Nicole Gelinas joins Seth Barron to discuss the financial shape of the New York region’s transit system, the importance of midtown Manhattan to the city’s economy, the disturbing spike in violent crime on streets and subways, and more.
Seth Barron: Welcome back to the 10 Blocks Podcast. This is Seth Barron, associate editor of City Journal. Joining me on the show today is Nicole Gelinas. Thanks for joining us on the podcast today, Nicole.
Nicole Gelinas: Good afternoon, Seth. Thanks for having me back.
Seth Barron: New York City's problems don't seem to be getting better. One indicator of its troubles is the subway system where the situation is particularly dire. Nicole, you've been following MTA finances for a long time. What's the scope and depth of the current problem?
Nicole Gelinas: Right. The subway and the commuter rails are feeling the pandemic in the most acute way out of any government entity, just because they've lost so much of their riders. If you think about the MTA, which runs the subways, buses, Long Island Railroad Metro North to Westchester, they get basically half of their money from tax subsidies and half of their money from fares and tolls. Ridership is still down by 70%, and it's down consistently by 70%. I mean, we saw a little bit of a jump up in the early summer when the governor said people could go back to office work and could go back to stores and go back to visiting friends and relatives, but since then we've just plateaued. I mean, the subway ridership has not increased over the last couple of months. It's basically stuck at 30% of normal ridership, which means they're missing 70% of half of their revenues.
Now, the tax subsidies, they're down like 15, 20%, but they're not down as much as the fares, but until they get the ridership back they have very serious budget problems. They want more money from the federal government. They're likely to get some of it. They do want to make some budget cuts, but there is no indication that the governor would back up the kind of tough line they would need to take with the unions to get budget cuts that would actually make a difference. So for the moment, we're looking at big cuts in subway and bus service next year, and commuter rail, up to 40 to 50% cuts in service, which would just send us into an even harder recovery.
Because if you don't have the subway service there, people aren't going to want to come back to the city. I mean, you're not going to want to wait 20 minutes and pack onto an even more crowded train and pay a higher fare. So for the moment, either the federal government coming in and rescuing us or Cuomo actually getting the courage up to really take a hard stand with the unions, I mean, these are the only two options that the MTA is looking at before they have to make pretty big service cuts. And you yourself, Seth, have written about the subway system's other problem, which is rising violent crime.
Seth Barron: Yeah, and I would like to talk about that, but let me ask you a few more questions about the budget and the service cuts. Service cuts would mean like fewer trains?
Nicole Gelinas: Yeah. I mean the MTA, they have to present a balanced budget at their December board meeting, which makes sense because the year starts in January. So the board needs to know what does the budget look like? How are they balancing next year's budget? So, if there is no forthcoming federal aid in the next few weeks, they will present a balanced budget a couple of weeks before Christmas that will have significant cuts in service. Meaning yes, cuts to... sometimes they could cut a whole subway line. We saw that happen after the financial crisis where they got rid of the nine dream. They cut back a couple of bus lines too. So, they would look at low ridership bus lines and probably cut them back and also have bigger gaps between trains. So, if you're used to your train coming every two minutes, maybe your train would come every five minutes. Commuter rails, they've already cut back service.
I mean, a lot of days it more resembles a Sunday service than a regular service, but you could see things like fewer express trains, which they're already doing. So, to get from Northern Westchester into Manhattan can take you easily twice as long, even more, or more time in between trains. So, instead of half an hour waiting, you'd be waiting an hour, which of course, very difficult to entice people to come back to Manhattan right now if you're going to tell people you have to wait an hour if you miss your train home and you're going to be paying more for the same train ride because they're looking at fare hikes. It will be even harder to try to get people to come back to Manhattan for work or for fun.
Seth Barron: Now regarding the unions, the MTA, can they fire people if they don't have the money to pay them? I mean, that's usually acceptable, right, even with strict union contracts?
