Illustration by Kelsey Dake
At the not-yet-completed One57, a luxury residential tower off Central Park, the unsold floor-through apartments are going for $53 million and up. The penthouse sold for more than $90 million. One57 will be the tallest residence in the Western Hemisphere (until another luxury high-rise on Park Avenue is completed in 2015), and on a clear day, residents on the top floors should be able to just make out the South Bronx.
Deep thoughts this week:
1. New York is more unequal than ever.
2. So is everywhere else.
3. There's nothing the mayor can do about it.
4. Except make it worse — which may not be a bad thing.
It's the Economy
Adam Davidson translates often confusing and sometimes terrifying economic and financial news.
A large proportion of the buyers likely won't live in New York; they will keep the units as decadent pieds-à-terre. I initially felt anger and disgust at the idea of absentee billionaires hoarding Manhattan real estate, making the city even more unaffordable while they live like princes in Moscow or Hong Kong or wherever. But then I did the math. Assuming that their money has to go somewhere, it's not so bad that these billionaires choose to put a chunk of it here. Any city official in Dayton or, for that matter, Philadelphia would do anything to have such problems. Yet frustration with becoming a central node in the global network of massive wealth was a centerpiece of New York's recent mayoral campaign.
Bill de Blasio didn't mention One57 by name in the speech that defined his candidacy, the one in which he described a tale of two cities — one obscenely rich, the other miserably poor — but you could argue that his campaign against inequality wouldn't have been so successful were it not for the proliferation of places like this. But what the tower's affluent quasi residents really make clear is that New York's inequality is hardly a local phenomenon. Most New Yorkers were born somewhere else. Nearly half speak a foreign language at home, and countless others come to the city from somewhere else in the United States. New York's inequality is determined by events taking place far beyond the Hudson River or, even, the Atlantic Ocean.
Benjamin Barber, the political theorist and author of "If Mayors Ruled the World," is wildly biased in favor of de Blasio. He says he voted for him, has met with him to offer advice and works at CUNY, an institution the mayor-elect promises to fund generously. For all that, Barber has not been swayed by de Blasio's soaring rhetoric about reducing the gap between rich and poor. "Obviously, he wouldn't want to disengage New York City from its role in global finance, real estate," he said. De Blasio knows that being mayor of the financial capital of the United States offers great benefits. After all, nearly every significant transaction in the United States — from an Iowa farmer's line of credit to a major bond issue in Maine — runs through some desk in Manhattan where somebody gets a cut. And the city gets a cut of that cut.
Barber points out that mayors, unlike legislators, are generally less dogmatic once they are sworn into office. "The distance between Bloomberg and de Blasio is not as great as the media — and the two men — have made out," he said. "Being a mayor is about solving problems and not about striking ideological poses."
Edward Glaeser, an economist at Harvard, is Barber's political opposite. His book, "The Triumph of the City," is an eloquent attack on many of the policies de Blasio argues for, like targeted protections for certain kinds of industries and expansion of government housing. But appropriately, for all their differences, Glaeser and Barber agree that ideology doesn't matter much when mayors actually govern. There are policies that could reduce inequality on the national level, like improving schools everywhere or altering the tax code, Glaeser points out, but the opposite is true on a local level; when local governments improve their schools or create more progressive taxes, they may increase inequality locally by attracting more poor people. Glaeser says one way to significantly lessen inequality in the city would be to aggressively repel either the very poor or the very rich. De Blasio, thankfully, will do neither.
Much has been made of de Blasio's call for higher taxes on the rich to finance better education for the poor. But his actual policy proposal is the tiniest possible tweak. People making more than half a million a year will pay an additional half a percent in New York City income tax. (For most, this will mean a few hundred to a few thousand dollars a year.) His spokesman, Jonathan Rosen, explained that the increase was designed to help bring the children of poor New Yorkers into the middle class without encouraging wealthy people to leave the city because of the tax burden.
Whatever de Blasio does, Glaeser argues, the city will continue to attract both the superrich and the poor, and there will be less space occupied by the middle class. The gap between rich and poor has grown significantly over the past 35 years in nearly every nation, and especially in large cities. "Globalization and new technology have made cities more, not less, valuable," Glaeser said. This is because the most profitable businesses no longer involve heavy machinery; they are rooted in ideas, which, it turns out, spread most effectively when knowledge workers are densely packed together. The top handful of major metropolitan areas — New York, Chicago, Los Angeles — account for a hugely disproportionate share of overall U.S. economic growth, Glaeser says. There is every reason to believe this trend will continue and, most likely, increase. That will draw even more of the high-earning elite to big cities and many of the poor, too, seeking jobs and assistance in these centers of economic growth.
Barber and Glaeser agreed that however powerless de Blasio may be over these historic global trends, he does have one crucial power that he has already begun using: He can set a tone for the city as a place open to the poor and the middle class. His campaign to fight inequality could, paradoxically, make New York even more unequal. But if that inequality is a byproduct of New York's serving as a global symbol of opportunity, de Blasio's landslide victory suggests that most New Yorkers will be thrilled.
Adam Davidson is co-founder of NPR's "Planet Money," a podcast and blog.
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