Promising Projects Faster and Cheaper, Adams Administration Pursues Capital Construction Reforms
Mayor Adams hails housing construction (photo: Ed Reed/Mayoral Photography Office)
New York City’s infrastructure construction process is broken and Mayor Eric Adams wants to fix it.
The city’s capital budget funds infrastructure projects across the five boroughs, including new construction, maintenance, and repairs to everything from parks, schools, hospitals, and libraries to mass transit, sewers, courts, jails, police precincts, and more. But as New York City is in desperate need of sweeping infrastructure upgrades, there’s broad and begrudging acceptance that capital projects are inefficiently managed, leading to years-long delays and millions, if not billions, in cost overruns.
Having been elected in part on promises to fix how city government functions, Mayor Adams is attempting a comprehensive effort to reform the capital process through a series of internal improvements and a package of proposed state legislation that the administration projects would cut years off project timelines and save tens of millions of dollars each year. Some experts, however, question whether the proposals will make the kind of change that's really needed to deliver more projects more efficiently, considering that the city’s capital budget is roughly $16 billion annually.
The mayor’s preliminary budget proposal released in January includes a ten-year capital strategy of $159.3 billion, the largest-ever allocation in the city’s history. It includes $31.3 billion for transportation infrastructure, $29 billion for environmental protection, $18.7 billion for housing preservation and development, $17.2 billion for education and school construction, $8.8 billion for parks and recreation, $6.3 billion for resiliency and efficiency, $6.1 billion for economic development, and $3.8 billion each for health and hospitals and sanitation, and $34.3 billion for other purposes. The city is also expected to receive billions of dollars in federal infrastructure funding from the $1.2 trillion Bipartisan Infrastructure Law, which will send New York State $27 billion overall.
While the capital budget grows every year, so do the delays and costs associated with it. An independent portal launched in 2021 by a group of civic technologists, led by Devin Balkind, a former candidate for public advocate, showed the extent of delays and cost overruns for the city capital projects. Out of 5,095 projects analyzed, 2,950 were over budget, 2,871 were running long, 983 were starting late and 3,117 were ending late. Originally projected to cost $86.7 billion altogether, the projects had ballooned to an estimated $141 billion, $54.7 billion over budget.
Last year, in April, Adams created a Capital Process Reform Task Force, led by then-First Deputy Mayor Lorraine Grillo, which included Comptroller Brad Lander and stakeholders from the construction industry, labor unions, Minority- and Women-Owned Business Enterprises (M/WBEs), and others. That task force issued an initial set of 17 recommendations in October, followed by another 22 proposals in its final end-of-year report, released January 4.
“There is a covenant between government and the people of our city: New Yorkers pay taxes, and they expect that we deliver for them. For far too long, we have betrayed taxpayers when it comes to building public infrastructure,” Adams said in a statement accompanying the report’s release. “Now is the time to overhaul the slow and expensive process we go through to build public facilities so we can ‘Get Stuff Done’ for all New Yorkers — reconstructing streets, repairing bridges, bringing water to people’s homes, creating parks and libraries, and more. I am proud that our administration is advancing these recommendations today and look forward to advocating for needed changes at the state level in the upcoming session in Albany.”
In all, the task force’s 39 recommendations include 30 internal reforms that are within the power of the Adams administration and 9 legislative proposals that will require state approval.
“I have devoted my career to bringing New Yorkers the best public assets possible, but the existing capital process has not made it easy,” said Grillo — now the former first deputy mayor who previously led the city’s School Construction Authority (SCA) and Department of Design and Construction — in a statement when the report was released. “The task force’s 39 recommendations represent a real reform agenda, backed by the experts in the industry, and I am confident that the support of these leaders with different vantage points will translate into achieving real change.”
Administration officials said in a background briefing that the proposals will altogether modernize and streamline the capital process, cut redundant regulations, speed up projects and maintain accountability. They emphasized that though many of the current rules in place were originally well-intended – to ensure adequate oversight and prevent corruption and misuse of public funds – they have become barriers to an efficient capital process. Eliminating some of those rules, just as the state did during the covid emergency, will not completely do away with safeguards, they said, since oversight mechanisms continue to exist even in emergency situations.
