Recently, real estate-centric rag, The Real Deal, ran an article discussing the industry's love/hate relationship with Mayor de Blasio, focusing predominantly on that perspective--as one would expect. It included a comment from the DM for housing and economic development who said their relationship was improving, "I think it's changed in the sense that with each month or quarter that goes by, the industry is even more satisfied with the [administration's] ability to get deals done." This quote was presumably offered without any irony intended, given this little gem.
Any mention of opposition to the mayor's affordable housing and zoning plans was perfunctory at best, and completely ignored perhaps the most important and most overlooked concern--the impact these plans will have on NYC's communities. More on this later.
As I've written quite extensively on Ethics Ain't Pretty, to the surprise and now disappointment of many New Yorkers, the de Blasio administration has turned out to be more like Bloomberg redux than anyone expected. Quite simply, when it comes to the all-consuming power of big real estate, the status quo, and watching our beloved city surpass the threshold of progress into generic and homogeneous, the situation has reached Defcon 5.
Really, we shouldn't be that surprised given his history: supporting the massive developer giveaway known as Atlantic Yards that destroyed a viable neighborhood and countless small businesses; in favor of building condos in Brooklyn Bridge Park and NYU's latest land grab. NYU--the university who already decimated a neighborhood--and with whom many high-ranking BDB officials were once affiliated.
These were on the record during the mayoral race. But Bill de Blasio was a very lucky man with good timing who was never thoroughly vetted. In everyone's (necessary) myopia of 'Anyone but Quinn,' these facts were ignored for a multitude of reasons which are too complex to examine for this post.
While in the Council, de Blasio supported the 'Small Business Jobs Survival Act,' (SBJSA) as a means to right economic disparity and injustice--the eventual theme of his Tale of Two Cities mayoral run. But, as Public Advocate and now Mayor, it's been radio silence except to propagate the real estate- friendly narrative that fines, fees and lack of access to capital are the reasons NYC mom and pops close, despite a plethora of data and statistics proving otherwise.
Even considering these facts, it's still rather shocking what's gone on with the sale of the Brooklyn Heights library branch--an issue de Blasio actually campaigned against while running for mayor. Yet a few short years later, it's been a 180 change; in fact, the aforementioned DM assumed responsibility to ensure the deal went through.
The last time something so egregious occurred was in 1996 when Rudy Giuliani unilaterally sold the license for WNYC-TV. It was only when he then wanted to also sell off the city's water supply that there was a backlash, but too late for the station (at which i worked). To this day, NYC doesn't have its own public TV station. (Look it up.)
Unfortunately, many of my fellow professionals have utterly failed in covering this issue.
Citizens Defending Libraries founders Michael D.D. White and Caroline McIntyre discuss the administration's push to sell city assets to a private developer for a pittance on WBAI's The Morning Show, which I produced. Naturally, a new luxury tower is in the works.
The entire process exposes how co opted so many public officials have become by big real estate's largess; it also reveals widespread conflicts-of-interest running rampant throughout executive boards which affect public welfare in some way--including the Brooklyn Public Library's Board of Trustees--and amongst employees of various government entities.
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Now back to the impact question. John Fisher, creator of Tenant.net, tells WBAI why the expiration of the controversial developer incentive plan known as 421a isn't a bad thing. Fisher discusses what much of the media, politicians and even tenant groups have ignored in the debate--the impact of such a program and others like it including inclusionary zoning--a cornerstone of de Blasio's affordable housing plan.
Fisher noted that no matter how much "affordable" housing is included--25, 35, even 50%--it still means the rest will be luxury, translating into inevitable primary and secondary displacement of residents and businesses alike. This is a pattern we've seen for years, particularly under the Bloomberg rezonings-on-steroids.
Arguments in favor of deeper affordability and using an AMI that better reflects NYC, according to Fisher, are red herrings because the sheer volume and density of the market-rate housing created will ultimately supersede everything else and continue swallowing up community after community.
Moreover, current owners see these giant profits and want to get it on the action, often employing illegal tactics to push out long-term tenants. A reasonable person might be able to recognize something like a chronic lack of repairs, consistent lack of hot water and/or heat, or tenants being groundlessly hauled into housing court as forms of harassment, but the city's housing agency is still grappling with the definition.
And it's not as if ANY law enforcement office--not the five DA's or AG's offices etc.--or relevant agencies in charge of oversight take these issues seriously enough to prosecute most wrongdoers for the criminal fraud and other illegal activity. At best, there's a slew of press releases and a lot of promises made, but in reality the wheels of landlord corruption continue to spin.
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Underscoring Fisher's position is this interview I produced with a representative of CASA/New Settlement Apartments, who discusses community opposition to the mayor's proposed rezoning of 73 blocks along the Bronx's Jerome Avenue corridor--a stretch included in the nation's poorest urban Congressional District.
Carmen Rivera Vega tells how she and her neighbors spent a year engaging to create an alternative to the city's, after too many times actual residents--the ones who have been and would be directly affected---were again left out of area development plans.
