Wednesday, June 4, 2014


UPDATED JULY 24: This is my new article about Mayor de Blasio's appointment for Small Business Services commissioner, and some of the related issues facing the city's mom and pop stores. That there is little alarm in the fact few (almost none) at SBS actually have small business experience raises no eyebrows, but would that be acceptable at DOT or DEP, for example?

As I alluded to in my most recent post of Ethics Ain't Pretty, New York City should be a undergoing a major realignment of the political dynamic from the last two decades. In theory, "progressive" new mayor Bill de Blasio should have started his term in January wiping the slate clean from the right-wing, business-at-any-cost economic policies of Mayors Bloomberg and Giuliani. In theory, de Blasio is the polar ideological opposite of his two immediate predecessors. In theory..... 

Like the last Democratic mayor of New York City--David Dinkins--de Blasio's schizophrenia in his appointments to high-ranking positions is clearly evident. When it comes to social services and certain labor and education issues, some of de Blasio's nominations can be seen as groundbreaking, even inspiring, especially after 20 years of strategies that were decidedly anti-poor.

Longtime Legal Aid attorney, Steven Banks--who was an incredibly effective thorn in the sides of Giuliani and Bloomberg, particularly concerning the homeless-- was appointed to head the city's Human Resources Administration. This choice represents the major change anticipated by de Blasio's supporters, and even reflected in his high voter percentage. The new school's Chancellor, Carmen Farina, is very respected within education circles, having worked as a teacher, principal, and deputy chancellor within the city's system, and is a long-time advocate of early childhood education. 

But unlike Dinkins--where the philosophical transition from former Mayor Ed Koch didn't represent a huge political leap---many de Blasio appointments have more in common with the policies of the last twenty years than they have any right to have. 

In some circles, Mayor de Blasio is now being called Mayor de Bloomberg. It's become clear to even a casual observer of NYC government, when it's come to development--real estate or economic--Bill de Blasio has decided to perpetuate the status quo. And in NY, that means embracing the unrivaled power of real estate interests. The most telling sign came last month with the presentation of the mayor's new "affordable" housing plan, which has been praised by--you guessed it--the real estate industry, despite numerous and varied calls to break with the past and build more units for the poorest New Yorkers. 

Created under the auspices of the deputy mayor for housing and economic development, Alicia Glen-- the plan is only serving to codify many concerns (as previously mentioned in this blog) about the true loyalties of both the mayor and deputy mayor. In truth, de Blasio's plan falls far short of the actual demand for real affordable apartments and has more in common with Mayor Bloomberg's most recent housing plan in terms of numbers and details--such as they exist.Developers will still be "incentivized," either through direct subsidies or more likely, by allowing them to build bigger, denser buildings through rezonings (which they love) and using inclusionary zoning (IZ)--which has at best a mixed record of success in terms of creating affordable units. IZ can also result in unforeseen consequences, like the creation of a two-tiered system where regulated or lower-income tenants are often relegated to a 'less-than' status (like having to use a separate entrance) or are discriminated against by the developer in some other manner. 

John Fisher, who runs the website TenantNet, said the mayor's stated goal of "livable neighborhoods" is made meaningless because IZ "allows these giant towers to be built and the entire economic stability of a community becomes undermined. Economic pressures are put on the area's existing residential tenants, who tend to be lower income, as well as on local businesses so services get dislocated." When luxury towers are built, Fisher said, developers are singularly interested in attracting high-end tenants, so therefore they bring in high-end businesses and suddenly the neighborhood is too expensive to stay. The outcome is often secondary displacement of both residential and commercial tenants. 

As one journalist wrote about the overall proposal, "The result is that large groups of people will be left out the plan. It does not specify how many apartments will be built for the city's working poor, but the $40,000 a year it categorizes as "very low income" is middle-class next to a minimum-wage worker, for whom even a $600 rent would take more than half their income."

Moreover, he points out another big disappointment: De Blasio's plan doesn't live up to his campaign pledge to work towards repealing vacancy decontrol. (It remains unclear what would happen if the City Council repealed its own vacancy decontrol measure, which was passed in 1993/94, before the state's version ever took effect.) 

