« Freakonomics Radio

434. Is New York City Over?

2020-10-08 | 🔗

The pandemic has hit America's biggest city particularly hard. Amidst a deep fiscal hole, rising homicides, and a flight to the suburbs, some people think the city is heading back to the bad old 1970s. We look at the history — and the data — to see why that’s probably not the case.

This is an unofficial transcript meant for reference. Accuracy is not guaranteed.
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If you'd like to listen to free economic radio without ads the place to do that is sticker premium five dollars a month and you can get a free month trial by going to stick your premium dot com and use a promo code freak. You also get access to all our bonus. Episodes and you'll be supporting our show to that sticker premium: dot, com, promo code, greek banks more than two hundred thousand people have died from covert nineteen in the? U S and there is a common sentiment. The New York City is on its death bed too, It was, after all, the american epicenter of the pandemic, with more than twenty thousand people dead and nearly a quarter million positive cases. It also had to shut down that showed just how long the cities economy is on the very things that are most discourage during a pandemic pact: Broadway theatres, subway cars pact, restaurants and sidewalks pact offices and corking space over the Summer New York's
who rates fell dramatically. Schools recently reopened and even restaurants have been approved, resume indoor, dining at reduced capacity, but infection rates have begun to take up, again, which may lead to a second shut down which would pylon atop all the economic damage. It's already been done. So could the and city that has a story driven a city like New York, also drive it toward extinction, is New York City and as a new Yorker. I don't even like to say this allowed, but is New York City over over. My dead body is New York City over but What about the data citys projecting six, seven billion dollar deficits out. As far as the I can see, people are turned about what appears to be an increase in homicide raids, wealth we have people from home. That home could be anywhere
The city is not over today on I'm afraid you? The first of the two parts here is about the fate of cities in the age of cuban nineteen. This one is primarily about New York and the up, the downside of cities in general, and next week will talk about I solving one urban problem would help solve so many others which problems that I'm glad you asked housing crisis, but that's next week. Today's episode starts right after that here want it with me what my boss, what from stature and make productions? This is Reaganomics radio, gas. It explores the inside of everything, here's your home Stephen definite last month, executives from within
sixty of New York City largest employers, banks in law, firm sports leagues and real estate developers sent a letter to the mare, build the plaza they wore and that his poor management of the pandemic was threatening long term damage. There is widespread anxiety over public safety, cleanliness, other quality of life, issues that are contributing to deteriorate, conditions in commercial districts and neighbourhoods across the five boroughs, the five boroughs of New York City Just so you know, are the Bronx Manhattan, Brooklyn Queens, and that might also just so, you know, filled bless. Yo is Mc Grath who, even before the pandemic was almost comically unpopular. We don't need to get into the delay
but if you want to read up on him, just do a search for the plaza, that's D B, L, a S eye and then arrogant or hypocrite. Riven schmuck considered this campaign add from a fellow New York Democrat no less built up last year is the worst mayor in the history of New York City, and that is that its backs rose congressman. You don't sound very happy about this matter as a dogma. Congressmen now you- and I have They know each other a little bit through a family connection. My son has worked on your. And pain in your office in DC. Do you saw me swear to not let that relationship influence. This interview I saw, place? Where rose represents New York's, eleventh district? Historically, the only congressional district in the city, the votes republican? It includes all Staten, island and parts.
