While income inequality was a central theme of Bill de Blasio’s mayoral campaign, what specific ideas, programs and policies does he have, and what can New York City’s mayor do that’s not circumscribed by political reality?
Bill de Blasio’s landslide victory in the New York City mayoral election Nov. 5 signifies a rejection of the plutocratic regime of Michael Bloomberg. Where the outgoing multibillionaire thought the city’s skyrocketing rents were a fine thing because they indicated a strong housing market, the Democrat campaigned hard on the theme of “a tale of two cities,” one where billionaires are buying newly built penthouses with a view of Central Park for more than $90 million while close to half of its people live in or near poverty.
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“It’s not divisive to acknowledge the greatest income disparity since the Great Depression,” de Blasio told a crowd of labor-union supporters in Brooklyn Nov. 1. In his victory speech election night, he called economic inequality “the defining challenge of our times.” He won almost 74 percent of the vote, the biggest margin in a mayoral election since 1985 and the biggest for a non-incumbent since the five boroughs were united in 1898. Many of the city’s more liberal politicians, union leaders and activists say they’re “thrilled,” and call the election a historic turning point after 20 years of Bloomberg and Rudolph Giuliani.
But while income inequality was a central theme of his campaign, how much is he actually going to do about it? What ideas, programs, and policies does he have, and what can he do that’s not circumscribed by political reality?
De Blasio is likely to modify one noneconomic aspect of inequality, the Bloomberg administration’s “stop and frisk” policy, in which any black teenager or young man was likely to be stopped by police at least once a year. More important, he has the power to do that. He can direct police to stop people only on suspicions more reasonable than a “furtive motion,” and he can drop the city’s appeal of a court ruling that held the policy racially discriminatory. If the Bloomberg administration’s policies were motivated by its racially charged belief that if you didn’t keep certain people on a short leash, crime would return to late ’80s’ levels, de Blasio contends that effective policing and civil liberties aren’t incompatible.
Still, he wants to avoid the political fate of David Dinkins, the city’s only genuine-Democrat mayor in the last 35 years. Dinkins had the misfortune to govern during the high-violence early ’90s, including the year a Bronx social club was firebombed by the doorwoman’s ex-boyfriend, killing 87 people and pushing the city’s homicide total to an all-time high. A famous 1990 New York Post headline screamed, “DAVE, DO SOMETHING!” (Dinkins worked hard to combat the ongoing violence, but his efforts didn’t pay off until 1994 – after Giuliani had defeated him for re-election.)
On economic issues, however, the answer to “what will de Blasio change” may be “not all that much.” His platform is more a collection of small initiatives than grand visionary schemes. The best-known one is raising the top tax rate marginally (from 3.88 to 4.41 percent on income over $500,000) to finance universal pre-kindergarten.
His economic initiatives are primarily market incentives and increased job training. On the business side, he says he’d reduce corporate welfare and direct city-funded programs toward small businesses, invest in tech infrastructure, and create “economic development hubs” and “manufacturing 2.0.” On the workforce side, he says he’d “create a world-class education, training, and job placement system” concentrating on nursing and skilled and entry-level tech jobs; increase funding for the City University of New York; and link vocational education to occupations projected to grow. He also wants to strengthen the requirements that businesses receiving city funds or subsidies pay a “living wage,” provide legal services to help low-income workers challenge wage theft, and enact a local minimum wage higher than the state’s.
Deborah Axt, codirector of Make the Road New York, a community organization active in organizing low-wage workers, says the incoming administration should have four economic priorities: 1) raising the minimum wage (now $7.25 an hour, it will go up to $8 in January and $9 in 2016); 2) combating wage theft, which she says is a business model for “whole industries,” such as restaurants, nonunion construction, retail and car washes; 3) requiring businesses receiving city funds or subsidies to pay a living wage, at least $11.50; and 4) training young people for more than low-wage occupations and expanding English classes for immigrants.
The city has the power to do much of this, she says. For example, it could require employers receiving funds for repairing damage from Hurricane Sandy to pay a living wage. And while it’s legally complex for the city to help unions organize, she says, most employers who resist unions are usually committing some other violation such as cheating workers out of pay or illegally classifying them as “independent contractors” to avoid paying taxes or overtime, and authorities could crack down on them.
The mayor-elect has been “incredibly supportive” of organizing by the city’s increasingly militant fast-food, grocery and car-wash workers, says Axt. “I hope he isn’t afraid to think big.”
“If he concentrates on low-wage workers, he’ll get a lot of support,” says Ed Ott, former head of the New York City Central Labor Council and now a labor-studies professor at the City University’s Murphy Institute.
Yet there are two major obstacles. First, many of de Blasio’s ideas, such as raising taxes on the rich and increasing the minimum wage, would have to be approved by the state government, and Albany is difficult turf for that. The state Senate is gerrymandered to have a Republican majority (or more recently, a coalition of Republicans and renegade Democrats), and Gov. Andrew Cuomo is a Bloomberg Democrat, somewhat liberal on social issues but hostile to labor.
The mayor has “limited power and huge problems,” says Ott, noting the city was stripped of financial home rule during the 1970s’ fiscal crisis. It can raise sales and property taxes somewhat on its own but needs approval from Albany to raise income taxes. The state took power, but “abdicated responsibility,” he says, angrily.
The second obstacle is that training people for job skills alone doesn’t create jobs where they can get paid for using those skills – not in an economy where the middle-aged unemployed are routinely advised to “dumb your resume down so you look less experienced.”
“People need help accessing positions,” says Ott, especially in an economy where one-fifth of workers with middle-class skills “don’t have jobs,” and do freelance, temporary, and contract work. He suggests “some kind of central bank” to connect them to jobs.
