Photo (c) Gotham Gazette

Restaurants and small businesses are folding along Prospect Avenue.

You only have to walk along any city commercial strip to notice the myriad of "for rent" signs. They are popping up on storefronts across New York, as merchants of all types struggle to survive. The faltering economy deserves some of the blame, but many small business owners maintain the uptick in those signs preceded the current fiscal crisis.

Lauren Gonzalez's family-owned photo studio in Corona, Queens is in danger of closing after over 40 years. For more stories, view our audio slideshow on small businesses.

In fact, they argue, the real estate boom did as much if not more to cause the closings of New York's mom and pop shops as the current recession has. Landlords, they say, realizing the market would support almost any amount asked, hiked rents, sometimes by astronomical proportions. Long-time tenants were often pushed out.

Earlier this month, U.S. Rep. Anthony Weiner issued a report finding that more than 12 percent of the small businesses surveyed had closed. Brooklyn had the highest rate of vacant storefronts -- more than 14 percent -- but press reports reveal even Manhattan's upscale Madison Avenue isn't immune. Its retail store vacancy rate rose from 8 percent at the end of 2007 to above 12 percent in 2008. While not all of these vacant spaces once housed mom and pop operations -- the empty store at Brooklyn "junction" of Flatbush and Nostrand Avenues, for example, used to have a Circuit City -- many did.

Thriving local businesses are "barometers of the health and vitality of a neighborhood," said Ron Shiffman, a city planner who teaches at Pratt's Graduate Center for Planning and the Environment.

The empty storefronts leave a void in a community "especially when there are multiple vacancies on a single stretch," said Quenia Abreu, president and CEO of the New York Women's Chamber of Commerce. "The community shops someplace else, [taking] money out ... employment is taken out. Then [we] start seeing a problem with increasing criminal acts," such as vandalism, she said. "It's sad to see the start of community deterioration when we worked so hard to revitalize" these neighborhoods.

To stem the tide of closings, City Councilmember Robert Jackson has proposed the Small Business Survival Act. With 18 sponsors, Intro. 847 would give commercial tenants rights they do not currently possess when renewing a lease.

The bill continues a debate that has gone on in New York City at least since the 1980s. What, if anything, should government do to help and preserve the city's small businesses?

A Lost Cause?

Certainly many could use some assistance. A recent survey released by the U.S.A. Latino Chamber of Commerce based on data collected from all five boroughs between November 2008 and January 2009 underscored the gloomy situation. Of the 927 Hispanic businesses included, 53 percent said they are in danger of closing, with 74 percent reporting "high rents and unreasonable lease terms" as the main culprits. Two-thirds cited the "rising costs of doing business" in New York, followed by 65 percent who said municipal taxes and fees are excessively costly.

More than 90 percent described having had a "negative experience" while attempting to renew a lease because owners abused their power; 87 percent felt they had no rights at all during the renewal process. Moreover, a third of respondents reported a landlord demanded money in order to renew their lease, which is illegal. The owner made it clear to the merchant that there would be no renewal unless the storeowner paid an additional fee, off the record, off the books and outside the purview of the lease terms.

Although the issues extend beyond the Hispanic community, there is, said Abreu, "a disproportionate effect on minority and women-owned enterprises... such as beauty shops and bodegas." This is especially true in areas like Harlem and Washington Heights in Manhattan and Jackson Heights in Queens.

Setting Controls

The threats to these businesses are hardly a new phenomenon. Twenty-five years ago, in the face of the first great wave of modern gentrification, Manhattan's Upper West Side witnessed a slew of closings of neighborhood staples: bakeries, hardware stores, bodegas. What makes this round unique, according to merchants, is city government's attitude of indifference and a climate of in-hospitality -- even hostility -- toward them. Business owners point to uncontrolled escalating rents, countless neighborhood rezonings and the creation of more Business Improvement Districts (BIDs) as evidence.

Steve Null, who founded the Coalition for Fair Business Rents in 1984, wrote in an email, "A perfect storm has arrived with decades of rent gouging, abuses and corruption with no hope for a better future -- in a major down economy with the highest rents, landlord passalongs, taxes, utilities, insurance etc. All hell is about [to] happen on Main Street NYC if someone does not quickly regulate these out of control greedy landlords."

Jackson's bill attempts to address some of these challenges. "The absence of legal protection... has unnecessarily accelerated the closing of small businesses and resulted in lost jobs, tax revenues and community instability," the legislation states. In response, it attempts to create "a fair negotiating environment."

Specifically, if an owner and tenant cannot successfully negotiate renewal terms within 90 days, a mediator would intervene. Then if that fails, an arbitrator could be brought in to establish the new rent, based on various criteria such as the market value, longevity and location of the business, and the cost of maintaining and operating the property.

Currently, there is no regulation of rents for commercial property. Once a lease expires, landlords have sole discretion to charge whatever they please, or even to refuse a renewal for no cause.

Being forced to move can be disastrous for a small business. Shiffman, who sat on the first ever small business task force in the early 1980s, said remaining in the same place is crucial for small merchants. "Once a business is started, its location is critically important... because they [build up] their customers." Rent speculation ends up "driving businesses out" who, in turn, rarely succeed in a new place without their original patrons, he said.

Saying his bill is "about survival," Jackson said, "It's imperative that it's put into place. It's like a patient on a respirator who needs a doctor to rescue [them]. Under the measure, he said, storeowners could get a reasonable deal on renewals, while landlords would still turn a profit.

Jackson expects the bill to move by September, just in time for the Democratic primaries. He hopes to put pressure on local candidates -- if they don't support the bill, "small businesses won't support you."

As it stands now, the whole rent renewal process " is anti-democratic," said Queens Councilmember Tony Avella, a co-sponsor of the bill. "Why is the real estate industry allowed to control the agenda?... We have to protect these mom and pop stores who provide local jobs."

(The Real Estate Board did not return repeated requests for comment.)

Critics of increased controls argue they could do more harm than good. Restrictions on commercial rents "could be a big mistake, both hurting business and reducing tax revenues," said Stuart Saft, a real estate attorney who has represented landlords, told the Real Deal.

Meanwhile, other officials have offered additional proposals to help small businesses. City officials have suggested a number of solutions, including using zoning to discourage huge storefronts (almost always occupied by chains), providing more microloans and encouraging large developments to include small, independent stores.

The Administration's Role

In a Latin Chamber of Commerce survey, 59 percent of respondents believed the relevant local government leaders "don't understand" the particular needs of small businesses. And, 43 percent predicted a continuation of the city's "anti-[small business] environment."

"The city's tone [to merchants] is a major problem, and has been during previous administrations," said Shiffman, who also is the former director and co-founder of the Pratt Center for Community Development. "There's a sense in New York City that gentrification is a good thing... rather than [having] stable businesses."

For their part, administration officials cite the services they offer. "There is a lot of support being provided to small businesses and jobseekers through our agency," said Laura Postiglione, press secretary for Small Business Services. She highlighted the department's Business Solutions Center, which offers courses on business planning and related topics, and provides training funds for entry-level employees and pro-bono legal services to review contracts and leases. According to its Web site, the center helped 170 clients secure more than $11.8 million in financing and assisted more than 5,000 entrepreneurs in developing their business plans.

In his weekly radio address on March 22, Mayor Michael Bloomberg focused on the plight of small businesses and detailed the city's efforts at worker training. "During the past 12 months alone, we've distributed some $3 million in grants, coupled with funds from more than 30 employers, for training nearly 2,000 workers," Bloomberg reported.

According to Avella, who is running against Bloomberg for mayor, many independent merchants do not think Small Business Services meets their needs. In a recent letter to the mayor, Avella wrote, "I have been meeting with small business owners, who feel that [the Department of Small Business Services]... intentionally or unintentionally, prioritizes the needs of property owners/landlords and other moneyed interests, above the interests of individual merchants."

New York's land-use policies have also come under fire, particularly in traditionally ethnic communities. A joint report issued by Good Old Lower East Side, a tenants rights organization, and the Urban Justice Center, called "NO GO for Local Business", concluded the administration's push to rezone that area has led to small businesses "getting evicted in record numbers."

An analysis of Chinatown criticized government agencies like the Lower Manhattan Development Corp., the city's Department of Housing Preservation and Development, and planners for trying to attract luxury development and using "processes like rezoning and the use of eminent domain to remove low-income communities and communities of color."

"Property owners sense there will be more money in the future [from the rezonings], so they don't mind holding" on to their vacant properties, said Pratt's Shiffman.

The Roles of BIDs

A key part of the Bloomberg administration's small business strategy is the city's Business Improvement Districts. BIDs are state-authorized public/private endeavors designed to "supplement" municipal services such as sanitation and security in commercial areas. They are funded by fees assessed on local property owners and merchants.

The Bloomberg administration has created 18 BIDS for a total of 63. According to Postiglione, BIDs serve approximately 16,000 retail businesses and invest approximately $98 million in these districts.

Null believes the administration relies too much on the BIDs and that there is an inherent conflict between the interests of those running the district -- the majority of whom must be property owners -- and the needs of commercial tenants, who primarily rent space.

In his letter to Bloomberg, Avella noted the mayor has " often touted the ways in which BIDs bolster local economies," but, he continued, "Unfortunately, too many small BID members... feel the system is not addressing their needs."

