. "As Mayor, Dianne will work to put an end to all current and future plans for the privatization of NYCHA, including A Blueprint for Change," reads her campaign website.
In lieu of RAD, Morales has said she would seek $35 billion from Albany and Washington. Her opposition to privatization also extends to NYCHA land-leases for infill development. Her website makes no mention of the proposed Public Housing Preservation Trust, which would not entail privatizing management.
Morales wants to appoint a NYCHA board that is majority residents, including the chair. She wants to enforce requirements to employ public housing residents on projects using federal funds and provide more job readiness services.
Scott Stringer
Stringer has focused a great deal on NYCHA as comptroller, issuing many audits of the authority, but as a mayoral candidate has offered limited vision for getting NYCHA to a state of good repair without massive federal dollars. He opposes RAD in favor of seeking full funding from Washington. He has expressed openness to infill development, as he did a forum in December, as long as tenants are engaged in major decisions.
In the meantime, he has proposed leveraging annual surpluses from the Battery Park City Authority to back bonds to pay for the most urgent NYCHA repairs (it's something he has pushed for since his first year as comptroller). He estimates the surplus to reach $450 million over ten years.
"Comptroller Stringer is against RAD and Blueprint because it is a doorway to privatization," wrote Halimah Elmariah, a campaign spokesperson, in an email, when Gotham Gazette inquired about Stringer’s stances on NYCHA, which he has offered few details about during the several candidate forums of the race where public housing has been brought up. "We must have a roadmap for repairs that does not rely on private dollars or lead down a road of losing NYCHA assets."
With some openness to infill development pending tenant approval and additional focus on tenant input and buy-in, Stringer has proposed a development-wide ballot on which residents can clear or vote down major rehabilitation programs. He wants to create 15,000 units of housing for seniors on NYCHA property, and wants development on NYCHA land to go through the city’s extensive land use review process, ULURP.
"Comptroller Stringer also does not support infill as a means to raise money for NYCHA, and believes we should work with NYCHA residents to identify their needs and desires," Elmariah said. "Any infill that occurs should only be to meet the needs of NYCHA residents – such as building senior housing or new affordable housing for NYCHA residents" by dedicating a portion of new units to NYCHA residents.
Stringer is proposing a system for tracking building complaints and maintenance issues and better reporting on NYCHA inventory, like working boilers and other assets -- ideas born out of the multiple audits of NYCHA his comptroller’s office has done, according to his plan.
"As Mayor, Scott will manage the hell out of NYCHA, reforming its dysfunctional operation and investing billions to make badly-needed repairs," reads his housing plan, again showing an emphasis on management and operations but not the bigger picture of revenue and repairs.
Maya Wiley
Wiley, who served as counsel to the mayor and chair of the Civilian Complaint Review Board under de Blasio, has said she would invest $2 billion in public housing repairs and capital upgrades, including for energy efficiency and climate resiliency. She also wants to apply the city's code enforcement for privately-owned buildings to NYCHA. Advocates say bringing NYCHA under the purview of the Department of Buildings and Housing Preservation and Development for code enforcement would lead to more reporting on violations and shed a light on where conditions are worst. The details of her approach to NYCHA are outlined briefly in her broader housing plan.
Wiley is opposed to RAD and has not shown support for other financing schemes outside of direct aid from the state and federal governments. At a December forum, she said infill was a viable option but that it had to involve tenant input.
Like other candidates, Wiley also wants to increase services for NYCHA residents like workforce development and violence interrupter programs. "Investing in NYCHA means investing in job-ready skills and career pathways, promoting local hiring, and developing a model for long term sustainable safe and sustainable public housing," read a recent statement from her campaign. "Investments will be determined with the participation and input of NYCHA residents."
Andrew Yang
Yang, who led a test prep company, founded a nonprofit, and ran for president, supports a "Green New Deal for NYCHA," which his campaign website says would create jobs and promote climate resiliency "while saving nearly half a million units of affordable housing from falling beyond repair." NYCHA has just over 170,000 units in its portfolio. It is unclear what housing Yang's commitment to save another quarter million units or more refers to.
He has put forward two plans related to NYCHA, one on his green New Deal, and another on increasing resident input in public housing.