An interesting aside: Within the 117 pages of the plan, credit is given to the Dinkins and Giuliani administrations for their preservation efforts of affordable units. Yes, that Giuliani whose main concerns about housing centered on destroying community gardens or ensuring his developer friends were able to make tidy profits off of city assets. From a City Limits article in 1995, "The trouble is that nobody at the whole agency really gives a shit about the issue of housing anymore," said a former top aide to Lilliam Barrios-Paoli, the second commissioner to leave [the Housing, Preservation and Development agency] HPD in a year... the focus in housing has been to save money, not to spend more on the expensive building renovations that have been the heart of HPD's traditional mission...[the administration started] selling off old tax-lien debt to private investors...But in hatching the tax lien sale, Giuliani's minions initially made no provisions to protect the buildings' low-income tenants who might have faced evictions or deteriorating conditions if owners, unable to pay off the liens, abandoned their buildings." The entire article is worth reading.

Perhaps the shout-out to Rudy is Glen's way to justify her work as a senior official in his HPD. 

With almost every appointment dealing with land use in some way, de Blasio's progressive moniker becomes increasingly irrelevant, and the incestuousness of the city's permanent government and the influence of real estate become more entrenched and more interconnected. Most if not all these positions fall under Glen's jurisdiction. (Full disclosure: she and I were friends in high school.)

Here are several examples:1) Vicky Been, the new HPD Commissioner not only has connections to big real estate by way of her work at NYU's Furman Center for Real Estate and Urban Policy; there is also her obvious tie to NYU itself, whose mega-development plan was supported by de Blasio, but was widely opposed by the affected communities. First Deputy Mayor Tony Shorris also has connections to NYU, leaving many to wonder if these appointments are harbingers that the new administration will somehow circumvent legal rulings against the university so all or part or the expansion can still happen.

2) De Blasio's new Small Business Services (SBS) Commissioner is a former executive vice president and chief of staff of Bloomberg's NYC Economic Development Corporation (NYCEDC), a move the Small Business Congress is already deeming bad for what's left of the city's mom and pop businesses. Overall, they argue, the biggest obstacles facing small businesses and the main cause of closings are escalating rents and landlord extortion--areas both agencies have denied or ignored for years, in deference to the power of the real estate lobby. With New York's small businesses providing the largest number of decent jobs, it seems unclear how these kind of employment and labor issues can be separate from economic development, but it happens in NYC. 

Though de Blasio's appointment, Maria Torres-Springer, was on maternity leave until recently, one of her first moves was to name a deputy commissioner supervising the Neighborhood Development Division, in charge of the city's 69 Business Improvement Districts (BIDS). BIDS were created to supplement the city at a time when it couldn't provide necessary services due to financial shortfalls. Critics accuse the city now of relying too much on them in lieu of providing the services government should provide in the first place. And, they say, there is an inherent conflict-of interest because many BIDS represent the interests of property owners and not an area's commercial renters, who are usually forced to pay the related fees passed on by owners. 

In fact, a Furman Center analysis reported the larger BIDS have "a big impact' on commercial property values--which is not their core mission-- while the smaller ones are less effective. The report advocates more of the budget for smaller BIDS be spent on direct services and less on administrative costs. (FYI: I recently interviewed the commissioner for a separate article; I found her to be genuine and accessible.)

3) The new Landmarks Preservation Commission chair, Meenakshi Srinivasan, is the former head of the city's Board of Standards and Appeals (BSA) under Bloomberg--the entity that grants zoning variances to developers. Some tenant and community activists have already written her off as a 'real estate hack,' and there's some evidence to support that accusation, given her role in the Hudson Yards "master plan" and the Broadway/Theater District rezoning, both considered to be death knolls for the Hell's Kitchen and Clinton neighborhoods. While she is a city planner and architect, Srinivasan has no actual preservation experience though press accounts revealed the administration in fact interviewed several candidates with such credentials. 

On the other hand, I spoke with some veteran staff of the BSA--one of whom I have known for years--who praised her "intellectual heft and rigorous analytical skills," saying she is no pushover; credit also had to be given for Srinivasan's ability as "gate-keeper," deciding which applications were worthy of review. Based on these conversations, it would seem the BSA is a very different animal than it was during the days of Giuliani, when the board was considered a rubber stamp for developers. However, as the staff informed me, the agency doesn't track the number of zoning variances it approves or denies in a given year, making it impossible to objectively compare data within any year or analyze year-to-year outcomes. 