The BIDs can be a useful tool, Jeremy Waldrup, Small Business Services assistant commissioner for district development, said in an email. The districts "have catalyzed neighborhood revitalization and economic development... The programs and services provided by BIDs work to strengthen the local commercial corridors and impact the everyday lives of those who live, work and shop in these districts," Waldrup said.

In 2007, NYU's Furman Center for Real Estate and Urban Policy analyzed the efficacy of BIDS, determining that while larger BIDS increased property values, smaller BIDS proved to be a wash. With more than 50 percent of their budgets often eaten up by administrative costs, the study says, little remains to benefit local businesses.

Looking to the Future

As small businesses shut their doors, many of the tenants that move in are national chains that can afford higher rents. A recent count by the Center for an Urban Future found, "At least 32 retailers have 50 or more stores throughout the city, a list that includes everything from CVS and GNC to GameStop and Payless. Dozens of other companies have more than 10 outlets here."

Shiffman sees this as a disturbing trend -- and thinks the city should too. When it comes to chain stores and large franchises, he said, there should be no contest in public policy. "First and foremost, [small businesses] circulate money in the local economy, more than any other enterprise ... and, they employ local people and professionals, far better than do franchises. We need to nurture [these] businesses and manufacturers."

Jillian Jonas is a freelance journalist focusing on local and national politics, government and public policy.

To view our community incubator Google map, click here To add to the map, go here

When Michael Bloomberg was fired from Salomon Brothers in 1981, he used the opportunity to create his own business and become one of the richest people in America. Now, with an estimated 65,000 Wall Street employees facing the ax, he is encouraging them to follow in his footsteps.

"Time and time again, history has shown that our city rewards those who have the courage to pursue their dreams and launch new ideas," the mayor said when he announced his plan to revive the financial industry last week.

The plan would provide retraining for those who lost Wall Street jobs, offer seed funds for start-up companies, and attempt to woo banks and financial firms from other countries. To help new businesses thrive and grow, the city would create incubators, spaces where entrepreneurs could find affordable office space and have access to basic services and administrative support. Also announced was a network of available space for incubator clients called the Coalition of Space Providers.

For years, advocates in New York have been seeking official recognition of the contributions they think incubators can make to economic growth. And the city already is home to many incubators of different types and sizes. So how effective are they, and what is the best way to harness their potential?

(Go here for a map of all the city's incubators. Do you know of any incubators in New York City that should be on our map but aren't? Go here to add them.)

The Idea Hatches

Incubators generally offer management guidance, technical assistance and consulting to small companies. Often they provide cheap or free space, but "virtual" incubators that provide services remotely -- and do not offer space -- also are common. Once viable, businesses will usually "graduate," moving out into the world.

The business incubator concept is credited to Joseph Mancuso. In the mid-1950s, he was in charge of filling a large complex in Batavia, a small upstate city, but had trouble finding a tenant. So he divided it into small parcels for different businesses that shared office costs. He also provided business advice and helped raise money for them.

One of his original tenants was a chicken company. "In a joking way, because of all the chickens, we started calling it 'the incubator,'" the National Business Incubation Association quoted Mancuso as saying.

Chicken jokes aside, the idea offers special appeal now when so many large, established companies are failing.

"We need to help little saplings grow where the oaks have fallen," said John Tepper-Marlin, a former chief economist for the city comptroller who once used an incubator to launch a company.

"Business incubation is only one aspect of a well rounded economic development policy and not necessarily even the most important one, but it is a strategic one," said David Hochman of the Business Incubator Association of New York State.

The city's and state's environmental sustainability goals have also spurred the push for incubators and led to the creation of the City University's new Sustainable Business and Technology Incubator. "The challenge is now to implement the visions, the policies and the plans into American society," said Tria Case, who is leading the incubator team.

This isn't the first time the Bloomberg administration has looked to incubators to generate new jobs. In 2007, the city offered low cost land, subsidies for infrastructure construction and tax abatements to the developer of the East River Science Park so it could keep its rent low for biotech start ups.

Not Just Business

Some have criticized the mayor's current approach to helping the Wall Street set as one that unfairly benefits those who may already have the funds to start their own businesses and who helped create the current financial mess.

"What about the countless small businessmen and women ... who were running second- and third-generation shops," an incredulous Jeremiah Moss asked on his blog. "They weren't paying down million-dollar mortgages on luxury condos, ordering bottle service, and running up tabs at Bergdorf's -- they were supporting their families and paying the rent."

Some incubators already exist to help these more "Main Street' types.

The Industry City Art Project, for example, is an art incubator in an industrial complex that seeks to shield artists from commercial pressures. "We want to offer artists low-cost space so that financial pressures don't influence their production, which is particularly important for artists whose work may not be commercially viable," said Lise Soskolne, who works for Industry City's landlord in Sunset Park. The landlord funds the project.

One of the oldest incubators in the city assists only non-profit businesses. The Incubator/Partner Project Program at the Fund for the City of New York -- entirely funded with private money -- currently houses 25 small non-profits. Program enrollees receive financial, technical, managerial and legal assistance. Some never leave the program and instead become partners with the fund. "We choose projects based on our belief that they will create value for the city," said Jill Schumacher, the program coordinator.

The Food Bank, a non-profit that got its start at the fund, now distributes 200,000 meals a day to hungry New Yorkers. "The Fund for the City of New York was pivotal in helping to raise money, find space, develop a network for food distribution and assume back office operations," Lucy Cabrera, the Food Bank's president, said in a statement.

Many incubators aim to jump start businesses with social aims.

New York Women Social Entrepreneurs' incubator program pushes to get female social entrepreneurs up and running. Founded in January, it will provide a support team of apprentices and mentors to six women with businesses that have a mission to address a social need in the community. One of its partners is Baruch College's Zicklin Business School.

Green Spaces offers help for green businesses in its Downtown Brooklyn incubator. The project offers affordable office space and services, access to interns, and provides networking opportunities and workshops for small start up companies with staffs of one to five people. Existing small companies that would like to become environmentally friendly also can receive benefits and assistance. Green Spaces, which gets some funding from its building's owner, has only been open for about eight months but already houses 15 businesses.

Economic Impact

There is no hard data on the impact of incubators in New York City, but David Lewis, an assistant professor at the University of Albany, has studied the economic impact of incubators and found positive results. His research shows that nationally, 84 percent of "graduates" stay local once they outgrow an incubator's services. He points to another report from 1998 that studied six technology incubators in New Jersey and found each job created cost only $3,000.

The Virtual Incubation Program at the Industrial + Technology Assistance Corp. generated at least $34.3 million in economic impact within the five boroughs between 2002 and 2008, according to its spokesperson.

And a recent federal report also found incubators to be especially effective. "Investments in business incubators generate significantly greater impacts in the communities in which they are made than do other project types," the Economic Development Administration concluded.

Although they praise the positive impacts of incubators, advocates stress that they are only as successful as their management. To get the most bang for its buck, Lewis says business incubators should conduct feasibility studies before starting their programs, establish client entry and exit criteria, collect outcome data and provide networking opportunities between client firms.

Large incubators are best able to offer synergy among their clients, Tepper-Marlin, the former comptroller economist, noted. He also emphasized the importance of being located near universities. "You need the three-way mix of government support, deep knowledge and entrepreneurial skills," he said.

Government support for incubators should be "offered competitively, with incentives for best practices and accountability," said Hochman of the state incubator association. It should also be programmatic, covering all aspects of an incubator's programming, he adds. As a model, Hochman points to the New York State Energy Research and Development Authority's early stage renewable and clean energy technology program, which offers grants to incubators supporting clean energy companies.

Photo adapted from Brownstoner

The Oro Condos in downtown brooklyn

When the Oro Condominiums building in Downtown Brooklyn was still under construction in 2007, the Brooklyn Paper branded it as a "deluxe singles bar in the sky." Now, though, the glitter has apparently faded. On a recent winter night, only a smattering of light emanated from the otherwise eerily dark (though now completed) 40-story luxury tower on 306 Gold Street, not far from the Manhattan Bridge. A hip-looking young woman entering the building, who identified herself as an owner of one of the 300 homes but who preferred to remain anonymous, said the building "feels empty."

A similar picture is emerging across much of the city. In recent years, ordinary New Yorkers saw new condo construction transform their neighborhoods. This is especially true in hotspots like Downtown Brooklyn, Williamsburg and Long Island City, where large rezonings by the Bloomberg administration have spurred the rise of sleek luxury residential towers seemingly overnight.

But as New York City's economy rapidly worsens, people wonder how many of these new condo apartments will languish vacant. Precise numbers are difficult to come by, but government leaders and housing industry experts agree: The condo market is in serious distress.

It is not just the vacant units that are worrisome. In many neighborhoods, half-built projects sit stalled and land cleared for development shows no signs of activity, creating a nuisance for residents who now must live indefinitely with deserted construction sites.

All of this is expected to have a dramatic impact on New York City. But how bad is it, and how might policymakers, housing advocates, developers and financial institutions respond?