southern Brooklyn, one of the highest rates of unionization of any district in America, cops firemen, teachers, nurses, first responders sanitation workers, folks, who we just recently started calling essential workers, but, quite frankly, they were always essential like every member of the House of Representatives rose, is up for reelection in November. I don't give a shit about politics, my friend not right. Now, unemployment, sky, I can in the economy in disarray, people fearful further lives fearful for their future of their families, is the time we thinking about how to help people making does finally work again: people are sold disgusted with their government asunder. If the middle and the right, you recently said, there is no reason to every single teacher in New York City. Should not be tested at least every other day. As far as I know, that's not even close to happening is not happening, because a failure of leadership
failure of imagination. Nobody has confidence in this city right now, there's no, plan, there's no solidarity. There's no resources with a system of poor testing with system. Would New York City is acting almost as if it is a venture capitalist when it comes to figuring out the most innovative ways to be the pandemic investing them early on with public private partnerships and then dramatic, the scale in them there's no reason we couldn't be testing every single each and every other day we asked Mary, the Plaza or an interview, but he declined. There are at least two reasons why, in political circles, deplores YO is considered particularly unskilled. Last year he spent a lot of time outside the city running for president, even though he had virtually no constituency he's also
managed to annoy the one person. A New York City mayor can't afford to annoy the governor of New York. Andrew Cuomo. New York. Mayors have a history of acting like the most powerful person in one of the most important cities in the world, which, to be honest, is not entirely inaccurate, but a lot of the cities. Leverage runs through Albany the state capital, what we need and what this mayor has not done so need someone who is willing to exist in reality. Guess what? If you want the city? The prosper, you need the governor. If you want this city the prospects, should be a them usually working within, but as MAX rose it the deposit administer Nation was failing New York long before covered hit in some ways the mayor and his administration took up a new form, of laissez faire economics, weathers Well, we don't have to invest in the future of this city, because people will have to stay here. People will need to stay here people,
you always come here and build their businesses. We don't have to do anything, but that of course not the case. This is a competitive country and it is a competitive world. During the pandemic, New York City has been completed with neighbours like New Jersey in Connecticut and the New York suburbs, also Florida in Arizona Nashville in Austin. Those at least are a few of the places that some new Yorkers have fled to How many? The truth is? No one really knows yet. Pre pandemic, the city's population was eight point three million the New York Times analyzing cellphone data from that four hundred and twenty thousand people had left the city between March and may most of them wealthier residents with the second home,
measurement has an obvious limitation, leaving the city with your cell phone doesn't mean you won't return, especially if you own your homes and right now is not the easiest time to sell a new apartment. Here's another, probably better. Metric since March, roughly two hundred and fifty thousand new workers have filed with the Post office to change their mailing address. That's about double the number. from the same period last year, so that suggests roughly a hundred twenty five thousand higher than normal outflows. That goes with a significant decline. So hard to measure in the number of people move into New York? Still in a city of eight point, three million? This doesn't seem to qualify as a mass exodus to get a slightly finer greened look at population outflow. We hold up Nancy. Will I've been a kind of this at shady easy, where I look at the trends about real estate and then create analyses? you tell stories about the data street? Easy is a listing, sir.
used by landlords and renters buyers and sellers and real estate agents. It manages a pretty impressive database. I have access to all of the market data on the sales and the rentals listings. The universe of real estate listings in New York City and what has woozy since the pandemic, so Manhattan rental Ivan As a July, there's been thirty seven thousand listings on the market. That is a sixty five percent growth. From last July and how about in, say, queens and queens. You should know has two point: two million people, whereas Manhattan has only one point: six million in queens there's six thousand six hundred listings on the market and that twenty six, president increase from last July, so inventory grew everywhere when looking at the borough.
oh but grew way more Manhattan, so that some rental data, what about homes, sales, in July, there's than thirty seven percent fewer Manhattan homes that went into contracts than in the same month last year, there is largely been Fast, forwarding of natural attrition of the city so new Yorkers, too, are planning on moving to the suburbs within one or two years are due so now instead, so these new Yorkers are taking advantage of, the low mortgage rates to move to the suburbs. So that's another him, the outflow may not be as apocalyptic as some people think, at least not yet that it made more of a one time acceleration of a constant trend, although of course those outflows are usually countered by inflows, will people key
moving into New York? There are a lot of reasons to suspect, not particularly in the short term. The city is diminished and it remains relatively expensive, especially housing, although that too is enjoying at least a bit in Manhattan. Rents fell by three percent a year over a year since last July. That's the biggest. Decline. We ve seen sense recession when rents fell by ten percent, but we, says. We may be seen only the beginning of this trend. We do Manhattan runs could fall by more than ten percent, because there's a lot of factors where the pandemic has more impact on rents than the great recession and their that may be especially true for two reasons. The first is that a recovery from a pandemic is likely even more uncertain than recovery from a financial crash. The second is that the pandemic isn't
