Adams’ plan to head off the deficit was met with praise last week by the Citizens Budget Commission, which called for a 3% to 5% reduction in June. CBC President Andrew S. Rein said Jiha’s letter gives city agencies enough time to adjust their operations to meet the city’s targeted cuts.

Rein also pointed out that with 28,000 vacant positions in city government, the Adams administration should still be able to hire essential personnel and meet the budget-cutting goal.

“Importantly, the city is currently negotiating its next round of labor contracts,” Rein said. “Changing work rules and other contractual components to increase efficiency and provide PEG savings is the best way for the city to raise employee salaries without creating an unsustainable fiscal burden.”

Sean Campion, director of housing and economic development studies at the Citizens Budget Commission, a nonpartisan fiscal research firm, said that higher interest rates mean increased debt service costs for developers, especially affordable housing developers, who take on projects that already require higher levels of debt service because the amount of rental income is capped.

“The two consequences are you borrow less because you have less capacity to pay and developers must bring more money to the table,” Campion said. “Or the city must increase the subsidy on a per-unit basis, and that means the same amount of subsidy dollars don’t go as far.”

Campion added that rising inflation percentages have made construction costs steeper for developers, thus contributing to the lower affordable housing production totals. Earlier this year the state Legislature passed a bill that allows the state to reimburse firms for material cost overruns on public construction projects.

“[Rising construction cost] gives you the possibility of either needing to commit more money for the same number of units or getting fewer units produced for the same amount of subsidy,” Campion explained. “Some deals that would close at one construction price wouldn’t close now at the higher cost.”

If the city is to keep pace with REBNY’s ambitious timeline, then it will need to do more than just rely on Adams’ strained Department of Housing Preservation and Development staff to create more affordable housing. An all-hands-on deck approach is needed, Campion said.

“Market-rate housing alone won’t solve the affordability crisis. These city subsidized units help fill the gap, but it’s one piece of the housing market,” Campion said. “There should be a focus on increasing production of all segments of the market, including private.”

A new report by the nonpartisan Citizens Budget Commission (CBC) slammed the process through which the city decides to approve or reject the kinds of development projects that could supply that housing, calling it an “impediment to progress.”

Many of the flaws identified in the report stem from the political nature of that process. While housing is a citywide problem that involves complex issues of urban planning and economics, ultimate decision-making power on land use matters is delegated not to experts in those fields but to the local City Council member.

The CBC report offers as a potential solution allowing land use applicants to “appeal City Council rejections back to the [City Planning Commission] or to another body that represents citywide interests.” Delegating decision-making power on something as important as housing to subject matter experts with a citywide view is a sensible idea that should be explored further.

The guardrails installed around residential development in the city were put there with good intentions. But at some point it became clear that too much caution was ruining the ride.

That is the case with the city's land use approval process. A new report from the Citizens Budget Commission points to the process as one reason that housing creation in New York has failed to keep pace with population and job growth.

The report recommends changes to reduce the time and money developers must invest—which ultimately raises the cost of housing.

The CBC has helpfully laid out 15 improvements that could be made at the city and state levels, and it rates them from "modest" benefit to "substantial."

Naturally, the improvements with the biggest bang would be the most difficult to achieve. They involve changing New York law to limit or eliminate environmental review of some projects, and reforming the city charter to create an appeals process for zoning changes rejected by the City Council.

New York's environmental review law, which came out of the 1960s and '70s backlash against destroying communities in the name of progress, is well-intentioned. However, the CBC points out, the "private right of action" contained in the law "amplifies the ability of small groups of individuals, often of high economic status and possessing negative opinions of growth, to block projects with broad benefits for other current and future residents."

Late activist Jane Jacobs, who championed citizen voices in development decisions, never saw this coming.

The CBC studied land use applications filed between 2014 and 2017 and found that they took 2.5 years to approve, with pre-certification and environmental review taking up most of the time. That is two to three times as long as Boston and Los Angeles.