The Current Picture

Photo adapted from Brownstoner

The Avalon (left) and the Toren (right), in downtown Brooklyn

It was not long ago that the condo boom seemed unstoppable, with visions of "botoxing Brooklyn" -- as Faith Hope Consolo, chair of the Retail Leasing and Sales Division at Prudential Douglas Elliman Real Estate, put it -- threatening, or promising, depending on your outlook, to transform the borough's character on a grand scale.

Now, banners hanging from unfinished projects with names evocative of a sleek modernism like "Edge" and "Toren," touting a roof deck, fitness center and library, have, amid talk of a second Great Depression, acquired a surreal air.

New condo development tapered off in the summer of 2007 when the credit crunch began, according to Jonathan Miller, president and chief executive officer of Miller Samuel, a residential appraisal and consulting firm. Initially, this was good news for existing projects because it meant less competition. As time went on, though, the crunch affected buyers, which in turn has lowered sales.

"In general activity is down significantly in terms of number of sales, which is primarily from the credit problem and related to the recession," said Miller.

Bill Staniford, chief executive officer of Property Shark, a firm that provides real estate information, echoes Miller. "Right now we have a glut of supply and no demand." Staniford added that it's not just credit problems that are to blame, but also the downturn in the city's local economy, which relies heavily on the financial industry.

"I have a feeling the financial sector is not going to come storming back to NYC – a lot of those jobs are gone for good," he said. This is potentially devastating for a housing market that boomed in tandem with Wall Street profits. "The bonuses were really the drivers," noted Staniford, "because the bonuses were the down payment."

Tens of thousands of individuals who once got those big bonuses are now out of work and are struggling to keep their existing homes, let alone buy new, more expensive ones. Their parents may help pay the mortgage for now, Staniford said, but eventually these people may decide to leave the city. In that event, their homes will go onto the market, further adding to the glut.

"These people are of means, and they may be running through their savings right now and therefore you won't know they are in distress yet," Staniford added. "I've got a lot of friends in the finance industry – you lose your job and when reality sets in you say I've got to go back to North Carolina or Virginia or wherever I came from."

A Bottom In Sight?

Experts say the worst effects of the economic crisis on the condo market are still taking shape. Staniford projects another 15 to 20 percent drop in value before the end of 2009. "I keep looking at it and I don't see how it stops. I don't think we have seen the complete repercussions of this," he said.

The outer boroughs face particular challenges, according to Miller, because new development there was fueled by the high prices in Manhattan. The notion was that developers would be able to successfully market homes in Downtown Brooklyn or Williamsburg to buyers who wanted a luxury residence but who couldn't afford Manhattan prices. Now, declining prices in Manhattan have undercut that. Many buyers simply no longer need to look to Brooklyn or Queens.

For his part, Staniford worries about the ripple effects of an economy in distress. An increase in crime, for instance, would diminish the quality of life in the city – a recipe for "a perfect storm of negativity for the real estate industry."

"If you have a city that takes a 33 percent cut in revenue from the financial sector, if you keep walking down that path, it just keeps getting scarier and scarier. No one really imagined what is happening now," he said.

Reality Check

Not surprisingly, developers resist painting such a gloomy picture.

Don Capoccia, developer of Toren Condos at Flatbush and Myrtle avenues in Downtown Brooklyn, which is on schedule for completion this spring, says the biggest challenge now is to get prospective owners to sign a contract. "Buyers are spending a lot more time deliberating and comparing and contrasting properties," he said.

While he admits that things have slowed down significantly in the past several months, Capoccia said he has closed two contracts since the beginning of the year at his asking price and without making concessions. He also played down the concern that falling prices in Manhattan are an issue. "Toren has been averaging $750 to $775 per square foot, which is still a great deal even if Manhattan's prices do drop," he said.

But Miller of Miller Samuel says that $750 to $775 per square foot, while still below the rate for a comparable place in Manhattan, does not reflect the market corrections that have taken place since September, when there was a 20 percent drop in values after AIG and Lehman Brothers collapsed.

According to Miller, in September, prices in Manhattan fell from roughly $1,500 or $1,600 a square foot to $1,200 or $1,300. "Apply the same proportional drop – at least half of what it was for Manhattan – to developments (in Brooklyn) priced in the mid $700s (per square foot) and you're talking in the $600s," Miller said. "Brooklyn developers who have not adjusted their prices are receiving little contract activity."

Still, Capoccia insists, his apartments will sell. Citing the quality of the finishes in the condos, he said, "Toren looks a lot different than anything that's coming up right now."

Some experts question, however, whether luxury amenities alone will lure enough affluent buyers to keep these developments financially afloat. In the boom days, Miller said, "If you had the pet spa or the on-site sommelier, that meant something to people," but, he said, it's hard to imagine that dialogue today. "It's the age of austerity now. People are looking for shelter as opposed to lifestyle."

Staniford is matter-of-fact: "Say you have to move to New York City – are you really going to be thinking, 'I need that new fangled pool or gym' or whatever? No you're going to be looking for the best deal you can find."

Holes In the Ground

As bad as things may be for developers with finished apartments to sell, the situation can be even more calamitous for those whose projects have yet to get off the ground.

Developer John Catsimatidis, who is also a potential mayoral candidate, owns a vacant parcel of land on Myrtle Avenue in Downtown Brooklyn, which previously featured a modest retail strip, including an Associated Supermarket that served hundreds of public housing residents across the street. These businesses were torn down in 2006 to make way for a project that was originally supposed to include 1.4 million square feet of new development, of which 250,000 square feet was to be commercial space. The remainder of the project was slated for residents, including 200 affordable units and 600 luxury condos in a 38-story tower and a smaller building.

But nothing has been built yet, and now, with the economic crisis, Catsimatidis, a billionaire, has had to scale down his plans considerably. "We were supposed to build a $500 million dollar project with four to five large buildings and one smaller one," he said, "but banks don't have it. So right now, we're just building the smaller one."

But even for this severely scaled-back version, which will contain 100 market-rate residential units, the financing wasn't easy. Securing a construction loan meant putting up additional cash guarantees, something Catsimatidis says other developers are not willing -- or cannot afford -- to do.

"Banks are saying they want developers to take equal risk now," he said. "We have taken on more risk than we would normally take so that we can get this built."

Catsimatidis has been under fire from residents, advocacy groups and the local Councilmember Letitia James for tearing down amenities such as a supermarket, leaving a hole in the ground and abandoning the idea of affordable housing on the site. Catsimatidis claims that he has had difficulty obtaining bonds that would enable him to build the affordable component. He also indicated that he is seeking alternative options for the land that remains undeveloped, saying he is in conversations with institutions such as Pratt and Brooklyn Law School about building dormitory space.

"The financing is the same as any other project," he said. "But if you have the signature of an institution like NYU, that goes as additional collateral on credit and it's easier to finance."

Policy Mistakes?

Img from Rev. Santino

Condo construction in Long Island City

While developers are paying the price for the luxury-building binge, they had help in creating it. Many appraisers over-assessed the value of condo properties due to pressure from brokers and owners, which contributed to overdevelopment, according to Staniford. The city is at least partially responsible in the view of Councilmember James, who represents parts of Downtown Brooklyn where new condo construction has proliferated.

"In fairness to the developers, it was a bull market, and real estate was the hottest thing in town. No one anticipated that the economy would crash and that all these toxic mortgages would explode," she said.

James believes that Mayor Michael Bloomberg should take responsibility for the condo crisis. "His policies have been tilted toward the benefit of developers, and not enough towards working class residents. He was basically giving away the house for the purpose of generating revenue from the sale of these high-end luxury condos, not recognizing that it was disrupting stable communities and causing the displacement of long-term residents," she said.

James cited the mayor's zoning policies, which she said should have been designed to produce more affordable housing and jobs citywide. Under Bloomberg, the city has pushed through a historic number of large rezonings that have increased the value of land and fueled speculation. In many cases, such as Downtown Brooklyn, the original intention behind these zoning measures was to promote office space, but instead neighborhoods received an overabundance of luxury housing because of the boom market. The city did not have any policies in place to prevent such an imbalance.

In downtown Brooklyn at least, this new housing was beyond the reach of many longtime residents. At the same time, James said, the rising costs forced out manufacturers who had provided industrial jobs for residents who lack college educations. Such arguments have been echoed in other parts of the city from Williamsburg to Long Island City to the Lower East Side.

City officials have contended that changing obsolete zoning has been key to unlocking the potential of underutilized land and to stimulating the creation of new housing, jobs, public space and other amenities. Attributing the city's loss of industrial jobs to larger economic changes, they argue that rezoning measures combined with investment in public infrastructure has drawn private investment and resulted in economic growth, including an increase in affordable housing construction.

Lost Revenues

Whatever its role in creating the current problem, the city is feeling its effects. The administration has already started bracing for the revenue consequences of a dramatic slowdown in residential property sales and has proposed budget cuts and increases in taxes to close the resulting deficit.

"We're already seeing property transfer taxes and mortgage reporting taxes plummet," said City Councilmember David Yassky, whose district includes the condo-dense neighborhoods of Downtown Brooklyn and Williamsburg. "The city will definitely lose out."

Revenue from these two types of taxes depends exclusively on property sales. (Renters are not required to pay taxes for leasing space.) In the current climate, developers are being forced to convert units that were once for sale into rentals in order to pay their loans. This translates into revenues that, rather than just being delayed due to a slow sales pace, are permanently lost.