Nicole Gelinas: Yeah. Like most employers they can lay off people, particularly if you look at the railroad contracts. The two railroads, they have agreements with multiple crafts unions. They have different agreements with the people who maintain the trains, the people who conduct the trains, the operator of the train, the engineer, so each of these unions has a different contract with the MTA. Now, all of them have some provision for if there's a recession or an emergency, they can do layoffs. But, some of them say you have to give us a few weeks notice before the layoff, some of them require some severance, but it's all in the contracts. The problems are, they have to do it by seniority. So, you don't save as much as you could if you only just have to lay off the last person that you hired, and it doesn't change the rules that say you have to have a certain number of people on a train, or you have to have a certain number of people in a maintenance yard, or you only work so many hours in a day before you start making overtime pay.
So, all of those work rules still existing, but with fewer people, may not save you very much money. We really need a governor that would stand behind the MTA in favor of saying we have to open up these union contracts. By the way, these contracts go back to before the MTA existed when it was private railroads, the Penn Central Railroad back in the early 1970s that went bankrupt, partly because of these union contracts. If you look at some of the provisions, some of them date back to 1949 for things about how many vacation days you get and so forth. So, it's just time to open up these contracts and create modern contracts that allow us to maintain a higher level of service given a certain amount of budget cuts.
Seth Barron: In a related story, it's emerged that Midtown Manhattan office buildings are really not filling back up, that maybe they're at 15, 20% capacity. People just aren't coming back to work. Either companies have moved or they're just letting everyone work from home. To what extent does that impact the ridership question? I mean, what percentage of ridership is comprised of office workers?
Nicole Gelinas: Yeah, it's definitely chicken and egg. I mean, when you look at the commuter rail ridership, for example, it's down by more like 75% versus 70% because most of the people coming in are going to work. I mean, every single day, before the pandemic, four million people would come into Midtown Manhattan every day and go home at the end of the day, the vast majority of those people are coming into work. Then you have tourists make up a good portion of the daytime subway traffic. We don't have our foreign tourists right now. We don't even have most of our domestic tourists. So yes, I mean, office work and tourism are basically the two anchors of the Midtown economy. And people who maybe you don't have a white collar job, but you work at a retailer, you work at a restaurant, you work cleaning an office building, you work in security in an office building, all of those things depend on office workers and tourists being there.
If you're a hotel housekeeper and so forth, you're depending on the tourist market. So, both of those things are gone right now. I think there is pent up demand for tourism that when the borders open, when people feel safe flying around, people will want to come in, want to see a Broadway play again, want to get back to going to the opera, going to nightclubs, doing everything that's fun in the city. But I do think the white collar office force has a real problem. I don't think people are going to go back to a five day a week office week, which has huge implications for the value of real estate, and as you said, for the ridership on the MTA. One example of this is before the pandemic, about half of riders used monthly passes. Right now, only about a third of riders are using monthly passes. So, all of those people who used to come in every day, they're not coming in.
Seth Barron: And I gather they're thinking about doing away with the monthly pass.
Nicole Gelinas: Right, which I don't think is a good idea. I mean, we want these people to come back. It will be very difficult to get them to come back and maybe it won't work, but you don't want to send them away by saying if you do want to take the subway more than 40 times a month, then we're going to punish you by charging you for every extra ride after that.
Seth Barron: Regarding Midtown, the mayor recently made some comments that raised eyebrows. He sort of downplayed the importance of Midtown Manhattan to the city's economy and he indicated that he just didn't think Midtown Manhattan was the whole story. I mean, the way I look at it, that may be true that certain commercial strips, I don't know, in Brooklyn or the Bronx may be alive, but in terms of generating tax revenue, it's really not comparable is it? I mean, Midtown Manhattan and all the work that goes on there, it is sort of the engine of New York City's economy. No?