Comptroller Lander also echoed that point. “This is a problem of a system that over time has gotten calcified by far too many bureaucratic steps, many of which were adopted for thoughtful reasons at the time, but which have collectively proved to be just extraordinarily slowing weights on the system,” he said in a phone interview. “Part of the challenge, that means, is that there's no silver bullet, no easy fix — there's a lot of steps that have to be taken to transform the system.”
When Lander was a member of the City Council, he successfully sponsored legislation that was approved in 2020 to create an online capital projects tracker to allow the public to view progress of projects across the city. That tracker is set to launch this Spring, and may be the most crucial aspect of the reform agenda, Lander said. “Today, we would not be able to meaningfully measure the timeliness or expenditure of projects from start to finish – essentially what it was expected to cost in the beginning and how it’s shifted over time, across agencies in a comparable way,” he said.
After the tracker and the reforms are implemented, however, “I think we can save billions of dollars and I think we could probably cut 20% off the time that projects take,” he predicted.
“This is arguably the least sexy issue in public policy but one that is so well-positioned to help New York City for the long-term,” said Eli Dvorkin, editorial and policy director of Center for an Urban Future, a nonprofit urban policy think tank. CUF’s landmark infrastructure report, “Caution Ahead: Overdue Investments for New York's Aging Infrastructure,” from March 2014 helped shape the ongoing discussion around the city's infrastructure woes, and the think tank has issued several follow-ups that point to solutions, including a recent report in 2021.
“This has been a problem decades in the making, with a combination of challenges of the city's own making, and barriers or issues that stem from state law and rulemaking,” Dvorkin added. “And the combined effect is a capital construction process that costs hundreds of millions of dollars more than it should and takes months, if not years longer than it should.”
Many of the recommendations are technical, but in sum the Adams administration believes they would have an enormous impact.
Specific Recommendations
Among the state proposals are changes to procurement and M/WBE policies, insurance, and alternative delivery methods. They would allow the city to solicit electronic bids instead of paper and allow the Procurement Policy Board to issue public notices instead of requiring a public hearing for a project, which is currently set for procurements above $100,000 and adds about three weeks to the process.
Other proposals would enhance support for M/WBE contracting by increasing the M/WBE small purchase threshold from $1 million to $1.5 million (which allows contracts to be awarded without a competitive bidding process beholden to other laws), on par with public entities like the MTA. Another bill would expand M/WBE mentorship programs, currently run by the School Construction Authority and the Department of Design and Construction (DDC), to all city agencies.
Another two bills would make it easier for M/WBEs and smaller contractors to obtain insurance for projects, which is otherwise exorbitantly costly.
In 2019, seven city agencies were given design-build authority, which combines the design and construction procurement processes into one, lowering cost and time. Under a new proposal, the city is now pushing for what the industry calls progressive design build, which allows even earlier collaboration between city agencies and design and construction firms, and improves the speed and design of projects.
The city is also pushing for two project delivery models – Construction Manager-Build and Construction Manager-at-Risk – that are only currently allowed during a state of emergency. The models were crucial to projects during the pandemic, allowing DDC to build COVID-19 testing facilities in “an average of seven days with 55% M/WBE utilization” and “three permanent healthcare facilities in an average of 192 days with 46% M/WBE utilization,” according to the task force’s report.
These “alternate delivery methods” have also been utilized more recently in the building of the city’s controversial Humanitarian Emergency Response and Relief Centers (HERRCs) to house thousands of migrant asylum seekers who have arrived in the city over the last year.
Arguably the most important reform the city is seeking is converting the Department of Design and Construction from a city agency into a public authority like the SCA, under the purview of the state Public Authorities Control Board. That move would reduce bureaucratic red tape for the body, cut down on redundant oversight, and streamline projects without sacrificing transparency and accountability, according to the city officials who spoke to Gotham Gazette.
The administration expects that some of the state legislation will require a home rule message from the City Council. "The Council is a valued partner and we hope they will play an important role in advancing this reform agenda. The determination of which bills are flagged for home rule is entirely up to the Legislature through their respective home rule counsels," a City Hall spokesperson said in an email.