Rivera said the median income is under $25,000 per year with many residents spending more than 50% of income on rent, yet the city is relying on an AMI of more than $63,000 to be eligible for its planned "affordable" units. The area is also home to many automotive-related businesses and related jobs the city seems bent on forcing out.
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With the City Council not only voting to approve a giant pay raise--but one significantly higher than was recommended--I was reminded of something. In 1999-2000, I worked for then- CM Kathryn Freed who represented lower Manhattan. This was definitely not a job for me and as I was leaving, the Council's salary was raised to $90,000 for this "part-time" job. Over 16 years, that salary will now become $148,500, a $36,000 pay raise since 2006. Considering annual rates of inflation or even COLA increases--or freezes as is the case this year--the word disproportionate is an understatement.
It's especially important because, as my current CM pointed out, Council employees tend to make paltry incomes, and this $36,000 raise is often more than what many earn in a given year. As a working journalist who regularly interacts with many of these staffers, it's pretty clear these days the 'best and the brightest' aren't generally flocking to, or staying at, the Council for jobs, and invariably the low salary is a giant factor. The staffs also seem to be a lot younger and more inexperienced.
Frankly, I needed a job at the time that gave me some stability, having burned out from the constant state of panic that comes with freelancing--especially in broadcast in the late 90's, and I knew and respected Kathryn.
With a Masters degree, I earned $32,000; a colleague who started the same time earned $31,000 and he had a Masters in transportation planning. My salary was insufficient for me to survive in New York City, if i hadn't lived in a rent-stabilized unit AND had a roommate. From what I've seen, this salary situation hasn't changed much after all these years, and Council staff are not represented by any municipal union.
Furthermore, my salary would have excluded me as too high for the very low end of city-sponsored affordable units AND from the vast majority of what's being currently proposed because it was too low.
Also of note: 60 Hudson Street--the building associated with last week's crane collapse--was already a major neighborhood concern in 1999. I inherited the relevant folder from the previous staffer, meaning this building was an issue even earlier. Yet, at last week's mayoral presser, the administration somehow seemed unaware of this. (And as a personal peeve, not one reporter inquired as to whether or not the crane crew was non-union.)
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I love this picture, and it brings out my Mod side; I feel sorry for you if you don't know who it is!
Since my last post, here are a few more businesses that I saw on Seinfeld re-runs which have also vanished: United Artists movie theater in Times Square, 50th Street Guild movie theater, Putamayo, Chock Full o'Nuts coffee shops...
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And speaking of businesses, it's hugely curious the de Blasio administration's new #OneNYC (his version of Mayor Bloomberg's sustainability plan) includes a purported goal of lifting people out of poverty, while simultaneously appearing to ignore one of the most sure-fire measures that has accomplished this. Small businesses have traditionally been considered a major pathway for low-income earners to achieve social mobility.
In fact, small businesses in general are often the only employers of the least desirable, like people with little education or with a criminal record, because they take chances, including in hiring. Just starting a small businesses implies you're a chance-taker, as the odds are overwhelmingly against you at the outset. And, you can be sure big corporations don't take similar hiring risks, and government hiring usually involves rules, regulations and certain minimum requirements.
Yet, there is not a single reference to saving an existing business or to job retention in #OneNYC, or anywhere else in the administration's repertoire, for that matter.
Depending upon whom you ask, immigrants own either almost 50 percent of all NYC small businesses according to the city's small business agency, or more than 80 percent, small biz advocates like the Small Business Congress (SBC) estimate.
Regardless, why would the mayor's plan ignore existing businesses? You can talk about creating jobs, workforce development and better job training up the wazoo, but why wouldn't you do anything to protect those that already exist?
This heartfelt editorial written by an immigrant small business owner goes to the crux of what's wrong with the city's two decades of ignoring the needs of our mom and pop stores--a policy still in place and seemingly not in any danger of imminent change.
#OneNYC's biggest "initiative" to directly help the poor is raising the minimum wage, an admirable and necessary goal. However, it's a somewhat simplistic and one-sided solution that could ultimately backfire, if it alone is enacted.
To put this into perspective, understand NYC small businesses contend both with exorbitant rents IN ADDITION to often paying a landlord's passed-on property taxes. Throw in a living wage requirement, or anything that could lower revenues for many mom and pops, and that could very well be the tipping point. It's just too much pressure--something inevitably has to give. We could potentially see widespread closures and massive amounts of job layoffs.
Now, before you think I'm adopting some reactionary position suggesting a living wage is less important than keeping small businesses open, that misses the critical point. It's not an either or question---we should be able to have both.
The key reasons the city's mom and pops operate within such a hostile climate are twofold:
1-The unfettered speculative real estate market--rising rent is a major cause of prices increasing, but wages are stagnating simultaneously, and every lease renewal puts more pressure on wages. Every rent increase essentially takes away any flexibility a small business owner may have had and that covers how much workers are paid above minimum wage. Steve Null from the SBC said, "There's a jobs AND wages crisis, and its connected. [Real estate] speculation and profiteering is causing inflation."
2-The top-down economic policy started under Mayor Giuliani, but expanded as if on steroids under Bloomberg; As Null explained, instead of the city asking small biz owners 'How can we help you pay more [to your workers]?,' it ignores the environment under which they operate, permitting speculators to keep making bigger profits. "You can have better wages or higher landlord profits, but not both. You have to make an economic priority," Null said.
