New York’s Covid Comeback Must Target Equitable Growth

After getting the pandemic under control following a devastating spring, New York City now faces a second wave, leading to school shutdowns and tighter controls on businesses and social activities.  New York—and other cities—will come back and claim their economic leadership role, even though cities face significant budget constraints if they must act on their own.  But just going back to pre-pandemic levels of inequality and social problems isn’t good enough. 

The Regional Plan Association (RPA), an invaluable advocacy and research group, recently issued “New York’s Next Comeback.” RPA underscores New York’s and its history of rebounding from previous crises, and the report finds “reasons to be hopeful,” even in the face of a second Covid-19 wave, slow economic recovery, and growing budget gaps.  

But RPA also cites three major threats to a rebound.  First, a growing fiscal crisis for the city and state could “lead to extensive deterioration of public services and infrastructure, especially the region’s transit system.”  The Metropolitan Transit Authority (MTA), which runs the region’s mass transit systems, is planning service cuts, layoffs, and fare increases while teetering on the edge of bankruptcy and in desperate need of federal assistance.  Mitchell Moss at NYU’s Rudin Center has documented that such cuts could cost the region “as many as 450,000 total jobs” by 2022.

Second, RPA fears “widespread evictions and business failures” that “would fall heaviest on the poor.”  In September, the Centers for Disease Control (CDC) issued a national moratorium on residential evictions.  But it expires at the end of December, and so far there’s no sign the outgoing Trump Administration will renew it.  New York State may extend its own moratorium (for some residential and commercial tenants), providing continued relief.   

But these eviction moratoriums aren’t rent forgiveness—they don’t take away the obligation for hard-pressed families and businesses to eventually pay the rent.  New York and some other states provide limited rent assistance for those affected by Covid-19, but the need vastly outweighs the funds available. And advocates fear a wave of evictions when the moratoriums expire.

RPA’s third big threat isn’t directly economic.  Instead, they highlight fears about crime and public safety—in their words, “an erosion of confidence” that “could lead to further outmigration and wider racial and social divisions.”

Oddly, given the perception of rampant crime increases, New York’s major crimes are stable this year—less than one percent lower than 2019.  But murders and shootings have skyrocketed, with murders up 37.3% (although 15.4% lower than ten years ago).  Analysts aren’t sure why.  Previous spikes in murders and shootings came with gang wars, especially over controlling the business of crack cocaine but there’s no such major factor present now.

New York suffered for decades from jokes by comedian David Letterman, portraying a violent, crime-ridden city even while crime rates fell to historic lows.  Although violent crime can be bad both for actual safety and perceptions (and RPA recognizes that poor and non-white neighborhoods have always suffered higher levels of crime), there is not a widely-agreed upon causal pathway between crime and economic development.

But even with RPA’s valuable reminder of New York’s great strengths, the analysis doesn’t fully engage some deeper underlying structural problems.  So it is not a complete guide to an equitable recovery in New York.

First, the report doesn’t fully reflect inequality’s longer-term pre-Covid trends or how a tight labor market and high growth are essential (although not sufficient) to address inequality.  My colleague James Parrott has documented New York’s decades-long trends in inequality.  He notes that the tight labor market just before Covid hit was leading to “real wage and income growth for the bottom half and for workers of color.” Many of those gains are now wiped out or compromised by the pandemic recession. 

Second, the report is too sanguine about conflict between suburbs and the city.  America’s metropolitan areas have developed with wealthier suburbs surrounding cities.  Although cities are fundamental for metro prosperity, they don’t reap the full fiscal and social benefits of their central role.

Suburbs don’t share tax revenues (New York gets some with a commuter tax).  They refuse to build multifamily housing (a recent NYU Furman Center report finds New York State has “by some measures the most exclusionary zoning in the country” while blue California continues to reject policies to build more affordable housing.) And suburbs around the country, protected by a very damaging 1974 Supreme Court ruling, don’t open their better-funded and superior schools to central city children.

Finally, the report downplays the negative effects of regional government fragmentation.  To be fair, that’s not RPA’s mission.  In fact, they and other regional groups around the nation must persuade suburbs to cooperate, given how much entrenched political power those governments have.  But RPA’s economic region has 782 separate municipalities (in three states), far too many for any coordinated and aggressive policies on equity or virtually anything else. 

Along with disproportionate power for states at the federal level, this metropolitan fragmentation blocks adequate policies for equitable growth.  New York—and all American cities—need a lot more immediate federal budget aid, which has been blocked by Republican Senators.  The entire country needs a “high-pressure” macroeconomic policy to create quality jobs, especially at a time of historically low inflation.  Cities need more equitable distribution of the property values and other income and wealth accruing to suburbs because they profit off a big city.  And low-income and non-white city residents are barred from suburbs’ better housing and schools.

Urban advocates can learn valuable lessons from the Committee for LA’s recent report, No Going Back.  The Committee shows how the Covid-19 crisis is deepening pre-existing structural racism and inequality and states clearly:  “We cannot go back to an old ‘normal’ that has failed so many.”

RPA and other urban advocates know that metropolitan structural problems preceded the pandemic and aren’t simply calling for a return to “normal.” But these thoughtful analyses need a fuller engagement with underlying socio-economic trends and structural factors.  We won’t solve the pandemic or create a stronger and more equitable future in its wake without addressing head-on the inequality caused by government fragmentation, uneven economic development, disproportionate suburban power, and structural racism.