The administration observes this principle when it suits Mayor Zohran Mamdani’s political needs. For instance, it touted the “unprecedented public transparency” of a new housing tracker. In September, City Hall released a trove of documents relating to air quality in Downtown Manhattan in the wake of 9/11.

“New Yorkers should welcome proactive disclosure,” my colleagues Cameron Macdonald and Santiago Vidal Calvo write. “But transparency is not limited to dashboards that City Hall chooses to publish. It also includes the calendars, communications, and facts informing decisions that the public chooses to examine.”

The Mayor’s Office’s arguably excessive delays (more on that below) in responding to basic record requests under the Freedom of Information Law insulate such decisions from timely public oversight. Which is why the Manhattan Institute is in court to make sure not just we, but the public at large can access public information in a timely manner.

But transparency is not just about documents.

When the mayor’s campaign promises of guaranteed rent freezes for the city’s rent-stabilized apartments shadow the Rent Guidelines Board — which did freeze said rents — there are valid questions about whether such an institution can operate independently or is acting on political mandates, especially since Mamdani appointed the majority of RGB members. (There’s another lawsuit, more below.)

There’s more.

One of the first decisions Mamdani made was to establish the Office of Mass Engagement, directed by the campaign’s former field director, that consolidates city outreach under an explicit organizing mandate. Perception is everything, and the kind of outreach the office engaged in from Rent Freeze hearings and tenant organizing, down to a table for the DSA, his political home, as just another nonprofit transit advocate at a bus resource fair — seems to muddle outreach and politics.

Mamdani’s first press conference was not with traditional media (though the mayor does find time to answer their questions), but creators and influencers, a practice the city has continued, including through Signal group chats that have brought up issues around record preservation.

The city argues the former have bigger reach. They may, but they are also less likely to scrutinize the administration. Since Signal messages were not preserved, we are unlikely to learn what conversations took place. The Signal group was formed out of the Creators4Zohran group that supported the mayor’s election campaign, Columbia Journalism Review reported.

Mayor Mamdani has shown no hesitation in using executive orders to force increased transparency on landlords and businesses. That makes his own office’s resistance to timely disclosure rather ironic.

Transparency Lawsuit

In order to keep the city accountable, the public needs access to information about what the city is doing in a timely manner, and it has the right to request such information under the Freedom of Information Law (FOIL).

MI is suing the city, again, this time over the Mayor’s Office delaying a response to a reasonable FOIL request in a reasonable time.

“Transparency is about timing as much as anything. When a controversy is in the making, records are what drive the reporting, oversight, and legislative debate,” Santiago Vidal Calvo and Cameron Macdonald argue. “To be told in January that a decision on a July request is coming is to have the news after the story has run its course and the officials have moved on. Put off disclosure until the civic moment is over and you have denied it in all but name.”

What triggered this lawsuit was such a six-month delay on MI’s request to see a list of meetings with people outside of the city government by Ana Maria Archila, commissioner of the Mayor’s Office for International Affairs.

Archila, as MI’s Adam Lehodey reported in July, had been planning to meet with Amir-Saeid Iravani, Iran’s ambassador to the United Nations, without Mayor Mamdani’s knowledge. The meeting was canceled once it became known, but prompted the question of who else had she met since taking office without the mayor’s knowledge?

While MI would like the court to order the city to provide information requested by us within 5 days, the case is asking the court more broadly “to enforce a modest rule: before City Hall makes a requester wait six months, it must have a request-specific reason for doing so,” Vidal Calvo and Macdonald write.

The Other Lawsuit: Rent Freeze Promise

The other lawsuit is over this year’s rent freeze which Mamdani explicitly promised during his electoral campaign, and then his appointed Rent Guidelines Board delivered.

The judge decided this week that he wanted to see what written communications the City Hall had with the board to come to a conclusion in the case. The rent freeze is currently set to take effect on October 1.

Why this case matters?

“If the courts don’t nullify the freeze, mayors will obtain de facto control over stabilized rent increases, despite statutory text and structure designed to insulate these decisions from political pressure,” Gandolfo DiFiore and MI’s John Ketcham write. “If successful, our legal challenge would not end rent stabilization or resolve the deeper issues with the HSTPA. It would, however, ensure that owners receive a fair process and prevent mayors from co-opting an independent body for political gain.”

Fixing NYC’s Tech Isn’t an IT Problem — It’s an Operations Problem

New York City has a long track record of spending millions of dollars on tech initiatives like the MyCity app that fail to deliver on their promise. Most recently, the mayor has deployed Public Interest Technology (PIT) Crews to fulfill his tech promises.

But simply hiring more developers or giving large contracts to vendors won’t ensure meaningful digital service will be delivered on time and on budget, MI’s Brittany Montgomery writes in Vital City.

The solutions to those challenges are operational, and without changing how the city hires, buys and budgets for these investments, even the most ambitious projects will fail to deliver.

The city should move from “waterfall” to “Agile” procurement, which is three times more successful at delivering projects as promised, stop treating tech investments as capital expenses they once primarily were and rethink how it buys technology as a service, she recommends.

And it needs to rethink its diversity requirements.

“The City’s current approach to procurement makes this way of working difficult, if not impossible. Local Law 2019/174 specifies percentage goals of total annual agency expenditure for six classes of minority-owned businesses, adding up to 73.52% of total spend for professional service contracts,” Montgomery writes. “In my experience, procurement officers apply all or most of these percentage goals across all contracts. Requiring blanket target participation rates on a single Scrum team would imply a minimum of six distinct companies supplying staff for a four-person team — a certain (and nonsensical) recipe for failure.”

Read more.

Issue Brief: How New York City Can Use AI to Improve Quality of Life

While national debate surrounding artificial intelligence often focuses on abstract risks, New York City has a concrete opportunity to use AI to improve daily life for residents.

In a new issue brief, MI’s Josh Appel outlines how Large Language Models (LLMs) can transform municipal governance—building on historic NYC data innovations like CompStat, FireCast, and 311—to synthesize data across city agencies, and how, by leveraging LLMs to analyze multi-agency data in real time, NYC can shift from troubleshooting to addressing emerging issues before they impact residents’ quality of life.

On Keeping Race Out of Student Discipline

New guidance on compliance with Title VI of the Civil Rights Act of 1964 from the U.S. Department of Education’s Office for Civil Rights charges schools with two “fundamental duties”: maintain safe, orderly learning environments and eliminate racial discrimination in disciplinary enforcement.

This is the right approach. By focusing on basic fairness rather than over- or under-disciplining students to align with racial metrics, schools can work on applying behavioral science and addressing the root causes of misbehavior rather than managing public relations metrics, MI’s Jennifer Weber writes in City Journal.

“Schools need to be willing to do more than just count suspensions, assign labels to behavior, and refer students elsewhere for help. Teachers and administrators must be willing to examine their own behavior, too,” she argues. “They must teach expectations, identify missing academic or behavioral skills, respond consistently, and track whether the student improves. The measure of a discipline system should be whether students’ behavior—and their lives—actually get better.”

Read more.

More on Education

• The state moved ahead in the process to eliminate passing Regents as a high school graduation requirement. The results of this test were not meaningful, MI’s Ray Domanico told The Post, but “[t]here has to be a meaningful way to determine if students are meeting expectations. They have to come out of high school prepared.” Officials are yet to share how they plan to ensure that the proposed “portrait of a graduate” paints an accurate picture of a graduate’s skills across the competencies to be judged, like critical thinking.

• Councilmembers make new push to improve diversity at NYC specialized high schools (Gothamist)

• 1 in 3 NYC students were chronically absent from school last year, missing 10% or more of school days. This number hasn’t budged and remains higher than pre-pandemic, Chalkbeat reports. As my colleague Danyela Souza Egorov and I have written, such absences, which start as early as kindergarten, for many students compound over years into significant learning loss.

• Gov. Hochul is under pressure from unions and civil rights leaders to “Opt Out” from a federal tax-credit scholarship program, Chalkbeat reports. The governor is firm in her resolve — opting in will benefit all children and takes no money away from public schools. MI’s Ray Domanico agrees, Gov. Hochul is right to stay the course.

Extra! Extra!

• Park Avenue redesign moves ahead, city plans leafy walkway and 2-way bike lane (Gothamist)

• You’re Joining a Union — Whether You Want to Or Not (City Journal)

• How’s Mamdani Doing? Mayor Releases Mixed City Scorecard (The City Reporter)

• ‘Off a Cliff’: AI Devours Entry-Level Tech Jobs, As Experienced Workers Hold On (The City Reporter)

• NYPD expects daily UN General Assembly protests as NYC street closures begin (Gothamist)

• More EV charging (with future implications for curb management) and testing bus stop roof gardens coming to Brooklyn, and Tesla starts testing driverless cars in the city.

• What The Dickens? DOT’s Final Truck Route Map Is A Tale Of Two Cities (Streetsblog)

On 9/11, I was not yet a New Yorker, nor did I know I ever would be.

I vividly remember the morning; I was a foreign visitor in D.C. on a work trip. Along with millions of others, I watched in horror the second plane hit the South Tower on live television. But I experienced it as an outsider, not as a New Yorker and not as an American.

I remember sitting that night alone in a hotel room thinking about what was likely to happen next in the rest of the world. 9/11 was a horrific, foreign tragedy, and yet it was personal, for it was crystal clear it was about to affect all of us.

I moved to New York a year later, one of the more than 3 million New Yorkers — almost 40% of the city’s residents — who are foreign-born. Millions have moved through the city since the terrorist attack, and more than half of New York’s foreign-born residents in 2023 had arrived in the country after 2000.

When they came, they brought with them, as I did, a very different, global perspective on what 9/11 meant.

Our lives were shaped by the event elsewhere, in ways that other New Yorkers may not understand. We come carrying memories that were not formed here, into a place that was defined by the event. We live in a city shaped by its reaction to it, but we know no different life here than the one we arrived into. We belong to a different New York than those who were here before.

As Harry Siegel writes, more than three-quarters of today’s residents were not here on 9/11. People are born, die, come and leave. The city creates institutional memory — surveillance, safeguards, procedures, etc. — but, as Nicole Gelinas observed, life in the city went back to normal, if a new normal, remarkably quickly. The event shattered many lives, but the city survived.

The attacks on 9/11 changed the world; they were a watershed moment in New York, American and global experience. It’s also the defining day of the calendar in New York City: a day of remembrance that’s individually and communally brutally all of ours.

More:

• September 11 and the Loss of Certainty by City Journal’s Johnathan Clarke

• The Resilient City by MI’s Nicole Gelinas

• What murals tell us about 9/11 (NYT)

• A City Forgets. Maybe It’s Supposed To. (Vital City)

• The First Rough Draft of 9/11 History (Free Press)

• After 9/11, Documents Suggest, New Yorkers Were Misled About Air Quality (NYT)

And now to the rest of New York’s news.

Back to School

The first day of school for public school students was yesterday, September 10, which was also the launch date for the city’s new free, universal childcare program for 2-year-olds.

The launch was mired in payment controversies and the sudden departure of the head of the program at the Department of Education just weeks before launch. Not every parent was pleased with their assigned, mostly home-based childcare providers, choosing to keep the children in their existing daycare settings.

As for the city’s overall school system, enrollment keeps going down. According to late-August data, the city enrolled almost 22,000 fewer kids last school year than the year before, and total enrollment in the city’s traditional K-12 public schools fell below 790,000 from almost a million just a decade ago. Data for this school year will be collected in October.

Related:

• NYC teachers were promised $8,500 bonuses for large class sizes. The details are murky. (Chalkbeat)

• Mamdani’s top task to fix NYC schools: make kids show up (MI’s Danyela Souza Egorov and John Ketcham in the Post)

• Education needs reform: the latest Gallup poll shows a rapidly falling satisfaction with the quality of education our schoolchildren are getting.

Housing News

In Why We Are Taking Mamdani’s Rent Freeze to Court, MI’s John Ketcham and property owner Gandolfo DiFiore explain their thinking and why MI is providing financial support and recently filed an amicus curiae brief in the case.

“We did so because we believe Mamdani’s repeated promise to freeze rents prejudged a decision that by law belongs to an independent Rent Guidelines Board (RGB),” they write, hoping the outcome of the case would result in a fairer process, one that includes the board justifying its decisions with a rationale.

“If the courts don’t nullify the freeze, mayors will obtain de facto control over stabilized rent increases, despite statutory text and structure designed to insulate these decisions from political pressure,” they write. “Rent freezes will become standard campaign promises, threatening the existence of privately owned, rent-regulated housing.”

Other:

• The City Council confirmed Mayor Mamdani’s appointee John Mangin to the city’s five-member Board of Standards and Appeals after all. The position will allow him to weigh in on approving changes and overriding council objections to certain kinds of housing developments. MI’s Eric Kober and John Ketcham argued last month that Mangin is certainly “qualified to carry out the policies that the city has already chosen,” and that this was the wrong fight for the city council to pick when it came to housing.

