The Meltdown and the Middle Class

Location: Can I get you to talk about the much discussed report on the middle class that you are working on?

Mr. Bowles: I think one of the things that I’m excited about is that we’re not talking strictly about how to save the middle class. We’re looking at New York’s historic role as a place that groomed a middle class and looking at whether that’s continuing to happen today. We’re going well beyond just the real estate price increases that you’ve seen—and obviously that adds quite a bit of a burden to the middle class in New York—but we’re also focusing on things like the economy, and one of the problems that we find is that there aren’t a lot of middle-income jobs being created in New York City like the ones that were before. That’s really put a huge premium on higher education, and yet a lot of the poor and working poor in this city don’t have higher education and so we haven’t seen the same kind of mobility up to the middle class as maybe we once did.

How does the financial crisis impact the ongoing gentrification of the city?

It might put the brakes on gentrification in some neighborhoods. New York’s starting from a pretty strong position right now as we head into a recession. Large numbers of people have opted to stay in the city, and they have bought homes in all sorts of neighborhoods throughout the five boroughs, not the just the Upper East and Upper West Side. You’re starting with a good core of people that are going to stay in place and that will continue to drive demand for restaurants and other stores that have opened up in recent years in places like Fifth Avenue in Park Slope or in Hunters Point or Forest Hills. You know, I do think, though, that some of the more recently developed or more recently gentrified neighborhoods, that’s where you might see some of the pressure. You might see fewer people moving to those neighborhoods.

What neighborhoods? Are there some that you have in mind specifically?

Bushwick might be an example. This was a neighborhood that as recently as the early 1990s had some of the highest levels of crime in the city. The gentrification there has not come full circle, and as a result it may not have taken hold. It’s the neighborhoods and developments that are further away from transit that will suffer, neighborhoods where the schools aren’t as good, that haven’t yet developed a lot of amenities. A good example would be two neighborhoods in Long Island City that I think might have very different fortunes, and that’s the Queens West waterfront around Hunter’s Point, which has seen significant new development there and a lot of restaurants; and, on the flip side, you have Queensboro Plaza, where there’s been incredible new condo development recently but where there aren’t really amenities, where it’s not as attractive.

Do you think there will be an uptick in the crime rate as a result of the recession?

I’m surprised we haven’t yet seen an uptick in crime in this city. You’ve got to give a lot of credit to the police and to the Bloomberg administration. But the combination of foreclosures and a one-time spike in unemployment, if that’s what happens, could very well lead to a rise in crime around the city, at least in a handful of neighborhoods. I think that the investments that people have made in communities, buying homes and apartments, may negate some of that. People are very concerned and very active in their neighborhoods, and they may not let that kind of disinvestment occur, but I wouldn’t be surprised if there’s a slight uptick in crime, although I am not predicting a doomsday scenario like the late 1980s or early 1990s.

A few months ago you published an article by Robert Yaro calling for major infrastructure projects. Is there a need for that in New York City, and if so, what is it specifically?

I think we need significant investment in mass transit outside of Manhattan. Virtually all of the population growth in the last two decades has taken place in the four boroughs outside of Manhattan. You see overcrowded trains because there has not been a sharp increase in service in the boroughs. Generally, the infrastructure investment in the transit system, particularly outside of Manhattan, has just not kept pace with the population growth. And if you really want to retain middle-class families, the professionals that move to the city, in large part, this is where they’re moving. They’re not just moving to neighborhoods like Brooklyn Heights that are just across the river. They’re moving further and further out where the affordable apartments are located.

How will the financial crisis impact the retail chains in New York?

Well, we’re definitely going to see a closure of a number of banks, and we might see consolidation of drugstores, which are two of the biggest problem areas when it comes to national chains in New York. It could be a real opportunity for independent businesses to move into some of those storefronts, but I think that the days of when New York had no national chains are over because a lot of New Yorkers like having that retail diversity. Despite the proliferation of some of these national businesses, New York and even Manhattan remain towns of independent businesses. You can go to almost any neighborhood in Manhattan today and you’re largely going to see independent businesses. The challenge for New York is how do we help more of these independent businesses stay and grow here, and when the next real estate expansion occurs, what can we do to make sure that more of these independent businesses don’t get displaced.

Do you support the third term for Bloomberg?

Absolutely not. I think Mayor Bloomberg has done a lot of things very well. I don’t agree with him on everything, but I think he’s done a good job in a lot of areas; but I think it’s incredibly undemocratic and an awful precedent to set. I’m 100 percent against it, and I’d like to see it stopped.

Now, are you against it because it’s just a City Council thing at this point? Would you support a referendum of some kind?

If you’re going to do it at all, I think a referendum is the way to go, no question, but there have been two referenda on this topic. Voters have spoken. I don’t think it makes sense to reverse term limits. This is a democracy, and we’ve decided to have two terms for our mayors and City Council members and I think you have to have faith in the system. We may not see someone with the same kind of business background as Mayor Bloomberg, but, you know, maybe the next person will have skills and attributes that may prove even more beneficial in this time for New York. I just think it’s an awful precedent.

Were you around the city when Giuliani tried to extend his own term? How did you stand on that one?

New Yorkers across the board were against that. I think it stunk of a power grab, and I think this is exactly what it is again. New Yorkers are more receptive to this mayor staying in office because he has done a very good job and he’s proven to be a manager that’s brought in talented people, that have, in a lot of ways, gone above politics. That’s all great, but it’s just the wrong move to put one person above the system.

ohaydock@observer.com