So quickly has Mayor de Blasio changed the political landscape in New York City that most observers have failed to comprehend the cumulative effect on the city’s wealth inequality.
I have for the first time quantified the real financial impact of de Blasio’s initiatives on ordinary city residents, and it is nothing less than staggering.
Between mid-2014 and mid-2017, New Yorkers benefited to the tune of at least $21 billion — either in direct cash payments, or in the value of new city services they had not previously enjoyed, or in money de Blasio’s programs saved them from having to spend.
That, of course, is an estimated $21 billion, for when dealing with such huge sums of money, one can only make a ballpark estimate, but it is most surely a conservative estimate.
The universal pre-kindergarten program, for example, did not merely add an entire year to the school experience of every child; it also saved parents who utilized the program a full year of child care costs, which in New York City run an average of $12,500 for a 4-year-old child in a private program.
Thus, by the third year of the universal pre-K program, New York families had saved $1.4 billion in child-care expenses, according to calculations by the city’s Office of Management and Budget.
So, too, with the new law mandating five days of paid sick leave for all workers.
More than 500,000 city residents gained coverage under the expanded version of the paid sick leave law that de Blasio signed in March of 2014. By mid-2017, those workers had received nearly $500 million in benefits from their employers — none of which had been previously available to them.
The biggest single direct infusion of money, however, came from new labor contracts the city reached in swift and amicable negotiations with its own employees. Those contracts resulted by the middle of 2017 in more than $15 billion in wage hikes, back pay and benefits for some 300,000 workers.
Much of that money, needless to say, was then spent by those workers in the municipal economy, thus sparking what growth-machine advocates love to describe as a “multiplier effect.”
In my new book, I delineate in a half dozen other reforms that also resulted in huge expenditures, including one of the largest unreported wealth transfers from landlords to a city’s working class in modern U.S. history – three years of a near-total freeze on rents for regulated apartments that occurred under de Blasio.
Ever since World War II, prices for a large portion of New York City’s private rental apartments have been determined by the Rent Guidelines Board, an obscure agency whose members are appointed by the mayor. New York rent regulations are in place to prevent price gouging by landlords because of a perennial acute scarcity of available rental units – vacancy rates were about 3% in 2014.
There are more than 1 million of these regulated apartments in New York City, including units in public housing projects, and for the bulk of them, about 841,000 units that are privately owned and that receive no government subsidies, the rent board determines each year how much landlords can increase the rent.
Public meetings of the board are always raucous affairs pitting tenants against landlords. Over the past two decades, the board has granted average annual increases of 3%, so that property owners had grown accustomed to the steady increase in their revenues. Under de Blasio, however, the board authorized astoundingly low hikes of just 1%, 0%, and 0%.
That change in policy alone represented an estimated dollar savings to tenants of more $2.1 billion over the first three years of the new administration.
The combination of those historically low rent increases, along with universal pre-K, paid sick leave and other de Blasio reforms thus amounted to an unprecedented multibillion-dollar improvement in the economic life of the city’s working-class and poor majority.
De Blasio is the most prominent example of the new progressive leaders who are directly challenging the “growth machine” model that has dominated urban America since the 1920s.
The sheer number of progressive changes in government policy launched by de Blasio and his allies in the council during their first three years in power can be difficult to grasp, but the impact of those reforms on the everyday lives of New Yorkers is undeniable.
Here are just a few examples:
More equitable funding for city parks. Under former mayor Bloomberg, the privatizing of parkland for commercial ventures and huge investments in Manhattan parks such as the High Line, Randall’s Island and Hudson River Park became the norm.
De Blasio launched instead in 2014 a community parks initiative that has now earmarked $285 million in capital funds to improve more than 60 neighborhood playgrounds and small parks, and another $150 million to build new soccer fields and hiking trails in five major parks in long-neglected neighborhoods such as Harlem, the South Bronx, Astoria, Queens and Fresh Kills in Staten Island.
Municipal identification card. In Jan. 2014, de Blasio announced plans to issue a municipal photo identification card that could be used by any resident, citizen or noncitizen, who was older than 14 for local identification purposes, including opening bank accounts, entering public buildings and interacting with the police department.