• Over 2,000 NYC buildings could be subject to the Community Opportunity to Purchase Act (COPA), which gives city-approved nonprofits and joint ventures the first opportunity to buy distressed rental buildings, Crain’s reports. MI’s John Ketcham was blunt when he wrote about COPA earlier: “COPA is an attack on fundamental private property rights that will exacerbate the city’s housing crisis merely to benefit nonprofit allies of the City’s progressive leadership.” The revised and reintroduced bill is moving through council hearings.

Worker Power

• “As Mamdani lauds ‘worker power,’ unions for NYC employees get a cooler reception,” Gothamist reports. When Mamdani announced the new Office of Worker Power, “he was flanked by hotel workers, Amazon delivery drivers, and home health aides as he signed the executive order. Teachers, firefighters and sanitation workers were noticeably absent.”

• Ahead of Labor Day, I wrote about Mamdani’s Shadow Workforce — the 80,000 or so non-profit workers who deliver the city’s services under city contracts and who are increasingly unionizing, in part as a result of the city’s poor contracting practices. Read MI’s Stephen Eide’s piece on Mamdani’s NGO Model Army to understand how we got here.

Extra! Extra!

• Gothamist took an in-depth look at the city’s vast private surveillance network.

• MTA Flips the Switch from Electric Buses Back to Natural Gas, The City Reporter reports, with officials pointing to challenges in the electric bus industry.

• Grocers file antitrust suit to block Mamdami admin’s plan for NYC-owned supermarkets: ‘Predatory pricing’ (New York Post)

• Can you air-condition a city? (Bloomberg City Lab)

• Quality of Life Comes at a Cost: The most desirable cities are the least affordable (Aziz Sunderji)

Will The Politics of Affordability Undo The Nonprofit Human Service Provision?

This Labor Day, local politicians will once again extol their support for working New Yorkers, standing shoulder to shoulder with the city’s unions. Staunchly pro-labor Mayor Zohran Mamdani will be there and may point to his support for the Delivery Protection Act, which would prohibit operators of last-mile facilities from contracting out their core warehouse and delivery work.

The bill is principally aimed at Amazon’s Delivery Service Partner model and would require companies operating these facilities to employ workers directly.

Mamdani argues that a company should not control working conditions while outsourcing responsibility for workers.

But the Mayor is also management now. And before he targets private sector contracting practices, he might want to look inward: New York City itself relies on a vast contracted workforce to deliver essential public services, and does a notoriously bad job paying and managing those contracts.

More than 80,000 employees of nonprofit organizations provide human services under New York City contracts, staffing shelters and senior centers, representing indigent defendants, and operating foster-care and after-school programs, among others.

There are good reasons to contract out work: it allows the city to potentially offer better service more efficiently, and these nonprofits tend to possess the knowledge, agility, and specialization that the city may not. But those advantages depend on the providers being able to operate independently and compete with one another.

That is, often, not how it works.

The New York City style of outsourced government means that city agencies are the main purchaser, with enormous leverage over price and contract terms. Yet it also cannot credibly allow many providers to fail and let services stop. So, the city preserves incumbents and outdated contract terms rather than risk disruption, especially when it comes to serving “vulnerable populations.”

Human services account for 87% of the city’s negotiated contract extensions since 2010. Over time, some providers become too big, too specialized, or simply too embedded to replace, and repeated extensions in turn weaken both competition and the pressure to innovate.

Incumbency can be mutually convenient—the city likes familiar providers, providers like guaranteed contracts.

But providers and workers alike bear the costs of this system.

Bureaucratic rules result in slow contract processing and notoriously late payments, effectively limiting competition to those nonprofits who can fund operations while waiting for the city to pay and know how to navigate the bidding process.

A 2025 review of payment delays for the city’s human services by the comptroller found roughly 4,000 unpaid nonprofit invoices worth $861 million. At seven of the eight agencies examined, providers waited more than 200 days on average from the official start of a contract to receive their first payment.

To help meet their contract obligations, providers often borrow to make payroll, leave positions vacant, and ask existing employees to do more.

Meanwhile, the city micromanages away the flexibility that was a reason to outsource work in the first place. Micromanaged budgets make it difficult for providers to respond to changing market conditions: moving money into payroll may require city approval that can further delay payments. Stagnant wages have led to high turnover and high vacancies.

It is hardly surprising that workers have turned to unions.

Nonprofit human-services employees earn an estimated 25 to 30 percent less than city workers in comparable jobs. This summer, employees of Bronx Defenders, a legal aid organization, staged an 11-day strike over compensation. Such negotiations are effectively three-sided: workers bargain with the nonprofit, but City Hall largely controls the money available for a settlement.

In response to this precarity, the City Council has introduced legislation (Int. 0452) that would establish a “required wage” for contracted human services providers tied to comparable city employment. #justpay, a coalition of nonprofit human services providers and workers, unions and advocates, has made passing this bill a priority.

What’s really happening here is that the city’s own contracting failures are pushing the system toward public-sector wage structure.

In a better-managed system, competitive compensation would not necessarily mean matching municipal salaries, benefits, and collective-bargaining increases—many of which are inflated by the political power of public-sector unions. By one estimate, salary parity would cost the city between $965 million and $1.35 billion annually. Replicating the full municipal compensation would risk turning nominally independent providers into a shadow civil service.

The reasons to outsource this work were and remain good ones.

Nonprofits often possess expertise and community relationships that government agencies lack; outsourcing should give them operational flexibility, and competition may produce better services at lower cost.

But if New York wants outsourcing to deliver on its promise, it needs to start by reforming its contracting practices so providers are able to operate as independent contractors: pay them on time, give them operational discretion, and rates that allow them to compete for labor. The city also needs to ensure there is enough competition so that incumbency does not become an entitlement, and capable challengers have a genuine chance to enter.

And, as MI’s Josh Appel argues, it should judge providers by service quality, not their ability to finance the city’s late payments or master its paperwork.

Mamdani’s NGO Model Army

The contracting system has also affected the city’s political landscape.

The administrative choice to shift provision of New York’s social-services from unionized city employees to a large, lower-paid nonprofit workforce has had political consequences no one fully appreciated until last year, when Zohran Mamdani won a campaign powered by tens of thousands of young, ideologically motivated volunteers.

Read Stephen Eide’s brilliant piece on Mamdani’s NGO Model Army to understand how we got here.

Related: What Role Should Nonprofits Play in Cities? (Vital City)

More from MI:

New Brief: The Mediocre State of New York State Schools

New York “spends more per pupil than any other state, pays among the highest teacher salaries, maintains some of the most rigorous teacher certification requirements, and identifies a larger share of students with disabilities than nearly every other state,” MI’s Jennifer Weber, Carolyn D. Gorman, and Ray Domanico write in a new report. Yet student outcomes remain mediocre.

They point to a governance system, led by the Board of Regents and the State Education Department, “that makes no-one truly responsible for results” as the root cause of this failure and recommend that the state measure what works and use evidence to guide policy and classroom decisions.

Full brief here.

Rethinking NGO Procurement Through Performance-Based Models

This winter policy analyst Josh Appel looked at New York City’s nonprofit procurement process and found that the current reimbursement-based model provides few incentives for cost control or performance.

Transitioning to a performance-based model “will reduce administrative burden on the front end while incentivizing improved outcomes and lower spending,” he writes, acknowledging that “the challenge will be finding the best metric to measure “performance” across the categories of nonprofit work. But certainly, even while operating the cost-based model, we should be able to measure success to some extent even if it is not a prominent factor in procurement today.”

Full brief here.

Extra! Extra!

• Mamdani’s mixed signals on use of Signal. (The City Reporter)

• Inside Mamdani’s Private Army of Public Influencers. (The New York Times)

• Should NYC Have Open Primaries? Hellgate is curious why “Mayor Mamdani now opposes an election reform that would allow 1.1 million independent voters—people currently shut out of a major part of the democratic process—to vote in City primary elections.” MI’s John Ketcham thinks we should have open primaries.

• Recent Trends in Personal Income & Wage Inequality — a report released this week by the city comptroller finds that New York today is more unequal than it was before the pandemic, however, “most of the increase in income concentration, in recent years, appears to have been driven by business and investment income, reflecting wealth inequality, and also by bonus incentive pay. Base wages and salaries do not appear to be the culprit—as looking at them alone suggests, paradoxically, that workers in lower-wage occupation have generally seen faster income growth than workers in higher-wage fields.”

• Rules surrounding the new street vending licenses are murky (The City Reporter).

• The city announced a one-year moratorium on AI for students in 2-K through eighth grade. To understand why that is a step in the right direction, read MI’s Jennifer Weber’s brief.

From street-corner cameras to high-flying drones and license plate readers, the eye of government is getting harder to escape in New York. In today’s round-up, we weigh the evidence on whether ALPRs actually deter crime, look at the NYPD’s latest public housing lawsuit, and break down key updates on city labor battles, fiscal policy, and Wall Street earnings.

Are ALPRs Worth It?

CCTV cameras capture you passing by, the NYPD watches over many street corners and from the sky, dispatching drones to evaluate 911 calls and monitor large gatherings, as well as using license plate readers to find vehicles of interest, all fed into its Domain Awareness System.

On August 26, U.S. Senator Josh Hawley (R-Mo.), Chairman of the Judiciary Subcommittee on Crime and Counterterrorism, launched an investigation into Flock Safety’s AI-powered network of thousands of cameras across the country.

Writing in defense of automatic license-plate readers (ALPR), some of which are produced by Flock, and AI surveillance in The Atlantic, MI’s Charles Fain Lehman notes that cameras in general are known to reduce crime. Do ALPRs work? There is little research, but one recent report found they resulted in an 11% drop in vehicle theft.

There has been legitimate pushback against such cameras from both the right and the left over systematic surveillance by the government and the potential for abuse of such powers. But we should not dismiss ALPRs reflexively, Lehman argues.

He points to research that cameras in Medellin, Colombia, reduced crime by about 19%. Subway stations in Stockholm, Sweden, saw a 25% reduction in crime after cameras were installed, and similarly, crime fell 20% in areas with cameras in Montevideo, Uruguay.

“Cameras help police catch criminals,” he writes. “That reduces crime through two channels: incapacitating offenders who are caught and convicted, and increasing the certainty of apprehension, which theoretically should deter criminals from offending in the first place.” Appropriately regulated, such cameras have the potential to “make the criminal-justice system both fairer and less punitive.”

Cato Institute’s Mike Fox pushes back on Lehman’s piece, quoting Benjamin Franklin: “Those who would give up essential liberty to purchase a little temporary safety deserve neither liberty nor safety.”

“Flock is merely one piece of a vastly expanding surveillance state,” he writes. “The company’s potential downfall should not be blamed on legislation targeting ALPRs specifically but through the firm enforcement of the Fourth Amendment itself.”

Related:

• Two of the city’s public housing (NYCHA) tenant associations are suing the city over privacy concerns from NYPDs direct, real-time access to nearly 20,000 public housing cameras, NY Focus reports. The footage goes straight to the NYPD’s Domain Awareness System to support the NYPD’s “predictive policing” approach.

Crime Data & Reality

Murders and shootings are down mid-year, and while the rest of the seven major crimes are also down, overall major crimes remain 25% higher than in 2019. Felony assaults have increased for 6 straight years and are now 48% higher than in 2019.

“Criminologists have for years generally viewed homicides as one of the most reliable markers of general crime trends because they tend to have the highest reporting rates. They also constitute a category that is relatively difficult to manipulate,” MI’s Rafael Mangual writes. “But in New York’s case, homicides have diverged from many of the other crime categories tracked by the city, which over the last several years have not declined at nearly the same rate, if at all.”

Despite progress, the city was not yet at pre-pandemic crime levels at the end of 2025.

Related:

• The State of Crime in New York City, Midyear 2026: The Detailed Picture — Vital City.

• Where Do Voters Turn When Crime Goes Up? Apparently, Nowhere in Particular, MI’s Robert VerBruggen writes.

Unions and Fear of Being “LaSalled”

Mamdani is right to take on the City Council over paraprofessional pay, MI’s Ken Girardin explains. Such payment should be part of collective bargaining under the 1967 Taylor Law, and a ruling against the mayor would embolden public-sector unions to make similar deals with lawmakers outside of contract negotiations.

“The fight between the city council and Mamdani will be compelling because of the extent to which the unions have gone in attacking the independence of the state’s judicial system,” Girardin writes, referring to the union-led campaign three years ago to derail Hochul’s nominee Hector LaSalle. “The UFT seems to be betting that judges, at least at the trial level, will fear getting ‘LaSalled’ if they question the legality of what the union and its proxies are attempting.”

Read more.

More from MI

• Nicole Gelinas on NYC Austerity. What do we mean when we talk about austerity in New York? In a must-read piece in City Journal, Gelinas dives into the city’s history and looks at what Mamdani’s narrative is likely to mean in practice. “Though politically useful, Mamdani’s attacks on austerity may only hasten its return,” she notes. “Regardless, then, of how New York’s mayor or other political leaders talk about austerity, the real question is how long governments can keep avoiding it. After decades of rising debt and expanding budgets—and financial markets willing to absorb both—fiscal restraint has been the exception rather than the rule. The uncertainty is not whether austerity will return—but when.”

