What Elites Do Instead of Providing Services

I realized last year that even when they face a problem that is evidently about city services, city governments prefer to go for monuments that glorify their leadership. The most blatant example then was Cornell NYC Tech, the city-backed university whose campus construction alone is several times as expensive as the CUNY system per student. Since then I’ve tried to collect examples of power brokers proposing similar schemes, of which the worst is Larry Summers’ proposal to solve US inequality by spending public money on airport improvements. These are, to be frank, analogs of what American transit activists have to deal with routinely, with agencies preferring expensive iconic stations to ordinary capital and operating improvements in service.

The argument for Cornell NYC Tech is that New York needs tech entrepreneurs of the kind that Silicon Valley has, and that for that it needs its own Stanford. Instead of investing in STEM education across the CUNY system, or in its dedicated technological campus at the New York City College of Technology, it decided to start a private university from scratch, inviting other universities to bid on it. The city wanted Stanford to win the bid, but instead the winning bid was a joint effort by Cornell and the Technion, Israel’s technological university. The Technion was never run this way; it was started as a German-style technical university and is now a public university, funded and run on the same terms as the other Israeli public universities.

For Cornell NYC Tech, the city has lined up $2 billion in public and private funds for campus construction, expecting 2,000 students in 2037, which at 4% interest is $40,000 per student-year; annual capital and operating spending together, from all sources including tuition, is $16,000 per full-time equivalent student at the CUNY senior colleges and $11,000 at the CUNY community colleges (see PDF-page 65 of the budget request). This is the educational equivalent of airport connectors, which cities routinely spend several times per rider on as they would on ordinary subway extensions.

Summers’ proposal for airport improvements is in a way more frustrating, and more telling. He did not propose it as part of an independent infrastructure plan, but as a way to build public works to reduce US inequality, on the grounds that JFK is “an embarrassment as an entry point” and “the wealthiest, by flying privately, largely escape its depredations.” The proportion of people who fly privately is tiny; an income level at the bottom of the US top 1%, $400,000 per year, will buy you a lot of intercontinental business-class travel or some first-class travel, while affording a late-model Learjet requires an annual income of many tens of millions of dollars. Since poor people don’t fly as much as rich people, the users of JFK skew richer than the general city public.

My frustration comes from the fact that Summers is not trying to derail the conversation: he previously wrote about inequality as a problem and proposed standard center-left solutions, including raising taxes on capital gains and inheritances, supporting unionization, and (by implication) investment in public education. He clearly cares about the problem. He just seems to think that airport investment benefits the poor more than the rich. Most likely, this comes out of years of insider schmoozing with people so rich that they do own private jets, and generalizing to the considerably broader class of rich people.

In both cases, even on its stated merits, the proposal misses key facts about the situation. Silicon Valley began around Stanford, but once the initial tech cluster formed, it became independent of the university, so that even companies formed by people with no affiliation with Stanford or the Bay Area, such as Facebook, relocated to the area. New York is not going to grow its tech industry to the proportion of Silicon Valley’s by building an enterprise university any more than the Bay Area can become a world financial center by building affiliate universities for Columbia and NYU, from which many finance workers are recruited. As for JFK, like many of its users, when I arrive my first experience is the immigration line, a humiliating experience that involves fingerprinting and standing in line possibly for hours, depending on what terminal I use and what time I arrive. Public works will not solve that.

The problem with making even the merit-based argument is that public monuments are never truly merit-based projects. The decision-making process goes in the other direction: first the city elites (or, in case Summers’ proposal makes it into a national jobs bill, national elites) decide on something they want to see built, usually with the adjective world-class thrown in: a world-class university, a world-class airport, a world-class train station, a world-class office tower. The image of a world-class monument is more important than whether it works at its stated goal, such as improving education or transportation or fulfilling a need for class A office space.

Witness all the problems involving World Trade Center, which is being built entirely for prestige value, at enormous cost. The associated PATH station is $4 billion, almost as much as Second Avenue Subway, and about the same as 20 kilometers of subway in an average first-world city. One World Trade Center cost about $12,000 per square meter. I am not aware of any office tower in the world that is this expensive outside the WTC area and Hudson Yards; the tallest recent tower built in New York excluding 1 WTC, Bank of America Tower, cost about $5,500 per square meter in 2012 dollars, while the range I have seen for office towers in the 200+ meter range is about $2,500-6,000. Meanwhile, the WTC site struggles to find tenants: 1 WTC is almost half empty.

