“New York bounces back. Always.”
Dan Doctoroff is the CEO of Sidewalk Labs, a company which has long been at the forefront of urban reform throughout the United States, and is distinctly focused on affordable housing, green energy, and sustainable industrial infrastructure. He previously served as former Mayor Bloomberg’s Deputy Mayor, and oversaw over 289 projects centered around developing the five boroughs of New York. Doctoroff was instrumental in the post-9/11 rebuilding process, representing the city during negotiations around how best to rebuild Lower Manhattan. Doctoroff also created PlaNYC, the 127-point plan that brought together more than 25 city agencies to make New York City more environmentally sustainable.
You can watch the full interview here: https://www.youtube.com/watch?v=wo53t03Od2g
The following is a lightly edited transcript of the interview.
JORDAN: Many of New York’s financial institutions have relocated to other states. The same trend is also present in the city’s population, as almost 3.6 million people left New York last year. What’s the impact of this exodus, and is there any way to reverse it?
DAN: First, you’ve got to separate out what happened during COVID, much of which is temporary. New York was certainly starting to lose population starting in 2017, and it’s a worrying trend. We’re going to have to address it because what’s really important for a city is that a city grows. When a city grows, it generates more revenue. More revenue means more investment in better quality of life, and overall the city then attracts more people, perpetuating a virtuous cycle. We’re going to have to really focus on growth, and we’re going to have to do it in a way that makes people feel like the benefits of growth are distributed fairly.
JORDAN: You said it yourself, outside of COVID-19 we’ve seen a lot of other factors driving this exodus, one of which is crime. Your administration and the Giuliani administration had huge progress reducing violent crime throughout New York City, but in the past two years we’ve seen that trend shift. In 2020 alone murders were up 41% over 2019 and 53% over 2018. Two things here. First, what went wrong between 2018 and now, and what should the next mayoral administration do to deal with this increase in crime?
DAN: Historically, crime had actually been dropping for the past 25 years, and it’s only in the last couple that crime went up in a couple of categories (albeit very visible and important ones). Overall, crime last year did not go up when you take into account all categories of major crime. That said, the rise in violent crime is really worrisome. I think what we have seen is a changing dynamic in the wake of societal changes and the way in which we manage crime. We also have to take into account racial bias in our criminal justice system. The trick for the new mayor and new DA will be to find that right balance between making people feel safe and managing crime effectively, but doing it in a way that is fair. There are lots of new approaches to that, and I do believe that as New Yorkers look to the election one of the most important things people will look for are candidates who talk about reducing crime and administering the criminal justice system fairly.
JORDAN: Okay so it’s that balance that’s really key. This leads well into my second question which is about a similar balance. You’ve spoken a lot about the importance of recovering economically and reforming the criminal justice system/bringing down the rate of crime. Should one of these be prioritized over the other or do we need some sort of equilibrium when building back New York.
DAN: Well I don’t think it’s just about crime or the economy. I think we have to grow but we have to do it in a way that is inclusive, that makes people feel like they benefit from growth. Over the last several decades, there has been an emerging perception that the benefits of growth have not been distributed fairly. So what do we have to do in order to create true, inclusive growth? We have to think about education. We’ve made a lot of progress in our educational system, but it’s stalled over the last few years. Our schools are highly segregated – how do we address that? Healthcare – we saw during COVID that people of color and less means were disproportionately impacted by the pandemic. Even things like getting around the city – the distances people have to travel from the farthest parts of Queens and Brooklyn are real inhibitors to opportunity. How can we improve our transportation system, in addition to dealing with criminal justice and crime. The good news is, there’s new approaches to all of those things. What’s really important is that we have an open mind towards innovating and creating new solutions to these problems. Unless we address them, and unless people begin to trust that the benefits are growth will accrue to them, they’re going to be opposed to growth. That’s when we start shrinking, and when we shrink, the opposite of that virtuous cycle occurs. Shrinking leads to a loss of money which ultimately causes disinvestment in quality of life, forcing people to leave and perpetuating the cycle. That’s what can’t happen. Anybody who is old remembers that in the 1970s, New York lost 800,000 people in one decade. We lost 13 Fortune 500 companies in one year. The city was almost bankrupt, and it took us 25 years to recover from that. We can’t take the good aspects of New York for granted, and in order to continue that we need to address some of these imbalances.