• John Ketcham on Urban Density. “Whether greater density yields shared prosperity or urban dysfunction depends on whether public and private institutions can channel the concentration of humanity into productivity rather than cacophony,” Ketcham writes in City Journal. “The denser the city, the more capable its government must be to address its disadvantages.”

• Christian Browne on Mamdani vs. Amazon. “The city council has no general power to ban employment contracts or to dictate the labor arrangements between last-mile operators and their workers,” Christian Browne writes. “The New York State Labor Law governs employment matters throughout the state.”

Extra! Extra!

• Comptroller’s monthly economic snapshot of the city’s health notes that Wall Street firm profits reached $24.8 billion, boosting corporate tax payments that surpassed New York City’s full-year Financial Plan profit projection in just six months.

• Mamdani has assembled his Business Advisory Council, to be announced imminently, the New York Times writes.

• The number of millionaires in New York is virtually unchanged, according to the latest income tax data from the IRS, MI’s E.J. McMahon writes.

• Economic gain from the 2026 FIFA World Cup for the region: $3.5 billion, a report from Gov. Hochul says.

• Grocers sue the city over Mamdani’s city-owned supermarket plan, claiming such stores would be unfair competition, NY Post reports.

• REBNY second quarter real estate report shows that condo construction is down.

• Mamdani’s pied-à-terre tax rollout has been a mess, but it has cost Mamdani nothing in terms of support from his political base, MI’s Daniel Rosen writes.

• Students want to be in the city, and universities are hiring, the City Reporter reports.

The Free Press

Are Americans Losing Faith in Capitalism? We Asked Them.

Welcome back to The Honesty Project, a series of opinion surveys from The Free Press. We’re asking Americans what they believe about the most important issues in public life. And we’re going deeper than a typical poll…

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25 days ago · 20 likes · 223 comments · Mene Ukueberuwa

Mamdani Sets Ambitious Housing Goal

A draft “Fair Housing Growth Strategy” released by the Mamdani Administration this week sets the goal of producing 700,000 units over 10 years to relieve the housing crisis. It also sets out five-year, non-binding housing goals by community district, sketching out the outer borough past low-growth neighborhoods expected to see the highest growth, while avoiding specifics of how it plans to get there.

“The maps comparing high- and low-growth areas have a lot of overlap with the maps depicting areas that supported Mamdani and those voting for his principal challenger, Andrew Cuomo, in the 2025 mayoral election,” MI’s Eric Kober observes. Mamdani owes little to the low-growth areas, and has the powers to facilitate much more housing development.

“What’s needed is clarity from the administration on where and how it intends to utilize the mayor’s new land use powers. It is probably unrealistic to expect council endorsement of these plans, but there needs to be enough of a working understanding with a majority on the council so that city government can continue to function, even with continual bickering,” Kober concludes. “Until that happens, the council will continue to lash out, as with the Mangin nomination – and the tools that can get the city closer to meeting its housing needs will fail to fulfill their potential.”

Read more

Related: Another housing fight the city doesn’t need is over John Mangin’s confirmation to the Board of Standards and Appeals. “The BSA needs a chair who understands New York’s complicated land-use rules and will exercise good judgment in applying the law,” MI’s Eric Kober and John Ketcham write of Mamdani’s nominee in City Journal. “Mangin is a strong fit on both counts.”

The Trouble With Bonuses

The City Council unanimously passed the RESPECT Check Act, requiring the city to pay up to $10,000 in “workforce stabilization payments” to paraprofessionals employed by the city’s Department of Education. The council argues that a starting salary of $33,000 leads to vacancies, which contributes to the high cost of Carter cases.

The mayor let the legislation become law this week and instead opted to sue the council, even though he had promised to support the payments during his election campaign. The administration is arguing that the council’s move circumvents conventional labor bargaining and would open the door to similar fights in the future.

"The mayor is taking up an important fight, the outcome of which will have enormous implications for the city,” MI’s Ken Girardin explains. “The Council has essentially told the city's public employee unions that they can get goodies outside the give-and-take of the bargaining process, where mayors weigh costs and tradeoffs. Why should a union agree to efficiencies or other reforms in exchange for raises? Why should they eat vegetables when the Council they helped elect is handing out dessert?"

In fiscal year 2025, the city spent $1.3 billion on Carter cases, where it pays for special needs children to receive education the city cannot provide in private settings, something that needs to be reined in, MI’s Jennifer Weber writes, by bringing more special education services into the public school system.

The Moving Dividend

Just what is the premium we are willing to pay to live where we want to?

MI’s Daniel Martino has created an interactive tool that allows anyone to examine hypothetical moves to see roughly just how much more (or less) in taxes they may be paying by moving from one metropolitan area to another.

“My new income tax tool shows that not only the rich, but also low- and middle-income Americans, have a lot to gain from moving across state lines,” he writes. “If Democratic-controlled states do not keep tax rates in line with those in Republican-controlled states, the middle class in those states might begin to flee as fast as the rich.”

Check it out

Related: Escape from New York may not be easy.

The Bigger Apple Podcast: Why Small Classes Won’t Save Our Schools

On the latest episode of The Bigger Apple, Nicole Gelinas and I talked with education policy expert and MI fellow Jennifer Weber about the history of school choice, the limits of small schools and small classes, and reforms that could help the city improve its schools. Listen to the episode wherever you get your podcasts.

Sweden Doesn’t Mandate Childcare Ratios. Why Does America?

“Child-to-staff requirements in daycares raise costs without delivering clear benefits,” Chelsea Olivia Follett, a Research Fellow at the Cato Institute’s Center for Global Liberty and Prosperity, writes in City Journal.

All U.S. states have such mandates. But Sweden, often looked to as an example of universal childcare, does not regulate staffing ratios for preschools serving 1- to 5-year-olds, proving that “the choice isn’t between mandates and bad care,” she writes. “Sweden’s approach asks policymakers to place their confidence in childcare professionals and families instead of micromanaging these arrangements. If Sweden can trust parents and providers to deliver quality care, so can we.”

Related: Center for New York City’s modeling estimates that Mamdani may need $5 billion more each year, for a total of $9 billion, to provide the kind of universal childcare the city envisions, largely due to expected higher wage costs. Full report here or you can read the writeup in the New York Times.

More from MI:

• The Hidden Costs of Affordable-Housing Mandates

  “Inclusionary zoning can reduce construction and raise rents. Some cities are starting to rethink it,” Shawn Regan writes in City Journal. “Last month, San Francisco sharply scaled its program back, cutting the requirement from 15 percent of units to 5 percent across much of the city and exempting projects with fewer than 25 units altogether. The retreat comes as new research finds that inclusionary zoning comes with a steep hidden price: fewer homes, higher rents, and costs far greater than other affordable-housing programs.”

• New York’s Resource Curse

  New York suffers from a municipal “resource curse”— “a condition in which abundant revenues weaken the pressure to spend wisely and govern efficiently,” MI’s John Ketcham writes, but “Mamdani’s reluctance to pursue genuine reform creates political openings for Hochul and Menin.”

  Gov. Hochul and Speaker Menin can help break the curse by controlling the state’s costs, resisting the council’s move to expand the CityFHEPS housing-assistance program, which has ballooned from $25 million to $2 billion in just 7 years, and pushing for an overhaul of the city’s property tax system.

Safety vs. Labor Unions

“In Democratic jurisdictions, a coalition of labor unions, anti-tech activists, and politicians have kept driverless vehicles off the streets,” Rogé Karma writes in Atlantic, California being a notable exception. “They argue that the new technology would make the roads more dangerous and throw millions of human drivers out of work, all to enrich a handful of tech oligarchs.”

But when it comes to Waymo, data seems to prove them wrong on safety, and how to reconcile the benefits to many with the costs to the few is up for debate.

“Democrats’ main job in blue states and cities with robust mass-transit networks is not to protect driver jobs, but to make sure that we don’t have a repeat of the Uber and Lyft price wars,” MI’s Nicole Gelinas says. “That is, any movement from the transit system to a low-occupancy car, whether driverless or not, is an urban failure.”

Related:

• How To Make Driverless Ride-Hail Work in New York (Vital City)

• The Bigger Apple Podcast episode with Sam “Gridlock Sam” Schwartz on autonomous vehicles from earlier this year.

• Four Bad Arguments Against Self-Driving Taxis

• In a new-ish report, Hunter College and Open Plans, a street advocacy group, looked at what lessons New York should take from California when it comes to autonomous vehicles. (When it came to safety, they got their numbers wrong and had to retract that section of the report.)

Extra! Extra!

• DSA leader Gustavo Gordillo has it good in NYC, while lefty wunderkind Morris Katz struggles to pay $6,500 a month rent? (New York Post)

• Mamdani’s ‘Bro’ Culture in City Hall (The New York Times)

• This Preliminary Mayor’s Management Report provides a baseline for judging Mamdani’s performance.

• Congestion pricing did not improve air quality, city report finds. (Gothamist)

• More Subsidies for Groceries? The city is considering tax abatements and zoning benefits for grocers competing with city stores, Dan Rivoli reported for NY1.

• Newark’s food pantries look more like grocery stores. (Gothamist)

• Here’s how grocery prices work. (Vital City)

• For the first time in 100 years, a river otter has been spotted along the Bronx River (Gothamist)

• One to watch: A grassroots campaign called “Serve NYC, Afford NYC” is organizing around $30-per-hour minimum wage and 6.5% annual raises ahead of DC37 contract negotiations, which would have serious implications for the budget. Mamdani campaigned on a $30-per-hour minimum wage and DC 37 endorsed him before the primary.

The late-summer housing news is a new report from NYC Mayor Zohran Mamdani’s administration, setting a very ambitious goal of producing 700,000 new housing units over a decade to remediate the city’s severe housing supply shortage. The report, a draft “Fair Housing Growth Strategy” required by a 2023 local law, also sets out five-year housing goals by community district.

The targets are non-binding, and the report discusses the path to achieving those goals only in general terms, avoiding discussion of specific locations for new housing or the changes in zoning and other regulations necessary to achieve so many new units.

As a point of comparison, in the first six months of 2026, following significant pro-housing zoning changes enacted in the term of Mamdani’s predecessor, Eric Adams, New York City issued building permits for 14,714 new housing units, or just under 30,000 on an annualized basis. That’s a strong pace for the city by recent historical standards, but only a fraction of the annual average NYC would need to hit the target of 700,000 over ten years.

New York City did exceed 70,000 new units permitted in 2022, but that was a consequence of the expiration of the Section 421-a real estate tax exemption program; many years’ construction was brought forward to vest tax benefits.

NYC has long found that the best way to boost housing production is to take benefits away from housing developers. Unfortunately, such boosts are temporary, and housing production subsequently plummets. The prior 421-a expiration, in 2015, also led to a burst in permits, exceeding 60,000 in that year. Going further back in time, the “grace period” in which developments with permits under the pre-1961 zoning could complete construction after the far more restrictive 1961 zoning went into effect also supercharged housing construction.

To get 70,000 new units a year permitted consistently for a decade, or even a large increment over current production, would require that the city maintain a welcoming environment for investment in new housing, rather than periodically offering the last chance to build at a profit for years to come. We are far from that goal.

The Politics of Zoning

The main culprit is zoning. Back in 1961, with the city in decline and the suburbs booming, NYC instituted an entirely new Zoning Resolution. Based on a pessimistic view of the city’s future, the 1961 zoning allowed far less housing growth than the old zoning it replaced.

When the city’s economy recovered from the fiscal crisis of the 1970’s and the population began growing to new record levels, the 1961 zoning proved woefully inadequate. City planners have tried, with some success, to build the political consensus necessary to change the rules to allow more housing growth. Nonetheless, the draft fair housing strategy report indicates that on a community district basis, housing growth is strikingly uneven. As shown in the graphic below, “low growth” areas are found around the periphery of the city, as well as in some affluent parts of Manhattan.

The maps comparing high- and low-growth areas have a lot of overlap with the maps depicting areas that supported Mamdani and those voting for his principal challenger, Andrew Cuomo, in the 2025 mayoral election. Mamdani drew his support mostly from high-growth areas; that growth had produced changes to the demographic composition of the city’s electorate that worked in his favor, in particular the influx of college-educated young adults to growing areas in northern Brooklyn and western Queens.

Mamdani’s lack of political support in many low-growth areas combines with 2025 amendments to the City Charter to give him an opportunity to facilitate large amounts of housing growth.

By October 1, the Department of City Planning will designate the twelve community districts where the “Affordable Housing Fast Track,” a truncated zoning approval process cutting out the City Council, will apply for zoning changes facilitating mixed-income housing.

The designation is based on recent relative levels of affordable housing production, not overall housing production. However, an analysis using preliminary data by NYU’s Furman Center found that the likely qualifying community districts are, except for Manhattan Community District 5 south of Central Park, also low-growth areas using the city’s criteria (see map below).

The Affordable Housing Fast Track means that, in the low-density districts, the administration could effectuate, very quickly, zoning changes that could substantially change land use and result in significant increments of new housing. It would be harder in the Manhattan community districts; these areas are already dense, and there are few potential development sites. Building more mixed-income housing would require other changes that are not likely given current politics.

But the Affordable Housing Fast Track is not the only pro-housing-growth charter change.