In the Great Depression, the federal government created millions of jobs through programs like the Works Progress Administration. In New York City, it built Brooklyn College, LaGuardia Airport and the nation’s first public-housing projects. Yet when it was suggested to de Blasio in September that the city needed a new WPA-style program, he answered, “in a perfect world.”
Even if the minimum wage were raised to $15 an hour, people would still have a hard time living in New York, as it’s almost impossible to find an apartment for less than $1,000/month. The city’s “affordability crisis,” as de Blasio noted on election night, has been building for more than 30 years. Rising rents accelerated dramatically after 1997, when the state legislature knocked huge loopholes in the city’s rent controls, deregulating vacant apartments that cost more than $2,000. Sold as a measure that would affect a handful of rich Manhattanites only, the change drove up rents all over the city (especially as the state failed to enforce the law against illegal overcharges).
By 2011, most New York tenants who didn’t get housing subsidies were spending more than 30 percent of their income on rent. Half of the 3 million people in households defined as low-income – less than $34,000 a year for a family of three – spent more than half their income on rent. Last winter, the number of people staying in city homeless shelters exceeded 50,000, the most since the Depression. The number of people on the waiting list for public housing, about the only apartments in the city available for under $700, now tops the 180,000 apartments in the system.
To counter this, de Blasio pledges to “build or preserve nearly 200,000 affordable units.” The obstacle here is that the most effective ways the city can preserve and create affordable housing are currently illegal. State law prohibits the city from strengthening its rent controls; de Blasio says he’ll lobby for stronger regulations, but the real-estate lobby has invested millions of dollars in Governor Cuomo, the Republican Senate majority and the renegade Democrats who share power with it to block that. And a 1998 federal law, the Quality Housing and Work Responsibility Act of 1998, prohibits local governments from building more public housing than they already have.
“It’s impossible even if an authority had the capital to build new housing,” says Victor Bach, senior housing policy analyst at the Community Service Society. Federal funds for public housing have been cut since the Reagan era; the New York State government “abdicated” in the late ’90s, and Bloomberg cut off city operating subsidies in 2003.
Thus, de Blasio’s housing policy will likely be limited to a more liberal version of Bloomberg’s, using a complicated mix of tax and zoning incentives to piggyback “affordable” units onto luxury development. His main proposal is mandatory “inclusionary zoning”: requiring developers who get zoning variances or who benefit from rezoning to include a certain amount of lower-rent housing, usually 20 percent. His platform estimates this will yield more than 50,000 affordable units. He would also invest $1 billion from city pension funds and tax vacant land at the full rate, estimating that these measures would create about 15,000 units.
He also says he would change the formula used by the Bloomberg program to determine what’s “affordable.” As the present formula is based on the “area median income” for some of the more affluent suburbs as well as the city, it’s allowed apartments renting for more than $2,500 to be counted as “affordable” – and thus, created more “affordable” apartments for people making more than $100,000 than it did for people making less than $30,000.
However, inclusionary zoning will be a “hard pill to swallow” in neighborhoods like Bushwick, says Make the Road lead organizer Jose Lopez. The working-class, mostly Latino section of northeast Brooklyn was ravaged by arson and looting in the 1970s, but in the last decade, it’s gentrified rapidly. As young artists and hipsters moved in, landlords began harassing lower-income residents to leave, and trendy restaurants and new luxury buildings have followed.
A development proposed for the former Rheingold brewery there would contain 23 percent affordable units, says Lopez – but they’re aimed at people making around $48,000, in a neighborhood where the median income is around $35,000. “This means nothing for folks who’ve been living in Bushwick for a long time,” he says. For residents who lived through the bad years, setting aside such a small percentage means “you’re asking me to say it’s OK to give up 70 percent of my neighborhood.”
One thing the city can do, says Bach, would be to stop charging the public-housing authority $100 million a year for police and other services, which would help it clear up its lengthy backlog of repairs. Another would be using revenues from the Battery Park City development in Lower Manhattan to build new housing. When that complex was built in the 1970s, he recalls, part of the deal that let the publicly subsidized development be used for market-rate housing – some apartments there now rent for more than $9,000 a month – was to use any surplus for affordable housing in other areas. Instead, the city diverted that money to general use.
The largest obstacle, says Bach, is the long-term “failure of all levels of government to consider low-income housing development a major priority.” It’ll be “hard overnight to provide the amount needed.” He believes de Blasio is aware of the problems and committed to fixing them; the question is “to what extent can he summon the political will and take the risks to make it real?”
For Ott, the long-term problem is turning around a generation of the ideology that giving more money to the rich is the best way to help the economy. People aren’t talking about alternatives, he says. Who remembers that 25 years ago people were discussing commercial rent control as a way to protect small businesses? How many people remember that 40 years ago the City University had free tuition? Instead, he says, you have some Democrats in Washington talking about cutting Social Security.
Given all these strictures, a local elected official who wants to do anything serious about income inequality would probably need the share-the-wealth fervor and Machiavellian law-stretching of a Hugo Chavez or a Huey Long.
Is Bill de Blasio that person? Despite the New York Post running a photo of him next to a hammer and sickle, he’s spent a fair amount of time since winning the Democratic primary trying to reassure the city’s elite that talking about “the affordability crisis” doesn’t make him Che Guevara, ready to line them up at the outfield wall in Yankee Stadium. “It’s not class warfare,” he told the Association for a Better New York in early October. He certainly didn’t scare them off to the point that they didn’t give him money. He received more than $750,000 in contributions from the city’s main real-estate interests – including Extell, the developer of the aforementioned $90 million penthouse.
“He has to be willing to raise some hell, like a Huey Long,” says Ott, “or else be like a Roosevelt who can convince the upper class that it’s in their best interests.”