Yang's Green New Deal for NYCHA is different from the federal legislation of that theme sponsored by Rep. Ocasio-Cortez, which she pointed out when he released his plan. It centers around installing solar panels on every NYCHA roof by 2030 with the goal of converting power to 100% renewable energy. He wants to upgrade heating appliances, toilets, and refrigerators, and retrofit windows and facades for energy efficiency. Those upgrades, he has said, would reduce leaks -- a root cause of the authority's mold problem. He would also make the mold ombudsperson, currently a temporary court-ordered position, permanent and invest in public awareness campaigns for residents. His campaign estimates the upgrades could net $100 million to 398 million annually and create roughly 325,000 jobs over ten years. Those jobs would be coupled with training for which residents would be prioritized.
Yang has said he would seek funding from the federal government to the tune of $48 billion over ten years to meet the authority's capital needs. Like Donovan, Yang's campaign has said his administration "would use its deep relationships in Washington, DC" to get the full capital funding needed, ostensibly referring to ones he garnered in his bid for the White House last year and subsequent political organizing. He supports the preservation trust and has said he would work with the state to give NYCHA residents board representation and limit its impact on the authority's waiting list.
Yang opposes infill development for "luxury" housing and would push to require all new development on NYCHA land to go through the ULURP process. So far, all infill projects in New York City have been 100% affordable, according to Sean Campion, senior research associate at Citizens Budget Commission.
Yang has said he would pursue the expansion of the NYCHA board from seven to 11 members, with six seats reserved for residents. He said he would "appoint" a community based organization to provide services and allocate federal subsidies known as "tenant participation activity" funds in developments that don't have their own resident councils.
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by Ethan Geringer-Sameth, reporter, Gotham Gazette
@GeringerSameth @GothamGazette
Effort to 'Defund the NYPD' Appears Stalled Ahead of De Blasio's Final Budget
De Blasio and the NYPD (photo: Michael Appleton/Mayor's Office)
Even though cutting NYPD funding has become a popular position among many candidates running for mayor, City Council, and other offices this year, the city’s current leadership seems unlikely to embrace any significant cuts to the police department in the upcoming budget amid a sustained increase in gun violence and a glut of federal funding.
“The voters of this city overwhelmingly, I'm convinced, want a balance. They want reform. They want non-discriminatory policing. They want respectful policing, but they also believe the NYPD has a crucial role to play in this city protecting all of us,” Mayor Bill de Blasio said at a May 27 news conference, when asked if Democratic voters are beginning to reject the ‘defund the NYPD’ movement. “That's the balance I think people are looking for.”
Last year, as the pandemic raged and Black Lives Matter protests subsumed the city in the wake of the police killing of George Floyd in Minneapolis, Mayor Bill de Blasio and the City Council led by Speaker Corey Johnson embraced, to varying degrees, demands to reduce police funding and redirect those resources to underfunded community programs. Together, they announced an agreement to make cuts to the NYPD’s nearly $6 billion annual operating budget, with the mayor painting it as a $1 billion cut that was in actuality far more limited, as Johnson quickly noted in dispute. Outside of the operating budget, there’s another $5.3 billion in additional spending that goes towards fringe benefits, debt service, and other spending for the department, bringing total actual NYPD expenditures to more than $11 billion annually. The NYPD is also responsible for a large share of legal settlements paid out by the city, costing $205 million in the 2020 fiscal year.
But the deal left virtually everyone dissatisfied. Police reform activists called it insufficient and hollow, particularly as it promised nearly $300 million in cuts to overtime spending, which the department has notoriously failed to control over the years, and included the eventual but unachieved shifting of school safety agents to the Department of Education, as well as capital funding cuts that became temporary.
Johnson himself admitted he wasn’t happy with what the Council delivered and had wanted deeper cuts, though he said he was deferring to members of color who had urged him to moderate the ‘defunding’ push. “To everyone who is disappointed that we did not go farther, I want to be very honest and candid, I am disappointed as well,” he said at the time.
The extremely contentious process that included an encampment near City Hall and vandalism at Johnson’s boyfriend’s apartment, as well as stark warnings from conservatives about the potential for crime increases, appeared to take a major toll on Johnson and contribute to his decision not to run for mayor. He’s now running for city comptroller, however.
The budget deal that was reached and approved by the Council just after the July 1 deadline for a new city spending plan created stark divisions in the 51-seat Council, which has only 3 Republicans. Several Democratic Council members of color, including close Johnson ally and Majority Leader Laurie Cumbo, opposed deeper cuts, arguing that their communities demanded more police presence, not less, but with more equity and accountability. In the end, 17 members ended up voting against the final package, including moderate members who protested the cuts and progressive members who voted no because they saw the cuts as insufficient. It was the largest number of no votes on a city budget in at least the last two decades.