The card was officially issued the following year, and it mushroomed in use after Commissioner of Immigrant Affairs Nisha Agarwal convinced dozens of museums and cultural institutions to grant its holders a one-year free membership. By late 2016, nearly 1 million people had obtained the ID card, and de Blasio’s aides estimated that New Yorkers using the card had saved $24 million in admissions fees as a result.
Higher pay for the lowest-wage workers. In Sept. 2014, de Blasio issued an executive order extending the city’s “living-wage” law to thousands of employees of commercial tenants located on city-subsidized developments, and increasing the wage itself from $11.90 to $13.13 an hour.
The combined action was projected to benefit some 18,000 workers, with the lowest-paid 4,000 seeing their salaries increase by $10,000 a year.
A few months later, the city agreed to a $2-an-hour hike in pay for some 6,000 of its employees who had been receiving less than the “living wage,” and in Jan. 2016 de Blasio announced that 20,000 crossing guards, seasonal and other low-wage city workers would receive a minimum of $15 an hour in pay. At the same time, the mayor kept pressing Gov. Cuomo and lawmakers in Albany to boost the state minimum wage.
Reducing water bills for homeowners. Throughout the 12 years of the Bloomberg administration, water rates for property owners skyrocketed, with annual increases averaging 8.5%. Those increases were not only slashed in de Blasio’s first three years — to an average of 2.8% — but in 2016 the mayor waived some $563 million in rental payments the water board owed to the city, then directed a part of the savings to be used to provide credits of $183 to some 664,000 owners of one-to-three-story homes.
The Rent Stabilization Association, the lobbying group for landlords, immediately challenged the credit in court because it did not apply to owners of co-ops, condos, and rental buildings, and the courts upheld the challenge. But by early 2017 de Blasio was still seeking a water bill credit that could withstand a court challenge.
Expansion of after-school and summer programs. A less publicized companion project that de Blasio vowed to implement along with universal pre-K was a major expansion of after-school activities for middle schoolers. Between 2014 and 2016, the city enrolled 43,113 additional children in after-school programs and 15,708 in summer programs, at an increased cost of $321 million.
Paid parental leave. Through another executive order in Dec. 2015, de Blasio granted six weeks of paid parental leave to some 20,000 managerial employees in city government. His aides then announced the city was eager to negotiate with municipal union leaders a similar benefit for the rest of the 300,000 city workers, if some financial offsets to the cost could be negotiated.
Four months later, Cuomo and the state legislature, no doubt influenced by New York City’s example, approved both a gradual increase in the state’s minimum wage to $15 an hour and 12 weeks of paid parental leave for state employees, one of the strongest such policies in the nation.
Broadband for all. With 22% of New Yorkers having no access to Internet service at home, de Blasio targeted elimination of the digital divide as a key part of his plan to reduce income inequality. He and his former chief counsel, Maya Wiley, pursued that goal relentlessly. In June 2015, the city blasted telecom giant Verizon after an audit revealed that the company’s FiOS division was years behind in making high-speed broadband available throughout the city as required by its franchise contract, especially in low-income neighborhoods.
De Blasio threatened to reject any discretionary city contracts to Verizon unless it dramatically improved its FiOS rollout. The following month the mayor announced that the city would spend $10 million to provide free wireless broadband to five public housing projects in the poorest neighborhoods, with total broadband infrastructure investment to jump to $70 million citywide.
Wiley also fast-tracked a new franchise to turn old pay phone booths into new free wireless hot spots in all five boroughs, though that ambitious plan soon backfired when the hot spots began attracting the city’s homeless population.
While he remains the most influential of the nation’s growing number of progressive mayors, de Blasio has been weakened and frayed by some policy decisions that alienated key groups of supporters, by incidents of inept governance, and by the stench of old-style pay-to-play corruption. Nonetheless, decades of a widening gulf between the nation’s super-rich and the vast majority has now unleashed a new urban movement that will not be easily contained. The fight to reclaim Gotham in the 21st century has only just begun.
Gonzalez, a longtime Daily News columnist, is author of “Reclaiming Gotham: Bill de Blasio and the Movement to End America’s Tale of Two Cities” from which this is excerpted.