done doing its damage on the economy. Just last week we saw tens thousands of new lay offs and fur lows announced by firms like Disney United in American Airlines and even when jobs are based in New York City, there is a trickle down effect on the financial services and banking industries. Here, consulting and accounting firms on commercial real estate in the hospitality sector, a recent audit by the New York state Controller, reported that over the next year between a third and a half of New York cities, restaurants and bars may close permanently. So you could imagine that pandemic induced urban fleet accelerate, and maybe not just in New York, but in cities all over the country, except patently that is not happening. The national online real estate for Mozilla, which happens to own street easy, if only to U S? Cities of so
far seeing their nearby suburban housing market surge, disproportionately New York, the most expensive city in the country and San Francisco, which number two meaning that a lot of other very popular and expensive cities see to be weathering the pandemic. Better cities like Seattle, see is a younger city, then either the San Francisco or New York and its less dense. That's Jacob Victor. He is an urban economists at the University of Washington in Seattle, as you likely. No Seattle is home to Amazon and Microsoft and other techie firms and its different from America's older cities, so Francisco's, the densest city on the West Coast, New York City, is the densest city in the United States, Seattle didn't really
whom, until both were too when it comes to cover nineteen most American Citys, find themselves in more of a Seattle position. Then a New York position. Most american cities aren't very dense there more car cities than public transportation cities. A lot of them could pass for New York City suburbs. That said, Victoria sees covered, nineteen affecting but he's like Seattle to imagine the typical work day of an Amazon Employ in Seattle. They wake up in the morning in a house that might cost a million dollars and if it had been in Pittsburgh, it would be less than half that much they eat their breakfast and then they go to work and if their out in the suburbs, it's getting into South Lake Union, the neighborhood where Amazon is might take em an hour and then they
work all day, and then they go home and that's another hour an hour and a half. So that's a lot of commuting. People will self report a lower quality of life if they have to endure long commutes covered. Nineteen has essentially wiped out commuting, at least for now, at least for the kind of What can be done from home once you start to move to a model where you're not based in an office than the entire need to locate in a place where there are a lot of highly skilled workers near by sort of evaporates in cities, with a concentration of highly skilled workers, tend to be pensive cities had so it could lead to a situation where it you ve got more innovation happening in different parts of the country, and you have people being recruited without the necessity of relocating. This could be good news for smaller cheap.
Our cities also for suburban in rural areas, but it's bad news even more bad news for a big city like New York, whose density has lately been working against it, the cities, directing six seven billion dollar deficits out. As far as the I can see that stand, doktor off, who was deputy mare for economic development under New York Mare, Michael Bloomberg, in the early two thousands today doktor off is the ceo of sidewalk labs and He is trying to rally other New York business leaders to prevent cataclysm. We don T yet know how severe it's gonna be until we know along the pandemic gonna last, but the risk that were is based
Equally shoving the city into a nineteen, seventy style, vicious cycle which you dont want to happen in a city is for the city to actually shrink in terms of the number of residents, the number of jobs and the number of visitors, because when its ranks the budget gets compressed. When that happens, quality of life Harry rates and more people leave perpetuating the cycle. That's what happened in New York in the nineteen. Seventy them lose as a one hundred thousand presidents between one thousand nine hundred and seventy and one thousand nine hundred and eighty, and that is the historian Kim Phillips Fein author of the book. Fear city, which is about New York's fiscal crisis. The fiscal crisis is usually described as an example of governmental overreach and
irresponsibility, the idea being that New York's local government was engaged in in all manner of wasteful, frivolous, unnecessary spending and as a result, was almost forced into defaulting on it. and having to declare a bankruptcy to Philip Spine. That is only part of the story. New York did have a problem covering its bills in the nineteen seven bills that given the nature of work were unusually large the transit system, the library system, the park system, the tuition pre city university, the network of more than twenty publicly spills as well as an ambitious investment in public health initiatives. All of this is kind of honest scare.
Oh unusual for american cities. In general, but that massive expenditure she argues, wasn't a primary driver of the crisis. I placed the primary responsibility on the the that gripped the entire United States in the early seventys. The long underlying trends of de industrialization, an suburbanization which were driven in part by federal policies on trade, aid and on the kind of structure that supported the development of suburbia. This fed the sort of urban flight, the out of New Yorkers are worried about today. Wealthier people world make the city to go to the surrounding suburbs. People were Jenny rating their livelihoods in New York, but then paying our property taxes to jurisdictions beyond the city limits, the city kept
bending on all the services that make a city city, but with declining tax revenues, there arose a huge deficit one point: five billion dollars a year, which was a lot of money back in the nineteen seventies and instead of addressing this open way, the mayor of the city and others in the city government begin to quietly are more and more. The mayor at the time was Abraham Beam who, before them to politics, was an account which presumably meant he understood the value of not spending beyond your means, but by one thousand nine hundred and seventy five. The city was facing a three billion dollar shortfall and was unable to borrow any more from creditors. Bankruptcy look
Clearly, if not inevitable, the Republicans running Washington under Present Gerald Ford weren't willing to help either here's how the Daily NEWS put it, and perhaps the most famous front, page headline in tabloid history forward to city drop dead, but the governor of New York, Hugh, Carry had brought in the saviour by the name of Felix Rowan. Failing our ten wise and investment banker, two became very involved publicly in the cities, effort to respond to the crisis, and he headed up the meaning.