Along with the state proposals, the internal reforms include a series of technical changes that would ensure that projects begin quicker, more projects fall under already standardized rules, contractors are paid faster, M/WBEs can be placed on pre-qualified lists for certain types of projects, invoices are standardized across city agencies, invoices are efficiently tracked, and more.
Potential Impact
“There are really practical, concrete recommendations in there…and if they are implemented, they will be, in my view, highly effective in making progress on both the cost overruns and the exorbitantly long timelines for these projects,” Dvorkin said.
“When you look at the procurement reform process, cutting red tape, streamlining approvals, it's a no-brainer,” said Carlo Scissura, President and CEO of the New York Building Congress, a membership association of the construction industry. Scissura and his fellow industry leaders have advocated for capital reform for years, and are optimistic about the reforms proposed by the Adams administration.
“It's an impact on not just construction and the trades. It’s on everyday New Yorkers,” he said. “It takes too long to build a wing on a hospital or a sewer line or a road. It is hurting everyday New Yorkers.”
Currently, under state law, the city is required to award contracts to the lowest bidder, which the administration is trying to change under one of its proposals. Though it seems counterintuitive – awarding higher bids that could cost more – experts say that the lowest bids are not always the most efficient, since firms with more experience and expertise may be rejected because of costlier bids. “If you look specifically at design-build, it can't always go to the lowest bidder,” Scissura said,
One key part of the internal reforms is to make it easier and quicker for government and contractors to handle change orders, which can often delay projects that are underway and make them costlier in the process.
“New Yorkers would benefit from having parks and libraries that are offline for shorter periods of time, and they come back better than ever, faster than ever,” Dvorkin said. “I mean, these are really meaningful improvements in the lives of everyday New Yorkers.”
Members of the City Council have spent years attempting to reform the capital budget and construction process. Staten Island Council Member Joe Borelli, the Republican minority leader, introduced legislation last year that would increase transparency around capital projects, their costs and timelines, after being frustrated by the previous administration’s failure to address inefficiencies in the capital process. When he introduced the bill, he cited the construction of a bathroom (comfort station) in Seaside Wildlife Nature Park – a project that he secured for his district and which was meant to cost $6 million, but saw its projected costs increase to more than $10 million. “This has come to a critical point, where so much of our capital debt is going to pay for projects that exist only on paper,” he said in a statement to Gotham Gazette, when asked about the Adams administration’s reform proposals. “We have paralyzed ourselves and this reform is badly needed. Full speed ahead.”
Council Member Shekar Krishnan, a Queens Democrat who chairs the Council's parks committee, has taken his own targeted approach, proposing a new Parks Construction Authority, modeled on the School Construction Authority, to reduce delays on parks projects. The proposal is part of his five-point plan to improve and maintain parks, plant more trees, make waterfronts more accessible and upgrade playgrounds across the city.
Citizens Budget Commission, a nonprofit watchdog group, has spent years arguing for capital process reform. CBC’s Ana Champeny, vice president for research, and Sean Campion, director of housing and economic development studies, praised the Adams administration for addressing the big-picture issues and the nuts and bolts reforms together. “It's a nice balance in that way,” Champeny said.
Campion noted that the city showed that it could deliver on projects when it received emergency authorization during the pandemic, as DDC officials highlighted. And that could help the city’s argument for other reforms presented to the state. “They've had some track record of getting this authority and using it…,” he said. “I think as you see the progress from some of what's already happened, it may give some momentum to some of the other stuff.”
Champeny expressed concern over what she called an unexpected proposal to make DDC a public authority. “I think it's sort of an interesting idea that would require more details…to figure out if that’s really the best way to address some of the challenges that the city is facing,” she said, noting that public authorities like the School Construction Authority and the New York City Housing Authority (NYCHA) aren’t as transparent about their budgets as city agencies.
“I think, for us, the main thing is not doing this merely to sidestep the procurement rules which the city has, which, yes, they are onerous, but many of them are also put in for some very valid reasons,’ she said.
