Eric Adams and Kathy Hochul have big plans for New York City
By 2023, New York’s leaders had hoped that America’s largest city would be as strong as ever, the impact of the pandemic as fast as clouds over the horizon. If only. In mid-September only half of the Manhattan office workers are going to work in Manhattan. Spending at restaurants and bars in the city’s main business districts is 23% below its pre-pandemic levels. Because fewer passengers are riding trains, the subway system is cutting service on Mondays and Fridays. New York will likely never return to its old normal. The question now is how the town could move on to a better town.
That is the goal set by Eric Adams, the Democratic mayor of New York, and Kathy Hochul, the Democratic governor of the state. Last month, a panel convened by the mayor and the governor presented a plan to transform New York City, with 40 initiatives to recreate three broad areas: business districts, commuting and housing, and do all this with fairness as well as growth in mind. Local governments specialize in reports about the future, but this one stands out.
That’s partly because Mr. Adams and Ms. Hochul are collaborating — a seemingly small feat but unusual in New York, where previous governors and mayors have specialized in enemies. Business leaders also seem to support it; many senior officers sat on the panel. And because the report’s recommendations are particularly bold.
That is particularly evident in the proposals for the city’s business districts. Many cities are struggling with empty offices as people continue to work at least partially from home. Manhattan has the highest vacancy rate. Many shops, from retailers to dry cleaners, and restaurants, which rely on office workers for customs, are closed or struggling.
Rethinking and reimagining business areas as vibrant 24/7 spaces, with more of a mix of residential and office space, is a key part of the sustainability plan. Among the panel’s recommendations is the creation of tax incentives to encourage landlords to convert offices to residential or renovate office space. Less restrictive zoning laws will be needed. Some of the proposals require legislative changes, which are always complicated.
Converting many of the larger office buildings to residential use will be difficult if not impossible. Nicole Gelinas of the Manhattan Institute, a think tank, doubts there will be much of a turnaround. “Mansions without windows or apartments without kitchens? I don’t think that’s a good idea,” she says. Dylan Burzinski of Green Street, an analytics firm, says that only about 20m sq ft (1.8m sq m) can be converted to residential space, which is not much compared to Manhattan’s 420m sq ft office market. A large proportion of the town’s office buildings are obsolete and energy inefficient. Tears will be needed – the average building is 75 years old.
A conversion probably wouldn’t bring the same tax revenue to the city either. Manhattan’s business districts generate 59% of office and retail property tax revenue. Downsizing could ultimately affect city services. The future looks dark. A recent paper co-authored by Stijn Van Nieuwerburgh, “Work from Home and the Office Real Estate Apocalypse”, estimates that office valuations will be 39% lower than 2019 values by 2029. Many companies, such as Meta , reducing office space.
Resumes are part of New York’s DNA. Its busy port led to crofting factories, which gave way to skyscrapers full of office workers. Panel co-chair Dan Doctoroff, when he worked for former mayor Michael Bloomberg, used the rebuilding of Lower Manhattan after the 2001 attacks as a catalyst for rethinking and recycling much of the city. – big. He says “The key is execution. We need to hold elected officials accountable, accountable.” Fortunately, he says, Mr. Adams and Ms. Hochul are completely behind the plan. With the recession and companies such as Goldman Sachs announcing layoffs there is uncertainty. Ironically, says Kathryn Wylde of the Partnership for New York City, this is starting to move people back to the office. ■
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