Category Archives: Infrastructure

NY: The Economics of Infrastructure

$2 billion may seem like a lot for infrastructure (and it is) but given that New York is in some serious need of an upgrade for its water and sewer systems, that is hardly anything.  Indeed, experts believe that it is likely to cost around $80 billion.

This proposal by Gov. Cuomo is in addition  to the $200 million that was approved in 2016 by lawmakers for water projects in the region.  Despite this, the proposal is garnering support from both parties due to the fact that many of the water systems have been wearing out for some time already (one example being that almost 1,500 water main breaks were encountered by The Erie County Water Authority in 2015). Indeed, it has been estimated that 20 percent of NYC’s treated water which goes into municipal pipes encounters a leak before it gets to the faucet which is becoming an increasingly problematic situation. Maintenance and repair is crucial now before the situation worsens.

One problem is however, as Steven Cohen, Executive Director of Columbia University’s Earth Institute asks:

“The structure of the public-private deal or partnership is critical, but again, the central issue remains, who pays? People resist paying for resources that once were free. Before this country became modern and urban, many people were able to get water for free from their own wells. They managed their waste in septic fields and compost heaps, and the occasional garbage fire. Now they pay for water, sewage treatment and waste removal. They used to get their TV for free with antennas, now they pay monthly Internet and cable bills. Life has become more complicated and more expensive and our incomes have not kept pace with the increased cost of everything. It’s easy to understand why people resist paying for the modernization of infrastructure. But it can’t be avoided for much longer. A progressive fee system for privatized infrastructure needs to be considered as part of the way to help the working poor and people on fixed incomes to bear the cost of infrastructure upgrades.”

He answers: “The issue is how payment for the infrastructure is set up and how the government maintains control to ensure accountability if the private firm does a lousy job.”

Let’s hope the bill is sorted out in time for New Yorkers to get safe water in their homes.

Major NYC Projects

There are currently some extremely substantive projects underway which will develop New York City’s infrastructure quite significantly over the next few years. Large funds have been and are going into these and this article looks at some of the major ones.

In addition to the one that has already happened at the beginning of this year (the Second Avenue subway line that was a century in the making and cost $4.5 billion) there is the construction of the real estate project at Hudson Yards, which has been deemed the most expensive of its kind in American history. Then there is Cornell University’s construction of its fancy new campus featuring classrooms, a hotel, eateries and stores for its graduate students.

Since the 9/11 attacks NYC has also been working toward the renovation of the site where the Twin Towers were destroyed and now the Freedom Tower has been erected which is New York’s tallest skyscraper, along with a new transit hub, the memorial, museum, mall and park.  Two more towers along with a small church and arts center are still being constructed with everything due for completion in the next three years.

Essex Crossing (across from the lower east side in Manhattan) will have 1,000 apartments which will be available for low to moderate-income residents and feature a Regal movie theater, street market, cultural space and bowling alley.  Others of the large scale constructions in the work include: Hunters Point South (a 30-acre project over in Long Island City, Queens which will likewise offer affordable housing), Pacific Park (again with a lot of lower rent priced apartments – 2,250 of which will be lower than market rate – as well as an eight-acre park, and a variety of shops to Prospect Heights, Brooklyn) and Industry City (which is a major redevelopment  featuring a hotel, stores and a 16-building hub for tech startups).

New York City is clearly undergoing some major construction for enhancements over the next few years that are set to really benefit lower-income individuals and families.