The sentiments after 9/11 ensured WTC would be rebuilt taller, regardless of actual demand in Lower Manhattan. Viewed through this lens, 1 WTC is not really about office space, but about proving a point about the power of US and New York to come back and not surrender to terrorism. This is why the transit spending went mainly to the PATH station and not to bringing the LIRR to Lower Manhattan, as proposed by the Regional Plan Association and studied officially in subsequent years: the LIRR project would’ve been about Lower Manhattan in general, without enhancing the specific prestige of WTC, while the billions poured into the WTC site and its PATH stations are all about the prestige.

Those other projects – various overrated transit schemes such as airport connectors, but also Cornell NYC Tech and Summers’ JFK proposals – are the same. They are not about what people living in, working in, or visiting the city need. They are not even about what they want. Whereas there was a citywide impulse to rebuild WTC taller after 9/11, there is no equivalent impulse to build an exclusive technical university, except among the power brokers. They are entirely about being able to say, “we have our own ___” and “I got that build.” It looks like development, but at best provides a fraction of the advertised value, and at worst provides nothing.

Whenever an urban project is proposed, the most important question to be asked is “what problem is this solving?”. Often, the problem is real, but there are much cheaper and less glamorous solutions. At other times, the project is a solution in search of a problem, and this is often detectable when proponents tout many unrelated benefits, almost as if the project can solve every major problem.

Compare this with solid public transit projects. Consider the lines I think North American cities should be focusing on, and the lines proposed in comments, especially as the Vermont subway in Los Angeles. In every single case, there are strong arguments for why the ridership of those lines would be high relative to the cost, and why existing subway lines (if any) and surface transit options are inadequate. The problem being solved is underserved neighborhoods with high transit demand, or in the case of the crosstown lines underserved origin-destination pairs in high demand. For other lines, not listed, there might be a separate argument regarding transit-oriented development: American cities tend to oversell TOD, as the problems with Hudson Yards show, but there do exist cases in which extending a subway line can allow dense development, or the construction of a new business district. But this involves figuring out where the development comes from – for example, the housing market may be very expensive, signaling high demand, or there may be projections of high future metropolitan population growth.

Usually, support for prestige projects to the exclusion of providing public services is the hallmark of moderates, along a broad arc from the center-left to the center-right. In the last few years, Republicans too far right to be called center-right have prioritized cutting taxes and spending and weakening the unions; signature projects conflict with their opposition to government spending. Conversely, urban leftist activists tend to oppose these prestige projects, on such grounds as gentrification, displacement, and private-sector involvement in public services.

The people in between those two ends are the ones most guilty of this kind of thinking. They are usually neo-liberal enough that they believe the government should champion market solutions and oppose industrial policy, and yet what they do is in many cases exactly industrial policy: Cornell NYC Tech is an attempt to curry favor with the technology industry. They are not so conservative as to believe government is always the problem, but the role they envision for government is to partner with the private sector to build public projects, which they tend to choose on grounds of what looks good rather than what provides the best public service. They know the buzzwords of urban politics well: for example, they’ll happily argue climate change to push a desired agenda that is usually only partly related to the problem, but lack the urgency of actual environmentalist activists and often also build roads and other dirty projects.

As with most bad things in politics, it’s a result of weak democratic institutions on the local level. American mayors tend to be elected dictators, and the opposition to them tends to be based on personality rather than ideology. In this non-ideological framework, the role of government is not to balance market and state solutions based on the voters’ preferences, but to aggrandize the leaders. Signature initiatives must appeal to the broad spectrum of non-ideological voters, so they can’t involve merely increasing spending on a chosen priority like education or transportation. Doing nothing is not an option – something has to be passed to remind people that the government still exists and has a purpose. The political incentives are against any incremental improvements that lead to tangible results, and for white elephants.

47 comments

  1. Eric

    1. I don’t think most of the extravagances of the WTC would have been built if the decision were left to NYC. But after 9/11, the federal government contributed a large amount of money which had to be spent on a narrow range of projects. That biased the decisions in favor of non-useful things.

    2. Similarly, Cornell NYC Tech is not competing in a free market. The government money which will fund research there would otherwise go to a different university.

    • Alon Levy

      1. The federal money could have been spent on WTC-related things, but the city could have chosen to sell the LIRR to Lower Manhattan as a Lower Manhattan revitalization, or something. (Not that it matters thaaaat much, since the proposal was focused on airport access.)

      2. Most of the money for Cornell NYC Tech is not federal research money that would’ve gone to universities outside the city. It’s either city funds (including imputed costs of free land donated by the city), or funds donated by private donors who wanted to be part of the project; these could equally well have gone into public education, and the land could have been used for something else.