Campion and Champeny did make several recommendations as well. They noted that the reform report did not address the city’s scaffold law, which contributes to higher costs. And they urged the city to be more transparent about reporting on agency performance and tracking capital project delivery. “It's not that it's something they omitted, it's something that I would like to see more of a focus on,” Champeny said of the tracking process.
Stephen Smith, executive director of the Center for Building in North America, a research nonprofit he founded last year, said that “tens of millions of dollars every year” are paltry savings for a capital budget that runs into tens of billions every year. “They don't seem to have any faith in their own ideas,” Smith said in a phone interview. “Tens of millions is so low that it's totally swamped by just ordinary inflation…Whether they actually save any money or not, it's impossible over the next few years to go back and look and see if it is, because what they're claiming is being overwhelmed.”
“They're claiming that they're going to do it imperceptibly faster, imperceptibly cheaper, which, well, it's not perceptible so no one can really judge them on it. But fundamentally, it seems like they've given up before they’ve even started,” he added.
Smith was particularly not convinced by the proposal to establish DDC as a public authority. “Public authorities in New York have the same exact issues. The Port Authority, the School Construction Authority, have all of the same issues if not worse, so on its face, I don't see why that would change anything,” he said.
Smith did share the criticism that others have levied, that state rules have made the capital process overly onerous for contractors, effectively limiting competition in the public contracting field. He also cited the scaffold law and noted its exclusion from the administration’s proposals. “Quite obviously,” he said, “they're not proposing anything that is going to substantially alleviate the compliance burden of working for government, especially.”
Smith said that a key part of the problem is Adams’ administration being staffed with too many top officials who have been in city government for many years, overseeing the very problems they are now supposed to solve. “So I don't know what would change things,” he said. “That's like a big, difficult question, but I would say probably start with new leadership.”
***
by Samar Khurshid, senior reporter, Gotham Gazette
@samarkhurshid @GothamGazette
Officials, Advocates Analyze Implications of Hochul's 'Housing Compact' on New York City
Governor Hochul, Mayor Adams & others at ground-breaking (photo: Kevin P. Coughlin/Governor's Office)
Last month, in her State of the State address, Governor Kathy Hochul proposed a “Housing Compact” to build 800,000 units of housing across the state over the next ten years. It is an ambitious plan that aims to tackle the state’s dire housing shortage by leveraging private development, setting mandatory housing creation targets, promoting density near mass transit stations, and easing regulations to bolster the state’s meager housing production.
On Thursday, a panel of government officials and other experts examined the sweeping implications that the proposal will have for New York City, where the housing crisis is acutely felt and where Mayor Eric Adams’ administration is pursuing its own complementary efforts to spur housing production.
Thursday’s event was hosted by the NYU Furman Center, which focuses on housing policy, and moderated by Vicki Been, faculty director of the center and former deputy mayor for housing and economic development under Mayor Bill de Blasio. The panelists included Alicka Ampry-Samuel, regional administrator overseeing New York and New Jersey for the U.S. Department of Housing and Urban Development (HUD); Dan Garodnick, commissioner of the city’s Department of City Planning and chair of the New York City Planning Commission; Annemarie Gray, executive director of Open New York, a nonprofit pro-development advocacy group; and Cea Weaver, campaign coordinator of the statewide Housing Justice For All coalition that focuses on tenant protections and social housing.
Ahead of the panel discussion, RuthAnne Visnauskas, Commissioner and CEO of New York Homes and Community Renewal, the state’s housing agency, pointed to the state’s desperate need for more housing as she highlighted the top lines of the governor’s plan. New York State has created more than 1.2 million jobs over the last ten years and only 400,000 units of housing; of those, New York City accounted for 780,000 jobs and 220,000 homes. Between the 2010 and 2020 Census, the state’s population increased by 823,000 residents, more than 629,000 of whom were New York City residents. But some parts of the state have seen drops in population, while many New Yorkers appear to be leaving the city based on the high cost of housing.
Visnauskas said the governor’s plan assumes another 400,000 homes would be created over the next decade following the current trend, while the state creates a framework to build an additional 400,000. “We need to make up for decades of underproduction,” she said. “We need it to make sure that we can support our growing economy and we need it to make sure that there's more affordability for New York's housing and families.”