According to the mayor's Financial Plan Summary released in January, real property transfer and mortgage reporting taxes combined declined by 57 percent from December 2007 to December 2008. The Office of Management and Budget projects these revenues will fall by hundreds of millions more dollars in 2010 before stabilizing and moving up in 2011.

While the OMB calculates these revenues as a relatively small percentage of the total budget – only 4.2 percent for fiscal year 2009 – they still represent hundreds of millions of dollars the city won't see. This percentage is expected to shrink to 3.2 percent for 2010, with the gap being filled by increases in property and sales taxes.

From Crisis to Opportunity

With general agreement on the existence of the problem, if not its magnitude, government officials, real estate experts and housing advocates are currently debating solutions.

One small step forward occurred on Feb. 12, when City Council Speaker Christine Quinn, in her annual State of the City address, put forth a proposal that would help convert thousands of vacant condo units to affordable housing.

"Capitalizing on New York's recent development boom," she stated, "the Affordable Housing Recovery Program will work to make unsold condominiums affordable to middle income New Yorkers to buy or rent."

According to Andrew Doba, a council spokesperson, the initiative is the result of efforts by a special housing task force created by the speaker a year ago that brought together developers, affordable housing advocates and other stakeholders.

At this stage, the program is still just an idea with few specifics. Before it can move forward, the City Council and the mayor will have to hammer out possibly controversial policy questions and craft a plan acceptable to both. For instance, while Doba emphasized that the goal is to stabilize communities, it is unclear whether the program would include rental units or only those for purchase. According to Doba, the Bloomberg administration has signaled that they like outlines of the proposal so far, which is designed to use capital funding that has already been budgeted.

If the Affordable Housing Recovery Program is implemented, individual developers would have the option to negotiate with the city to make apartments available to middle-income residents, who would qualify based on income. The amount of the subsidy would be determined on a case-by-case basis and would depend on a number of factors, including the original asking price of the units, the debt structure of the project, and whether or not the development is in foreclosure, to name a few.

No one has yet specified even a range of how much money developers might be awarded, but Doba states that it is not intended to bring them windfall profits. But should the city take resources that could go to other programs and use them to fix this problem that developers at least partly brought on themselves?

Brad Lander of the Pratt Center for Community Development, who also participated in the speaker's task force and is a candidate for City Council, supports the idea, as long as the per-unit cost does not exceed the amount designated for other homes in the city's affordable housing program. This, he said, would safeguard the city from over-subsidizing developers and ensure there is more affordable housing in the long run.

"You're talking about developers who speculated in a boom marketplace, who had unrealistic expectations that included no affordable units and who were taking advantage of the 421-a tax break [for housing development]. I do not think we should bail out failed speculators," he said

Lander acknowledged that a lot of discussion needs to take place before the speaker's program can move forward. "It's an idea more than a fleshed-out program," he said, predicting that the implementation process, which will involve looking at buildings one by one, is bound to get messy. "If you're building a totally new development and are interested in taking advantage of one of the city's programs, it's a lot easier because it works the same for everyone," he said.

But will developers come to the table? Yassky believes they will. "You will see the city working with developers to get buildings filled at affordable rates," He said.

This could turn into something of a waiting game, however, as officials calculate the precise conditions needed to justify intervention. "There are some big issues here," said Yassky, "and I think that Housing Preservation and Development and the mayor will want some sense of where the market has ended up." Housing Preservation and Development is still waiting on its new commissioner, Rafael Cestero, who is scheduled to take over in March.

Not everyone feels the city should intervene. "Whenever the city has become involved in the property ownership business in the past, it has been a failure," said City Councilmember Peter Vallone, whose district includes Astoria, where there has been significant new condo development. "People need to relax. This is very cyclical and the economy will soon recover."

Staniford agrees government involvement will only make a bad situation worse, adding that until the market reaches the bottom, gridlock will persist. "What I'm most concerned about is that the pricing becomes accessible for the market again," he explained. "We are still priced too high, and until prices get down lower transactions won't occur."

Beyond Damage Control?

The speaker's press release announcing the recovery program stated, "New Yorkers who were once nearly priced out of their communities will now have a chance to buy or rent one of the new homes that were built in their own backyards."

To affordable housing advocates focused on the effects of gentrification and displacement, this statement surely reflects a certain backward logic. Still, many support the basic spirit of the program. Ismene Speliotis of New York Acorn's Housing Here and Now initiative participated in the city's housing task force. She views the current crisis not only as an opportunity to increase levels of affordable housing, but also to adjust policies that were skewed in the first place, which will promote more equitable approaches to development over the long-term.

Speliotis says the Affordable Housing Recovery Program is a good idea, but the city should not have subsidized these developments to begin with. "Acorn had done a study when these buildings were being built -- Sweetheart Development -- and was completely outraged because developers were getting an automatic 10-year tax abatement, " she said. Affordable housing advocates have long objected to what they view as an extraordinary level of public subsidy for market-rate housing that would have been built anyway and criticize the city for not extracting greater public benefit in exchange for such subsidies. The rules on the subsidies have been tightened somewhat, but for years they went to anyone who built housing -- regardless of how expensive it might be.

Putting together a program that does not reward developers for having built vacant housing poses difficult challenges, Speliotis acknowledged. "You've got legal, financial, and then kind of just the psychological hurdles, the perception of the market and what is going to happen," she said. "But in our view, if developers convert some of these empty units to affordable housing, people lose less money. They make less profit, but still, one could define that as an opportunity."

Amid all their disagreements, though, experts do seem to agree on the resilience of New York City's real estate market. For Miller, it's just a question of time. "People are anxious to get things back to where they were, but unappreciative of how long it's going to take," he said. "Time is a four-letter word right now."

Staniford concurs, albeit from a slightly different angle. The real question, he said, will be what's going to replace all the financial sector jobs. But he remains certain something will: "There is no doubt in my mind that New York City will come back again. The place is just way too unique. There is great energy here."

Allison Lirish Dean is a journalist, urban planner and filmmaker. She lives in Brooklyn.

Photo by Konstantin Sergeyev

Protesters showed up in clown suits. Their opponents threatened to barricade a major thoroughfare with school buses. A respected community board member was fired from her leadership post. The debate has involved lost jobs, injury -- and even sex.

The source of all this controversy and activism? A bike lane.

With concerns about pollution, congestion and energy consumption, encouraging people to cycle instead of drive could be seen as a kind of motherhood and apple pie issue. But as the Department of Transportation greatly expands New York's bicycling lanes, it has encountered opposition from local small manufacturing businesses, the Hasidic community and shop owners, among others.

"We would never have predicted that bike lanes could provoke so much upset," Gowanus Lounge once observed after a community meeting on bike lanes, adding that a member of a local civic group said the issue "led to the most contentious meetings they have experienced, including discussions of Atlantic Yards."

Some of the controversy undoubtedly stems from the frenzied competition for New York's streets with motorists, cyclists, trucks, pedestrians, skaters and baby strollers all jostling up against each other for safe passage. Some critics, though, say the city, in its drive to expand bicycling, has not always consulted sufficiently with the affected communities .

Birth of a Bike Lane

The fight over the bike lane on Kent Avenue in Williamsburg has proved particularly contentious and shows no signs of abating.

Photo from the Department of Transportation

Like many thoroughfares near the waterfront in the outer boroughs, Kent Avenue can feel like a desolate concrete valley. Big trucks gun their engines as they make their way to and from downtown Brooklyn, creating a noisy, dusty and dangerous situation for pedestrians and cyclists.

Mayor Michael Bloomberg's administration has sought to change that, and transform the area, along with other parts of the city's waterfront, into a vibrant ribbon of accessible open space and new high-rises. To achieve this, the administration sought to rezone the neighborhood in 2005. When elected representatives and residents balked at high-rises along the waterfront, the city offered three major incentives: open space with access to the river, affordable housing and retention the manufacturing jobs that have long sustained the neighborhood's working-class population. The rezoning was approved, and two years later, the city added the bike lane to the mix

In April 2008, Department of Transportation officials appeared before Community Board 1 to present the local segment of a greenway that would eventually stretch from Sunset Park in the south all the way to Greenpoint. Their drawings showed both lanes of bike traffic together, separated from cars and trucks by a planted divider. Until funds were available to build that, the transportation department representatives said, Kent Avenue needed a temporary bike lane because the street was dangerous without one.

That temporary design would involve a bike path along Kent, from Clymer Street to Quay Street. It would eliminate about 500 parking spaces, but the officials said parking on side streets and at new developments on the waterfront would replace them. These private buildings, when complete, would provide about 3,500 new parking spaces.

Originally, many residents were excited about safe bike routes along the river. In April, the community board voted 39 to 2 in favor of the long-term plan. But when the bike lanes were finally painted, problems appeared almost instantly. The lanes did not look like the ones in the pictures. They ran along both sides of the street, surprising even cyclists. And the signs that accompanied them did not just forbid parking, but all stopping at any time. Hasidic Jews charged the city first posted the laws banning parking on Kent at 6:30 a.m. on Saturday, when observant Jews are forbidden to drive and that traffic agent ticketed their cars.