In other community districts with low-density zoning, the city can apply a similar fast-track process, also cutting out the city council, to allow new housing up to four stories in height. There is also, throughout the city, a Fast Track Zoning Action where the Board of Standards and Appeals (BSA) can grant zoning modifications for 100 percent affordable housing, also without need for the council’s approval.

The combination of a mayor with substantial housing-construction ambitions, his lack of political debts to voters in the areas heretofore protected from growth, and the shift of land use approval power from the city council to the mayor inherent in last year’s charter amendments has made many council members angry and obstreperous. This accounts in large part for the council’s opposition to the mayor’s nomination of John Mangin to head the BSA, a largely technocratic position that is charged with implementing city policies already made.

The council is not without leverage here. I wrote last year, when the charter amendments were proposed:

The mayor’s power under the changed charter is not absolute; he will still need the city council’s support—not only on land-use issues still subject to ULURP but on the budget and other matters under the council’s purview. Many affordable housing developments will continue to require council approval for city-owned land dispositions and tax exemptions.

The Takeaway

What’s needed is clarity from the administration on where and how it intends to utilize the mayor’s new land use powers. It is probably unrealistic to expect council endorsement of these plans, but there needs to be enough of a working understanding with a majority on the council so that city government can continue to function, even with continual bickering. Until that happens, the council will continue to lash out, as with the Mangin nomination – and the tools that can get the city closer to meeting its housing needs will fail to fulfill their potential.

The big crises in NYC education are literacy and attendance. Roughly one-third of public school students, including in elementary grades, are chronically absent; 56% of third-graders read below grade level, and early academic frustration frequently fuels behavioral disruptions and truancy in upper grades.

Reading is critical for academic success, and students in the lower grades need good teachers and frequent checks on progress to make sure they are not falling behind, not technology or screens to learn, Weber stressed.

The mayor should pay more attention to K-12 education, especially at the elementary school level, because it sets students up for success or failure early. For many families, the quality of public school education, not just affordability, is a major factor in deciding whether or not to stay in the city.

For more, listen to the episode wherever you get your podcasts.

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Street safety is a big part of that freedom, and the city is cracking down on the sales of illegal e-bikes, scooters and motorcycles.

But walkable neighborhoods are also expensive, with few affordable, family-sized apartments for rent. And rents hit a new record high across the city last month. Solution? We need to build more housing that enables more children to grow up in walkable neighborhoods.

This brings us to this month’s crucial fight in City Hall. Mayor Mamdani has nominated an architect of his predecessor’s pro-growth City of Yes, John Mangin to chair the Board of Standards and Appeals. Mangin was also behind the City Charter changes that gave the mayor a greater say in what gets built over council objections — voters agreed. Some council members still have concerns, even though the council passed City of Yes. The BSA is a technical body that has built in safeguards against overreach, and fears of massive, non-contextual development may be overstated.

Will that and free childcare be enough to keep families in the city? MI’s Jennifer Weber argues that until we fix our public schools, families will keep leaving.

All that and more below.

Where Are American Children Supposed to Learn How to Become Adults?

While debates over children’s civic development tend to pit parental authority against state institutions, political theorist Elly Long suggests a neglected middle ground: the built environment of walkable, mixed-use neighborhoods.

Unlike suburban "car hell"—where single-use zoning forces kids into social isolation and digital screen dependence—safe, walkable environments foster independence by allowing children to safely navigate physical spaces, encounter diverse community members, and learn self-reliance.

Read more.

Related: Should Letting Children Play Alone Outside Be a Crime? (NYT)

Street Safety and Micro-Mobility

The city is cracking down on the sales of illegal e-bikes, scooters, and mopeds — heavy, fast-moving vehicles increasingly involved in more tragic crashes.

Transportation Commissioner Mike Flynn writes on his Substack that an estimated 620,000 daily trips are taken by these micro-mobility means — which is to say that they are firmly part of the city’s infrastructure as an alternative to cars.

Urban planners are right that cars cause almost all fatal crashes, but “not getting killed by an SUV” is a pretty low bar for urban livability. One should be able to navigate the city safely and pleasantly on foot. After all, walking is the main form of transportation in the city.

Yet instead of protecting and expanding sidewalks, many of which are already past capacity, the city is focused on the safety and comfort of the fastest-expanding mode of transportation: two-wheeled vehicles.

Bike-heavy European capitals, frequently cited as examples, work because both pedestrians and bicycles yield to each other. In New York, pedestrians operate under the informal yet inalienable right to read the street and cross whenever they deem appropriate — aka the recently decriminalized jaywalking. These free-range pedestrians are also making micro-mobility trips dangerous in the process.

Micro-mobility vehicles seem to think of themselves as pedestrians, too, often disregarding traffic regulations. Conflict between the two becomes almost inevitable, so while the city’s efforts to bring some order are a welcome development, to keep the city walkable and safe, more remains to be done.

Related:

• Some of the bills to be considered at the council’s Sept. 30 hearing about e-bikes, scooters and mopeds (Streetsblog). More background and data on the issues (NYT).

• Cheaper Citi Bike Will Need More Than Public Subsidy. (Streetsblog)

Free Child Care Won’t Keep Families in New York

Last week, the Mamdani administration sent letters to parents of 2,000 two-year-olds offering them free daycare placements. The administration says that 5,700 applications have been submitted and a lottery will be used to allocate any offers families don’t accept. Little beyond that was made clear, including how many of these seats are existing seats that are now funded through the city’s program, how many are new seats added to the system, and who the providers will be.

This week, the mayor announced that the city will be funding the share about 22,000 families were expected to contribute to childcare under the state’s childcare voucher program, and various existing city programs requiring sliding scale payments. More than 100,000 children aged 6 months to 13 years are currently in the programs, and the subsidy will cost $5.2 million.

But this is unlikely to stem the exodus of middle-class families, for whom rent is still a significant burden, and free childcare not the only consideration when deciding to stay in the city. Quality of the K-12 education plays a big role in “whether parents believe those years are worth the price of staying,” MI’s Jennifer Weber writes.

Related:

• Regulations are keeping families smaller than they want to be (City Journal)

• NYC’s unexplained test score swings prompt experts to question reading results (Chalkbeat)

• NYC’s school system is built for a city that no longer exists (Searchlight)

Data Point

How Much Higher Will the Rents Go?

It seems there is no limit, and the families with children are paying the steepest price.

In NYC, 53.4% of families spend more than 30% of their income on rent, and on a median family income of $88,937, a two-bedroom apartment (median asking rent of $4,750/month) would consume 64% of annual earnings.

And that’s if they can find such an apartment for rent in the first place: the number of available multi-bedroom units is down 38% from 2019, with those with three bedrooms falling almost 20% in the past year to just over 3,000 units, according to a StreetEasy report that complements Zillow’s national report, out this week.

Extra! Extra!

• How elevators are making housing more expensive. (Reason)

• Mamdani backs delivery worker bill that Amazon says will cost jobs and raise prices. (Crain’s, NYT)

• NYC DSA is 60% white, internal survey says. (City&State)

• No “bright red lines” between Mamdani Administration and DSA? (NYT)

• NYC parking “stickers of shame” are back (NYT)

• New York Needs New Ornamental Architecture (Vital City)

• Privately owned public spaces were featured in a NY1 segment that left me wondering about the challenges their private owners face in keeping them maintained and orderly in a city that struggles with those same issues in its publicly owned spaces.

We’ve completely overlooked a third sphere between home and school: the neighborhood. The built environment where children physically encounter neighbors, strangers, institutions, and informal rules without parents or government deliberately instructing them.

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Writing in The Political Science Reviewer, political theorist Elly Long suggests that partisans of the question “who forms children?” may find common ground by instead asking “where.” What built environment is most likely to produce capable participants in democratic life? Her answer is walkable, mixed-use neighborhoods.

The Problem With “Car Hell”

In contrast to mixed-use neighborhoods, single-use zoning separates residential areas from public and commercial zones. The result is sprawl. Single-family zoning has dominated all other forms of residential land use regulation in the U.S. since the 1920s.

Children are the biggest losers of sprawl, according to James Howard Kunstler, because they’re unable to move between the private and public spheres by themselves. They don’t drive cars, and streets without sidewalks usually aren’t safe for walking or bicycling. American Enterprise Institute’s Tim Carney named this condition in his book, Family Unfriendly: “Car Hell.”

A child confined at home by sprawl accesses outside influence through their phone screen. That brings two things directly into the living room that neither side of the debate on civic formation wants: anti-democratic ideas and the tyranny of public opinion. In a walkable city, a child learns on the sidewalk that not all strangers are threats, that a neighborhood contains people like and unlike his parents, and that he can navigate a busy world without an adult driving him through it.

Both sides of the debate have reason to find this fresh framing attractive. Those who favor public institutions for civic formation argue that children need exposure to people and ideas beyond their families to learn how to live with differences and develop ideas independent of their parents. Those who favor the family, on the other hand, argue that parents are responsible for giving children the moral framework they need to make sense of the world, while also protecting them from having the values of the state or the majority imposed on them.

Walkable, mixed-use neighborhoods offer what both sides want: they create more interactions between kids and the community through physical proximity, while not dismissing parental authority.

New York’s Unique Asset

Long is describing New York. Only 15 percent of the city’s land is single-use zoned. Its sidewalks and subways are places where future productive citizens learn to practice autonomy for adult life.

So why are families leaving?

According to an April Manhattan Institute report by Connor O’Brien and Liena Zagare, New York City’s under-five population fell 18 percent in just over three years—18.9 percent in Manhattan, 17.8 percent in Brooklyn, and 17 percent in Queens. Falling birthrates and out-migration explain the decline, which has been steepest in the densest places.

Walkable New York is Scarce and Expensive

Families need family-sized housing they can afford. Roughly 70 percent of New York households rent, but just 19 percent of the city’s rental apartments have three or more bedrooms (compared to 40 percent renters nationally and 30 percent three-bedroom apartments or larger).

The average asking rent for a three-bedroom market-rate apartment in Manhattan, the most walkable borough of the city, this July exceeded $12,000 a month. A two-bedroom is now more than $8,000. The citywide vacancy rate is 1.49%, a number not seen in generations, making finding an affordable apartment for the average family almost impossible.

The solution is abundance. With the City of Yes, the city has taken steps in the right direction, but it needs to facilitate the development of much more market-rate housing than the current zoning and building code make feasible.

Order, Transit, and Criminalizing Childhood

Physical space alone is not enough. As Jane Jacobs argued, public trust is accumulated through “eyes on the street”—many small sidewalk contacts are only possible when those contacts are unthreatening.

Because a child’s independent range in New York, like in the suburbs, is limited by the available transportation options, safety of streets and transit determine a practical limit by influencing how far and in what ways parents will actually let kids go. Enforcement of rules, better street lighting, and regular police patrols promote civic formation in addition to quality of life. Homelessness and random violence physically hinder it the same way sprawl does by sticking kids and parents in “Uber Hell”.

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The capacity for children’s independence does not mean it will be made use of automatically. A 2025 survey of parents by the Institute for Family Studies finds a general culture of low autonomy. Most American kids are not allowed to travel beyond their own street by the age of 14, according to their parents, but independence can have meaningful positive impacts on children’s anxiety.

Even though there is no age limit on when a parent can leave a child alone in New York, there is no affirmative protection allowing ordinary, age-appropriate independent activity, like walking home from school. Without legal protection, parents allowing their children to be unsupervised can face a child protection investigation and, depending on the circumstances, criminal charges, with the court deciding after the fact whether a parent’s judgment was reasonable.

New York State should pass a Reasonable Childhood Independence law (joining eleven other states) to clarify that leaving a child unsupervised is not by itself neglect.

The Bottom Line

If we want to raise capable participants in democratic life, part of the policy question should be how to increase more children’s access to walkable, safe, mixed-use neighborhoods. One answer is by building more of them.

Our Recent Issue Briefs and Reports

• Understanding How Proportional Representation Might Work in New York City by Jack Santucci and John Ketcham

• The Limits of New York’s “Tax the Rich” Policy by E.J. McMahon

• New York City’s Migrant Crisis: A Case Study of Welfare Magnet Effects by Stephen Eide

• An Education Agenda for New York City: NYC Schools Need Significant Change, Not More Money by Jennifer Weber, Danyela Souza Egorov, and Ray Domanico

• What to Do About NYC’s Empty Schools by Danyela Souza Egorov

• New York State Math Standards Keep Changing While Students Stagnate by Jennifer Weber

It’s all true. We are very much obsessed with making the city better. That includes questioning Mayor Mamdani’s policy agenda, spotting issues and trends, and suggesting alternative (better!) solutions to the problems NYC faces. We are skeptical, but give credit when it’s due.

As MI president Reihan Salam told the Times:

“I vehemently believe that we are defenders of the beautiful mosaic,” he told the Times’s Eliza Shapiro and Nicholas Fandos of our vision for the city. “But it means that you need to not be an idiot.”

To the many new subscribers who read the Times story — welcome!

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This week’s focus is on welfare and housing, a bit on education, and groceries.

Our latest poll looks at how Americans think about welfare thirty years after the landmark 1996 reforms; Stephen Eide reviews a new paper from Notre Dame on the impact of the right to counsel for tenants on evictions and rents, and looks in depth at the recent migrant crisis and the role of the city’s generosity in shaping it.

