NYC resources flowing in new directions
Four recent measures tell a bigger story
Four specific announcements from the NYC city government in recent days, taken together, demonstrate a clear story of the city harnessing its fiscal and policy powers to shape how resources flow, what gets valued, and how. In turn contributing towards a more affordable, thriving city for all its inhabitants.
NYC pension funds step up investment in affordable housing
The Comptroller announced that the city’s pension funds (there are five of them) will invest $4 billion in “affordable housing production and preservation” over the next four years.
It sounds a lot, but in the context of the funds’ total assets of around $300 billion it’s not exactly huge. And of course it prompts the usual question of tensions between pension funds’ fiduciary duty to maximize returns (in this case, for the pensions of city workers), and the need to keep rents affordable.
But it puts a clear spotlight on the fact that as pension funds allocate proportions of their assets to real estate, how they do so is key. (The four areas being prioritized with these investments are broken down here).
Some city workers have pushed the comptroller on whether this is prioritizing a politically-aligned investment strategy rather than focusing solely on profit maximization. But that perspective overlooks the fact that irresponsible investment in real estate creates feedback loops through deepened inequality that in turn generate systemic risks for the economy as a whole. In other words, done right this strategy can make a contribution to affordability while also generating stable returns for workers’ pensions over the long term.
Pied-à-terre tax
Meanwhile the NY State Governor, with support from the Mayor (and, the administration says, 93% of New Yorkers) has proposed a “pied-à-terre tax” on luxury second homes in NYC that are valued at $5 million or more.
The tax aims to enable the city to levy an annual surcharge on the ultra-wealthy who own second homes in NYC but don’t live here, generating a projected $500 million a year: a targeted approach to shifting resources in ways (albeit distributive rather than pre-distributive) that are unlikely to dampen continued investment in the city’s broader economy.
Clean energy and efficiency investments in NYCHA
One in sixteen New Yorkers live in its public housing (NYCHA). Many NYCHA developments are underfunded and overlooked when it comes to basic maintenance and repairs, as well as climate resilience and upgrades.
I remember walking along the Coney Island boardwalk seven years after superstorm Sandy: new water-front apartment buildings with enticing names like “Ocean Dreams” were sprouting up while hoardings outside the nearby NYCHA developments described still-underway damage repair work from the storm.
This Earth Day, one of the city’s priority announcements was “innovating at scale”, an update and extension of the NYCHA sustainability agenda. It sets out targets for heat pump installation, efficient lighting and water, induction stoves, resilience measures and more: building on previous steps, yes, but sending a signal of where and how investment will be prioritized.
Now it’s a question of following through, and ensuring that climate improvements come hand in hand with basic maintenance improvements. City Limits (where I serve on the board) has a good summary of the announcement and its implications.
And the Urban Forest plan
Another Earth Day announcement was the NYC Urban Forest Plan, which aims to increase the city’s tree canopy to 30% city-wide by 2040 from its current 23.4% - protecting the trees that the city has, and planting more.
I bet the fact that it’s currently 23.4% percent comes as surprise to many readers. More on the city’s plant and animal inhabitants is in this gorgeous inventory by the NYC Biodiversity Taskforce: “Oaks, Our City and Us.”
On their own, each of the measures above may not seem that transformational. But taken together - and with many others - they work as kind of acupuncture of change. They are are opening up the space for the city to imagine what it can be, should be. Moving from a mentality of “well that doesn’t work” to “let’s do this.”