The main strategies include setting housing unit growth targets for every three years of 3% for New York City and its suburbs and 1% for upstate; rezoning for transit-oriented development; easing conversions of commercial space into housing; legalizing and incentivizing basement apartments and other accessory dwelling units (ADUs); and establishing other new tax incentives for affordable housing.
Visnauskas also cited studies from other municipalities to dispel concerns that increasing development would either lead to displacement and gentrification in the city or reduce property values in suburban counties. She did concede that the Housing Compact would be fine-tuned over time as the nitty gritty details are debated, discussed, and analyzed. “What we have proposed is not perfect,” she said. “We think it is a great framework.”
The governor’s plan will now be the subject of not only much public discussion and debate, but state legislative hearings and negotiations ahead of a budget that is due by the April 1 start of the new state fiscal year. Hochul, a Democrat who just won her first term in the governor’s office, must reach compromises with the Democratic supermajorities in both houses.
Each of the panelists at Thursday’s event praised the governor for taking the housing crisis head on, though they had varying concerns, predictions, and prescriptions for the state’s approach.
“It allows for municipalities to have a vision and something on paper that they can start with,” said Ampry-Samuel, a former Democratic member of the New York City Council from Brooklyn. She did have one major concern, however. Hochul’s plan proposes exemptions from full environmental reviews in certain cases under the housing targets and transit-oriented development proposals. “When you get into certain communities, environmental justice issues are huge…So that piece of it makes me a little leery,” Ampry-Samuel said.
There was agreement on the panel that the most impactful policy – a mandatory 3% housing growth target for the city and its suburbs every three years – may also be the most challenging.
“The thing which creates the most opportunity is the growth target,” said Garodnick, also a former Democratic City Council member, from Manhattan. “The thing which creates the most difficulty is the growth target.”
To meet that target, the city would have to build 360,000 housing units in a decade, a daunting prospect but one that Mayor Adams wants to surpass. Adams has announced several housing-related plans, including an initial plan in June titled, “Housing Our Neighbors: A Blueprint for Housing and Homelessness,” which did not include any numerical targets for housing, followed by his “Get Stuff Built” plan in December which set a “moonshot” goal of 500,000 units over ten years.
Prior to those plans, he announced the concepts for three major citywide zoning text amendments under his “City of Yes” plan, which Garodnick said would “complement” the governor’s plan. They are in various stages of development, with the one most focused on housing supply, Zoning for Housing Opportunity, expected in draft form sometime this year from the Department of City Planning. The administration faces the formidable challenge of adapting and applying that amendment to the city’s 59 individual community districts, each with varying permitted zoning uses, as well as, possibly, the governor’s proposed mandate for housing growth that applies on the community district level in the city.
“The thing that's going to be the most challenging is the growth targets not just in New York City, but in the New York City suburbs,” said Weaver. Housing growth in suburban counties has severely lagged behind suburbs in neighboring states because of restrictive housing policies on Long Island and in Westchester. The governor’s plan is already facing opposition from local elected officials, mostly Republicans, who say it will supplant local decision-making. Almost no one disagrees with the notion that the state must significantly ramp up housing supply.
Hochul’s plan comes with carrots and sticks. To help localities build more housing, the governor proposed funding to aid localities with planning and for infrastructure to support more population density. But, if localities fail or refuse to meet the housing growth targets, her plan creates a fast-track process to expedite zoning approvals.
“We think there's a lot of synergy between what we are working on and have been working on and what the state is now proposing,” Garodnick said. He noted that the overall proposal incentivizes the Adams administration to advance its own citywide strategy, particularly the Zoning for Housing Opportunity text amendment that would encourage housing creation across the city, in low- and high-density areas, by increasing the floor area ratio for all types of affordable housing (on par with the current allowance for senior housing), expanding acceptable types and sizes of housing, making it easier to convert commercial buildings to housing, and reducing parking requirements. “Now if the state's proposals are adopted, that helps speed up our work in a real way,” Garodnick said, noting that the text amendment will likely head to the City Council for approval in late 2024.