simple assistance, corporation, otherwise known as big MAC, which was authorized to sell bonds on behalf of the city that were backed by a special sales tax and then backward release. The money to the city as the city showed progress towards a balanced budget. Big MAC stabilize the city's finances enough to avoid bankruptcy by investors. We're still reluctant to buy New York City is dead. This led to the creation of the emergency financial control Board, which was a state entity that was given final veto power over the city's budget and this in a way were final, say over New York spending from the Elect the officials in the city and put it in the hands of the state
helps, explain why, to this day, the mayor of New York City has to make especially nice with Albany people pretty explicit about the time. The idea is to make it harder for new Yorkers to influence what their city spends. Money on New York City finally had a balanced budget by nineteen eighty, but the cities. Workforce had been reduced by twenty percent and there were lots of other problems. The EL parks that dilapidated. Fires in the South Bronx or in Brooklyn. The number of Homicides in New York goes up dramatically from about fourteen hundred a year and nineteen. Seventy two, a bit over two thousand by nineteen. Eighty and remember the city had lost eight hundred thousand residents over that It is as though the city government is drawing back right when its presence might have been.
They ve been vows. It was a long climb out of a relatively short decline. That again is Dan Doktor off enough Felix rotten in business and labour leaders came together, basically the state of New York from bankruptcy, but that didn't make the city better. It took twenty five years to get that eight hundred thousand people back, and that was just the start of the recovery ok, so the fiscal crisis in the seventies was a relatively short decline. Even though that the underlying problems were evident for awhile, followed by a realm fifthly, long recovery. The pandemic, meanwhile, was totally unexpected and the economic decline has been.
Faster, more drastic and in in the long run, maybe even deeper. So when you look at these two declines, how do you conceptually think of recovering from this one verses that one so that one took long time, billions of dollars of investment, painstaking progress followed by retrenchment and more progress. This in a one could argue. We were starting to see evidence of a decline in New York before the pandemic. Population had been drifting downward a little bit the last couple years ago, Two years we lost fifty thousand or so people and so that was a negative sign. We had started to see slight up tax and certain categories of crime which were disconcerting, but I think what covert does His potentially dramatically accelerates that process-
On the other hand, New York starts going into this crisis in a much better position than it was in nineteen. Seventy five, because it has happened so quickly. So that gives you the opportunity to be really innovative and try things that are very different. What kind of different things the example doktor off gives is something he tried at the beginning, of the Bloomberg administration right after the nine eleven terrorist attacks in neighborhoods near the world. Trade centre in lower Manhattan. Vacancy rates were as high as forty five percent.
when people said there, never going to come back to a graveyard, we said you know what. If you move back into lower Manhattan, we will pay. Fifty percent a year ran for six months in retrospect that that's really cheap. Doesn't it was incredibly inexpensive. Investment in lower Manhattan, the vacancy rate, went down to two percent and after those incentives wore off it didn't go back up again, but the difference there, is it after nine eleven New York City received massive federal aid, doktor off, for instance, had twenty billion dollars in federal funds at his disposal to redevelop
downtown Manhattan alone. How much direct federal aid is New York City expecting from the Trump administration? The answer to that would seem to be zero, or maybe even negative, as Trump is threatened to cut federal funding. I asked Congressman MAX rose to assess the difference between a second Trump Administration and a Biden administration in terms of federal aid to New York, its enormous its enormous. I mean this president in his full blown subsidiaries like Mitch, Mcconnell walk around hyper politicizing. This notion of defending the police ever where they go, they talk about it. What all the while they are the greatest. opponents of the funding, the police in the United States of America Money Minute. What happens if we don't state local aid perhaps get fire this plain and simple. They walk around town, king about how much they want schools to get open, but there are unwilling to sign
the dotted line to get billions of dollars back to New York. these schools, so, as congressmen MAX rose sees it New York is living through another Ford to city drop dead moment me. While New York mayor the Plaza, has gone to Albany, to request the authority to borrow five billion dollars to avoid laying off thousands of municipal workers, his request has thus far been denied the historian Kim Phillips fine things. This may be at least a small blessing in disguise. I dont myself see. Borrowing is a long term solution to these problems, partly because it sets up the same dynamic that saw in the seventies, where creditor Earth are then, given a greater amount of power, over the city. That's what the debt does Moody's the bond credit rating agency would seem to agree they