Block the Dock

Businesses charged that the new bike paths prevented them from legally using their loading docks. David Hollier owns a high-end furniture shop that employs 10 people, most of whom, like Hollier, bike to work. The business requires Hollier to load and unload heavy pallets of fine wood almost every day. He does not see why he should lose access to his loading dock because of the bike lanes.

About 20 businesses on Kent raise similar concerns, including the glass producer Goldray Industries and Acme Smoked Fish.

The business owners say they were surprised by the new signs forbidding stopping in the bike lanes adjoining their loading docks. "They didn't even put a flyer on the door," Hollier said.

Karen Nieves, business services manager for the Greenpoint Williamsburg Industrial Business Zone, said she is "deeply disappointed in the lack of outreach for this plan." She thinks it could threaten the very survival of some of the manufacturers, all of whom together employ about 300 people.

The Department of Transportation insists it did all the outreach required when it addressed the Community Board on three separate occasions. If any groups didn't know enough about what has been going on the past two years," said Teresa Toro, who headed the Community Board's Transportation Committee until she was ousted late last year, "they should reach out to their representatives on CB1 and ask why they haven't kept you properly informed."

Living on the Lanes

The residents offer a different set of concerns. Most are Hasidic Jews and Latinos who live in "affordable" apartments set aside in new high-rise buildings. Since the area is not well served by public transit, many families rely on cars, and the parking spaces in the basements of their buildings are beyond their means at about $325a month. Now, residents complain, street parking is hard to find, and the ban on stopping in the bike lans means they cannot drop off or pick up family members anywhere near their homes.

The residents, like the business owners, say they did not receive adequate warning about the full effects of the bike path. At a Nov. 24 town hall meeting on transportation issues, Hasidic members of the Community Board said even they had not understood what was coming. Isaac Abraham, a Hasidic activist running for City Council, reminded representatives of the Department of Transportation that he helped organize a blockade of the New York marathon 20 years ago to protest a temporary closure of the Brooklyn Queens Expressway. If the lost parking spaces were not restored, he said, he might consider a similar move, blocking Kent Avenue with school buses.

Reaching a Compromise?

So far, the bike lanes remain. At a community board meeting in January, bike lane supporters showed up in force. City officials have not shown any public sign of wavering, although the Department of Transportation's borough commissioner, Joseph Palmieri, has tweaked the plan a bit. The department now allows bus pickup in front of the Zafir Jewish Learning Center. It temporarily eased up on issuing tickets for blocking the bike lanes and installed a loading dock for one manufacturer, Carriage House Papers. The owner of Carriage House, though, said the loading dock is useless because she has to circle the block to use it.

Meanwhile, discussions continue. A number of local leaders and politicians have written to the transportation department demanding the bike lane on the east side of the street be removed and parking restored. Councilmember David Yassky has put together a committee to consider alternative solutions, including the possibility, endorsed by some neighborhood activists, of making Kent Avenue into a one-way street.

Fueling the Opposition

Kent Avenue isn’t the only place where the city’s transportation planning has run up against the concerns of local business owners and residents. Wiley Norvell, communications director at the cyclist advocacy group Transportation Alternatives, sees people come out to fight nearly every mile of bike lane the city builds.

In Fort Greene, for instance, residents opposed five miles of lanes, marked by striped pavement, along Carlton and Willoughby streets in June 2006, and the community board voted against the plan 16 to 15. But the Department of Transportation went ahead and implemented the plan anyway, and few residents have complained since.

That case was typical, Norvell said, in that the opposition to the bike lanes was not so much about local issues but rather "a referendum on cycling as a form of transportation." About 80 percent of the negative comments about bike lanes, Norvell said, simply criticize bikers as jerks who don't follow the rules.

The lack of a true consultation process with affected commuities, though, makes the bike lanes a harder sell, Lower Manhattan offers another example of how the city's transportation planning can run up against the concerns of local business owners.

Last fall the Department of Transportation began installing a new bike lane on Grand Street between Varick Street and Chrystie Street through Soho, Little Italy and Chinatown. Presenting the bike lane as an important connection from the Manhattan and Williamsburg Bridges for commuters into Lower Manhattan, the department's plan consisted of an northern lane for commercial loading and unloading, a lane for motor traffic, a parking lane, a buffer and a bicycle lane along the southern curb. In July the proposal passed the board with a vote of 33 in favor, 1 against and 1 abstention.

Opposition from some business owners materialized, however, as the bike lane was installed. A few in the business community felt they had not been sufficiently consulted or educated about the changes.

The protected lane with the buffer between car and bicycle is intended to make bicyclists safer and keep the bike lane clear of double-parked cars and other vehicles. It also has narrowed the street, though, and some business owners contend this makes it more difficult for large tour buses to navigate. As a result, they say, fewer tourists have patronized their businesses.

Others dismiss any correlation between the bike lane and decreased businesses, attributing any falloff in customers to the declining economy rather than the bike lane. In a December op-ed article for the Villager, restaurateur and Soho resident Florent Morellet wrote the Grand Street bike lane creates a more orderly and a safer thoroughfare.

Transportation Alternatives’ Norvell agrees. "It is a much more orderly environment," he said. "I think overall the street configuration is in really good shape." Grand Street was remodeled from one and a half lanes of traffic, which led motorists to jockey for position, exacerbating congestion, to a single lane of motor vehicle traffic.

A bike messenger, though, was less enthusiastic about the lane. "It doesn't keep pedestrians out of the street. People see it as another place to walk," he said. On a recent afternoon postal workers and a deliveryman pushed carts through the lane.

Concerns raised earlier this winter over congestion and an overly street maybe easing. "I wouldn't worry about all that gossip," said a part-time worker at Ferrara Cafe. Concerns that the bike lane has made tourist access too difficult were played down. "This is a very well known place, known all over the world."

The current attitude on Grand Street seems to indicate that, in general, business owners, residents, and cyclists agree that bike lanes are a good thing for safety and for the environment. The problems many have is the way the city goes about implementing its policy to expand bike lanes.

"How are you going to make it 'no stopping at any time' and not let them know?" asked Nieves of the Greenpoint Williamsburg Industrial Business Zone. Taking consultation beyond the community boards and doing some more direct outreach might make for a far smoother ride.

Photo (cc) minusbaby

What's the future of NYCHA?

Tino Hernandez, who recently resigned after seven years as chairman of the New York City Housing Authority, was a low-key figure who competently steered the authority through Bush administration cuts designed to kill public housing. While Hernandez may have been a quiet leader, and left under a cloud of bad press about elevators, his impact on the authority's direction was significant. Under his tenure NYCHA administrators initiated wide-ranging management reform -- adopting some private sector methods and emphasizing non-governmental sources of revenue -- in the hope of saving this massive housing system.

Tenants, employees and many housing advocates have expressed legitimate concerns about outsourcing work to private companies and rent increases, but taken as a whole this "new" direction looks a lot like the original vision of public housing. NYCHA's founders in the 1930s never intended to isolate public housing residents from market forces or private sector management. They envisioned a vast system filled with working people paying a reasonable rent for quality, moderately subsidized housing.

Public housing was also a key element in rebuilding neighborhoods to attract private investment; private contractors built the projects; and private entities often played a role in upkeep. New York's system was largely built under this model, making it dramatically different from troubled public housing in cities like Chicago and St. Louis.

Reinventing Public Housing, New York Style

From the late 1960s to the 1990s, however, politicians forced NYCHA administrators to accept a welfare state model of absurdly low rents, more welfare tenants and skyrocketing labor costs. NYCHA projects became isolated from the mainstream of New York life. New York still did better a better job managing its projects than other cities, but social problems and management challenges multiplied.

Since the mid-1990s, and mostly under Hernandez's guidance since 2001, NYCHA began to embrace the notion that public housing cannot survive in America without some market discipline and private sector participation. The hubbub over elevator outages and budget shortfalls at NYCHA has obscured not only the decent state of NYCHA housing as a whole, but also a more important shift in philosophy. Economic reality matters once again to NYCHA.

New York's new direction does not include the dramatic demolition and private redevelopment that has accompanied outright privatization of housing projects in cities such as Chicago. Nor are NYCHA's projects likely to be sold to tenants or investors. The 178,000 apartments managed by NYCHA will remain as comparatively affordable housing into the future. Declining subsidies, and an ideological preference for private sector approaches, have nevertheless inspired so many distinct reforms that the system as a whole is quite different from what it was just a decade ago.

What does market-based reality in New York's public housing look like? It starts with moving toward realistic rents. Rents became so out of line with operating costs that they threatened to sink the authority in the long term. Even after recent increases, average apartment rents are still only $378 per month.

At long last the top earners in the current tenant population (about 25 percent of tenants) pay more and will pay more in the future. A "working family preference," which favors working families in the admissions process, has so improved the mix in New York's projects that the authority can now turn to these families to make up, in part, for declining subsidies. In 2008, for instance, NYCHA collected $788 million in tenant rent and only $803 million in federal public housing subsidies. This robust collection is possible because, contrary to popular perception, only 12 percent of current NYCHA families subsist on welfare and over 45 percent are working families. (The other 43 percent are seniors and the disabled.)

NYCHA isn't going upscale overnight. By federal law, rents remain capped at 30 percent of income; average family income is still only $22,000; the state government is increasing payments for welfare families; and the federal Department of Housing and Urban Development has approved the use of Section 8 vouchers in some projects.