On the education front, Jennifer Weber presents a framework on how to think about AI in the classroom. And Jennifer and Danyela Souza Egorov write in Searchlight (Citizens Union’s new publication) about the need for education reform.

That, and more, below.

Price Controls and Rationing at Mamdani’s Groceries?

This week, Mamdani announced that the city will set prices, monthly, at 30% below those at comparable groceries for the subsidized basket of goods sold at its five yet-to-be-opened groceries. The basket will include all fruit, vegetables, meat and fish, as well as some dairy and dry goods sold at the stores.

This raises the question of arbitrage — why would someone not buy out the store and sell the goods nearby at a profit?

“[W]e are looking to make sure that we target New Yorkers, whether it be [through] a sort of a library card-esque [system], and also, we manage who’s buying and that it’s focused on everyday New Yorkers,” the interim EDC head Jeanny Pak says. “So, we are mindful of that, and we’re going to make sure that we have all the things in place to ensure that that does not happen.”

It won’t come as a surprise that MI fellows don’t think public grocery stores are a good idea. As Nicole Gelinas wrote in the Times, the problem with public grocery stores is reality.

Data Dashboard

We are adding a Data tab in the navigation bar to allow for easier tracking of key measures of the city’s health — and potential early warning signs.

The number of individuals in the city’s Department of Homeless Services shelters is one such data point.

More than 82,000 residents slept in the city’s shelters on July 28; almost 28,000 of them — a third — were children. In fact, families with children account for 63% of all homeless individuals, a number that shot up during the migrant crisis. While it has been slowly decreasing, homelessness among single men and women is on the rise, keeping the total number high.

“New Yorkers should not make their peace with tens of thousands sleeping every night in shelter and a couple thousand more sleeping on the streets and in the subways,” MI’s Stephen Eide tells The Bigger Apple. “And history suggests that they will not. It’s only a matter of time before homelessness reemerges as a front-burner source of public controversy. This shelter tracking tool can serve as an early warning system.”

Related:

• New York City’s Migrant Crisis. “Immigration scholars have long debated whether, and to what extent, generous public benefits induce migration. The migrant crisis in New York City presents a case study of this “welfare magnet” hypothesis, demonstrating that certain benefit programs, in some situations, can indeed affect migration. The crisis also offers a case study in how state and local benefit programs can influence the movement of low-income people more broadly,” Stephen writes in his new brief.

• Free Eviction Defense Lawyers Don’t Prevent Homelessness. While being represented in housing court can delay evictions, Notre Dame economist Robert Collinson and his co-authors find that the right to counsel also raises rents.

• Funding Housing Isn’t Cheaper Than Shelter, because shelter is temporary, and housing is permanent. When CityFHEPS, the city-funded housing support program, was introduced as a cheaper alternative to funding shelter stays, families were spending an average of 446 days in DHS shelters. Once people secure permanent housing, however, they stay. NYCHA residents remain in their apartments for an average of 27 years, while NYC Section 8 recipients stay for 15. CityFHEPS may formally be a five-year program, but with a 90% extension rate for "good cause," it is hardly temporary.

Latest Polling: American Attitudes on Welfare, Crime, and the Political Environment

Our latest national survey is out, and Bill Clinton was right about welfare, MI’s Jesse Arm and Sean Speer write. Thirty years after the landmark 1996 welfare reforms, Americans across demographic and political lines overwhelmingly favor requiring welfare recipients to seek work (74%), prioritizing targeted aid for those in true need (67%), and providing dedicated benefits rather than unrestricted cash payments (80%).

Voters also strongly oppose radical proposals to abolish police, prisons, or borders while maintaining support for the death penalty for severe crimes. However, notable generational divides surface throughout the survey: younger voters express significantly more openness to universal basic income, unrestricted cash aid, and socialist identities than older Americans.

Read more

One Size Does Not Fit All: A Developmentally Appropriate Framework for AI in K–12 Education

For the past hundred years, schools have brought in new technologies like radio, television, and computers before really understanding how they affect children. By the time the impact became clear, these tools were already part of students' everyday routines. But this time it’s different, MI’s Jennifer Weber tells the Bigger Apple.

“Instead of just changing how students get information, generative AI can actually do the thinking and learning for them, taking over the tasks meant to help students build their own skills,” she writes. “Right now, most fourth-graders in New York are not reading or doing math at grade level, and those most likely to rely on AI instead of thinking for themselves are often the least prepared to handle it.”

In a new brief, Jennifer looks at AI in education through the lens of cognitive development, suggesting a framework for when and how AI should be used in classrooms, based on students’ developmental needs.

Read more

Talk to Tenants Trouble

By using its resources to help organize tenants through the Talk to Tenants initiative, the city is picking sides when its proper role should be a neutral arbiter, MI’s Nicole Gelinas writes. That aside, there is also a more practical reason not to.

As Nicole notes, tenant organizing in the 1970s and ‘80s was a genuine grassroots effort in deteriorating buildings, where residents themselves handled repairs, collected rent, and maintained safety:

“But if you can’t do the basic work of organizing yourselves, you likely won’t be able to do this much harder work. Few if any buildings are in this dire state today, and encouraging tenants to force fragile buildings into greater disrepair when they are unprepared to do the sweat-work themselves is irresponsible.”

Read more

Extra! Extra!

This was not a great week for our mayor.

• Mamdani’s Netanyahu gambit served no one, Ross Barkan writes in Crain’s, and he’ll be tested by protesters during the United Nations General Assembly in September. “Can the new mayor ensure there isn’t any chaos or violence? Will protesters feel aggrieved if the police exercise a heavy hand? We will find out soon enough.” (Mamdani’s address.)

• Outrage over Mamdani’s messy Pied-à-Terre list or Mamdani’s pied-a-terrible mess, as POLITICO calls it, and blowback over the lack of Jewish lawyers on a panel that advises him on picking judges, given the large number of Jewish lawyers in the city, were bigger than the city probably envisioned.

• Meanwhile, rent freeze goes to court, MI’s John Ketcham writes in City Journal, and the teachers’ union threatens “all out war” with the mayor over council-approved paraprofessional payments he’s yet to sign off on, the Times reports.

• But it was not all bad. The mayor’s “Open for Business” offers common sense changes to the city’s regulatory code to help small businesses comply with the city’s rules, a welcome move, though there’s much more to be done.

• So, Can Socialists Govern? Crain’s looks at Mamdani’s opportunities, and it seems he may have more durable support from the DSA than one may have expected.

• But I’ll leave you with Allison Schrager’s thoughts in Americans Are Richer Than Ever. Why Are They So Angry? According to her,

  “Much of the dissatisfaction has non-economic roots, and politicians are feeling pressured to respond with policies that purport to take control over the economy and provide a sense of safety — price controls, immigration restrictions, tariffs and so on. Americans should be wary. If these are the solutions, soon they will not only be unhappy, but poorer too.”

  Read the whole piece at Bloomberg.

Fed’s Penn Station Plan a Promising One

“New York City’s Penn Station is the ultimate transportation planner’s nightmare, dysfunctional on multiple levels and seemingly impossible to fix,” MI’s Eric Kober writes, with plans to improve the station stymied by “the eternal frustrations of cost, funding, and feasibility.”

While public attention fixes on how the station will look, a new Federal Railroad Administration report led by Andy Byford offers a positive plan for fixing how it operates, he writes.

Instead of moving forward with a politically toxic, multibillion-dollar plan to bulldoze a vibrant city block to the south, Byford’s plan seeks to optimize the current station to handle the influx of trains from the new Hudson River tunnels, which are scheduled to open by 2035, while floating “through-running” regional rail as a long-term goal.

However, converting this blueprint into reality will not be easy.

Read the full analysis

How the Internet Changed NYC

History suggests New York City is uniquely positioned to weather the AI boom, just as it survived the 1990s digital revolution, Stephen Eide writes.

When the internet emerged, Wall Street capitalized heavily as the ultimate backend financier for tech, funneling massive IPO windfalls into the municipal budget—a dynamic likely to repeat with AI giants.

However, AI won’t operate in a vacuum; its rise coincides with a rapidly aging population. Eide sketches out what that and more means for New York.

Read more

Special Education

For years, New York City has responded to its special education crisis by spending more money rather than fixing the policies that created it.

Mayor Zohran Mamdani's new preschool expansion that brings special education services inside the school system is a welcome investment, but it won't meaningfully change a system that now costs taxpayers nearly $1.5 billion a year in due-process settlements, also known as Carter cases, MI’s Jennifer Weber writes.

“Nearly one in four public school students now has an IEP [Individual Education Plan], and the numbers continue to rise,” Weber writes. Every new classification requires legally mandated services that the city has struggled to provide.

Her latest piece looks at how we got here, and what structural reforms would make a difference.

Read more

Who Are NYC’s 300,000 Chronically Absent Students?

New York City’s education debate remains obsessed with high-profile battles over elite high schools, but to improve its public schools, the city has to address the fact that almost 300,000 students are chronically absent from school.

Attendance is not the only reason for achievement gaps or the dismally low acceptance rates of Black and Hispanic students to the city’s specialized high schools. But it is the prerequisite for every other school improvement effort — students cannot benefit from stronger curriculum or better teachers if they are not in class. Kids in classrooms with high chronic absenteeism end up behind even if they do show up.

In New York, one in three public school students is chronically absent from school, defined as missing 10% or 18+ school days — almost a month of classes. Since the pandemic, the school system has lost about 100,000 students, while the number of those absent is up by 30,000.

Read more

More from MI

• Mayor Mamdani’s Relentless War on Landlords by Eric Kober.

• Mamdani moves to Help New York’s Small Businesses — But He Could Do More by Jarrett Dieterle.

• Mamdani and the Left’s Israel Fantasy by Charles fein Lehman.

• A new brief: New York City’s Migrant Crisis A Case Study of Welfare Magnet Effects by Stephen Eide.

Extra! Extra!

• The impact from the World Cup on local business seems to be positive, with hotels the ultimate winners. The cost of hosting the event is yet to be tallied, while the intangible benefits of bringing joy and unifying the city are priceless.

• Mamdani’s interview with the New York Times.

• Leaders and advocates in gentrifying neighborhoods fear that victories by the Democratic Socialists of America could mean political erasure, the Times reports.

• A battle in Albany over who should approve and regulate charter schools is escalating, New York Focus reports.

• Landlords are suing NYC Rent Guidelines Board over the rent freeze decision, Gothamist reports.

• Mamdani’s Commission on Government Efficiency approved the five questions that will be on the ballot in November. They include simplifying review and approvals for use of public space and street safety, like outdoor dining and bike lanes; simplifying government contracting and building permits; and setting contribution goals for the rainy day fund.

• Mamdani appointed Anthony Shorris and Lina Khan to lead the Economic Development Agency. Here’s what it may mean.

• In a new report, Hunter College and Open Plans, a street advocacy group, look at what lessons New York should take from California when it comes to autonomous vehicles. We had Sam Schwartz and Kelly McGuinness on our podcast not long ago to talk about autonomous vehicles in NYC, and I have some thoughts on this too.

Whenever debates over educational equity erupt in New York City, the conversation inevitably turns to the city’s specialized high schools.

But the much bigger crisis, affecting hundreds of thousands of students, is that of chronic absenteeism, which undermines children before they even finish elementary school, as my colleague Danyela Souza Egorov wrote in the Bigger Apple last week.

Attendance is not the only reason for achievement gaps or the dismally low acceptance rates of Black and Hispanic students to the city’s specialized high schools. But it is the prerequisite for every other school improvement effort — students cannot benefit from stronger curriculum or better teachers if they are not in class. Kids in classrooms with high chronic absenteeism end up behind even if they do show up.

Chronic Absenteeism Among Ethnic Groups

Since the focus of the SHSAT conversation has been on the ethnic and racial disparities, let’s look through the same lens at attendance.

In New York, one in three public school students is chronically absent from school, defined as missing 10% or 18+ school days — almost a month of classes. There are now more chronically absent Hispanic kids in NYC public schools (149,900) than chronically absent kids of all other races and ethnicities combined (140,772).

A big reason this number is so high is that Hispanic kids are by far the largest student group in the city, making up 43.2% of total public school enrollment.

But because the absenteeism rate within this group is also high, nearly 1 in 6 of all public school students in New York City (17.2%) is a Hispanic child who is missing more than three weeks of school a year.

Chronic absenteeism is a big problem across the school system, but it is especially high among Black students (40.5%) and Hispanic students (39.8%). The rates are lower for White students (24.6%) and Asian students (19%), but the gap in participation is still large.

Despite NYC public schools losing over 100,000 enrolled students (-10.5%) between 2018–19 and 2024–25, the total number of chronically absent children actually grew by over 32,000 (+12.5%), driving the citywide absenteeism rate up from 26.5% to 33.3%.

Hispanic students drove the majority of the absolute absenteeism surge (+22,418 absent children), Asian and White students experienced the highest relative spikes in absenteeism counts (+34.8% and +21.0%), while Black public school enrollment experienced a massive contraction (-22.8%), causing their raw absent numbers to drop even though their absenteeism rate remains the highest at 40.4%.