recently downgraded. New York city rating and warned it could be lowered further if the city borrows more money to pay its bills so, based on what we ve heard thus far, you might easily think that New York is over two: does anyone have any actual ideas for how to help the city recover, We're gonna need to moving move quickly back to a managerial style of city government, about tax policy, we're gonna need to move back to figuring out. Which taxes are gonna scare off the least tax base and Maybe easing regulations start with one stop remedy that's coming up right after this briefest of breaks also remember to check out the other shows in the free radio network, new stupid questions and people. I mostly admire we'll be right back Fr Economics, radio is sponsored by square if you run a business or thinking
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with one of our unladylike Hall of Fame, he rose Samantha be really no living here today. This is okay. Now, in its awesome, okay, I had did have a chocolate ever principle before us I got Walker Soup Dear India, where dropping new episode every Tuesday, don't miss Single one subscribed widely, you like, consider apple pie, gas or wherever you get your PA. So big question first, is New York City over Now, the city is not over and studied at the beginning of the year. That is the Harvard economist Glaser. This is in question,
the challenge New York has reinvented itself over and over again in its four hundred year history, but I think by the time we're looking five years out, the city will have large they were and will be, entering into the next chapter Glaser is regarded as one of the most distinguished urban economists of his generation. He also happens to have grown up in Manhattan in the nineteen Seventys, which might account for a little bit of his optimism about the city's Rico right now. I should say that that optimism is predicated on the idea that we will get this pandemic under control in the next. You know twenty four months and that they will not be a second pandemic within seven years. That is just as disruptive. I think If the new normal is wave after wave of pandemics, then the city
It is under a much greater challenge. In two thousand eleven Glaser published a book called triumph of the city. How our greatest invention makes us richer, smarter, greener, healthier and happier. How does he back? cup such an aggressive claim. The way I understand this is what happened with globalization. New technologies have radically increased returns to being smart. and we are a social species that become smart by being around other smart people in the developing world. Cities offer the only path we know of out of poverty into prosperity and in an increasingly mobilized world in a world in which we don't need vast numbers of people working in agriculture for yourselves millions of people, billions of people have flocked to cities for the promise of some sort of a future that is brighter than the unending rural poverty. That is the past. You call the city our greatest invention, which means you're putting and ahead of
mathematics. The computer, antibiotics and rum reason ice cream. How so? How is the city the greatest human invention It is the machine that makes all the other inventions possible right and the isn't, for that. Is that almost every one of inventions that you raise, whether its mathematics and its development, whether in classical Greece, twenty five hundred years ago or in the house of wisdom and absent Baghdad twelve hundred years ago, it is human connections that make their creativity powers for almost nothing that we have done as a species is a solar creation. We collaborate with. And from each other. We steal each others, ideas with some degree of regularity sure, but you don't need a city for that, necessarily and obviously, in a digital age, you can connect much more easily. I dont think is any he's been living through this thing and thinks that, like boy, we want to do is sit in my office, along with the rest of my life adjusted Sue. I have been betting that virtual connections will not replace faced with
connections for the last thirty years or so, and I'm not gonna stop now, and certainly the text profits in the nineteen eighties argued that the ability to use these fax machines and so forth would make face to face interactions. Actually, that's wrong to me, because it seemed often faced with these interactions and electronic interactions with compliments rather than substitutes. I asked Glaser to justify each of the claims in his books subtitle that cities make us richer, smarter, green your healthier and happier richer enormous amount of data showing that we become more productive in cities that wage the high in cities, the people come to cities periods, wave gains that wage growth is faster and city? So it's not as if you come in just immediately again, all the weight gain from being city is just a year. By year you experience faster wastward about smarter, smarter it's exactly through this channel and which we learn from one another, You'Ll- think about Brunelleschi figuring out the basic mathematics of linear perspective.
