The former deputy mayor of economic development describes the policy discussions that led to rezoning 40% of the city during a period of dramatic growth.
Few people have had a greater impact on the look and feel of New York City than Dan Doctoroff. As deputy mayor of economic development for the first six years of the Bloomberg Administration, he presided over the fine-grain rezoning of 40% of the City, as well as the mega-projects that have come to define 21st century New York. In his new memoir, Greater Than Ever, Doctoroff describes the behind the scenes policy discussions that led to projects like the High Line, Hudson Yards, the World Trade Center Complex, and Barclays Center. He remains on the cutting edge of urbanism as CEO of Alphabet’s smart cities company, Sidewalk Labs.
The first installment of this two-part Q&A focuses on Doctoroff’s experience leading New York City’s post-9/11 recovery as a key member of the Bloomberg Administration. In Part Two, Doctoroff will reflect on the City’s contemporary challenges, and share his insider knowledge of Michael Bloomberg’s leadership style, Donald Trump’s temperament, and the future of cities.
You first visited NYC with your parents back in the late 1960s, and moved there in the ‘80s. Many artists and urbanists would say that those were more creative times, and lots of them bemoan what the city has become now, lacking in grit and edge. How would you compare the old and new New Yorks?
When I reluctantly moved to New York in 1983, we lived just off Gramercy Park, near Park Avenue South. I did my third year of law school at NYU and just walking the relatively short distance was an adventure. Dozens of prostitutes patrolled Park Avenue South and you couldn’t walk through Union Square or Washington Square Park without getting accosted by drug peddlers. Trash was strewn all over the streets. My wife and I thought we would stay in the city for two years, max.
As I retrace that walk today, it is completely different. Cleaner, for sure. Safer, dramatically more so. There are so many more people on the streets, at all hours of the day and night. There are 8.6 million people in the city today compared to 7.2 million then. Has that made the city less creative? I don’t think so. What has happened is that the city has become more expensive and that has pushed some who can’t afford parts of the city into others, and part of what government policies need to do is maintain some level of economic diversity and make sure neighborhoods don't lose their character—what made them great places to live in the first place.
But the good news is that there are so many other places to live in the city today that would have been considered undesirable 35 years ago. Today, we are seeing large communities of artists and creative types living in the South Bronx, for example. The way we always saw our role in government was to eliminate really bad friction that makes urban life difficult or painful, while at the same time preserving the good friction that makes life interesting. How you get to the right balance is a judgment call. But, today the fact is more and more people—not just millennials and wealthy people—want to be in New York. It’s still a magnet for people from everywhere, and that is the single best evidence that we got the balance right.
The book tells the stories of how you and the Bloomberg Administration got the big things done—the rebuilding of the World Trade Center site, the High Line, Hudson Yards, waterfront redevelopment across the city, affordable housing, new zoning, Plan NYC, Barclays Center and the Nets—I could go on. But much of urbanism today, following Jane Jacobs, is about small things that knit together the fabric of the city. “Big Things” brings to mind Robert Moses. Are these policies more Moses than Jacobs? How do you reconcile the two?
We like to think we walked that middle line between the “big plans” and the very small things that knit together the fabric of the city. We did get a lot done, and a lot of the book is devoted to that, but when we did “big” things we tried to do things more carefully than had been done in the past, specifically when it comes to community engagement.
We believed New York’s economy needed a massive jolt of energy and a push forward to prepare it for the 21st century. If you looked across the city, there were thousand of acres of land that were unused, largely because they were zoned for industrial or manufacturing uses for which we could not compete anymore. Many were on some of the most valuable real estate in New York, like along the waterfront, on the West Side of Manhattan, or near Downtown Brooklyn. There were no real communities in those areas. In fact, at one point we calculated that, taken together, all of our big plans would only dislocate 400 people despite creating 120 million square feet of buildable space for residential, commercial and other uses.
In the end, we did 140 separate rezonings during the Bloomberg administration. 40 percent of the city was rezoned. While some of these rezonings were the big ones you’ve read about, the significant majority of them were much finer grained. We went block by block, building by building, in many cases trying to preserve the existing character or enhancing the existing character by downzoning and landmark preservation, even as we prepared the City for the future. All of them were done in partnership with communities.
You write that your own and Mayor Bloomberg’s strategy for the city’s redevelopment crystallized with the city’s bid for the 2012 Olympics, which initially included a plan to build a huge new stadium in Hudson Yards. Many leading urban economists and policy types believe that the Olympics create more costs and stress on a city than they are worth. How do you respond to that? Would actually getting the Olympics have helped or hurt the city’s redevelopment compared to what you were able to do?
The Olympics can be good for a city and they can be bad. It all depends on how it chooses to use the opportunity. Look at Barcelona, which used the 1992 Games to undo decades of neglect under Franco, or London’s regeneration of the entire East End. When it works, it is because cities used the deadlines the Olympics created to take a hard look at what their needs are going to be decades into the future and use the moment as a catalyst to get things done.
Getting things done in a city is always hard; there are always vested interests, NIMBYism, lack of funding, or lack of political will. Being on the Olympic global stage creates momentum and an imperative to get things done. You still need to be careful and fiscally responsible, but you have a once in a generation opportunity to make smart investments that might not otherwise be possible.