JORDAN: Right so it’s less about merely rebuilding and more about innovating upon what’s already there, thus ensuring that people who feel marginalized get to this state of balance, equality, and equity.
DAN: Yes. Again, I don’t know what balance means exactly but the key thing is that people have to believe that this city is rooting for them, that it’s giving them opportunity and that it’s not unfair. It doesn’t mean everyone has to be given the same opportunities, it just means that people have to feel like the barriers to them having a better life are starting to get tossed out.
JORDAN: On that theme of opportunity, we’ve seen a shift in where businesses are but also how businesses operate. A lot of firms have told people that you don’t need to come into work five days a week, and you can work remotely – we’ve seen that strategy work for a lot of major institutions. Do you think that shift might be a driving force in giving people employment opportunities that otherwise would have been inaccessible?
DAN: I think that might play a bit of a role going forward, but most of the people who live in those outer boroughs aren’t working for financial firms. Those people are primarily in essential jobs. Nevertheless, I do think we’ll see a trend of increased flexibility across most businesses. A good question to ask is whether that greater flexibility is a good or bad thing for New York. It’s probably not great for real estate in central business districts, but it might lead to more economic activity within neighborhoods around the city – we’ve already begun to see that during COVID. What you will see is opportunity distributed more broadly across the city. That will be helpful to a lot of people, but we still have to deal with the underlying issues with transportation and the like.
JORDAN: Well, I definitely want to talk about transportation in a bit, but first I’d like to get back to something you said earlier about the people who aren’t necessarily working for these financial institutions. You’re right that the majority of outer-borough residents are working for restaurants, retail vendors, etc. These businesses have suffered the most under the pandemic. What should be the government’s role to help those businesses which can’t recover quickly or adapt?
DAN: First of all, the federal government has played a significant role in helping businesses through this crisis. We’ve now spent $4 billion thus far, and new legislation has allocated $1 trillion to this cause. A lot of the money has gone to small businesses. That said, it’s clearly not enough – we’ve seen vacancy rates higher than any time before, and so I think the city itself can help businesses to get back on their feet. There’s creative financing initiatives that the city could deploy, like a revolving fund of some sort. The city created a huge amount of affordable housing by having its own bank for that, so something like that for small businesses is a very interesting idea. Even Andrew Yang is proposing something like that. There are definitely things the city can do. The other thing New York can do is make it easier to get new businesses up and running and stay open via cutting red tape, making it more streamlined, fast track approvals, etc. A city can play an important role in recovery, through all of the above and by making investments in promoting the city proper. One of the things I’m really proud of that we did when I was in government was a huge spending initiative to promote tourism in the wake of 9/11. We attracted a lot of events, made it easier to build hotels, and tourism came back. We’re facing a similar crisis now, but we’ll see what happens post-vaccine. A clever city can make smart investments in specific sectors of the economy, and that will be a very important priority for the next mayor.
JORDAN: You think we’re at a point right now in the pandemic where the next administration can focus on strategic investments without it being a detriment to other ventures?
DAN: I think so. You have to have a strategy, you have to think of the city as a competitive entity. You have to be self-aware to know where you can make change and where you can’t. You have to have a financially driven analysis to understand where you should invest and where you shouldn’t. We did all of those things in the wake of 9/11, and they can be done again.
JORDAN: You’ve spoken a lot about the necessity of New York’s competitiveness with other cities. One of the things pushing a lot of people away are New York’s taxes. We have, of the major cities in the U.S., the highest taxes, which will be going up in the future. Isn’t that a major part of what’s making people feel like they don’t have opportunity here or that they should get out and move somewhere else with lower taxes?