Let's not kid ourselves--we all know the main reasons small business after small business close in NYC--especially these days--are astronomical rent increases or a tenant being denied a new lease.
To help paint the picture, the SBC described some of the most common results when a commercial lease expires:
- It's a death sentence for many long-established businesses, arts and cultural institutions, and for thousands of jobs;
- It perpetuates sky-high rents, the changing character of city neighborhoods and loss of an energy and spirit to that community that can't be replaced;
- The loss of opportunity for social mobility and critical first job experience for lower income families;
- Countless empty storefronts on main street, with some spaces warehoused for years to maintain artificially high rents.
The mayor can change this immediately if he so chooses. After all, as previously written in EAP, Council Member Bill de Blasio was once a sponsor of the 'Small Business Jobs Survival Act' (SBJSA), which he called a means to fighting economic injustice.
The SBJSA is intended to equalize the one-sided relationship between commercial tenants and landlords by bestowing tenants with rights: equal rights to negotiate and mediation, to a lease renewal, and to a lease that would cover a decent time span.
And this bill applies not only to retail tenants, but also cultural/arts organizations and professional offices--as opposed to at least one other proposal currently floating around. Unfortunately, these desperately needed rights seem to have disappeared from the mayor's brain.
It shouldn't be surprising given the deputy mayor for housing and economic development, who recently told a radio interviewer in a stunning example of cluelessness, "New Yorkers have a tendency to over-romanticize the city's past...to rewrite history. Change is hard but change can also be great."
How can someone with such authority and responsibility be so incredibly wrong? Then again, given her chosen and limited frame of reference--predominantly Goldman Sach's Urban Investment Group and Giuliani's HPD--I guess it's not that shocking.
Jeremiah Moss, creator of the Vanishing-NY blog and the #SAVENYC campaign, articulately explained why the DM is so deluded, in a segment I produced for WBAI radio's 'The Morning Show' on April 16:
I hear this argument a lot, that it's just all about nostalgia, and it's NOT all about nostalgia. It's not about the past really, it's about the present and a very real problem in the present of NYC losing its unique character. So, while many of the places we're losing are older--older places i think are like elderly people, the most vulnerable in this society--it's really about preserving and protecting what makes New York, New York.
And that's not a nostalgic endeavor, that's about wanting to have a place with character, and we know NY is losing its character. We're hearing about it now everyday. We hear about it from celebrities. We hear about it from tourists. We hear about it from writers. It shows up in film... on Saturday Night Live. This is clearly something that most people agree upon...It's [the city] not there anymore, and it's disappearing faster and faster everyday.
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Like clockwork, the Rent Guideline Board's (RGB) just-released preliminary increase numbers for stabilized lease renewals simply underscore how utterly meaningless the administration has been about affordability--and sadly, how beholden it is to the real estate industry.
Last year's shenanigans were bad enough. But in a year where owners costs have demonstrably dropped, it seems as though our progressive mayor--with his total control of RGB appointments and the cover the RGB's own data offered--if he had wanted a freeze or negligent increases, the mayor could have easily gotten them.
Instead, we got 0-2 percent increases for one-year lease renewals and 0.5-3.5 percent for two. One tenant activist wrote: BDB/Alicia Glen Screw Tenants Again.
This year the argument for a rent freeze, or even a decrease, and the accompanying data, are even stronger. While the freeze is still in play, the upper boundaries are even higher than last year. And for a two-year lease, the lower number.... is almost a full percentage point higher than last year's 2.75 percent. With the decrease in landlord expenses, especially fuel, a 0.5 percent increase is obscene. These ranges were set with the full approval of Mayor de Blasio. (Glen is the DM to whom I referred earlier.)
It should be noted the RGB's own 2015 Price Index of Operating Costs for rent-stabilized apartment buildings increased by a mere 0.5 percent. The federal government's 2015 cost of living adjustment (in this case, increase) was 1.7 percent.
How on earth are these ranges justified, especially for two-year renewals? This administration was welcomed by many who expected a deliverance after so many years of exclusively pro-landlord disproportionate increases. Disappointment shouldn't be the only response. People should be irate and inundating their Council Member, Speaker and Mayor with calls and emails. They should be marching on those offices. This cannot and should not be accepted as a fait accompli.
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Don't forget #SAVENYC's rally/concert at Arlene's Grocery, in what remains of Manhattan's LES tomorrow, Saturday, May 2 @10pm. Admission is $5, with appearance by the very fabulous and entertaining NYC stalwart, performance artist Penny Arcade, and original NYC punk and front man of the Dictators-NYC (formerly the Dictators), Handsome Dick Manitoba.
Having seen both perform several times, get ready for lots of fun. Because both are veterans of the city's one time thriving underground/alternative scene, prepare to also be schooled in why NYC's disappearing character is so damned important.
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Update and Correction: The RGB's 2-year lease renewal range is 0.5-3.5 percent, not 3.5-5 percent. Additional information has also been added.