On that timeline, Been noted to Garodnick, it will only go into effect by mid-2025.
“That's right, you got it,” Garodnick said. “They've got us on a clock.”
The city and state will also benefit from federal support, Ampry-Samuel said. Last May, President Joe Biden announced a Housing Supply Action Plan to address the country’s housing shortage. “The federal government is, under this administration, doing everything we can to make it easier,” Ampry-Samuel said, noting that the federal plan echoes the state and city’s own efforts.
The panelists did have recommendations to improve Hochul’s housing compact.
Weaver said the plan should include core tenant protections such as a right to lease renewal, a right to negotiate rental increases, and particularly passage of the “good cause” eviction bill proposed by State Senator Julia Salazar and Assemblymember Pamela Hunter that would prevent exorbitant rent raises and protect tenants against evictions unless they violate their lease.
She also argued for a robust Housing Access Voucher Program (HAVP), proposed by State Senator Brian Kavanagh and Assemblymember Linda Rosenthal. “This feels like a no-brainer to me,” she said of the voucher program, which was recently passed again by the State Senate in the new session that began last month (it did not pass the Assembly last year and Hochul has not supported it). “This is something that we really deeply support and the real estate industry deeply supports, but it's not in this plan.”
Gray from Open New York said the lesson New York should take from other jurisdictions is creating strong mechanisms for enforcing the housing targets by allowing nonprofits to file lawsuits through a private right of action and stiff penalties for localities that delay projects on purpose. “That was something that we think is really important to get stronger so that this framework actually is effective, and there's accountability,” she said.
Garodnick emphasized the need to reform the state’s environmental review process, which he said is “old and outdated” and often ends up “being a defense of the status quo, which is inconsistent with New York City's own environmental goals.”
He said one of the larger issues is offering tax incentives to encourage developers to build more housing. Last year, Governor Hochul proposed a replacement of the expired 421-a affordable housing tax credit, but her alternative 485-w program was shot down by the Legislature. In her plan this year, she did not put forward another proposal, though she did include a four-year extension of the deadline for buildings to be completed in order to receive 421-a benefits. Hochul has indicated that she wants to negotiate a new program with the Legislature.
“We can do a lot of the regulatory work here and set up a framework which enables something to happen but if it does not pencil out, it won't actually get built,” Gardonick said of how development is financed.
Without a tax incentive program, Garodnick said building affordable housing is “very difficult and I think history has shown that it's a very important incentive to actually get this done and to build, in particular, the affordable units that we want to build in the most expensive areas of the city.”
Ampry-Samuel said she would like to see an “intentional focus” on also funding the New York City Housing Authority (NYCHA), public housing home to roughly 400,000 New Yorkers. “If we could figure out a way to provide funding and prioritize the preservation of the most affordable housing stock that we have, I would love to see that,” said Ampry-Samuel, who oversees NYCHA in her HUD role and previously chaired the City Council’s public housing committee. Even when Democrats held the presidency and both houses of Congress over the last two years, they did not provide an influx of federal funding for much-needed NYCHA repairs.
There was broad agreement among the panelists that the governor's plan will require buy-in from all stakeholders, from community residents to City Council members, and clear communication about the benefits it will have in the long run.
Garodnick said the city is already taking that approach to the citywide zoning amendments. “Now I certainly feel a sensitivity to the dynamic that is at play on the other side,” he said, citing his experience in the City Council. “The pressures that Council members are feeling on this front, it's real, it is not just made up. It is hard for them to do these things. And so our primary role here is to shape an ambitious proposal which gets us to where we need to be, but also enables us to bring people along with us for this process.”
Gray said the state needs to “be really clear and kind of take the temperature down of what this is.” “This is doable. This is actually not that crazy…and it really benefits so many people to have a world with more diverse housing options,” she added.
Even as housing growth has been sluggish in the city, it has also been inequitably distributed. Been of the Furman Center, formerly both a deputy mayor and city housing commissioner, pointed to a map showing that, between 2011-2019, only about one-third of the city’s 59 community board districts exceeded a 3% growth rate of housing unit permits issued every three years. The question, she asked, is how the city can build more affordable housing in areas that are well-resourced and amenity-rich but have had little housing growth — in part where the state mandates by community district and the transit-oriented development rezoning requirements would come into play.