In short, the school system has shrunk substantially, but a significantly larger proportion of its remaining students is struggling with chronic attendance issues post-pandemic.

Structural Issues

Chronic absenteeism does not happen in a vacuum.

The pandemic disrupted attendance and appears to have left a lasting impact, changing the culture around attendance — that school is optional — across the board and nationally.

The recent migrant influx and increased immigration enforcement in NYC likely affected attendance among some immigrant students, but such data is not publicly available from the city’s Department of Education.1

Meanwhile, last year, 253,041 students living in poverty were chronically absent. Nearly half of NYC students in temporary housing—61,323 children—were chronically absent, and over 43% of students with disabilities missed weeks of school.

Tackling a crisis of this scale requires focused policy that builds partnerships across healthcare, social services, and the community. Schools cannot fix poverty or housing instability, but schools cannot hide behind external factors either, and there is much that can be done.2

“Chronic absenteeism will undermine all their other academic interventions such as NYC Reads and NYC Solves,” Egorov told me. “The Chancellor should set clear goals for District superintendents and principals to reduce chronic absenteeism. Elected officials should launch a public campaign to make sure that families and students understand that every day in school counts.”

The pandemic-induced change in the culture around attendance is a public conversation we should be having, and one where public messaging at all levels helps.

“When local leaders visibly support attendance in places of worship, at community meetings, in storefronts, and through local media, they help build a culture where school attendance is seen as both a personal and community responsibility,” Catherine Falconer of John Hopkins Bloomberg School of Public Health writes.

Mayor Mamdani and his Office of Mass Engagement should get ready to start the new school year by setting high expectations and sending a strong message to kids and their families that attending school matters.

More by Manhattan Institute Fellows:

• An Education Agenda for New York City: NYC Schools Need Significant Change, Not More Money

• Chronic Absenteeism Is Hampering School Improvement Efforts in New York City: What Can Be Done About It?

• The SHSAT Crisis Starts in Kindergarten

Mayor Zohran Mamdani’s new $67.5 million Pre-K special education expansion is a welcome development in New York City special education policy. For the first time, the city is bringing specialized programs—Nest, Horizon, AIMS, PATH, and ACES— into 26 schools across 14 districts to serve 250 students starting this fall, while adding hundreds of new staff members, including 10 new preschool evaluation teams.

Building in-house evaluation teams rather than continuing to rely on outside agencies is something I recommended in a Manhattan Institute brief earlier this year. This investment is a step in the right direction, but it is a long way from solving the special education crisis facing the city.

The High Cost of Mandated Spending

New York City spent $1.3 billion on due-process claims in fiscal year 2025. These are commonly called “Carter cases,” after the Supreme Court decision affirming that when a school district fails to provide a free appropriate public education, families may seek payment for private school tuition and, increasingly in New York, for privately obtained services.

In 2005, these cases cost the city $47 million. Even with the savings projected in the mayor’s budget, the city expects to spend nearly $1.4 billion next year.

When Mayor Mamdani first revealed a $5.4 billion budget gap, his administration identified due-process spending as one of the major drivers of the shortfall. The average settlement in 2025 was $101,757 per student—roughly three times what the city spends on a general education student.

Explosion of Carter Cases

In 2024, New York State recorded 517 due-process filings per 10,000 students. New York City accounted for 98 percent of those filings. Since 2014, the city’s filing rate has risen from 106 per 10,000 students to 517—an increase of 384 percent.

To understand why so many families end up in due process, we need to look before kindergarten.

As the city rolled out Pre-K for All in 2014 and 3-K for All in 2017, tens of thousands of preschoolers in need of Individual Education Plans (IEPs) were identified. In 2024-2025, of the 94,537 3-K and Pre-K students, 31,945 received special education services—34% of all enrolled.

The city never built the public capacity to serve them.

Instead, preschool special education has operated almost entirely through private providers. Children with disabilities begin their education in small, specialized private classrooms. At age five, they are offered a DOE kindergarten placement that often looks very different, often with larger classrooms and less individualized support.

Between 2013 and 2025, the share of all public-school students identified with disabilities rose from 139 to 242 per 1,000 students—a 74 percent increase—even as overall enrollment fell by roughly 340,000 students. Nearly one in four public school students now has an IEP, and the numbers continue to rise. New special education recommendations increased by 55 percent between 2024 and 2025.

Many families respond to the lack of public capacity to provide special education services by filing due process claims to remain in private settings or continue receiving privately provided services.

Cost Drivers: Geographic Mismatch & Automatic Renewals

The mayor’s financial plan assumes $149 million in reduced Carter spending by serving families who would otherwise seek private placements.

But the geography of this latest expansion suggests otherwise.

Of the 20,051 due-process cases settled last fiscal year, 65 percent involved white students, who make up just 16 percent of public school enrollment. Eight zip codes, all in central and southern Brooklyn, accounted for 44 percent of all cases.

The expansion adds special education programs at only two schools across those 8 zip codes. The remaining 24 schools are in neighborhoods that have historically generated few to no Carter Cases, meaning the savings the budget assumes are unlikely to materialize.

Under Mayor de Blasio, the city began routinely renewing many of Carter case settlements from year to year without determining whether public schools could now appropriately serve the child.

The growth in Carter cases is unlikely to reduce without addressing the structural issues.

Three Barriers to Fixing NYC Special Education

While expanding preschool special education seats is a positive step, the system relies on models unproven in early childhood, fails to guarantee that children actually receive their legally mandated services, and leaves the underlying drivers of over-classification and rising costs unaddressed.

Programs used are unproven at the preschool level.

The city has highlighted impressive outcomes, including that 97 percent of Nest and Horizon students graduate from high school. But these figures do not come from rigorous evaluations of the programs themselves. They tell us that students admitted to the programs did well, not necessarily that the programs caused those outcomes.

Nor have these models ever operated in Pre-K. What works in K-12 does not automatically work in preschool. The city should commit now to publishing preschool-specific outcome data beginning with the first year of implementation.

Seats are not services.

To its credit, the city has opened more than 800 new preschool special education classes and testified this winter that the seat waitlist had been eliminated. This latest announcement also places programs in neighborhoods where children have long lacked nearby options; fourteen of the twenty-six new schools are in the Bronx.

But classrooms alone do not ensure that children receive the services required by law. Today, only 63 percent of preschoolers with disabilities receive all of the services required by their Individualized Education Programs.

The expansion does not address the underlying drivers of growth in special education or in Carter case spending.

A 74 percent increase in disability identification warrants scrutiny because each new classification entails legally mandated services the city has already demonstrated it cannot consistently provide.

Most states use tiered intervention systems in preschool, providing support within general education classrooms and monitoring children’s progress before referring them for special education evaluation.

New York City’s preschool system, built largely around private providers, has no comparable step. Identification moves almost directly from concern to evaluation and classification. The city needs to make sure it is classifying children accurately.

Federal law also requires annual reviews of student placements. The city largely stopped conducting meaningful reviews of Carter case placements a decade ago and should resume them.

The city deserves credit for investing in public special education capacity, but should ultimately be judged not by how many classrooms it opens or how many staff it hires, but by whether it addresses the structural problems that made it necessary in the first place.

New York City’s Penn Station is the ultimate transportation planner’s nightmare, dysfunctional on multiple levels and seemingly impossible to fix. At different times, the city, the states of New Jersey and New York, and the station’s owner, Amtrak, have developed plans to improve the station, only to be defeated by the eternal frustrations of cost, funding, and feasibility. Now, a new report from the Federal Railroad Administration, spearheaded by Amtrak’s special advisor (and former NYC transit chief) Andy Byford, offers a positive path forward.

Penn Station upgrade plans can be broadly divided into two categories: those focusing on the station’s appearance and public space, and those focusing on station operations. Both are important. The original station was one of the nation’s finest public buildings, replaced with a set of dingy, uninspiring underground passageways.

Planners have long sought to recapture a semblance of past splendor; most recently, U.S. Transportation Secretary Sean Duffy and Amtrak announced the designation of a developer who will, among other improvements, “construct a grand entrance on Eighth Avenue to a new train hall” and “replace cramped, decrepit walkways with open, beautiful concourses.”

That ambitious vision awaits clarity on, wait for it, costs, funding, and feasibility. However, when choices invariably need to be made, improving the station’s operations is much more important.

The need for such improvements is long-standing. Penn Station, at its completion in 1910, was operated by one railroad company (the Pennsylvania Railroad or PRR) and functioned primarily as an intercity station. To minimize the acquisition of private land, the station was wedged between the north side of West 33^rd Street and the south side of West 31^st Street.

Within this 580-foot north-south dimension are 11 platforms and 21 tracks (see Figure 1 below). Because most of the platforms are unusually narrow, compared to a typical big-city railroad station, passengers boarding trains must wait on the level above until departing passengers exit. That increases the “dwell time,” or the amount of time trains spend between arrival and departure.

That problem is exacerbated by the growth of commuter services as the old Pennsylvania Railroad system was carved up among three entities, Amtrak, New York’s MTA and New Jersey Transit.

The station is at capacity for service from the west, where only a two-track tunnel crosses the Hudson River. The East River approach, with four tunnels, will be at capacity when new Metro-North service over the Hell Gate Bridge begins in 2030.

The railroads would run more trains at peak times if they could. An opportunity arises with the completion of a new two-track tunnel to New Jersey, expected to be completed by 2035, and the rehabilitation of the existing North (Hudson) River tunnels, to be completed by 2038.

That’s a way off in the future, but Penn Station improvements have long lead times.

Byford’s team offers two options for the shorter and longer term. The initial Operating Concept 1 (Figure 2 below) would take advantage of the new Hudson River tunnels to simplify traffic patterns within the station. Along with extending the length of the three southernmost platforms, adding more stairs and escalators, and removing pedestrian obstacles on the platforms, that would reduce “dwell time” and allow for more peak-hour service. A longer-term plan would combine two platforms in the center into one, much wider platform.

The new proposals represent a move away from an older Amtrak plan that would have expanded the station to the south to provide capacity for additional service. That plan was first proposed in 2011, as a component of the Gateway program, a series of service improvements between Newark and New York Penn Station.

The Penn South expansion would have constructed new platforms on the city block south of the existing station, bounded by Seventh and Eighth Avenues and West 30^th and 31^st Streets, known as Block 780. Additionally, it would have included the lots fronting on the east side of Seventh Avenue opposite Block 780, and a portion of the block on the west side of Eighth Avenue (see Figure 3 below).

Penn Station South was never going to happen. It involved the acquisition of substantial residential and commercial real estate at a prohibitive financial and political cost. However, Amtrak’s interest and the misguided support of elected officials placed a cloud over the area. The city has for years maintained obsolete manufacturing zoning that prohibits new housing in an area of high demand.

At a public meeting in Manhattan on July 14, Byford remarked, “ It would’ve been immoral to tear down a vibrant block of New York City before we had properly evaluated how to extract every ounce of additional capacity out of Penn’s existing footprint.” Now that his team has presented a credible plan to do that, one hopes that the development potential of this area can be unlocked.

While a big step forward for practical planning, the Byford team’s proposal has a long way to go. Future steps include getting buy-in from the commuter railroads and the New Jersey and New York governors, and developing cost estimates, an operating plan for expanded train service, and a financing scheme.

The report asserts that the plan offers increased opportunity for “through-running” — commuter service that carries passengers through Penn Station, rather than terminating there as New Jersey Transit and Long Island Rail Road trains do currently.

While theoretically more operationally efficient, through-running presents operational, financial, and labor issues and has long been seenby the railroads and some transit wonks as impractical.

Long-suffering commuters will yet wait a while for relief. However, Byford and his team have performed an important service by focusing on track-level improvements that are both practical and can be phased in as resources become available. Just as important is focusing away from a pie-in-the-sky scheme that has for years paralyzed real estate investment unnecessarily.

This week, much time was spent criticizing the Specialized High Schools Admissions Test (SHSAT) after just 3 Black students were admitted to Stuyvesant, one of the city’s most prestigious selective high schools, with little focus on the many reasons why.

The media, including the New York Times and Chalkbeat, the outlet covering education in the city, also failed to give proper attention to the many reasons why Black and Hispanic students may be so woefully underrepresented. Among them are the large disparities in educational achievement before high school, compounded by attendance issues that start in kindergarten, and the fact that many of the high achievers are enrolled in charter schools or get scholarships to attend private schools.

While there are many characteristics of students that may hinder their academic success, such as limited English proficiency, a disability, or poverty, the city takes these into account when determining a school’s quality — its performance as well as its impact on students’ achievement.1

About half of Black students attend schools deemed less than “Good” by the city .2

To better understand what that means, I mapped some of the data provided by the city’s Department of Education on middle and high school quality, students’ elementary and middle school math proficiency, and the share of Black students as a share of a school’s total enrollment. The charts speak for themselves (and are best viewed on desktop).

The mayor acknowledges there are issues to be addressed and that rigor must be part of the solution. “[W]e know that there’s so much more work to be done,” Mamdani said at a press conference, before praising Schools Chancellor Kamar Samuels for his “emphasis on addressing racial inequities and doing so while providing the strongest and [most] rigorous education that is possible for New York City students.”