The working family preference, however, is likely to tilt the balance from the very poor. New York is moving from a model of welfare state public housing, where public housing serves the neediest as a government social program, back to its roots as a system of partly self-supporting affordable housing for the city's working class. This shift certainly raises the question of what is to be done with the very poor, but we know for certain they should not be concentrated in NYCHA projects.

Changes in the Projects

Tenants paying more rent will also demand a level of service equivalent to that found in private housing. Some already are. The $107 million plan to replace and maintain elevators may reflect the rising expectations of residents. Working families also can create a culture of achievement and decorum. Respect for buildings and equipment, more common in private housing where tenants understand the relationship between vandalism and rental costs, will hopefully reduce the burden on NYCHA budgets and staff in the long run.

Another sign of the declining public character of public housing is the closing of many community centers and shifting of community programs (for youth, seniors, the unemployed, etc.) from NYCHA's purview. The federal government never provided much support for this mission, leaving NYCHA to shift funds around to cover its community operations.

Those days are coming to an end. Many community centers and programs will, in 2009, either close or be signed over to city agencies and non-profit organizations; hundreds of positions are being eliminated to save millions annually. The long-term effects of these changes will depend entirely on the degree to which already strapped public and private agencies pick up the slack. NYCHA's retreat from running social programs has been widely criticized but it is in line with the original intent of NYCHA's founders who welcomed nonprofits into public housing and never intended to run social service or community programs from the top down.

Private sector approaches are evident in labor policies generally. Private contractors have always been a key element of NYCHA's management style, but the scale is changing. The number of direct, public housing employees has shrunk dramatically over the last few years. Today 12,400 staff members maintain a system of housing for over 400,000 people, down from a high of 15,000 employees. NYCHA administrators have largely preserved field staff on the grounds (janitors, elevator repairmen, etc.), but management offices at many adjoining developments have been merged and private sector contracting is on the rise. Private contracting now includes much construction and renovation work, technology upgrades, and even legal services. Many of the small, scatter site developments are entirely managed by private contractors.

Private employees are more economical in the long run than unionized employees who receive high wages and generous benefits regardless of financial conditions. Unionized staff is good for the city's financial health, but only made sense in the context of strong subsidies. No one knows, however, if fewer people and further innovation will yield better maintenance in the long term. New York sorely needs a non-partisan Straphangers style evaluation system that can make sure NYCHA lives up to its stated standards. (is a sample of what this might look like).

A promising aspect of the private sector management model is the introduction of a centralized call center for tenant complaints staffed by NYCHA employees. This service has proved extraordinarily popular with tenants and gives reason to hope that more can be done with less.

Wide Open Spaces

The disposition of NYCHA's vast land rights is the least advanced but potentially most dramatic change initiated during Hernandez's tenure. This process also harks back to NYCHA's founding years when public housing was a key force for leveraging private investment in tenement slums. Many of NYCHA's traditional public housing complexes are mostly open space, and this land has been underutilized, for decades. The buildings of Riis Houses on the Lower East Side, for instance, cover only 20 percent of the land. Middle-income and affordable housing, built through a partnership of different housing agencies, already is under construction on the grounds of some developments. Pressure is also being felt to sell air rights, valued in the millions, to brighten NYCHA's balance sheets.

The upside of this process, should it gain traction, will be more revenue for renovation and daily operations as well as greater social and architectural variety. New construction, if creatively considered, offers the opportunity to knit NYCHA towers back into the city as a whole.

What could public housing look like in the long term if these methods are successful? Housing projects still will be affordable compared to their neighbors, but not as cheap as they are today. More working and lower middle-class families, and new developments on NYCHA land, will help break up remaining concentrations of poverty. Standards of maintenance and upkeep will be higher in spite of fewer employees. Non-profits and city agencies will run great community centers. Far less subsidy will be demanded, and NYCHA will balance its budget. Such a system would, in fact, be the realization of the founders' original intent.

Less rosy scenarios are quite possible, and questions of equity remain for both tenants and workers, but applying private-sector approaches in New York could actually preserve public housing. If it does, this will, in no small measure, be part of Tino Hernandez's legacy.

Nicholas Dagen Bloom is an associate professor at New York Institute of Technology and author of "Public Housing That Worked: New York in the Twentieth Century."

Photo (c) WE ACT

Since the late '80s, environmental activist group WE ACT has been working to improve environmental health in northern Manhattan. Here, they partner with Community Board 9 to organize the Harlem-on-the-River Project.

At 7 a.m. on Martin Luther King Day, 1988, the founders of the soon to be formed West Harlem Environmental Action (WEACT) donned gas masks and placards, and held up traffic on the West Side Highway in front of the North River Sewage Treatment Plant. For the two years since it opened, the sewage plant had plagued the Harlem community with foul odors and noxious emissions that residents blamed for their respiratory problems.

Twenty years later, WEACT has 17 staff members dedicated to mitigating the disproportionate environmental burdens that Harlem residents bear and, more recently, to fighting for climate justice. Since PlaNYC2030's launch in 2007, WEACT has lobbied to make sure the proposal's benefits extend all the way uptown. Now it sees the effort as paying off in a variety of ways that could improve public health and the environment in Upper Manhattan.

A History of Activism

WEACT's fight against the sewage treatment plant did not end with a demonstration. Four years later, the organization sued the Department of Environmental Protection for operating that plant as a public and private nuisance. After six years of litigation, the city settled the North River Sewage Treatment Plant suit and established a $1.1 million fund to address community concerns. The fund enabled WEACT to hire three full-time staff members and allowed the group to ensure that the city completed its $55 million renovation of the plant.

WEACT filed a complaint against the Metropolitan Transportation Authority for locating a disproportionate number of its bus depots and other facilities in northern Manhattan. The area still houses six out of the city's seven diesel bus depots. In 2004, the Federal Transportation Authority validated the MTA complaint. Also that year, WEACT successfully blocked the reopening of the 135th Street marine waste transfer station on the grounds that the station would bring even more pollution into an area that already had more than its fair share. All the while, WEACT staff continued to educate Harlem residents about the environmental issues that threaten their health and well being.

Photo by WE ACT

A decade ago, the organization began lobbying the MTA and the state to use cleaner fuels and added global warming to its agenda by joining national and local climate justice initiatives such as the Environmental Justice Climate Change Initiative, and the Campaign for New York's Future. "The most vulnerable communities even in the richest nations will be those who are first and worst impacted," explained WEACT deputy director Cecil Corbin Mark. "So we have begun in the last three years to work on increasing our community's awareness of the health impacts of climate change and to have them understand some of the policy issues that are involved."

As the effects of climate change become increasingly apparent, WEACT has geared its local efforts toward adaptation. For instance, Corbin Mark said that WEACT is addressing questions such as, "How does our community adapt to this? If we know that climate change is coming, how do we as communities become prepared to deal with that reality? Part of it is reducing our carbon footprint, reducing our impact on this moving train of global warming."

That, of course, is also one of the key goals of PlaNYC2030.

Sustainability in Harlem

In 2006 Mayor Michael Bloomberg invited WEACT founder, Peggy Shepherd to participate on his Sustainability Advisory Board and help draft PlaNYC2030. Shepherd and her organization saw a golden opportunity to ensure that the plan addressed justice issues.

One example is the city's Million Trees Program. According to Corbin Mark, WEACT has "been very focused on ... trying to make sure we get as many of those million trees as possible planted in northern Manhattan. ... The more trees we can get planted – and hopefully they grow quick and fast and big and tall -- the more we are able to offset the heat effect that we have going."

Another of PlaNYC's strategies to offset the "urban heat island effect" is to encourage green roofs, roofs that are at least partially covered with vegetation to absorb storm water, reflect sunlight and insulate the building. To launch that effort, WEACT is raising funds from private donors for its "From Tar Beach to Green Roofs" initiative to create green roofs all along 125th Street. It plans to start with some of the public buildings, including two schools where students will be involved in the design process.

WEACT also intends to capitalize on PlaNYC2030's attention to greening buildings through retrofitting. Here again, the plan offers the group an opportunity to further long-standing goals of educating Harlemites about indoor toxins such as lead paint, mold and rat poison.

"I think that is a real frontier for us as we think about healthier homes and a better housing stock for our community," said Corbin Mark, "One of the things we constantly deal with in northern Manhattan is landlords using dirty grades of oil" in their boilers. Accordingly, WEACT is working to fund programs that will help landlords not only to retrofit their boilers to require less oil, but also to use cleaner, more renewable energy sources.

Finally, according to PlaNYC2030, no New Yorker should live more than a "10 minute walk from a park." WEACT would like to see those new green spaces in Harlem serve multiple purposes. The organization wants to green local school yards with vegetable gardens. The gardens would be accessible to community members, and would involve students in growing their own food, while teaching them about healthy food choices.

Thus, this initiative addresses green space as well as childhood obesity rates and diabetes. In 2007, the East and Central Harlem District Public Health Office reported that more than one in four children in the area's Head Start programs and public elementary schools are obese, and the New York City Department of Health and Mental Hygiene estimates that adolescents account for 45 percent of Harlem's diabetes cases.