Many local elected officials including City Council Speaker Adrienne Adams and the borough presidents in Manhattan, Brooklyn, and Queens have expressed support for aggressively pursuing housing growth, some issuing or pursuing their own housing plans. Speaker Adams proposed a housing agenda in December along with a Planning and Land Use toolkit to improve the city’s land use process. Manhattan Borough President Mark Levine recently released a plan to build 73,000 homes on 171 vacant sites in the borough. Brooklyn Borough President Antonio Reynoso launched a comprehensive planning effort for his borough in April last year, with a draft report expected this Spring. And Queens Borough President Donovan Richards has been staunchly talking about housing growth all over the borough for years, emphasizing that it is his top priority.
The map, Garodnick said, illustrates the barriers to development in the city. “The state proposal and our city proposal are designed to enable more housing everywhere,” he said. If the Adams administration’s citywide strategy is successful, “you will see development flow naturally into the areas where we had so many barriers before, both in the higher density areas and in the lower density areas where we have seen very little happening because it has been blocked.”
***
by Samar Khurshid, senior reporter, Gotham Gazette
@samarkhurshid @GothamGazette
Examining Midtown Traffic, Former NYC Transportation Commissioner Calls for New For-Hire Vehicle Regulations
Midtown streets (photo: Benjamin Kanter/Mayoral Photo Office)
As the MTA and partners prepare to implement congestion pricing in New York City to raise needed funds for transit infrastructure and reduce traffic, a former New York City transportation commissioner proposes that the state and city should primarily target for-hire vehicles that he assesses as the true culprits behind Midtown’s congestion woes.
In a recent study, Lucius Riccio, adjunct professor of statistics, analytics, and operations at NYU's Stern School of Business, found that 36.3% of 2,000 vehicles he recorded in randomly selected Midtown locations were for-hire vehicles run by app-based companies like Uber and Lyft; another 32.7% were personal cars and 14.2% were yellow or green cabs. If only cars are taken into account, for-hire vehicles accounted for 43.6%, personal cars 39.3%, and cabs 17.1%.
Riccio, a former MTA board member and DOT commissioner under Mayor David Dinkins, said his findings illustrate that for-hire vehicles are the real driver of traffic congestion in Midtown, and other parts of Manhattan too. The MTA is attempting to tackle the larger issue with congestion pricing, which was approved by the state in 2019 and is set to be implemented on a delayed timeline sometime later this year or next.
The program will impose tolls of between $9 and $23 for vehicles entering Manhattan’s Central Business District, below 61st Street. Different types of vehicles, including for-hire vehicles, will likely be subject to different fees, which are being determined by the Traffic Mobility Review Board.
The number of for-hire vehicles skyrocketed in New York City in the last ten years, crossing 100,000 in 2018, which prompted the New York City Council and then-Mayor Bill de Blasio to impose a one-year cap on new for-hire vehicle licenses. That cap has since been extended multiple times, including in March 2022 under Mayor Eric Adams. In August, however, the NYC Taxi and Limousine Commission ruled that it would issue 1,000 new for-hire-vehicle licenses, limited to electric vehicles.
“This invasion seriously affected the established yellow taxi system, the city's first true congestion pricing program and probably the best regulated taxi system in the world,” Riccio said in a phone interview.
As Riccio set out to examine the effect of for-hire vehicles on congestion, he recorded 90 short videos at random spots in Midtown during October and November, which he posted to his YouTube channel. Struck by the volume and percentage of for-hire vehicles making up Midtown traffic, he concluded that the city and state need to do more to discourage the proliferation of for-hire vehicles on city streets, including by raising the costs of operating them. As he noted in his study, there are about three times as many for-hire vehicles in the city as traditional cabs, and while cab drivers spent millions on taxi medallions (before the industry crashed and sent many drivers deep into debt), for-hire vehicle operators only pay about $275 for an annual vehicle license fee.