DAN: As you point out, taxation is a really interesting issue. It tends to be a big problem for those who make the most money, and we’re highly dependent upon those people. 1% of the population generates 40% of the individual taxes collected by New York City. Most of those people are loyal New Yorkers. They want New York to be successful. What they don’t want is to be treated with disrespect, or taken advantage of. I think if a new mayor went to them and said “we need your help for the next few years,” the overwhelming majority would agree with a temporary tax increase. The government has to do it in a way that’s respectful, not spiteful. Look at what’s happening in Albany – we can’t do something like that where it’s just “penalize the rich.” At some point if taxes get too high, people are going to feel taken advantage of, and enough of them will leave to the point where it will really hurt the city, sending New York into that vicious cycle we talked about. The thing we have to avoid is the ‘70s all over again. That’s key. We need to make people feel like they’re a part of the solution, and that everybody is going to benefit.
JORDAN: That’s really interesting. I haven’t heard people talk about the taxation rhetoric but I get it. You see trending hashtags like #EatTheRich and other inflammatory, aggressive, anti-wealth rhetoric driving policies, which is never good. If they spun it in a positive way and made it all about helping the city, do you think more people would be okay with that?
DAN: I do. Let’s figure out what we need. Let’s not forget we’re getting a huge amount of money from the federal government under the COVID relief plan. That’s going to help New York avoid major budgetary issues for the next couple of years. It’s going to enable the MTA to avoid dramatic cuts in service and mass layoffs. We first need to understand what the math says – what do we really need? We have to rebuild the city and the momentum therein. If done correctly, people will be very open to playing a part in the recovery. We have to remember, New Yorker’s are incredibly proud of their city. They want to play a role in making it greater. They will do that if they are part of the process. That’s part of why New York has always managed to recover. There is great pride here, but you can’t squander it by being disrespectful.
JORDAN: I’m glad you brought up the MTA. Even among kids my age, who are of relatively low risk from COVID, we’ve seen a shift away from public transportation. People are afraid to use buses and subways. The MTA can’t rely on federal funds forever – the New York Times published a report recently which confirmed that the allocation in the COVID relief plan is not enough. How do we get people feeling comfortable and okay with taking public transportation, if even the vaccine rolling out doesn’t seem to be doing it?
DAN: Don’t forget, the vaccine isn’t really rolling out right now. 20-25% of New Yorkers are fully vaccinated at this point. It’s very hard given what we’ve been through to imagine a time when we’re all vaccinated or have the equivalent of herd immunity. I would be careful about making judgements at this point. Let’s see where we are in July, when anyone who wants the vaccine will be able to get it. The pressure to get vaccinated will simply grow. That will come from employers, coworkers, schools, etc. I suspect we will see a more rapid recovery than we’re assuming right now. I caution against the “disaster scenario.” The most important thing is that we get to the other side without damaging quality of life. I’m encouraged that we’ll have made a lot of progress by the end of the year.
JORDAN: So you think the vaccine will be that push that gets people back to the realm of normalcy?
DAN: Yes. Normal is obviously a term of art. The great thing about New York is that it’s always changing and evolving. The reason it has been the capital of the world and the leading city in the United States is because New Yorkers are optimistic. They look ahead, they adapt. New Yorkers will adapt here too. This is a city of immigrants. 40% of New Yorkers were born outside of America. 25% have at least one parent born outside of America. People like me grew up elsewhere in the U.S. and came to New York later in life. The act of emigration and immigration is an act of optimism. You have to believe that where you’re going is better than where you came from. This city is a collection of dreamers and optimists – people who are looking toward the future. For the most part, that’s a great thing, and greater still when you’re talking about recovery. The caveat to that, is we can’t predict what will happen with COVID variants, whether the vaccines will inoculate against those variants, that’s a wildcard. The one thing foundational to recovery is a focus on public health. People have to believe that the highest risk places are safe, and that’s why the MTA will continue to spend $300 million to clean up the subways in a new way. We have to send visible signals that it’s safe to come back. After 9/11, sending those signals was really important. Bag checks, massive police squads down the boulevards, just to let everybody know we were vigilant. There were police cars on bridges, we added 1200 officers exclusively focused on counter-terrorism. There’s a lot a city can do to instill confidence. Back then, it was about public safety in terms of protecting people against terrorism. Now, it’s about public health. New Yorkers look forward, and that is one of our most important strengths.