      • Adirondacker12800

        Since the state owns the LIRR the city would have had a hard time convincing the Port Authority to buy it.

  2. Rico

    While I agree with the points in your article the devil is in the details. Which major project is not considered a vanity project for elites and considered an important contributor for______ by its supporters. In Vancouver every Skytrain line goes through this before it gets built with opponents claiming buses (or LRT) are adequate for the foreseable future and proponents claiming the benifits outweigh the costs of the project.

    • Alon Levy

      Yes, but there actually is a discussion about costs and benefits, not just for speed but also capacity. Vanity projects don’t have any of that; for example, there’s no discussion about service needs whenever a city proposes an airport connector. My understanding is that the Canada Line was just declared to be about both Richmond and the airport, and nobody investigated if the airport branch is useful (it is, but less so than the Richmond branch). The New York airport connectors, both the ones already built and the one Port Authority is proposing, have never had any such discussion, except at the margins of transit activism.

      • Adirondacker12800

        The Port Authority’s money is the Port Authority’s money and the only say the people of New York and New Jersey have over it is when the Governor of one state refuses to approve the minutes of the Board’s meetings. Ya get the governors on board and their isn’t much to discuss. Governors hear from rich people who want less competition for space for their limos and cabs and airport connectors get built. Gets hoi polloi away from the terminals.

  3. Rico

    My first sentence should have been, ‘….is not considered a vanity project for elites by opponents…’

  4. letsgola

    Great post. I would add that the dysfunction is different on opposite ends of the political spectrum.

    On the left, you have people who really do believe they are solving urban problems through streetcars, rent control, inclusionary zoning, etc. The problem on the left isn’t disinterest in solving problems, it’s the delusion that they are solving problems.

    On the right, you have people who can’t differentiate between the size of the government and the competence of the government. The problem on the right is the belief that the government can’t solve any problems.

    So take your pick, delusional or stupid. The fact that the right has become the party of racism and obstruction (even if it means torching their own ideas, like the individual mandate) leaves you with pretty much only one option. But it’s still a shitty option.

    • Alon Levy

      Re streetcars, I want to stress that this is more center-left than left-left. In Seattle, the Socialist City Councilor’s signature issue isn’t a streetcar; it’s a $15 minimum wage, plus a few things that are less covered, like her proposal to seize the Boeing plant should Boeing decide to leave for California.

      Likewise, the idea that the government can’t solve any problems is not thaaat common on the local level. It’s more common on the state level, and there you see the Chainsaw Al approach to government spending. But on the local level, center-right mayors champion vanity projects just like everyone else (e.g. Giuliani’s idea of the N to LaGuardia), since they do believe government has a purpose.

  5. Nathanael

    FWIW, the “grassroots” professors and students at Cornell opposed “Cornell NYC Tech”, which is siphoning resources away from Ithaca.

    But the elite administrators liked it. Because they are bored with living in Ithaca, or something.

    • Adirondacker12800

      The students and professors they are trying to attract can pick Cornell or someplace that ain’t in the middle of friggin’ nowhere like Harvard or even Yale. Or if they are into the whole land grant thing, Rutgers. Though there isn’t going to be a whole lot of land grant kinda thing going on a short walk from the F train. Where they can hop on an Acela and be in Washington DC faster than they can get to Ithaca.

      • Alon Levy

        The city gave them 10 free acres in what is technically part of the borough of Manhattan, on an undercrowded subway line (=good for more housing).

      • Adirondacker12800

        The West Side Yards? It’s owned by the state a.k.a the LIRR. The LIRR doens’t pay property taxes so the LIRR selling off air rights to developers gets the city property tax money. They are building housing there.

          • Adirondacker12800

            Dormortories aren’t housing. I’m sure like NYU and Columbia they are gonna find a reason to build more housing, the stuff on the web site says “350 housing units”

          • Alon Levy

            350 housing units on 10 acres? Yawn. Line up a Manhattan block with 6-story New Law tenements and you get 480 (small) apartments on 3 acres.

          • Adirondacker12800

            one kitchen equals one housing unit. I dunno how many students they are gonna cram into one three bedroom. Probably at least 6. The micro units, who knows how they are counting them or how many people are going to be in one. New Law tenements even Old Law tenements, in good neighborhoods tend to have one or two people in them. When they decide to put a 15 story dorm on one of the green spaces and 20 story apartment building for married students and entry level faculty will you be happier?