In a comprehensive new brief on how to improve the city’s schools, released this week, the Manhattan Institute’s fellows identify the structural and operational issues in need of reform and offer pragmatic solutions to help the mayor in his efforts.

That and more below.

An Education Agenda for New York City: NYC Schools Need Significant Change, Not More Money

New York City’s school system faces deep structural issues—marked by falling enrollment, rising costs, and inconsistent academic outcomes—that cannot be solved simply by increasing funding, my colleagues Ray Domanico, Danyela Souza Egorov, and Jennifer Weber write in a new Manhattan Institute brief.

To achieve better results with its existing resources, the city must adapt to its smaller student population and focus on closing the achievement gap between its best and worst schools. They advocate for consolidating under-enrolled schools, redistricting school district boundaries, reinstating strict quality monitoring and accountability, and annually reviewing special education placements.

Additionally, the city should seek to improve student outcomes by prioritizing elementary instruction, expanding specialized and technical career pathways, and pairing restorative justice policies with structured, behavior-based discipline among many other recommendations.

Full Report

High Expectations

City Councilmember Lincoln Restler took to X earlier this week calling for “state legislation to modify the admissions process” at the city’s specialized high schools, writing that “A single test should never be the only factor deciding who gets in & who doesn’t.”

The city’s eight specialized high schools currently admit students based on the results of the three-hour SHSAT, blind to other criteria.

Bringing in holistic measures like middle school grades, extracurriculars, or interviews would do the exact opposite of promoting fairness, Manhattan Institute’s Wai Wah Chin writes in City Journal. Instead, it would “inject subjectivity and bias and favor those with economic privileges” who have the resources to polish their resumes.

Rather than diluting the standards, Chin insists that the city’s leadership needs to step up and build a system of “abundance, rigor, merit—and accountability.” In her view, the real path to equity is in raising the floor for everyone.

“New York City’s students would be far better served,” she writes, “by improved elementary instruction, expanded high-quality charters, honest grading, and an unapologetic culture of excellence.”

Read the full story

Attendance Matters

Part of academic success involves showing up for school in the first place. “Students cannot learn effectively if they are not present in school, and chronic absenteeism is reflected in test scores,” my colleague Danyela Souza Egorov writes.

While absenteeism is a serious system-wide issue, the high absenteeism rates among Black and Hispanic students should be a cause for alarm, since these attendance issues start in kindergarten and contribute to the great variation in educational outcomes among the city’s ethnic groups.

Read the full story

Extra! Extra!

• This week, the city released its Rental Ripoff Report, recommending 23 policy actions with the goal of protecting renters and modernizing housing oversight by formally recognizing tenant unions, requiring landlords to disclose the use of AI in rental listings, and upgrading building registration systems, as well as aggressively targeting repeat offender landlords through inspections, targeted programs, and litigation.

• Counterfeit goods peddlers vs Mamdani — 1:0, as the administration fails to clean up the notorious stretch of Canal Street. “Just 30 minutes after the raid, they [the illicit peddlers] were set up and back in business,” the New York Post reports. Nicole Gelinas, Rafael Malangua, and I discussed the situation on Canal Street on our podcast a couple of months ago.

• Westside homeless encampment by the Intrepid spans 12 blocks, with residents even tapping into utility poles as the city slow-walks enforcement, the New York Post reports.

• Governor Kathy Hochul announced a moratorium on data centers in New York, something MI’s Sean Speer calls a “huge mistake”, while Shawn Regan explains that it is not data centers so much as bad policies that are raising your electric bills.

• MI’s Stephen Eide looked back at how the internet changed New York City and what that might mean for the impact of AI.

• Benjamin Schneider writes about the future of New York’s historic preservation movement in Planetizen.

Each year, when the NYC Department of Education releases admissions data for specialized high schools, the press and elected officials highlight the low enrollment of Black and Hispanic students. Just yesterday, the New York Times published a story titled “An Elite N.Y.C. Public School Admitted 777 Students. Only 3 Were Black.” The focus was on the test and racial disparities, without addressing the underlying causes.

A Brooklyn city council member requested state legislation to “modify the admissions process,” while the Queens Borough President called for “a real, independent investigation into the admissions process.” A spokesperson for Mayor Mamdani said that the mayor “believes we must root out the deep racial and economic inequities that persist in our public school system, and our administration will be reviewing these results carefully.”

Headlines such as “Just 1 Black student gets into Staten Island Tech” or “NYC specialized high schools continue to offer few seats to Black and Hispanic students” are intended to shock, yet they often overlook that few Black and Hispanic 8th-grade students are adequately prepared to succeed on the admissions test. The articles also don’t mention the fact that these specialized high schools enroll a majority of low-income students, nor do they include the data on private schools’ scholarships for high-performing black and Hispanic students.

Absenteeism is a significant factor in these results and deserves more attention.

Among the ethnic groups of students in the city’s public schools, there are notable differences in attendance. In the 2024-25 school year, 13% of Asian 7th graders were chronically absent, compared to 36% of Black and 35.2% of Hispanic students. This issue begins early: in kindergarten, 27% of Asian students were chronically absent, while over 45% of Black and Hispanic students missed more than 10% of school days and significant instructional time.

Students cannot learn effectively if they are not present in school, and chronic absenteeism is reflected in test scores.

In grades 3-8, Asian students demonstrate high proficiency rates in math and ELA, at 80% and 74.9%, respectively. For Black students, these rates are 43% and 47%. Hispanic students have proficiency rates of 43.1% in math and 43.5% in ELA. Students who are not proficient are unlikely to perform well on a rigorous test such as the SHSAT.

Mayor Mamdani, who attended the private Bank Street School before enrolling at Bronx Science, has benefited from specialized high schools. During the campaign, he said that he would follow the advice from the 2019 School Diversity Advisory Group and “ensure that all high school admissions criteria are transparent and designed to reduce the racial and socioeconomic isolation currently prevalent in most high schools.”

To address the racial inequities highlighted by the admissions test, his administration should prioritize reducing absenteeism among Black and Hispanic students and ensure access to high-quality instruction throughout K-8. Efforts should also focus on decreasing the number of Black and Hispanic students in persistently underperforming schools, where more than half of students are not reading or doing math at grade level. This systemic failure contributes to disparities in SHSAT participation: 32.4% of test-takers are Asian, compared to 18.4% Black and 26.1% Hispanic students.

Mamdani’s first budget indicates no significant changes to the educational system responsible for these outcomes. It continues to fund underperforming, underenrolled schools and does not expand high-demand, high-performing schools. As long as these policies persist, SHSAT admission numbers are unlikely to change.

Expanding SHSAT seats in the borough with the greatest need would be a good starting point: students from Queens receive 32% of offers, but only 3.2% of seats are there. His administration could also publish both racial and income breakdowns of admitted students to highlight how these schools serve a majority of low-income students, so we can have an honest debate about the challenges and benefits of these schools.

Artificial Intelligence’s effect on New York City is uncertain. Maybe the changes coming are absolutely unprecedented. Or maybe past experiences with technological change can, at a minimum, inform speculation.

When the internet came online, New York’s manufacturing heyday was long past. The city had managed deindustrialization better than many other old, cold places, thanks to an expansion of the white-collar economy in the 1980s and 1990s.

By the same token, New York seemed more vulnerable than elsewhere. The city’s vast corporate back office and status as the nation’s media capital made it look primed for tragedy. What had saved the local economy would prove its downfall, thanks to the threat new technology posed to white-collar employment. Similar warnings are being voiced now with respect to AI’s threat to “knowledge-intensive white-collar work”; “this is a revolution coming squarely at white-collar workers”.

Technological Change Requires Financing

Back then, though, New York made it through. One reason was that massive technological change takes financing. Therefore, if you want your city to benefit from massive technological change and you can’t be Silicon Valley itself, your second best option is to be Wall Street. Issuing debt to hire talent and fund data centers, handling IPOs, structuring mergers and acquisitions: that all takes financial expertise on the back end.

The dotcom era was outstanding for New York. State Comptroller data on the Wall Street bonus pool show that 1999 and 2000 posted annual increases of 49% and 44%, respectively, the third and fourth highest annual increases over the last three decades. The Giuliani administration’s FY99 budget announcement heralded the “Largest [Surplus] in City History.” (Though one 1999 bond offering cautioned investors that “The year 2000 presents potential operational problems for computerized data files and computer programs which may recognize the year 2000 as the year 1900, resulting in possible system failures or miscalculations.” Between 1996 and late 1999, the city government spent $350 million prepping for Y2K, an impressive sum that itself speaks to that period’s budgetary cushion.)

Yes, the dotcom bubble would burst and intensify 9/11’s economic pain. The volatility of a Wall Street-centered economy, particularly when coupled with New York’s steeply progressive income tax, has been understood by everyone for a very long time. New York’s budget will benefit from the IPOs of SpaceX, Anthropic and ChatGPT, though state and local policymakers are already committed to mismanaging whatever windfall is realized. (Incidentally, Giuliani mismanaged the windfall in the 90s.^[1]) But the point for now is that New York squeezed more resources out of the commercialization of the Internet than most other cities, thanks to Wall Street.

The Age of AI Will Coincide With The Age of Aging

Another point to bear in mind is that AI’s not the only factor that’ll be shaping the economy of the future. The state labor department maintains a database of local employment data broken down by industry. Comparing 1990 to 2025, the data show that some tech job categories did indeed boom, but so did the health and human services, and the loss of manufacturing was another major change.

Trends in home health aide employment were at best indirectly related to the internet’s diffusion throughout society and the economy. The age of AI will coincide with the age of aging, which will push employment in the health and human services ever higher. Even if AI makes healthcare more efficient (quicker notetaking and diagnoses, chatbot therapists), that value will most likely be plowed back into more healthcare jobs. And perhaps retail employment now stands in about the same position as the garment industry did in 1990, set to fall farther.

The Internet Changed the Government in New York

The digital age’s emergence coincided with New York’s transition from notorious dysfunctionality to a city that other cities turned to for advice on how to whip their own municipal operations into shape. The phrase “the ungovernable city” was coined by Nathan Glazer in 1961. But New York reached its true governance nadir in the 1975 fiscal crisis. Writes Thomas Dyja in New York, New York, New York (2021) “[t]he City had lost control in the ‘70s not just because of debt, but because it couldn’t effectively manage its information.”

The internet—or, digital technology more broadly—helped the New York government come back from that brink. Compstat is the most important example; another would be 311. Compiling, organizing, and usefully analyzing government data had never been possible at such a scale before. And where the internet proper came in was really with transparency, by making all that information on municipal operations easily and immediately accessible. To the extent that transparency equates with accountability, the internet contributed to the cause of good government in New York.

The internet and related innovations also made the government’s job easier by making the drug and sex trades less geographically bound. Mobile phones eased tensions over crack turf, likely pushing down the murder rate. The virtual red light district that is the Internet helped drive traditional red light districts like Times Square out of business.

Of course, the internet giveth and taketh away. The decline of local journalism struck a blow to accountability that has not been offset by the increase in data-informed citizen bloggers. Further, while tech gurus recommend taking new technologies and building 100% new enterprises around them, that obviously can’t be done with government. Accordingly, ideas for how cutting-edge technologies can improve the public sector tend to be anti-moonshot stuff, small hacks for low-priority problems. In the 2010s, London-based DeepMind tried to help reform the UK’s NHS, a very high-priority problem. Results were mixed. Anthropic CEO Dario Amodei says that he’s far more bullish on AI’s ability to advance science and medicine than democratic governance.

And the government can misapply technology. Recognition of that was reflected in Albany’s recent school phone ban. It was also reflected in community policing, which involved a certain walking back of the once innovative idea that moving cops en masse from foot patrols to radio-equipped cars, cut off from communities, was the future of policing.

It Takes Leadership to Make the Most of Technology to Benefit Government and Taxpayers

Michael Bloomberg was a sui generis mayor in so many ways, one being his status as a top-ranking technologist. Having made billions melding finance and tech, Bloomberg had an instinctual faith in the benefits of data and analysis to improve government.

New York’s current socialist leadership has a much more cabined notion of tech’s potential. While Mayor Zohran Mamdani pays lip service to “modernizing city government,” his hero Bernie Sanders calls for seizing control of the AI industry. At the time of Sputnik, the Soviet Union’s leadership believed sincerely that the managed economy would outperform capitalism on technological innovation. The modern DSA doesn’t appear to care about competing on such terms.

The DSA owes much of its rising power to old-school organizational abilities like door knocking. Mamdani’s recent primary successes, contrasted with the failure of Los Angeles mayoral candidate Spencer Pratt’s AI-viral-video-centered campaign, represent a win for the world of atoms over the world of bits. There are bigger problems with DSA governance than its minimal interest in technological dynamism. But let its minimal interest in technological dynamism be noted for the record.