JORDAN: I couldn’t agree more. You’ve spoken a lot about New York’s optimism, and the importance of keeping people focused on the future. Unfortunately, in part due to the media and in part due to political polarization, a lot of people have lost faith in New York and America, and have become more pessimistic about the general state of our nation. How can those in power, coming into power, get people feeling confident and optimistic about their lives and the city again?
DAN: The most important thing is to show momentum. Once we start to see growth again, people are going to start feeling more confident. Confidence builds on confidence, and that’s exactly what happened after 9/11. That doesn’t mean the government can’t take specific actions to make people feel more confident or invest in the city. I’ll give you another example. When the towers were destroyed we lost 3,000 people, and after 9/11 lower Manhattan emptied. The vacancy rate went from 1% to 50% overnight. The city made it a priority to repopulate lower Manhattan, and we used federal money to subsidize 50% of the rent for 6 months, and that vacancy rate plummeted to 2% within two months. When those incentives wore off, nobody left. If you start inspiring confidence, you’ll see a natural growth perpetuated over time.
JORDAN: Right, it requires both actionable policy but also positive rhetoric and getting people back.
DAN: Confidence! In the Great Depression, Franklin Roosevelt was elected President, and in his inauguration speech he said one of the most profound things anyone has ever said: “we’ve got nothing to fear but fear itself.” It’s confidence that’s the key. Leaders can inspire confidence. If we galvanize that confidence, the natural optimism of New Yorkers will take over.
JORDAN: Thinking big picture, we have an entirely new administration coming in this year. Once they take over, what can they do specifically to get people ready to build back better. You and Bloomberg took over after the worst crisis in the city’s history, and you helped New York get back on its feet within a couple of months. It was an incredible turnaround. It’ll be a year and a half since the start of the pandemic – what should their first steps look like?
DAN: Don’t forget, all of these officials will be elected in June. That’s when the Democratic primary is, and there won’t be a serious Republican challenger. They’re going to have six months to prepare before they take office. Bloomberg and I only had two months. The new mayor, city council, other officials, they take office January 1. As a Republican, Bloomberg wasn’t elected until the beginning of November, so he had to put together his entire team and get ready to go in less than two months. I was not appointed to my position as Deputy Mayor until December 28. There’s a lot of time to prepare. That’s really important. The new mayor will have a lot of time to get their team in place, to develop specific plans, and what’s really important is that those plans balance inclusion and fair growth. We need to address some of the racial and structural inequities in the system. We need to acknowledge that at the end of the day, we are a competitive entity, and we have to be innovative. It’s innovation that’s going to be most important. How do we rethink the ways of old? If we start succeeding with innovation, people will gain greater confidence in our ability to do new things and solve problems. That’s what I hope for the new mayor to focus on.
JORDAN: Most importantly, you’re feeling confident and optimistic about the future of the city?
DAN: Yes I am. People have counted this city out over and over again. It always bounces back. It’s leadership and creativity that determines how quickly that’s going to happen. If you think about the last 20 years, we’ve had 9/11, the financial crisis of ‘08, Superstorm Sandy, and now COVID. In the first three cases, everybody said “New York will never bounce back!” In all those cases, New York came back. With good leadership, and a commitment from everybody to pull us out of this, we’ll come back.