“I’m encouraging New Yorkers to go on with your lives [and] get out on the town despite Coronavirus,” declared New York City Mayor Bill de Blasio on March 3. Two weeks later, de Blasio was calling for “literally a nationalization” of industry because of a “war-like situation.”
Some policies age better than others, and with tens of thousands of New Yorkers now dead or ill from Covid-19—and mass quarantine and social distancing the norm for millions more—telling city-dwellers to travel widely in the face of a pandemic looks reckless in hindsight.
But long before the pandemic, the city was already making a series of policy choices that made New Yorkers more vulnerable and less able to adapt to our new normal. At the time, the wisdom of these policies was questionable; with what we know now, they may even pose harm to public health and make it harder for small businesses to survive, let alone persuade New Yorkers to stay in New York.
Here are three recent examples:
1.) Cracking down on food deliveries
It may be hard to believe now, but one of the top issues for New York City’s leadership the past year was a crackdown on food delivery apps and their e-bike riders. Mayor de Blasio made it illegal to operate the electric-powered bicycles that power 60% of the city’s 50,000 delivery cyclists, many of them struggling immigrants who now faced fines and even confiscation of their vehicles (and therefore their livelihood). While Gov. Andrew Cuomo went over Mayor de Blasio’s head by technically legalizing e-bikes, and the mayor suspended the NYPD’s heavily-tweeted confiscations of thousands of bikes now sitting in warehouses, these powered two-wheelers are still illegal on streets with a posted speed limit of 30 mph or less, which is to say all of New York City. However, now that many New Yorkers rely on a timely, almost frictionless delivery of food, these e-bikes—speedier than pedal power, more affordable than cars—are not going anywhere, especially if the city can come up with some common-sense regulations.
Meanwhile, city council members introduced a package of legislation in February of this year limiting the commissions that delivery services, like GrubHub, Seamless, and DoorDash, could charge restaurants; U.S. Senator Chuck Schumer (D-NY) even called for federal investigations in to their charging practices.
Now, at least 500 local restaurants are relying on delivery and pick-up orders for 100% of their business. Food delivery apps have seen their roster of eateries expand dramatically practically overnight, while their delivery customer base has also grown exponentially; Uber cited a 10-fold increase in new customer sign-ups for its Uber Eats service nationwide in March. Similar services for groceries, such as Instacart and Shipt, have seen their daily downloads rise by 218% and 124%, respectively.
While delivery app fees are still generating outrage (and a lawsuit) from margin-constrained owners, these services are actually helping restaurants by bringing in new customers and advertising their wares (and, in the case of Uber Eats, waiving the collection of fees altogether). This revenue from fees also translates into hazard pay for delivery workers who are risking their lives, limbs, and lungs to deliver food to quarantined New Yorkers.
2.) Banning cashless businesses
Earlier this year, New York’s city council voted 43–3 to ban cashless, card-only stores and restaurants. “This practice punishes the underbanked,” said City Council Speaker Corey Johnson before the vote. Now, any business refusing cash will be fined $1,000 for the first violation, with subsequent fines of $1,500 each, and will be prohibited from charging higher prices for cash transactions.
Now, thousands of city stores and restaurants are closed or struggling to stay open amidst the state’s shuttering of non-essential businesses. For those who remain open, cash-handling is estimated to eat up between 4.7% and 15.3% of revenues thanks to the cost and complexities of managing cash drawers, making change, transferring funds to banks, auditing, and outright theft.
Cash may also be spreading disease. Julia Maritz and her colleagues at New York University found 3,000 types of organisms living on dollar bills, including bacteria linked to pneumonia. Countries using more hard currency show greater rates of disease transmission, even during quarantines. As a result of these concerns over “dirty money,” countries like South Korea and China are literally laundering, removing, or even burning banknotes, and the Federal Reserve is quarantining dollars believed to have circulated in Asia. Food delivery apps are also instituting “no-contact” deliveries in order to curb the use of cash. In places without bans on cashless businesses, restaurants and stores are now encouraging customers to “tap-and-go.”
Further, the World Health Organization is recommending contactless payments to help stop the spread of the coronavirus, and use is surging now in the United States. While contactless technologies were successfully rolled out on part of New York City’s subway system en route to replacing the MetroCard by 2023, advocates have so far stopped a roll-out of contactless payment technologies for the city’s IDNYC card serving the homeless and undocumented immigrants. And with the city’s rules necessitating cash drawers, many local service businesses held off upgrading their point-of-sale technologies to incorporate the RFID technology behind contactless payments.
3.) Kicking out new jobs and new housing
A little over one year ago, Amazon announced it was pulling out of its plans to build a second headquarters in New York City—and with it, some 25,000-plus jobs and untold sums of economic activity (generating yet more employment). Public officials in New York City and State, having lavished Amazon with subsidies to select a city it was likely to choose anyway, swung in the opposite direction once criticism of the deal-making set in. Now, Amazon alone said in March it was hiring 100,000 additional workers to meet a surge in online orders from quarantined Americans, and then promptly announced the hiring of another 75,000 workers in April. Of its March hiring push, a little more than 2,000 recruits were to be employed in New York City as warehouse workers—a far cry from its planned headquarters expansion, and just a drop in the bucket compared to the more than half a million jobs expected to be lost in the city over the first three quarters of 2020 and in the slow recovery to follow.
Meanwhile, even without Amazon’s hiring, the city has been permitting just one new home for every 3.9 new jobs over the past decade, and completing construction at a slower pace than even during the Great Depression.
The city has also frozen all non-essential construction activity in the city and halted reviews of new housing (even prohibiting architectural work on public design projects). While the city is granting some exceptions to developments containing affordable housing, the state is also now imposing higher, union-level prevailing wage requirements even on many of these private developments. The downturn is also expected to lead to lower property tax revenues for the already cash-strapped city over the next half-decade (roughly $700 million below expectations by 2024); now, with even less new taxable property on the horizon.
Going into the Covid-19 pandemic, rising housing costs were already rapidly outpacing income growth in New York City. With less housing available and at a dearer price, the city’s overcrowding rate has grown to more than two-and-a-half times the national average, making it harder to isolate and quarantine. Cramped illegal units are also believed to have proliferated across the same poorer neighborhoods now suffering the most from outbreaks of Covid-19.
If there’s one lesson from Covid-19 in New York, it’s this: New York City’s policymakers have taken growth for granted. However, if this city and other major cities like it are to survive, public officials will need to stop strangling them with bad policy. As it stands, their decisions make it harder than it already is to access the basics of life and the very things that make for a resilient city, like food, transportation, money, housing, and jobs.
Already, headlines are declaring that cities are “losing their allure,” and last year saw New York City’s population decline by 146 people a day, a trend likely to continue amidst the current pandemic. Mobile phone data reveals that richer and younger New Yorkers are fleeing quarantine.
Urban decline is not inevitable—it is a choice. For all the short-sighted pronouncements made by New York politicians this year, one may also be the most prescient: “Go back to Iowa, you go back to Ohio,” declared mayoral candidate and Brooklyn Borough President Eric Adams in January. Mr. Adams may just see his wish come true.
Michael Hendrix is director of state and local policy at the Manhattan Institute.
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