In New York City, we used the process of bidding for the Olympics as the catalyst. Nearly all of things we would have wanted the Olympics to create were actually set in motion and had plans approved before we ultimately lost to London. The proposed Olympic Village site is being turned into the largest middle-income housing development since the 1970s. Hudson Yards and the High Line were catalyzed by the Olympic effort. The Downtown Brooklyn plan, including the Barclays Center and the rezoning of the waterfront in Brooklyn, were all approved before we lost. So, too, were the new Yankee Stadium and CitiField.
It would have been an incredible celebration of what New York means to the world had we won. I will always regret losing, but in terms what we were able to achieve, the city benefited to almost the same extent as if we had hosted the Games.
New York City’s economy has changed dramatically since you first moved to the city in the 1980s. Back then there were still large factories and a blue collar working class. Today, that is mostly gone, and the city has been transformed into what former NYU President John Sexton dubbed an “ICE” economy based on Innovation, Culture, and Education. That transformation has helped rebuild the city’s economy, but has it also created even greater divides? You note that you developed a strategy not just for Manhattan’s ICE economy but for all five boroughs. Tell us more about that. And tell us more about what can be done to create a more balanced economy and a stronger middle class in the city?
Over the 12 years of the Bloomberg Administration, almost a half a million jobs were created and job growth was more than double the national average. Moreover, the economy became dramatically more diverse, both industry-wide and geographically. ICE was very important, but we also believed strongly that we had to create jobs in all five boroughs and for people of all incomes and education levels. Almost none of it was done with incentives.
We thought that by improving neighborhoods and business districts around the city, we would create new engines of job growth. ...
The vast majority of jobs created were not in so-called FIRE and ICE. They were local businesses that employed people in lots of different industries. They were in areas like tourism and film and television production, which were a huge focus for us and where the vast majority of the jobs do not require college degrees. Even in manufacturing, which I will admit we were slow to focus on, we eventually arrested a six decade decline by smart investment in places like the Brooklyn Navy Yard.
In every case, we tried to focus on things where we felt that we had a competitive advantage. I think this is one of the most important lessons of the book. Like an individual, a city has to be self-aware. You have to be clear where you can compete and where you can’t.
Cities need money to get things done. The Bloomberg Administration raised the property tax by 18.5 percent and also raised the city’s income taxes for high-earners. How did you get that done? What can NYC and other cities do today to capture the revenue they need to provide key services and build their economies?
We got it done through desperation. The city was facing an $8 billion deficit for the second fiscal year Mike Bloomberg was Mayor. Since the city was by law mandated to balance its budget, we didn’t have another option other than to eliminate services, which would have created a vicious cycle of decline, just like New York City experienced in the 1970s.
Raising taxes is tricky. New York is fortunate in that while it is a high cost place, we have other competitive advantages in many cases that allow us to overcome that cost disadvantage. Not every other city has that advantage.
The real answer to increasing revenue is growth. That’s always the answer. You create growth by having smart government policies to encourage the private sector to invest in ways that make sense for that city. When more people come, the marginal benefit of those people in terms of tax revenue is significant. You can reinvest that money back into improving the quality of life which attracts more people. That is the virtuous cycle of growth and that’s the timeless formula for generating long-term success of the city.
You write that the Bloomberg Administration started working on affordable housing before it was a major political issue and note that it developed the biggest affordable housing plan of any city. You add, “Bloomberg used to say that the best way to avoid gentrification (and to have rents go down) is to make the city worse.” Do you think the Bloomberg years did enough to address gentrification, affordability and inequality? How can cities today best deal with these issues?
We announced our housing plan, which became the single most ambitious affordable housing plan ever undertaken by an American city, in 2002, at a time when the city was in desperate financial shape because of 9/11 and when pretty much no one was advocating for an investment in affordable housing. People were worried that the city would lose population, not grow.
We had faith that the city would rebound and we knew that when it did we would have to provide more housing capacity—at all income levels. There were two minor things that we knew we were going to need that we didn’t have at the time: money and land! So we embarked on an ambitious rezoning campaign (rezoning 40% of the city) to create more available sites for housing. We also creatively found money, by among other things leveraging an under-utilized city-owned housing finance agency. We ended up preserving or creating 165,000 housing units, which means that about 8% of New Yorkers now live in housing they otherwise wouldn’t have been able to afford because of our plan.
But was it enough? In hindsight, it was not. We underestimated the pace of growth. Over the last 15 years, the population has grown by about 600,000, which is roughly the total population of Boston or Miami. We didn’t create enough housing to keep pace with demand. That’s why I applaud the de Blasio Administration’s effort to create 200,000 units of housing over the course of the next 10 years.
Inequality is difficult for cities to address on their own. But they can grow, and when they do they can reinvest in the city. Over the tenure of the Bloomberg Administration, the City’s budget grew from $42 billion in 2003 to $70 billion in 2014—that’s $28 billion that was invested back into education, social services, affordable housing, transportation, and other services. That money wasn’t spent on the 1%, and while it doesn’t mean the end of inequality, it gives people the tools to capitalize on opportunity.