Meeting Community Needs

If PlaNYC2030 is to improve the ecological and social environment in Harlem, the community will have to work with city officials. This can take effort on both sides.

As an example, Corbin Mark cites the city's climate change training session in East Harlem last spring. "The mayor's staff reached out to us and worked with us to develop something," Corbin Mark said. But Corbin Mark advised city officials that their one-size-fits-all approach would not work. Rather, the training had to be culturally and geographically sensitive.

"We literally had them redo what they thought was their very glorious standard training piece," Corbin Mark recalled. "I said ‘no, maps need to be focused on East Harlem; pictures need to be focused on East Harlem; concepts need to be focused on what does this mean to East Harlem.'" To Corbin Mark's pleasure, the city was receptive. "In the process I think they began to really understand what it means to think about these concepts from a local perch, a local perspective," he said.

But Corbin Mark also recognizes that he and his colleagues will have to maintain their vigilance. "You've got this blueprint out here [in PlaNYC 2030] and either some of these initiatives die on the vine, or they get implemented from a very top down kind of approach," he said. "We don't want put in all this thinking and labor and effort to make this blueprint, and then have the plan not come to our communities."

Melissa Checker is assistant professor of urban studies at Queens College, City University of New York. She is the author of Polluted Promises: Environmental Racism and the Search for Justice in a Southern Town,

 

Photo (cc) Jim Frazier

How will recent economic ups-and-downs affect New York City in the long term? The picture may not be so dire.

It is no exaggeration to say the short-term economic outlook is cloudier today than at almost any time in decades. The recession is already worse than anticipated. It is worldwide, it has structural roots as well as cyclical ones, and while it emanates from the financial sector, it reflects fundamental imbalances among consumers and in the broader economy.

So far, New York City has seen relatively modest job declines concentrated in finance and a small number of other areas. The city and its immediate suburbs have lagged the nation in terms of aggregate job losses that have been taking place for nearly a year. However, most regional economists expect the city to catch up very quickly, and by the middle of next year, the pace of our job losses likely will exceed the national average.

The coming months will pose real hardships for many New Yorkers, particularly low- and moderate-income families. Unemployment will rise, public services will suffer, and the mortgage foreclosure problem will undercut struggling neighborhoods. Despite the difficult times ahead, though, with the right government actions, New York City has a good chance of emerging from this turmoil in fairly good shape.

The Short-Term Outlook

Current forecasts call for New York City to lose 150,000 to 175,000 jobs by the end of next year. This would be about a 5 percent drop. That's less than during the downturn earlier this decade when we lost 240,000 jobs, and much less than in the downturn of the late 1980s to early 1990s that was much worse in the New York region than in the nation as a whole. New York City lost 10 percent of our jobs then. Of course, no one knows how steep or long the current downturn will be. Only four or five months ago, most forecasts predicted job losses about half of what they are now.

Through September, the city's finance sector lost a net of about 10,000 jobs, a little over 2 percent of the total. Following the financial market meltdown in the last half of September, not only did credit markets freeze up but the bottom dropped out of consumer confidence and spending. New York is feeling the effects of a recession that has spread across the globe.

New York's job losses appear to be accelerating. Finance sector employment will fall sharply - it could lose as many as 50,000 or 60,000 jobs in New York City, 10 percent to12 percent of the total. This will be accompanied by a substantial decline for many of the businesses that fill so many of Manhattan's buildings: professional and business services, corporate headquarters, media and technology. Hospitality and retail will suffer. And construction activity over the next two years will decline by 20 percent or more. With its concentration of financial and other export-oriented businesses, Manhattan's job base will contract much more than the employment levels in the other boroughs.

After the Recession

Economists know even less about what the recovery will look like than what we know about how bad the downturn will become. We expect to see a profound structural shift within the finance sector and in the relation of the finance sector to the broader economy and to government. This likely will mean that, for at least the next few years, the finance sector will not be as large as it was in 2007. Its presence in New York City could permanently shrink by 10 percent, if not more.

For the intermediate- and longer-term, though, New York's prospects remain fairly bright. We are in a much better position than we thought we were right after 9/11 when many feared that large commercial centers like New York City would no longer be viable in a time of terrorist attacks. Now, we face an energy-constrained world where New York City's overall energy efficiency and reliance on the most extensive mass transit system in the U.S. is a great asset.

Our dense concentration of business gives us a big leg up in terms of the productivity and profitability of many sectors - professional services, media, information technology, design and engineering. In most of these areas, the "value added" (the net dollar value created by business) per employee far outpaces the national average. Our cultural offerings surpass most cities in the world. The quality of life in the city has steadily improved.

New York City's many attributes are recognized in the 2008 ranking by Foreign Policy magazine in their Global Cities Index. New York City ranks as the Number 1 City To Do Business In out of 60 global cities. Of the five factors considered, New York ranked highest in business activity and human capital, second in political engagement, third in cultural exchange and fourth in information exchange. If you're worried about New York City's future in a world where we've seen "The End of Wall Street as We Know It," post those rankings next to your desk. Our recovery may be fitful, but New York City will continue to be a magnet for top entrepreneurial and creative talent the world over.

Government's Role

As many assets as the city has, New York's economic future depends heavily on effective national policies to foster genuine economic recovery. What happens in Washington, D.C. over the next several months is probably more central to the well being of New York City than at any other time since the days of President Franklin D. Roosevelt. Unprecedented actions have been taken, and unprecedented taxpayer resources have been committed to stabilizing the financial sector. It hasn't been stabilized yet, but the focus is there and the resources are at hand.

At least two other things also need to be done.

First, we have to stabilize the housing sector. It's paralyzed now. Prices have declined by 25 percent and are headed further down. We have to stem the flood of foreclosures and put a floor under housing prices. Millions of mortgages have to be renegotiated, losses have to be taken, bundles of mortgages have to be unbundled.

Second, the government must craft a robust macroeconomic recovery program to stem the current downward spiral. Usually, rising home sales, new construction and the related purchase of new appliances and furnishings pull the economy out of a downturn. Given the deep slump housing is in, that is not likely this time. The economy needs a big stimulus to turn the economy around and to substitute for the push a recovering housing sector normally provides.

To accomplish this, our leaders need to confront the forces that will say we can't let the federal deficit get any larger. We need to listen to John Maynard Keynes and not Pete Peterson. (Peterson, a prominent financier, is a leading advocate of the position that a looming federal deficit is the biggest barrier to long-term prosperity.) An effective economic recovery program might take 3 percent, 4 percent or 5 percent of Gross Domestic Product ($400 billion to $700 billion). Even so, that is far less than we have poured into the financial markets, and unless we're willing to make this additional investment, the money we've directed to saving the financial markets won't even be effective.

New York City's recovery won't get underway until we have a national program in place to deal with the other roadblocks remaining from the bursting of the housing and derivatives bubbles and to restore consumer confidence and spending.

This national economic recovery program needs to include:

-- A better targeted stimulus, including state fiscal and Medicaid relief, extended unemployment benefits, and increased aid to low-income populations;

-- A robust program to invest in infrastructure that funds ready-to-go state and local government projects (schools, sewers, roads, transit systems, etc.) and includes a major investment in green jobs to promote residential and commercial building retrofits and alternative energy development.

-- A universal health insurance program that covers the uninsured, finances health care in a sustainable way and helps small businesses provide affordable coverage to their employees.

We also need policies at the local, state and regional level to support, not undercut, these initiatives. We have to make sure we don't reinforce the downward economic spiral with damaging state and city budget cuts. Hopefully, we will come out of this downturn with an economy whose prosperity does not depend on debt and whose growth is more energy-efficient and sustainable. Sustainability means lessening our severe income disparities as well as achieving a better long-term environmental balance. If we have the right national policies, New York City will do well.

(This column is based on remarks Parrott gave at a Nov. 12 economic forum sponsored by McGraw-Hill and Zetlin & DeChiara LLP in association with the New York Building Congress and other organizations.)

James Parrott is deputy director and chief economist of the Fiscal Policy Institute (www.fiscalpolicy.org). He has been studying and writing about the New York economy since he landed in New York City a quarter century ago. 

Photo (cc) Wally Gobetz

For more photos from the Lower East Side, click here.

New York City's most "endangered neighborhood" was rezoned by the City Council today in an attempt to stave off gentrification and boost affordable housing.

The rezoning of the Lower East Side, a neighborhood of tenements turned trendy boutiques and hipster havens, will limit building height and spur development of affordable housing. The City Council approved the rezoning by a vote of 42 to 0.

In addition to the rezoning of the Lower East Side, the council also approved legislation clarifying regulations for broken parking meters and a bill that requires the police department to file quarterly reports on firearm trafficking.

Protecting the Neighborhood

The Lower East Side has been the longtime New York magnet for large immigrant populations, from German to Chinese, packed with infamous overcrowded tenements.

Now a Mecca of counterculture, the neighborhood has been largely taken over by developers and boutiques. Out-of-scale buildings along its main corridors, including East Houston, sparked a community-based drive to limit certain types of development, starting seven years ago, said Councilmember Rosie Mendez, who represents most of the area.

"This is something the community conceived of," said Mendez. "This will ensure that our community remains a low-scale community."