“The city missed a huge opportunity to charge the for-hire vehicles what they charged the yellows,” said Riccio, noting that the city could have charged FHVs high “entry” fees and raised close to $100 billion in revenue over time if each had been close to the price of a taxi medallion. Though he concedes that at a higher price point, the city would hardly sell 100,000 for-hire vehicle licenses.
“These people have gotten away without paying and they're killing the business of people who have paid,” he added. “if everybody else paid what the yellows had paid, the MTA would have all the money it needs.”
Instead, he recommends a reset and new permit fee bidding system under which the city can bid out 100,000 one-year permits for for-hire vehicles in the first year, setting a price of about $5,000 each, and raising $500 million in the process, “enough to build a mile and a half of new subway tunnel each year.” In the second year, the city could bid 80,000 permits and raise the price to $6,500, raising another half-billion dollars, and so on until the number of for-hire vehicle permits reaches parity with the 13,587 taxi medallions in the city.
Not only would the plan raise revenue – to boost the coffers of the MTA and improve mass transit service, and therefore ridership – it would also directly reduce traffic in Manhattan by cutting down the number of authorized for-hire vehicles.
Additionally, with congestion pricing set to move forward, Riccio proposes a Community District-based residential parking permit program, which would protect neighborhoods around the planned congestion zone from having to absorb commuters searching for parking. The notion is something that has been floated by others like DOT Commissioner Ydanis Rodriguez, when he was a City Council member, and Manhattan Borough President Mark Levine, though there has been no apparent movement to make it happen.
Riccio also argues that yellow and green cab operators should be immune from new congestion charges – since they have already paid into the system for their medallions – while the fees for cab licenses should either be reduced or dedicated to a fund for drivers. (Both taxi drivers and app-based for-hire vehicles currently pay a smaller congestion surcharge for rides south of 96th Street, which went into effect in 2019 and raises about $400 million annually for the MTA).
The MTA’s developing congestion pricing scheme, also called the Central Business District Tolling program, continues to be controversial. Supporters have said it is necessary to curb traffic, raise funds for mass transit improvements, and also to limit harmful greenhouse gas emissions and reduce the reliance on car culture in the city. But opponents have said it will impose undue costs on drivers – who could pay as much as $23 to enter the congestion zone – and push vehicles to other neighborhoods already choked with traffic.
The New York City Department of Transportation and the MTA, a state-run authority, had little to say about Riccio’s proposals.
“The City continues its efforts to address the subject through congestion pricing and by providing alternative modes of transportation,” said Scott Gastel, a DOT spokesperson, in an email.
The MTA’s Traffic Mobility Review Board, meanwhile, is in charge of creating the rates and regulations of the congestion pricing program, which is awaiting approval by the federal government.
“The effects that Central Business District Tolling would have on for-hire vehicles have been modeled under the environmental assessment. Toll rates and any discounts, exemptions or credits would be recommended by the Traffic Mobility Review Board,” said Aaron Donovan, an MTA spokesperson, in a statement that did not directly address Riccio’s findings.
“Lyft is committed to helping reduce traffic and congestion in NYC. It's why we are supportive of comprehensive congestion pricing, and in fact, 40% of our commute hour rides on the platform are on Citi Bike,” said CJ Macklin, a Lyft spokesperson in an email. “The study's findings do not match the MTA's and TLC's own analysis, which found that for-hire vehicle trips are still below pre-pandemic levels and cannot be attributed to the city's recent increase in congestion."
The TLC analysis referenced by Macklin showed that for-hire vehicle trips have recovered to about 83.2% of the pre-pandemic level. And while for-hire vehicle registrations crossed 120,000 in 2019, the MTA’s congestion pricing environmental assessment report from August 2022 showed that the number of for-hire vehicles making trips fell to about 70,000 by April 2022.
Riccio does note that his study is not comprehensive – he did not undertake a true random sampling but rather recorded streets “while going to and from the subway during the course of the day on the way to and from work.” He also noted that he did not study weekday traffic on bridges and tunnels entering Manhattan, and evening and weekend traffic.
***
by Samar Khurshid, senior reporter, Gotham Gazette
@samarkhurshid @GothamGazette
|
Tweet |