That budget agreement came as gun violence in the city had already increased amid the pandemic and the shootings and murders have only risen in the nearly year since. Overall, major crime has fallen slightly this year, by 1.77% through May 30, compared to the same period last year. But there have been concerning increases. Homicides are up 17.7% from last year, shootings are up 77% this year, felony assaults are up 8%, car thefts are up 24.8%, and hate crimes are up a whopping 104.3%. Some of the numbers are far more stark when compared with the same period in 2019. Major crimes are down 2.62% through May of this year compared to through May of 2019, but murders are up by 47.9% and shootings are up 107.4%. Car thefts are up 104.6% and hate crimes are up 38.2%.
This year, there seems to be no clamor among City Council members to make major, if any, reductions to the NYPD budget and any push for cuts may leapfrog to next year, as a new mayor and City Council class take office. Candidates up and down the ballot have expressed support for and opposition to cutting the police department budget.
In the Democratic primary for mayor, several leading candidates like Dianne Morales, Maya Wiley, Scott Stringer, and Shaun Donovan have proposed cutting NYPD funding from between $1 billion to $3 billion either immediately or over several years, though none but Morales has embraced the ‘defund’ slogan. More moderate candidates like Andrew Yang, Eric Adams, and Kathryn Garcia have expressed opposition to decreasing NYPD funding and Yang has even said he would hire more police officers. There are currently 34,994 uniformed officers and another 17,831 civilian employees of the NYPD, and personnel is by far the largest share of the department’s budget.
When the budget for the 2020 fiscal year was adopted in June 2019, the NYPD was funded at $5.3 billion for operating expenses. By the time the budget was modified that November, estimated operating costs of policing had risen to $5.82 billion.
The 2021 fiscal year budget, adopted July 1, 2020, allocated $4.9 billion for operating expenses to the NYPD, in effect cutting more than $865 million compared to the modified budget of the previous year (the remaining cuts that were part of the $1 billion came from fringe benefit spending). By November, it was modified to $5.35 billion, effectively bringing police funding back to the levels from two years ago, before ‘defund the NYPD’ was a common refrain.
Mayor de Blasio’s executive budget proposal puts NYPD funding at $5.13 billion for the 2022 fiscal year, roughly $230 million more than the budget that was adopted last year for this fiscal year, though it will likely increase as is the case each year. (It revised the estimated NYPD operating spending in the current fiscal year down to $5.08 billion, lower than the projection in the November modification).
Separately, the budget also includes increased funding for non-police mental health crisis response teams, a program that is being expanded citywide from the current pilot in three precincts at a cost of $112 million but isn’t being run through the police department. The city is also adding new mobile treatments teams for $23 million to respond to non-violent mental health calls. There’s also a spate of funding for other crime-prevention initiatives including $27 million for Cure Violence intervention programs, $6 million for an at-risk youth mentorship program, $7 million to expand the city’s Saturday Night Lights basketball program, and $1.3 million for a Joint Force to End Gun Violence.
Other elements of last year’s budget agreement have also failed to come to fruition. The mayor’s recently-proposed budget restores $105 million in capital funding for a new police precinct in Southeast Queens which was meant to be diverted to a community center as part of $500 million in capital funding shifts under last year’s budget deal (both are now happening thanks to federal funds). The Independent Budget Office expects NYPD overtime costs to be $400 million more than expected by the end of the current fiscal year. And the City Council is continuing to debate whether school safety agents will indeed be shifted from NYPD oversight to the Department of Education, another promise that was made last year but is not reflected in this year’s budget. The city is also considering hiring 475 more school safety agents.
But the mayor seems content with the direction of the current budget proposal. When asked about police funding levels, the slight increase in the NYPD budget this year in his executive budget and whether the city had truly met the promise of shifting $1 from the NYPD, de Blasio insisted that the city has effectively taken steps to address the demands of activists.