He then pass along to some neighbour of his city, like Florence, like gonna, tell us who takes that idea and puts it in lowly sculpture, passive long to another, resolute the city Masaccio such painting on the war, the perpetual, chapel, cast of the longest broccoli Philippians. So for the change of gene, is each person to becoming smarter because they're connected to other people in cities and yeah, I feel I'm becoming a little bit smarter at this even though you are sitting in some excerpt of Boston, I'm sitting in some extra at the moment of New York City and were just talking, none the telephone, essentially where it is well known that for economics CAS are aiming at the best virtual thing out here for duplicating the magic of the city by the steep we would still be learning much more from each other. What a dogs that is, we will still be learning but bore from each other. If we were face to face okay, now about blazers Cream, that cities are in fact,
greener. There are two main reasons why, as a person, your carbon emissions go down from living denser as the first is travel Americans just take. Much shorter courtships when they live in dense urban areas than when they live in far from separates. The second big difference comes from smaller living spaces. It's not that apartments are met, logically greener than simple, founded hash homes they're not, but they are typically smaller and that he's less energy spent air conditioning and less energy spent on home heating and how bout healthier well It certainly been challenged, is pandemics have reared themselves up again, we had a wasted century from nineteen twenty, two, twenty twenty, when we had almost no significant pandemics, perhaps with the exception of AIDS that struck the urban world We noticed an amazing thing, which was first life expectancies, equalized between cities and outsiders, and then life expectancies got longer and cities in New York actually.
for two years longer in New York, the lower death rates have been attributed to more exercise, more social connection, more active lives and finally happier if needed. Indeed, because New York is actually dont say that their happier effect what self, respecting new Yorkers Mattel an interview. I satisfied there, but they do in fact commit suicide. A much lower rates of triumph of the city was published, as I mentioned in two thousand, and eleven a lot has changed since then, even before the pandemic, even for New York and other cities went into lockdown pleaser had taken a hard look at how cities were coming up short of their promise. He wrote a paper called urbanization and its discontents does he backdrop for triumph, was the nineteen seventies and relative to where we were. in nineteen, seventy seven, the city on the edge of bankruptcy with crime rates soaring with industry, leaving by the hundreds of thousands of workers, rights, citizen,
two thousand and ten or two thousand and twenty still feel reasonably triumphant part of what happened between two thousand and ten and two thousand and twenty. Was we started just expecting more from our cities, then a reasonably safe place to make a living. We started expecting that it would start solving a wider range of social problems. We started becoming less tolerant of the inequalities. Existence exist, cities laser points to several urban discontents, an obvious one. The low availability and high cost of housing. It is certainly true that the cities try and so the seeds for their housing market difficulty and for the inside of a justification both of those reflect the fact that you have rising demand of a city. That's not being met with accommodating spam, is enhanced is pushing its way into neighborhoods that didn't really want to be pushed into high housing prices also work against the wage advantage that cities confer especially for less educated workers, inexpensive cities like New York unseen.
Francisco their wages have actually gone up right, and so, if you're looking for job, at least three covid. If you are trying to find a job as a bartender, you were going to be paid a lot more in San Francisco, then you were going to get paid in the Latin. On the other hand, the competition for urban space has said that those ways games have been eaten up by the price. So their quality of life is higher, their earnings are higher, but their pay through the nose for their living space. Another urban discontent, income, mobility or lack thereof. It really does look that, whilst it is between the great job of an ape many adults to connect with labour markets, they were really not doing a great job, helping kids to thrive. The lack of urban opportunity for kids growing up in cities does it disturbing said effects so of the discontents that you list, if you could fix one and lets say we're talking about fixing one pre pandemic, because there's so much in flux now, which would it be which discontent? If you could
Have some kind of magic wand or a lot of leverage? Do you think, would help take care of a lot of the others. Outlook is always about the kids, it's always about urban education. It is by far the most important enough, unfortunately, the hardest thing, if you hadn't, which, when I know how to fix it, I dont know if it's the politics of housing supply building more partners. I know how to make New York affordable. You build a hundred thousand units a year. That's a technological fix. Where's, the schools there living breathing organism with teachers and kids just really hard. But if you gave me like a magic wand of his eye, would fix those schools there is another urban discontent that has Ray risen. Lately, people are concerned about what peers to be an increase in homicide raids in at least some cities, but Jennifer Deal whack an economist at Texas. I M who studies the criminal justice system. crime is often part of the conversation around the state of our cities, and