Nicole Gelinas: Yeah. This is where concentrated wealth is created. So, you have 150,000 jobs per square mile. These are the highest paying jobs really in the world. So, when the mayor says things are okay in the neighborhoods, that's superficially true. I mean, if you go to a wealthier neighborhood like Greenwich Village or Chelsea, things look pretty normal, people are eating out outside. The Chelsea Market is always full. I mean, they've moved it all outside, but there's always people around there. Upper East Side, you walk up and down Madison Avenue, there are certainly people eating outside, even in the cold weather. But then if you go to a poorer neighborhood, other than the fact that the murder rate is up 40% which is not a good thing, things seem kind of normal. I mean, people are still going out shopping for groceries, shopping for housewares and so forth. But that's for two reasons. People who have lost their jobs, which is predominantly poorer people... we're still missing 650,000 jobs in the city... they have benefited from extraordinary federal unemployment benefits.
When those benefits run out, and some of them already have, if they haven't found new jobs you're going to see much greater poverty come to these neighborhoods. In richer neighborhoods, the jobs are still tied to Midtown Manhattan. I mean, maybe you're working at home, but if you're a lawyer, a computer programmer, if you're in the fashion industry, theoretically your job is still located in Midtown Manhattan. If this goes on for another year, that will no longer be true. More and more people's leases are up and people will say, "What is the point of paying this high rent and being tied to Midtown when I'm no longer going there?" And the city would also lose those tax revenues. So, we're kind of like in a state of suspended animation. I mean, the city is still getting all of these tax revenues from these kind of ghost jobs right now.
Seth Barron: You mentioned crime before. And yeah, I wrote an article recently talking about the spate of subway pushings, of which there were three in just a week. You've tracked crime in the subways pretty closely for years, are pushings up?I mean, it certainly seems like it. I haven't looked at the historical data.
Nicole Gelinas: Yeah, pushings are up. They've had 16 pushings through the end of November when they would normally have less than that for the full calendar year. And we've also had six murders. We usually will have one or two murders on the subway system every year, which obviously it would be better to have none, but with ridership of almost 2 billion people it had come to a place where it would be harder to get it down below one or two. But now, with ridership a tiny fraction of what it was, we've now had three to four times the normal number of murders on the subway system. I mean, you would have to go back almost 30 years to see a year with six murders. But I would ask you, Seth, with the pushings, I mean, what would you say to people who say, "Well, there's no way of preventing that. I mean people, they just snap and they might push someone to the subway tracks. How could the city be responsible for that?"
Seth Barron: Well, I mean, it's true from a certain perspective. I mean, it is hard to prevent a crime like that at the moment, but a lot of the people who they've arrested for these crimes have a long history of involvement with the mental health complex, the hospitals, the criminal justice system. So typically, it's not like it's a shop clerk who just snaps one day and pushes someone in front of a train. These are people who've acted out in the past, who are maybe homeless, who have serious mental illness, their family has dealt with it for years and they've touched the city. The city has encountered them before, they're already in the system. So essentially, these people are known quantities. Now, in terms of what to do about people like that, I mean, New York does have a very robust legal apparatus for dealing with the seriously mentally ill, people who pose a possible danger to themselves or others.
In 1999, a woman, Kendra Webdale, was pushed in front of a train by a horribly sick schizophrenic man who had sought treatment and been denied it. So, New York state has a law called Kendra's Law. It's assisted outpatient therapy treatment where they can compel people to comply with a medical regimen, a psychiatric regimen, or else face confinement or commitment, and it's been shown to work. And it doesn't usually require actual commitment, just in a sense a stern talking to by a judge and the threat of commitment gets people to the state of compliance. But I think the release of a lot of people from prison, because there's a lot of sick people in prisons upstate, and also the jail system in the city, a lot of people have been released.
Thousands of people have been released to the streets, essentially straight to homeless shelters, and they don't have treatment. They don't have any help basically, and so you have people like that roaming around. Now, I don't know how many of the pushings are released prisoners, but it is an issue. So, here's something else that the city could be dealing with, but they've dropped the ball on it. I think it is a failure of policy.