New York’s Exceptionalism

It was different for New Yorkers in the 1990s to contemplate their digital future than it is for New Yorkers in the 2020s to contemplate superintelligence. The internet emerged during the ‘holiday from history,’ between the fall of the Berlin Wall and 9/11. Due, among other reasons, to the absence of great power competition, Americans then were more optimistic, more patriotic, and had more trust in institutions than now. The internet was less often likened to nuclear energy (or electricity or fire) than AI is. The debate over AI is more anxious. Concerns over great power competition shape every question, and the pace of development is breakneck. The AI industry—which already generates more than $100 billion in revenues annually—is growing at a faster clip than the internet did in its early stages.

What makes all this doubly uncertain for New York is that it’s always hard to know what the right benchmark is for New York. Cleveland, Dallas, San Francisco, London? New York’s uniqueness imbues every policy debate, including around technology, with special nuance. Ridesharing was a different debate in New York because of the taxi industry’s prominence and the imperative to manage traffic density in core Manhattan. Airbnb was a different debate because of a tourist economy no other U.S. city approaches and sensitivity around housing affordability. New York needs to worry more about all varieties of terrorism than Cleveland does.

Increased white-collar unemployment would be bad news for tax receipts. But many laid-off white-collar workers would simply leave the city if they don’t own property and aren’t dependent on a local benefit program. One reason why deindustrialization hit places like Detroit and Pittsburgh so hard is that many auto and steelworkers owned their homes, creating a long tail effect for those regions.

Speaking of long tails, the internet had one, too. Remote work, which for the time being may be shaping labor dynamics more than AI, was caused by the internet’s invention decades before remote work’s normalization during and following COVID. Even as New York contemplates how AI will shape its future, it’s still not done being transformed by the technologies of the past.

^[1] “Giuliani, after coming into office with a promise of reducing government, had opened the spending spigots during the boom of the late 1990s.” Fred Siegel, The Prince of the City (Encounter 2005), p. 296.

This week, the Mayor’s Office of Immigrant Affairs came under fire for its choice of ethnic neighborhoods featured in the World Cup guide called “New York City: A Cultural Map.” The guide states that locations chosen “reflect the richness of New York City’s cultural life and its extraordinary diversity, particularly in the many immigrant enclaves such as Little Senegal, Little Colombia, Little India and numerous others.”

On a map crowded with “Little” neighborhoods, the absence of Little Italy was hard to miss, adding insult to injury of Italy not qualifying for the World Cup. Following the backlash, Mayor Mamdani announced today that Little Italy will be added to the map after all.

The decision about which 30 neighborhoods to include on a map in a city that prides itself on translating official documents into 10 languages (one of which is Italian) and providing interpretation in over 100 others is ultimately political. Not every enclave can be put on a map, and to be mapped is to say that this community is part of the official story the city wants visitors to see. Being omitted risks being treated as culturally past tense.

Demographically, the neighborhoods that attracted massive numbers of Italians during the 20th century no longer do so, and while there are still many Italian-Americans in New York City, their share of the population continues to fall. Yet Little Italy remains a vibrant tourist destination, keeping the memory and heritage of the community that played a major role in shaping the city alive through institutions like the Italian-American Museum on Mulberry and Grand, and offering visitors a glimpse of a bygone era—exactly the kind of experience World Cup visitors might seek.

It is the public spaces, the streets, and the commercial strips that define ethnic neighborhoods for visitors. We do not know who lives behind closed doors, but we do notice when streets fill with people who speak a language we may not understand, when shop signs are in a language other than English, or when there is a higher concentration of ethnic restaurants, setting a neighborhood up as a destination for those interested in exploring its heritage.

New York is a city of ethnic enclaves that ebb and flow with waves of migration, but they do not fade as quickly in communal memory as statistics may suggest. In favoring some communities over others to showcase our diversity, the city would do well to remember how deeply those who have assimilated or left still claim the neighborhoods their ancestors passed through—and how tightly they hold onto those memories.

Bensonhurst in Brooklyn may no longer be Italian by the city’s numbers, and for the third of the city’s roughly 3 million foreign-born residents who arrived in the United States after 2010, only traces of the Italian neighborhood exist along 18th Avenue in cultural icons like the Villabate Alba bakery, Il Centro Community Center and the neighborhood’s churches. But Bensonhurst, like Arthur Avenue, like Little Italy, remains Italian in the hearts and minds of the descendants of the Italian immigrants who settled there, keeping alive the memory of the old neighborhood as it was, too soon to be erased.

City’s International Affairs in Spotlight

MI’s Adam Lehodey reports that Mamdani’s Commissioner for International Affairs was planning to meet this week with Iran’s ambassador and permanent representative to the United Nations.

Good Economic News for Mamdani

Recent good economic news is buoying Mayor Zohran Mamdani’s administration: the job numbers are up in the key industries, office demand is strong, and housing starts are promising.

“Mamdani clearly intends, through his “Block by Block” plan, to make a significant further contribution to alleviating the city’s housing crisis, although the details will be important,” MI’s Eric Kober writes. “He has yet to articulate an economic development strategy, for which he has been criticized in the media. Despite catching a break from the city’s entrepreneurial energy, there is still much he could do, in particular to boost employment in the declining retail and leisure and hospitality industries, which are large sources of employment for less-skilled and less-educated workers.” Read the full story.

Related:

• Some of the biggest names in banking, law, and AI are expanding in Manhattan and Brooklyn. (The City Reporter)

• Anthropic plans to double its New York City workforce to 1,000 people this year. (The New York Times)

Buses & Residential Parking Permits

• The new “Next Stop: Fast Buses, Better Service” plan is the most recent attempt to overhaul the city’s slow bus system to deliver on the “fast” part of Mamdani’s campaign pledge to make the city’s buses “fast and free.” The plan targets a 20% speed increase across 50 priority corridors, proposes a high-speed Bus Rapid Transit-like network on five major avenues, and phases in system-wide all-door boarding via OMNY by late 2026. All with support from the state.

• Congestion pricing has not triggered the parking crisis critics feared. The Congestion Pricing Parking Study found that parking availability inside the toll zone remained stable, while double parking actually decreased by 10%. Neighborhoods just outside the zone saw no major spillover from drivers dumping their cars to avoid the toll, failing to make a “compelling case for the implementation of a Residential Parking Permit (RPP) program.”

Michael Harrington and the Democratic Socialists of America

MI’s Stephen Eide looks in depth at Michael Harrington and his attempts to make America socialist, observing that the current Democratic Socialists of America are unlikely to be more successful.

“The heart of early twenty-first-century socialism is urban college graduates energized by DSA messaging around ideas that cannot work nationally. The New York-based DSA is like the viral influencer who can’t make a living in the real world. Its record in America, past and present, shows that socialism can maintain either a broad appeal or a deep appeal—but not both,” he concludes.

Read the full story.

Related:

• Ed Kilgore ponders the conversation of whether Democrats are moving left rather than just rejecting the establishment in New York Magazine, and writes that “With the right tone, an “abundance” centrist enraged by bureaucratic and interest-group resistance to housing construction and infrastructure projects might strike some of the same anti-Establishment chords as a Democratic Socialist.”

• A Rhode Island DSA candidate is fundraising in Brooklyn, Gothamist observes.

• Frustration with the economy has been the most important factor in the surge in DSA membership, the New York Times reports.

• Plus an interesting podcast episode with Grace Mausser, Co-Chair of New York City DSA:

  Time To Say Goodbye

  How DSA Won with Grace Mausser

  Today we talk to Grace Mausser is Co-Chair of New York City DSA, the largest chapter of DSA with over 15,000 members. She has worked on dozens of democratic socialists campaigns in New York, building robust canvassing operations, creating broad left coalitions, and raising millions of dollars from grassroots donors…

  Listen now

  2 months ago · 1 like · Time To Say Goodbye

More from MI

We have three education pieces this week you may be interested in.

• The teachers’ unions have filed another lawsuit aimed at limiting educational options for New York families by targeting the transfer of a charter school network to another provider, Danyela Souza Egorov writes.

• Looking at the approved education budget, Danyela observes that the city continues to “spend lavishly on underperforming, under-enrolled schools and invest in initiatives unlikely to reverse these trends.”

• The experiment to eliminate gifted programs and tracking to reduce racial inequalities has proved wildly unpopular, Neetu Arnold reports. “In a postmortem of the 2024 presidential election, Democratic pollsters found that the most unpopular K–12 education policy was eliminating tracking in public schools.”

Related:

• Since some PTAs raise more than $1 million for their schools a year, some think NYC schools need to redistribute PTA wealth. (Gothamist)

• Mayor has devoted his attention to childcare, with K-12 education plans unclear six months in. (Chalkbeat)

Extra! Extra!

• Mamdani administration’s officials are reaching out to local business owners to reassure them about the proposed public supermarkets, the New York Post reports, while The New York Times notes that national chains are slashing grocery prices in response to weakening demand.

• A NYCHA plumber made more than $465,000 with overtime, and the city is now investigating. (The New York Times)

• The vacancy rate of rent-stabilized apartments is increasing. In 2025, the citywide vacancy rate for rent-stabilized apartments was approximately 5.6%, up from 3.7% in 2016. (The City Reporter)

One piece of good news comes from commercial real estate brokers who track Manhattan’s office market.

The office leasing market has been in the doldrums since the pandemic, as work-from-home reduced businesses’ need for office space. Now that may be turning around. Colliers reports that office leasing volume jumped in the first half of 2026, compared with the same period a year ago, and represented the best first half since 2002. Manhattan’s average asking rent was the highest since July 2020, and the availability rate (which includes both vacant space for rent and space expected to become vacant) continued to fall, to 13 percent in June.

Colliers attributed some of the tightening of the office market to residential conversions, with over 900,000 square feet of office space removed from the stock in the second quarter of 2026. State legislation enacted in 2024 created a tax exemption for conversion of non-residential buildings to housing, known as “Section 467-m.” The most generous exemption period, 35 years, applies to buildings that commenced construction by June 30, 2026. That gave building owners an incentive to move quickly.

In addition, the office market is getting a boost from employment growth.

In the year to May, New York City gained 44,500 private jobs overall, a gain of 1.1 percent. NYC’s employment is dominated by services, and these can be divided between “key industries,” which are relatively concentrated in the city, compared to the nation as a whole, and those that mainly serve the local population.

The city’s economy depends on the fortunes of key office-based industries, which bring in income from the rest of the nation and the world and fuel the city’s tax base. These are broadly categorized in jobs data as “Information,” “Financial Activities” and “Professional and Business Services,” and “Management of Companies and Enterprises.”

In April, I noted that key office-based industries had broadly stagnated in 2025. Employment has now picked up in the largest of these groupings, Professional and Business Services, which gained 14,500 jobs, or 1.8 percent, in the year ending in May 2026. The office-using Publishing component of Information grew 4.1 percent, while Financial Activities grew by 1.6 percent. Management of Companies and Enterprises grew by 1.5 percent. Among the local-serving industries, Private Education and Health Services had by far the largest growth in the year to May, gaining 23,300 jobs or 1.8 percent.

The mayor’s Executive Budget in May included an Economic Outlook chapter prepared by the city’s Office of Management and Budget. That chapter anticipated the continued rise in office asking rents but was more conservative in its forecast of office-based employment. The new data will keep the city’s revenue forecast on track and, with more people working at relatively high-paying jobs, perhaps lead to unexpectedly higher income tax revenues.

New York City’s ability to continue adding jobs depends on the availability of housing for its workers.

Since the great majority of workers in the city also live in the city, that requires progress in alleviating the city’s chronic housing supply shortfall. Here, the news is more equivocal, but there are some signs of progress.

In March, the city’s Planning Department (DCP) reported that 38,682 new housing units were completed in 2025, the most since 1965. That is a consequence of the rush to vest tax benefits under the Section 421-a program, for which construction was required to commence by June 2022.

The 421-a expiration compressed several years’ permits into one year. The huge spike in permits in 2022, to 71,226, was followed by a steep dropoff. In each of the next three years, citywide new housing permits were well under 20,000. DCP reported that permits for 63,805 new homes were active but unbuilt at the end of 2025. It is unclear how many of these will ultimately be completed. The 2024 state legislation that created the residential conversion incentive also extended the completion deadline for the vested 421-a developments to 2031.

In 2024, the city approved the “City of Yes” zoning amendments. These were expected to accelerate the pace of housing development, and 2026 housing permit data indicates that might be happening. In the first four months of 2026, NYC issued building permits for 9,705 new housing units, mostly in the Bronx, Brooklyn, and Queens. If it continues, the increased pace of permitting, plus the large overhang of approved permits from 2025, implies that the city may be able to sustain an elevated level of housing completions, compared with the experience of recent decades.

Ironically, Mamdani, who has only been mayor for a few months, is responsible for none of this. However, he gets the credit, just as he would be blamed if the city’s economy went into a tailspin. In any event, the mayor’s avowed democratic socialism has not scared off a sizable number of business decisions to invest in New York City.

Mamdani clearly intends, through his “Block by Block” plan, to make a significant further contribution to alleviating the city’s housing crisis, although the details will be important. He has yet to articulate an economic development strategy, for which he has been criticized in the media. Despite catching a break from the city’s entrepreneurial energy, there is still much he could do, in particular to boost employment in the declining retail, and leisure and hospitality industries, which are large sources of employment for less-skilled and less-educated workers.

The perspective from mid-2026 is much better than that from last year, but much remains to be done to keep the better times going.