          • Adirondacker12800

            Gotta ask them how they define that. “Housing unit” is a Census Bureau term. For non-group living it’s an unshared kitchen and bath. But there’s gonna be “micro units” versus “studios”. I assume the studios are going to have a private bath and at least a Pullman kitchen. They might be calling the 500 micro units one housing unit because there’s only one kitchen on the plans. Lots of bathrooms but one kitchen. so there 349 housing units not-“micro”, gets under the radar of the NIMBYs north of the bridge.

      • Nathanael

        We haven’t had a far-seeing President of Cornell since the first one. Ezra Cornell and Andrew Dickson White financed one of the earliest passenger railroads in the US specifically so that people could get to Cornell. Later Presidents of Cornell allowed it to be ripped out without paying any attention to the matter.

        • Adirondacker12800

          The movers and shakers in Ithaca weren’t particularly concerned when the stagecoaches stopped running or the lake steamers put out their boilers either.

          • Nathanael

            The early ones were. The later ones’ attitude — eh, whatever. They haven’t ever worked very hard to keep good airline service either, which has come and gone according to market whims. In very recent years there’s been some Cornell effort to provide Cornell-subsidized high-end bus service.

        • crazytrainmatt

          I actually looked this up a month or two ago, as you can still see remnants of these tracks from the road. The line was quite curvy, so time to NYC was something like 6-8 hours.

          • Adirondacker12800

            When the choice was to get in your Model T or if you had a newer car your Model A and drive down Main Street of every town between Ithaca and the Holland Tunnel an 8 hour train ride doesn’t seem so bad. When your choice is to take a train ride or shoot down Route 17 and be there hours faster the train doesn’t look as attractive. Then they went and built those lovely interstate highways

          • Nathanael

            Well, it was one of the earliest railroads in the United States (1827!!!!). They made some mistakes. For starters, the route from downtown Ithaca to the far end of South Hill in Ithaca can only be described as a mistake; it took over half an hour. (Seriously.)

            The rest of the route from Ithaca to Owego is pretty good actually.

            Meanwhile, bus service from Ithaca to NYC currently runs at 5 hours if it runs express and doesn’t hit any extra rush hour traffic; 6+ is more normal.

            So yeah. The railroad could easily be faster.

          • Nathanael

            ….also, route 17 isn’t really very fast. It essentially follows the same route as the railroad (very twisty), it’s just been upgraded more.

            Google thinks it’s 4 hours. Well, if you don’t hit traffic. You can easily lose two hours in traffic in New Jersey (south of Ramsey) if you hit the wrong time of day.

            Google thinks it’s 15 minutes faster to go via Scranton, but again, you’re likely to hit traffic in New Jersey (around Denville) and lose two hours.

            At this point the fastest reliable route from Ithaca to NYC is probably to drive to the Ramsey Route 17 station (which is right about where the congestion usually starts to hit) and catch NJ Transit there. Except I’d feel uncomfortable leaving my car there.

            The buses very determinedly fail to connect to the NJ Transit train service, and so get caught in traffic in New Jersey and Manhattan.

          • Adirondacker12800

            Ramsey is an upper middle class suburb. It’s safe to park your car there.
            Very early on they thought railroads had to be very very flat and made some bad decisions. Stuff that was built later, after 1845 or so, is about as good as it going to get without building lots of tunnels and viaducts.

          • Alon Levy

            And yet the fastest parts of the NEC opened in 1835 (Boston and Providence) and 1837 (New York, Providence and Boston).

          • Adirondacker12800

            Places where it’s flat. The shortest route between two places is a straight line and if it’s flat you build a straight line. The conventional wisdom in 1830 that building a railroad across the fjords of Connecticut was impossible so they went out and built the Long Island Railroad. Take a ferry to Brooklyn, a train to the East End, a ferry to Rhode Island and a train to Boston. Going across the estuaries in Connecticut was going to be too expensive so they went out and built the Air-Line. Which squiggled all over the place and was too slow once the Shoreline was completed. No matter what you do the Air-Line would never be fast unless you start to dig tunnels through the hills and viaducts across the valleys.
            The existing routes across Connecticut and Western Massachusetts are hopeless. If we are going to build tunnels and viaducts build it for HSR.

          • Nathanael

            “Ramsey is an upper middle class suburb. It’s safe to park your car there.”

            For how many days? Even in upper middle class suburbs, I’m not so sure about leaving a car for two, three weeks.