At a May 25 news conference, he explained, “Some functions were moved to other agencies, civilian agencies that we thought made more sense. We've continued to do that, for example, with the crisis calls, the mental health calls, where there's no violence involved, having those handled by civilians, social workers, health care professionals, not police officers. That kind of effort makes a lot of sense. Of course, it requires less from NYPD and more from the other agencies. So, that happened, that continues to happen. The size of the police force was brought down to about 35,000. I think that's the right level. That happened, that continues to happen. We're making investments in young people and those investments, Summer Youth Employment, the efforts to help young people with social emotional learning, all these investments are the way forward. So, we've taken the spirit of the call for change. We've put it into action and we're going to keep doing it.”
When asked if Speaker Johnson was open to cutting more NYPD funding or whether he believes it is at an appropriate level, a spokesperson simply said in a statement, “The Council is in budget negotiations with the Administration.”
The speaker has expressed some support for continuing the work begun last year, though its unclear if he will take the lead. In an April video interview with Gotham Gazette discussing his run for comptroller, Johnson said, “I do think we should look at opportunities to reinvest money out of policing and into communities, social services, mental health, education. We should demilitarize the police. I think those are things that we should always be doing.”
Noting that he has to balance the varying concerns of his colleagues on the Council, he said, “This year, I think we're going to go through a similar process of having to find consensus inside the body, listening to members on all sides and figuring out what works.”
It's unclear when a city budget may be finalized, though it is likely it will be between primary day, June 22, and the July 1 start of the new fiscal year, given that Johnson and many Council members are focused on the elections. Activists who last year were protesting and keyed in on the city budget may also be more tuned into the election cycle this year, trying to get their favored candidates elected to have a better chance at achieving their goals under the next mayor and Council.
But police reform activists are still pushing this administration and Council to live up to their past promises and go further, though their cries so far appear to be falling mostly on deaf ears amid increases in violent crime. The city is also flush with federal funds, unlike last year when a $9 billion budget deficit meant that the administration was slashing spending at many city agencies.
Nonetheless, activists, some elected officials, and many candidates for office this year want to see structural reforms to policing enacted sooner rather than later, including shifting the safety officers to the DOE, removing armed police officers from all schools and from response to homelessness and mental health crises, and curbing the use of surveillance technology and increased militarization.
“One of the challenges with this year's budget is the huge influx of federal dollars, which has allowed the mayor and many council members to dismiss the call to defund the police because ‘there's enough money to go around,’” said Keli Young, civil rights campaign coordinator at VOCAL-NY, a progressive reform group, in a text message. “This ignores the racist and classist history of policing in this country and the harm they have — and continue — to inflict on our communities. Federal dollars do not change the fact that broken policing systems are the real threat to public safety.”
Among the demands from VOCAL-NY, which is part of the Communities United for Police Reform coalition, are the creation of a non-police street response team and divesting $3 billion from the NYPD to be reinvested in community safety programs.
“It feels like the mayor has just continued to not listen to the calls that started last year to divest from the NYPD,” said Kesi Foster, a spokesperson for Communities United for Police Reform, in a phone interview. “In order to begin to protect New Yorkers from violence from the police, from misconduct, from biased and racist policing, we've got to reduce their scope and their funding and their power and authority. There’s no indication on the mayor’s side or even from the speaker’s side that any of them are willing to do that.”
On the one-year anniversary of George Floyd’s death on May 25, Brooklyn Council Members Brad Lander and Antonio Reynoso were the only two members who marched with activists and family members of people killed by police to call for defunding the NYPD, they said in a press release. They were also two of the "no" votes from the left last year on the current budget.
Lander, who is also running for comptroller this year, took issue with the fact that the budget includes more funding for school safety agents and for mental health co-response teams, which will still involve police.
“It's obviously the young people who believe we should not have cops in their schools. That’s not solely about cutting the funding and putting it elsewhere,” he said. “That’s saying, instead of having cops in schools, we want a guidance counselor in every school which this budget does not have. And we want restorative justice programs in every school, which we do not have.”
There are, of course, members of the City Council from both parties who will push back against any new proposed funding cuts to policing. Among them is Staten Island Republican Joe Borelli.
“These are completely unserious people,” Borelli said of the ‘defund’ activists, in a phone interview. “If we did all these police reforms and defunding and it didn't correlate with an unmitigated and unprecedented rise in crime, I’d keep my mouth shut. But you'd have to be blind to not see what's going on.”
“If we defunded the Parks Department, the grass would grow higher,” he added. “This is the same thing.”
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by Samar Khurshid, senior reporter, Gotham Gazette
@samarkhurshid @GothamGazette
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