4) The reappointed president/chief executive officer of the Brooklyn Navy Yard Development Corporation (BNYDC) is not only another Bloomberg holdover; he served as an evp and co-head of NYCEDC'S real estate division, and was responsible for overseeing controversial projects like Atlantic Yards and Cornell University's tech campus on Roosevelt Island. The announcement of David Ehrenberg's reappointment said he'd be working closely with NYCEDC and Glen. That last point is particularly of note, because of the pre-existing relationship between the Navy Yard and Goldman Sachs. 

On its website, Goldman Sachs states, "through its Urban Investment Group (UIG)...[it] has contributed to [BNYDC's] revival by helping finance the renovation... helped identify new sources of capital, invested its own capital.... and brought together the public and private parties needed to make the project work."

Glen is the former managing director of that very same division, after serving as the assistant commissioner for Housing Finance at HPD from 1998 to 2002. Capital NY referred to her as a Bloomberg collaborator.

There appears to be some overlap at HPD between Glen and former commissioner Richard Roberts, who left the city's employ for Goldman, and was one of at least four HPD commissioners under Giuliani. He was ultimately indicted for making false statements to prosecutors in a case involving his close relationship to Russell Harding, the ridiculously unqualified but well-connected head of the city's Housing Development Corporation. 

Incidentally, Goldman's new 43-story building in Battery Park City which opened in 2009, "was helped along by $1.65 billion worth of tax-exempt Liberty Bonds and an additional $115 million in tax sweeteners," according to the New York Times and criticized by then-public advocate, Bill de Blasio.

5) The new head of the City Planning Commission, Carl Weisbrod, as written previously, is the quintessential example of the permanent government, and almost always in work that has benefited real estate interests: as an original creator of NYCEDC and president of the Downtown Alliance; at the Battery Park City Authority; and as president of the Times Square BID during the 90's, when the area was transformed into a tourist's wet dream--which also lead to the displacement of countless long-standing area businesses and residents. The man was even a professor at NYU's Schack Institute for Real Estate--yet another NYU connection for de Blasio's government. 

Weisbrod has been "credited" with what most of us would recognize as the gentrification of Manhattan areas Hudson Square and the Meatpacking district, neither of which can be seen as shining beacons of affordable housing. Now his predisposition has already become obvious. The New York Post's main real estate lackey, Steve Cuozzo, wrote, "De Blasio’s “progressive” agenda has scared the daylights out of the real-estate community even as it feigns cautious optimism.... Weisbrod is anything but the kind of development-averse, ivory-tower technocrat de Blasio might have chosen. A real-estate man through and through."

Weisbrod and Glen brokered the deal giving the luxury developers of the Domino Sugar Refinery parcel zoning variances and other perks ostensibly to build more affordable housing. However, the difference between a potential deal reached by Bloomberg's people under their policies and this agreement will yield a meager seven percent more affordable units, or getting 60 more apartments for up to 40 more stories. What a tremendous victory for affordable housing! And this is clearly only the beginning.... 

6) Other areas of concern include the fact that his administration is reviving the Midtown East rezoning previously championed by Bloomberg and the real estate industry but generally opposed by the affected communities; that they are pushing to build towers on public parkland in Brooklyn Bridge Park with the smaller (and less desirable) tower dedicated to some kind of affordable housing, again despite community opposition to any housing; and that Glen appears to be backing away from the mayor's often stated support of a Rent Guidelines Board rent freeze for stabilized apartments. And now this is reported....not even the pretense of objectivity anymore?

As I noted in my 'Progressive Ideology vs Real Estate Interests' entry, in NYC, "to be labeled progressive-- which may be technically accurate--can also be somewhat meaningless, particularly when it comes to the enormous power and influence of the real estate industry.... it's not uncommon for political ideologies to become inconvenient or even irrelevant in the face of such enormous wealth and power. In fact, it's usually the rule, not the exception." So, who is the real Bill de Blasio?