As a result, 111 blocks of the neighborhood were rezoned, allowing for larger scale development along the area's wide streets, such as East Houston and Delancey, and smaller development on its residential corridors. All building heights will be limited to 80 feet, said officials. The area stretches from East 13th Street to Grand Street and from Avenue D to East of the Bowery.

Until this week, support for the plan within the council and among the members that represent the district, was shaky. According to an agreement between the administration and Councilmembers Mendez and Alan Gerson, dated today, the new zoning could provide more than 456 new affordable apartments -- thought to be the linchpin for gainig council support.

The actual construction of those homes, though, depends on whether a developer would take a height or density bonus, which would allow a building to be larger, in exchange for providing affordable housing.

The city's Department of Housing Preservation and Development has promised another 105 affordable units in the area.

The city will also work with the council members and the Lower Manhattan Development Corp. to allocate approximately $10 million toward the creation of new affordable housing in the area.

Outside of the Lower East Side, residents, particularly of Chinatown, have expressed concern over developer harassment, fearing gentrification could spill over into adjacent neighborhoods with less strict zoning requirements. The administration and the council members agreed to allocate $100,000 to groups that work on anti-eviction and harassment issues in the area.

Gerson also said the administration agreed to "fast-track" rezonings in adjacent neighborhoods to preserve their character as well.

Not everyone agrees that these measures will protect the community.

"What is this separate Chinatown plan really mean?" asked Josephine Lee, coordinator of the Coalition to Protect Chinatown and the Lower East Side, which opposed the rezoning. "There is not going to be any community left to fight for when they do this Chinatown plan."

Lee said the coalition plans to file a lawsuit against the city charging the rezoning is discriminatory.

Meter Makeover

Ever park at a broken meter and think you're getting free parking?

Technically, anyone who parks at a malfunctioning meter can only do so for one hour no matter how many hours an adjacent working meter may allow you to stay. No one, though, knows about the rule, says the council.

About 40,000 tickets are issued annually for parking at broken meters, said Councilmember Simcha Felder, the bill's (Intro 812) prime sponsor.

The legislation, which was approved by a vote of 42 to 0, will allow drivers to park at broken meters for the maximum allotted time in that immediate parking zone.

Police Reporting

The council also approved legislation (Intro 492-A) by a vote of 42 to 0 requiring the police department report how many arrests, per precinct, are from possession of firearms or trafficking of firearms.

Commercial Development Incentive

Any New York City business that receives tax abatements should be on their best behavior.

A bill (Intro 860), passed the City Council by a vote of 42 to 0, revises the tax abatement program to penalize certain companies with a history of violations with the city. If someone who receives a tax break has violations, such as asbestos or environmental hazards, and does not correct them within 180 days, their benefits would be suspended.

 

After much debate and opposition, the City Council Thursday approved a plan to develop Willets Point, a polluted industrial area of Queens. To win support, the administration agreed to provide more affordable housing on the site and to protections for local businesses. 

How do John McCain and Barack Obama compare on urban policy and what will it mean for New York and other large cities? Obama's campaign has a detailed set of principles and proposals that differ markedly from previous Democratic policy. McCain, on the other hand, has no explicit policy for cities, but several basic concepts are implicit in his platform, and some of his energy and environmental proposals are similar to Obama's.

Obama Goes From City to Metropolis

Unlike the Carter and Clinton administrations, which put forth (modest) policies to aid central cities like New York, the Obama campaign instead deals with metropolitan regions as a whole. This represents a major break with Democratic Party policy since the civil rights era. The War on Poverty and Model Cities programs focused federal resources on central cities, while the recommendations of the 1968 Report of the National Advisory Commission on Civil Disorders (the Kerner Commission) further called attention to the neglect of central cities.

After World War II, the nation's suburbs grew dramatically, and today some 80 percent of the U.S. population lives in large metropolitan regions. Most of that population is in suburbs, with central cities representing the smaller part of these giant regions. While suburbanites may not think of themselves as "urban," they are now part of a much larger urbanized area that may be lower in density than the central city but bears little resemblance to a small town or rural fringe.

Over the last two decades, presidents of both parties have shifted the focus of national urban policy from central cities to suburbs. Congress gained a suburban majority, and the nation's de facto urban policy became the promotion of home ownership, particularly in newly urbanizing regions. Home ownership levels increased, though only marginally (and have now begun to decline as a result of the mortgage crisis). But we now know that owning a home by itself does not necessarily mean progress for individuals or households, especially if homeowners resort to sub-prime mortgages because of their low incomes or redlining.

A far cry from the apocryphal call for cities to "drop dead" (widely attributed to a Republican president), the Obama platform explicitly states that cities should be seen not as the problem but as the solution. But he means the metropolitan regions, not the central cities. With this in mind, his specific solutions include: creation of a National Infrastructure Reinvestment Bank funded to the tune of $10 billion over 10 years; regional clusters for economic innovation; business incubators; workforce training; and green technology and green jobs.

Obama's platform still offers something for the older central cities. In housing and community development, areas of considerable concern to central cities like New York, Obama would restore rent subsidies and public housing operating funds that were cut under the George W. Bush administration - actions that might help the New York City Housing Authority balance its budget and prevent privatization. He would restore and increase Community Development Block Grant funding and create 20 "Promise Neighborhoods" that comprehensively deal with poverty. The Obama platform supports homeland security and community policing but requires police to be attentive to issues of accountability and brutality. Broader economic policies such as increasing the minimum wage and Earned Income Tax Credit are also listed as part of Obama's urban policy.

Obama addresses the "livability of cities"-- particularly public health and environmental concerns -- by calling for efforts to combat inefficient low-density suburban sprawl through "smart growth" around higher density urban centers. Smart growth has been a major goal of urban planning professionals in the nation.

"Our communities will better serve all of their residents," says the Obama campaign, "if we are able to leave our cars, to walk, bicycle and access other transportation alternatives." This could lead to federal support for recent efforts by the New York City Department of Transportation to improve the bicycle and pedestrian infrastructure. In the Senate, Obama sponsored the Healthy Places Act requiring federal agencies to evaluate the health impacts of urban policies.

McCain on Housing, Energy and the Environment

Perhaps the closest that John McCain comes to an urban policy is his Homeownership Resurgence Plan. In the second presidential debate McCain called for government to buy up and renegotiate fixed-rate mortgages for households struggling to meet their monthly payments. (Obama counters that, under the recent bailout legislation, the Treasury Department already has the ability to do this

Mortgage rescue would be good news for New York City neighborhoods facing exceptionally high rates of foreclosure. However, McCain's plan has a loophole that could affect its ability to rescue victims of predatory lenders that were particularly active in places like New York. The McCain plan requires beneficiaries to "prove their credit worthiness at the time of their original loan" and to have made a down payment. Predatory lenders have been especially active in minority neighborhoods in central cities, where they actively went after borrowers who did not make enough to pay their inflated mortgage and purposely confused or lied to them about the long-term costs and terms of the mortgages.

McCain's energy policies could help improve the environment in cities like New York. He promotes the development of hybrid and zero-emission vehicles, energy efficiency in government buildings, retrofitting private homes for energy efficiency and green jobs. He advocates the development of alternative fuels, including nuclear, biofuels and clean coal.

While there are some important differences between the two candidates on energy and environment, Obama also supports alternative fuels. Both candidates' policies would likely help reduce pollution from transportation in urban areas. However, to the extent that their programs emphasize use of alternative fuels and encourage auto use, they could exacerbate global warming and other long-term problems related to auto dependency in metropolitan regions. Obama mentions transportation alternatives, but it remains to be seen whether this would go beyond the current token support by federal, state and local governments for reducing auto use, such as striped bicycle lanes instead of protected lanes, or building more sidewalks in the suburbs that are rarely used.

Whither HUD?

Obama's platform includes two administrative changes aimed at implementing his urban proposals. First, he would create a White House Office on Urban Policy that would report directly to the president. And he would revive the federal agency in charge of housing and urban policy - the Department of Housing and Urban Development. President Lyndon Johnson made HUD a cabinet-level agency in 1965, but President Richard Nixon reduced the agency's responsibilities and Ronald Reagan severely cut the agency's budget. Most support for the direct construction of new low-income housing ended in the 1980s.

When Republicans led by Newt Gingrich controlled the House of Representatives in the 1990s, they came close to abolishing HUD as a Cabinet-level agency. It survived to implement the HOPE VI program, which subsidized the demolition of public housing and, in the most dramatic case, led to the abandonment of public housing tenants in New Orleans after Katrina. Since the 1980s, HUD has been wracked by several corruption scandals. Obama pledges to restore HUD programs "to their original purpose" - though he has not made it entirely clear what he means by that.

Neither of the two candidates has explicitly acknowledged the failure of the current urban policy that single-mindedly promotes homeownership. But if history is not to repeat itself, both parties might do well to explicitly acknowledge the needs and problems of urban renters - that means the majority of New Yorkers -- and redefine the "American Dream" as a stable job, a rent-controlled apartment and a safe, walkable urban environment.

See: McCain and Obama: Who's Best For the Cities? By Neil Pierce
and On Urban Issues, Obama, McCain are True to Their Parties

Tom Angotti is Professor of Urban Affairs and Planning at Hunter College, City University of NY, editor of Progressive Planning Magazine, and a member of the Task Force on Community-based Planning.