Nicole Gelinas: Yeah, and people might say, "Well, you don't want a person who's mentally ill in jail," but the solution is not to just send them out on the streets with basically no way to help themselves.
Seth Barron: Yeah. I mean, everybody's familiar with the whole deinstitutionalization question since the 60s and 70s when they shut down large hospitals, they've moved away from this model of committing the mentally ill and the development of anti-psychotic medications and what they call trans-institutionalization, which is essentially localizing mental health treatment into the community. I mean, all of that's fine if it works, but there's massive gaps in the safety net, I suppose. So, people fall through the cracks and then there's just not enough psychiatric beds. The state has been closing them, getting rid of psychiatric beds in hospitals, so there's not that much room.
The person who was recently arrested for pushing someone in front of a train, fortunately they didn't die, I can't remember the person's name right off the top of my head, but his grandmother said that she would call the city information line 311 all the time and beg for help, and her grandson was hospitalized and released very quickly, and she asked the social worker if he could stay there and they said, "No, no, the hospital's not a hotel." Someone who's really sick like that, well, I mean if he's at a hospital, a mental hospital...
Nicole Gelinas: Yeah, and the person who was accused of killing his mother in an apartment over the past weekend, his other relative said they called repeatedly for psychiatric help and the last they heard they said they couldn't have a psychiatric bed ready until Monday. And it's like, well, if you're that desperate you can't wait until business hours to do these things.
Seth Barron: Right. And unfortunately, we've just seen Chirlane McCray, the mayor's wife, she's in charge of... basically she's the mental health czar of the city and she's in charge of setting the policy. I mean, maybe not executing it, but she's certainly setting the direction. I mean, she just put out a new white paper today about what to do and it's called A Path Forward: Mental Health and the United States Pandemic Response. And one of her main message points is we must eliminate inequities in mental health care access and outcomes, and use public policy as a vehicle for equity and racial justice. Well, that's all fine, but it doesn't do very much. It would address nothing about the actual problems of people who are grievously ill and threatening their family or strangers.
Nicole Gelinas: Yeah, and if you want to think about equity and inequality, wealthier people, if they or their children or their relatives have a mental health problem, they tend to go to mental health treatment or rehab in a secluded area. You have gardens, you can walk around, you have quiet space, you don't have people tempting you to buy drugs or alcohol. I mean, that's why these places tend to be in bucolic places down in the South and in the West. But here, we seem to think it's okay to just put people with serious addiction or mental health problems into a hotel room that's in the middle of a dense city where you still have all these temptations. I mean, if you have a drug addiction or an alcohol addiction, you just go downstairs and walk around on the streets and you have to have a lot of self-control not to succumb to these things.
So, we have this ideology that we have to put mentally ill people and addicted people into a dense urban environment because everyone has to get along and be tolerant, but maybe that's really not what people need at that time in their life. I mean, if you were a wealthy parent of an addicted teenager, you wouldn't say, "Well, I'm going to pay to let him stay in a hotel all by himself on the Upper West Side." I mean, that is not a mental health solution. I mean, the place to do this is in the more secluded parts of the city, including really rethinking the whole Rikers Island thing to have a place on Rikers Island that is not a jail, that has nothing to do with the criminal justice system, but is basically a place where people could tend to a farm or have some grounds to walk around and be away from these temptations.
Seth Barron: It's a radical idea, but it might be what we need. And maybe when we have a new mayor and a new administration, perhaps it'll be time to start rethinking the way we address these issues. Thanks for joining us on the podcast today, Nicole. I feel like we covered some pretty deep issues very trenchantly.
Nicole Gelinas: Thank you, Seth, likewise.
Seth Barron: You can find City Journal on Twitter @CityJournal and on Instagram @cityjournal_mi. As always, if you like what you heard on the podcast, give us a five-star rating on iTunes. Thanks for listening. And thanks, Nicole, for joining us.
Nicole Gelinas: Thank you, Seth.
Photo by Spencer Platt/Getty Images