"This is one reason why New York produces less housing per capita than most other large cities, even those with more onerous planning and public review processes," the CBC concluded.

The CBC plans to present its findings at a virtual event Sept. 28, with opening remarks by Maria Torres-Springer, deputy mayor for economic and workforce development.

Another idea whose time has come is to create a comprehensive citywide zoning plan. A Crain's report in January noted that New York is alone among large U.S. cities in lacking such a plan.

"The city has stumbled between rampant growth and well-intended regulation one century after the other—without ever quite succeeding in giving communities a sense of control over their destiny," reporter Matthew Flamm wrote in January.

New York will need to build 560,000 residential units by 2030, according to an estimate from the Real Estate Board of New York. A small fraction of that number is in the pipeline.

Let's reform now, before the housing crunch makes the city unlivable.

The president of the independent Citizens Budget Commission, Andrew Rein, agreed that the spending cuts are “a prudent and fiscally necessary step to stabilize New York City’s budget in the long run”.

For years, the NYC Ferry system has been criticized for receiving much larger subsidies than other mass transit options across the city, despite its relatively low, affluent ridership.

A 2021 report from the Citizens Budget Commission (CBC) using data from fiscal year 2018 had NYC Ferry’s subsidy at $10.37 per ride behind only the city’s express bus system, which has an $11.79 subsidy per ride. That year, the Staten Island Ferry, which is free to riders, had a subsidy of $5.46, according to the CBC.

ome of those are new challenges to the budget. Others, like expiring union contracts and reduced federal funding, were already a part of the city’s fiscal picture when Adams passed the $101.1 billion fiscal year 2023 expense budget in mid-June.

Fiscal watchdogs like the Citizens Budget Commission called for more savings then – and are now praising the new PEG, calling it “a prudent and fiscally necessary step to stabilize New York City’s budget in the long run.”

Something had to give. While city revenue projections are often purposefully conservative, Adams’ first financial plan as mayor projected a $4.2 billion shortfall in fiscal year 2024, $3.7 billion in 2025 and $4 billion in 2026.

Jiha, of the Mayor’s Office of Management and Budget, said that the newest round of reductions is necessary because the stock market was down last fiscal year, because most of the city’s labor contracts have expired or will soon expire, because of new mandated needs like shelters for asylum seekers and because of an economic slowdown.

The Citizens’ Budget Commission applauded the move as “a prudent and fiscally necessary step to stabilize New York City’s budget in the long run.” CBC president Andrew Rein said that with the city’s 28,000 vacancies, it should be able to hire “critical service-providing positions” while still meeting its savings target.

Along those lines, Andrew Rein, the head of the Citizens Budget Commission, a fiscal watchdog group, applauded the mayor’s action, calling the cuts “a prudent and fiscally necessary step to stabilize New York City’s budget in the long run.”

But many workers at city agencies say that an ongoing municipal labor shortage has hampered their ability to deliver critical services from affordable housing to public health. Among the complaints is that the city is hurting its ability to hire by using a relatively new practice of lowballing new hires.

Schwartz, a former federal prosecutor, was appointed by a federal judge in 2019 to oversee NYCHA following revelations that agency brass had for years failed to address hazardous conditions in the authority’s various public housing projects across the city, including lead paint and toxic mold. As of May, Schwartz’s office had spent more than $32 million in city dollars on oversight operations, according to an analysis from the Citizens Budget Commission.

Adams’ move, however, drew praise from budget watchdogs who have observed with unease as troubling economic conditions form on the horizon.

“This is a prudent and fiscally necessary step to stabilize New York City’s budget in the long run,” Citizens Budget Commission President Andrew Rein said in a statement. “In June, we called for a 3 percent to 5 percent PEG, and the fiscal outlook has weakened since then.”

The president of the independent Citizens Budget Commission, Andrew Rein, called the looming spending cuts “a prudent and fiscally necessary step to stabilize New York City’s budget in the long run.”

“In June, we called for a 3% to 5% PEG and the fiscal outlook has weakened since then,” he said in a prepared statement.