whether they are appealing to live in whether their safety rated children. In over the past few decades, there had been a strong positive trend to basically crime rate, especially violence. I made dropped substantially beginning in early the mid nineties and its basically been a nonstop drop since then, and so the com, petitions were having now around and optic in a special homicide rates during the last couple of months. You know we're still at historic lows in terms of crime rates. How big is this optic? So the best research on this, I think, is by David Abrams at the university Pennsylvania, where he as aggregated a whole bunch of data. at the city level over time, and he finds that on average, there is about a five percent increase in homicide rates of five percent increase, especially coming off. Such a long decline doesn't sound that significant. So why is the sense that crime has gotten so bad
part of the reason is just the way the media talks about crime and the way that politicians or nuclear president had been talking about crime and so any in recent crime then becomes extremely salient to people when its mentioned in the news Alla time right so keeping in mind that five percent average increase in homicides. cities I'm looking at in these data have a much larger year over year, increase Philadelphia, a twenty three percent Chicago of thirty four percent New York City, twenty three percent New Orleans up thirty six percent. On the other hand, when you look at all these cities, even when their homicide rates of not risen, that much most non homicide crimes have since a pandemic began fallen. So why is that? Why would homicides be rising when almost all other crimes
most places seem to be falling. That is a great question. I'm not sure we have a great answer to it. Yet I think a lot of the other types of crimes depend heavily on foot traffic. If we're talking about robbery, It's our muggings of people are out. About any more than there is no one to rob we see Home burglaries are down a whole lot. That's probably because people are home in Berlin. I don't like to break into homes when people are there, we ve seen increased in commercial burglaries, so breaking into stores that are closed now, which makes sense homicide it's a bit of a mystery, and I think the mistress, compounded by the fact that were seeing different effects and different cities. So it's kind of hard to cope with a really clear story. It's possible! Some of this is gang violence than so of people are out and about than there are witnesses and by foreigners who might deter violet crime or violent confrontations among people that perhaps don't care about stayed home orders. Something else that has been written
out quite a bit now is what happens to domestic violence rates. We see domestic violence rates increase quite a bit. Some of them whose surely or turning into homicides, but that probably not explaining all of the potential effect on homicide in these cities. Another hypothesis, with some evidence provided by Research from the economist, Roland Friar is that when a given police department has been accused of brutality or using excess force, they tend to pull back from their crime prevention duties there. If it a few papers on this at this point, and most of them suggest that a reduction in police effort, or you know these police slowdowns probably are causing an increase in crime. It sir, longer and highly contentious conversational, whether it is reasonable for the police we pulling back in the current moment, but if they are there
it would be reasonable to expect that to contribute to increasing crime rates the summer of twenty twenty, so many urban police departments under scrutiny with widespread calls for police reform and de funding, so I live in often, I think they just voted to cut our place budget by a third. I am very interested to see how that play out, and so I think, interested lake with one foot in the moving then interrelated, but not that interested, but I mean I do believe strongly enough in the research that increasing policing Ladys his crime rates that broader commerce patient about reducing police budgets in shifting that money to other social services that could also reduce crime, I think, are very useful. Conversation to have, and I am all for trying some of those kinds of reforms. I think the challenges at those types of changes are not gonna happen overnight and so seeing some places cut. Therefore, east budgets, without a very clear plan as to how they're going to
essentially replace those efforts immediately, mother fashion, that makes me nervous rising crime in cities or even the perception of rising crime, tends to be an outsider factor in driving residents out of cities, especially the those with higher education levels and with kids at Glaser, even though he grew up in New York in the midst of the fiscal crisis, has more vivid memories of the crime threat. Then the bankruptcy threat set of blood but you could safely watch- was becoming smaller and smaller over the course of the nineteen seventies. Remember having a strategy of muttering loudly to myself, it hopes people think that I was either a heroine attic or otherwise. Insane leave me alone again. The pandemic is a different kind of threat to New York than the fiscal crisis was, but I asked Glaser to take a step back and talk about how to prevent another seventy style
to cycle by the way New York mere build. The plaza is term limited and will be replaced in twenty twenty one election. So what We need to move quickly back to a managerial style of city government right, we're gonna need to move back to figuring out which taxes are gonna scare off the least tax base, its crucial that we maintain basic city services and is crucial. We not ask any particular sector to bear the burden we need to have a managerial approached. The tries to spread the pain and try to keep the core services still functioning. Do you see any one running from air in New York City? Who fits those characteristics? I don't have any Yet I need to see more so one thing: It is not running a punitive city, not deciding any group of your city are the attack, and this is why We should not think that the fiscal burden is gonna, be a anyone sector. That's absolutely crucial. As everything is dead, the style and it's an openness.
