The $802.4 Billion City
It’s hard to argue with success, and by any measure, the recent news about the city’s real-estate market points to New York’s ability not just to create value, but to sustain it. As much of the nation has seen a downturn in residential and commercial real-estate prices, there has been local nervous chatter about an expected slowdown or slump. But any hand-wringing is premature: Statistics from the city’s annual assessment roll show a remarkable surge, with market values rising 19 percent in 2006.
This surprising news should actually come as no surprise: More and more, people are deciding that New York is the place to build a career, raise a family and grow old gracefully. The suburban migration of the 70’s and 80’s, when families equated a home in Westchester or Fairfield County with the good life, has lost much of its allure. The Bloomberg administration’s focus on keeping New York the country’s safest large city, improving the public schools, and helping those who rely on social and health services is paying off by enhancing property values and sparking new construction.
Neighborhoods in all five boroughs have benefited. The 2006 rise in property values was especially apparent outside Manhattan—a 27.6 percent jump in both the Bronx and Brooklyn, for example, as previously blighted areas such as Red Hook and East New York have seen an infusion of investment and enthusiasm. Manhattan values, meanwhile, rose 16.9 percent. For those who like precise figures, the total value of all New York City property was pegged at $802.4 billion, up from $674.1 billion in 2005.
Hotel owners, too, saw their values rise: The Marriott Marquis in Times Square is now valued at $504.9 million, up almost 40 percent from 2005, while the Grand Hyatt at Grand Central Terminal saw its worth climb 80 percent between 2005 and 2006, to $300.9 million. Clearly, the estimated 44 million tourists who visited the city last year had an impact.
Of course, a jump in property values—co-op and condo owners might take heart in knowing that the value of their apartments rose 26.3 percent last year—also means more money for the city treasury, in the form of taxes. The average tax bill for condos is expected to rise 2.1 percent, while co-op owners will see an average tax increase of 6.6 percent.
Unfortunately, this adds impetus to Mayor Michael Bloomberg’s policy—which began in 2004 and is now awaiting approval from the City Council and State Legislature for a three-year extension—of giving out $400 residential property-tax rebates. While politically popular, this misguided courtesy has cost the city $260 million annually and has only enriched homeowners by $400—a purely symbolic amount. It’s past time to retire this costly rebate: Property values have gone up far more than taxes during the past five years, and homeowners are doing just fine without it.
Pataki’s Leftover Pork
Every year, state taxpayers get hit with an outrageous bill for pork-barrel projects known as “member items.” These absurd projects are designed for no other reason than to get incumbent members re-elected. This year, these incumbent-protection projects will cost New York taxpayers $200 million.
That’s scandalous enough. But it’s just the beginning of the waste and corruption in Albany. Under the non-leadership of former Governor George Pataki, the state has taken to borrowing money—a stunning $1.9 billion last year—to fund these pet projects. This simply must stop. If Governor Eliot Spitzer is serious about changing the way Albany goes about its business, he can start by announcing that the state will cease and desist from channeling money to politically connected organizations and companies that have grown fat at the public trough.
The member-item disgrace is a scandal of its own. But last year’s borrowing to fund lights for Little League fields, street repaving and church driveways qualifies as a crime against taxpayers and the public treasury. It turns out—what a surprise!—that many of the beneficiaries of the state’s obscene largesse happen to be connected to top state policymakers and legislators.
Last year wasn’t the first time that Albany has borrowed money to engage in Tammany Hall–style politicking. But in previous years, lawmakers and the Governor apparently still had some semblance of shame: Borrowing for pork projects in 2001, for example, was almost negligible, and reached a high of about $600 million in 2003.
Last year, however, Mr. Pataki—one of the lamest lame ducks in New York history—presided over a monstrous increase in borrowing, no doubt realizing that the voters would never get a chance to exact righteous retribution. To their shame, legislators took full advantage of Mr. Pataki’s dereliction of duty, stuffing the budget with some of the foulest pork New York has ever seen. And that is no small “achievement.”
New York now has a Governor who made a name for himself by putting away corporate executives who thought they were bigger than the law. Now, Eliot Spitzer finds himself face to face with public officials who exude a similar arrogance: Not only do they think they can spend today’s tax dollars for tomorrow’s election, but they’re spending the next generation’s money to ensure their continued employment.
Mr. Spitzer cannot allow legislators to continue this outrageous abuse of the state treasury. He ought to serve notice, quietly but firmly, that there will be no such shenanigans in this year’s budget negotiations.
Spitzer Sees Stem-Cell Sense
Embryonic stem-cell research is one of those topics that illuminate the vast distance between George W. Bush and the voters of this state. Ever since the President restricted federal funds for the research, giving in to the qualms of his conservative base despite evidence that the study of stem cells may help cure devastating illnesses such as Alzheimer’s, polls have shown that the vast majority of New Yorkers are in favor of the state stepping in and funding the research.
Now this worthy idea may become a reality, as Governor Spitzer has proposed a $2 billion, 10-year bond initiative for scientific research and development, with half of that money going toward stem-cell research. Should the State Legislature pass the legislation, it would go before the voters; if they approved it, New York would be second only to California among states that have jumped into the gap left by the Bush administration’s lack of leadership on this important issue.
The fit is a natural one: New York has a first-rate set of biomedical research institutions, located throughout the state from Buffalo to Suffolk County, while Manhattan is home to the nation’s foremost researchers at Rockefeller University, New York University and Columbia-Presbyterian. Yet while states like California, New Jersey, Connecticut and Illinois have recognized the need to invest in and support stem-cell research, New York has lagged behind, suffering from the visionless leadership of former Governor Pataki and the ability of some conservative groups to delay scientific progress. Fortunately, Mr. Spitzer is guided by a stronger will.
As the new bond act works its way through the legislature, Mr. Spitzer has proposed an accompanying law to make sure that everything is done legally—reproductive cloning would be banned, for example—as well as a Stem Cell Commission to oversee the disbursement of money.
Of course, New Yorkers won’t be the only ones to benefit if the bond measure passes: The advances in discovering possible cures would be magnified for all. As one stem-cell advocate told The Times, “The real value is that if New York is involved, you suddenly have an ability to make a leap in progress across the country’s best minds.”