And it is also encouraging the ground up organic attempts to enable the civic leaders to do their own thing and have respect for that is the way Mr sheer the spotlight, when appropriate, and not to try and rabble all the oxygen in the room. Let's talk about regulations and particularly interested to know. If, for those who would like to see, cities really cheap, in their regulatory position, whether the pandemic might prove an opportunity for that to happen. So you re in your paper when Mark Zuckerberg started Facebook in his Harvard College dormitory. He faced few regulatory hurdles if he had been trying he started Bodega, that's all milk products three miles away. He would have needed more than ten permits Ivan. agonising over this. For a while- and I think, one of the rare This is why cyberspace is proven to be such an attractive place for new talent. Is it's been kind of a wild west,
Where did we're trying to sell books or establish search engines are set up social networks, the regulators weren't there they were playing catch up just as valid cities, but this meant that you could go and start your thing and eventually somewhat realized. They didn't actually like all the things you were doing in they try to clamp down, but you were so far ahead that your freedom, whatever you want, whereas in terms of starting a small grocery store, starting anything with the physical footprint governments. Already there, sometimes for good public health reasons, sometimes to protect incumbent businesses. Both cases you gotta run through this got of regulations now. Does the pandemic afforded a reset guy? I really hope, Sir, because one of the things this pandemic is doing. It is an absolute catastrophe for America, small businesses for cities, small businesses, who came into this with a very thin wafer of financial cushion. Many Them are being wiped out now, and so we will have to have new businesses replace all businesses, and it will stress if we,
Take it easy to start new businesses. Lots of business closures are. Ok, is really Kay than a business shuts down if one restaurants us down a new restaurant opens the same place, but you to make it easy for the same rest, Roger went broke in April of twenty twenty to reopen in it was twenty twenty one, and so it is so crucial to cities understand this period. It has ever been a period to serve restart business regulation. This is the time and how exactly does Glaser see this happening start with one stop primitive whatever it is? You think permits need to go through. You want one person for the businesses to connect so right now there is a plethora of different agencies. You need to see the fire department for this, and you need to see the police department for that. You can have one per in whose specializes, in making it easy for businesses to struggling carbon. An analysis and all those regulations. No one has ever applied indeed these in peace. A cost benefit analysis to any this, and they just agreed over time so create yourself
Whenever blue ribbon, commissioner, you need and I'll some amount of money to do this and make the thing work and third, it probably is worthwhile thinking about what you're doing around the real estate taxes on commercial space relative Residential Space New York is a varied, messed up property tax regime. It has long been overdue for the city to move towards a more sensible, more transparent system where we don't treat different forms of property wildly differently in terms of their tax burdens a Glaser has already given the New York City and state governments plenty to work on and he barely got to touch on when the most crucial problems that must be addressed in order to keep New York and other expensive cities from spiralling downward. The housing problems, that's where we will pick up this conversation neck it will include someone who recalls growing up in dilapidated
public housing in San Francisco and sadly feeling hopeless and frustrated and wondering? Why me why my community? Why is my family in this situation? Why are we poor. That is London Breed today is the mare of San Francisco. She and our economist friends will help us explored the history of unaffordable housing, the solutions that have failed and what might actually work that's next week on for economics, radio until then take care of yourself, and if you can, someone else to freedoms, radio is produced by stature and w productions. This episode is produced by Zack Levinsky. Our staff also includes Allison, Craig Low Red ribbon met Hickey, Daphne Chen married to Duke incurring Wallace are in turn is immaterial and we have held this week from James Foster. Our theme songs, Mr Fortune, by the hitchhikers, all the other music.
was composed by Luis scare. You can get free and honest radio and any podcast app. If you want the entire back catalogue, use a stitch up or go to free economic stuck, come freedoms. Radio can also be heard on many NPR and other radio stations round the country. This week we are We too join the mean public radio network Sunday afternoons to- and you can also hear, is now on calf S, K in Petersburg, Alaska check you we're a local station for details and if we are not in their liner well you tell them that needs to be rectified. As always. Thank you for listening. Do you have a solid our yes, I do. I do. I think I have office hours distorted eleven, but if we are to make Phd students way seven minutes, ok sounds good, teacher.
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Transcript generated on 2020-10-09.