          • Nathanael

            “Very early on they thought railroads had to be very very flat and made some bad decisions. ”

            Humorously, this behavior was a reaction to the *extremely* early railroads like the Ithaca & Owego, which were happily routed across hills with 70% grades, which turned out to be a poor choice. The designers also thought the Liverpool and Manchester had to be extremely straight, so burned enormous amounts of money on tunnels and bridges… but allowed extremely steep grades, causing lots of trouble later.

            Yeah, they didn’t know what they were doing before roughly 1845.

          • Alon Levy

            Um, what? The L&M had a ruling grade of 1%, pulled by cables. The ruling grade away from the cable-hauled section was 0.03%. No, that’s not a typo, it’s 1 in 3,300. That’s how flat they thought railroads had to be in 1830, because they had no experience with engines to be sure that they could climb steeper grades or with brakes to be sure they would work on the downgrade.

          • Adirondacker12800

            Google is your friend. From NJTransit.com

            Lot Location: Route 17 & Spring St
            Owner: NJ TRANSIT
            Contact: Standard Parking
            Phone: (201) 934-6582
            Standard Spaces: 1251
            Accessible Spaces: 23
            Evenings: PARKING ALLOWED
            Nights: PARKING ALLOWED
            Weekends: $2/DAY

            Why you’d want to park in Ramsey for three weeks is a different question.

            If you want something more secure, there’s plenty of parking at Newark Airport and it’s easy to get to the train station from the parking lots.

  6. Ralfff

    “On the left, you have people who really do believe they are solving urban problems through streetcars, rent control, inclusionary zoning, etc.”

    I don’t think it’s fair to call the left as a whole “delusional” on this issue. Some out-of-touch fool cheering on a 2 mph streetcar to nowhere does not negate the successful light rail projects the US has enjoyed recently. The much greater problem is the suburban dominance of politics in America today. Cities are limited in what they can do and suburbs feel no obligation to help, and often are actively trying to sabotage their cities, which they correctly perceive as competition. If the urban policymaking left is delusional, I’d argue that it’s in the failure to see suburbs as competitors and the cheering on of “regional” initiatives that enable the parasitic suburban relationship. The legislatures, national and state, are set up for suburban dominance through gerrymandering across municipal lines (although New York is an exception to this rule, it’s proven especially incompetent at electing state legislators in general).

    Great post, Alon. A good complementary post would be explaining how these points are different, or not, in other countries, because that’s what I was left wondering at the end.

    • fmanin

      The impression I get is that the problem is personality-driven, rather than ideology-driven, politics. The trouble here is that while American political parties do have ideological distinctions, they’re often blurred on the local level and/or cities are so completely dominated by Democrats that the party distinction becomes irrelevant. If so, one should be able to draw a correlation between ideologicality (!) of an entity’s politics and its ability to spend money usefully. This sounds like an interesting potential polisci project, the trouble is coming up with metrics for both of these components. Remind me to do a Google Scholar search and find a political scientist to do it with.

      • fmanin

        I should make it clear that this impression comes from Alon’s post.

        Also one has to control for clearly related variables such as corruption and ones I’m not thinking of right now. This is why I need a political scientist.

    • letsgola

      Fair enough, my comment was probably too harsh. Streetcars are popping up in both liberal and nominally conservative places (Utah, Tucson) and they are the sort of expensive monuments that Alon is talking about.

    • Alon Levy

      The country I know best on this subject is Israel, which has the exact same problem of elected dictators at the municipal level. While the political system at the national level is parliamentary, on the local level it is effectively presidential (I guess mayoral?), with separate elections for mayor and city council and a coordinated date on which all municipal elections are held nationwide. The mayor has extensive power, which results in a bandwagoning effect, where parties fight to join the municipal coalition rather than sit in opposition and propose alternatives. Both Tel Aviv and Jerusalem are run by people who have every misfeature of Bloomberg and Emanuel and none of their positive traits (e.g. unlike Bloomberg, Huldai hates immigrants); in Tel Aviv, both parties that ran challengers to Huldai last election, Meretz and the partially communist City for All, joined Huldai’s coalition, in City for All’s case violating a promise not to do so. In Haifa, I do not know what the mayor’s qualities are, but the governing coalition has spanned parties from the communists to parties to the right of Likud, contributing to the same corruption and lack of choice that Tel Aviv and Jerusalem have exhibited.

      • Yoav

        On Haifa – Yahav (Haifa’s Mayor) is trying to do good, I guess.
        But money is spent on the wrong things, like I huge new satium near Matam, which is practically not connected to the city, lots of new roads, like the new nahal giborim road which connects the Carmel with the downtown city.

        The “port campus” is pretty desolate, and the conditions in the downtown city are pretty abysmal. It is only full of people when the city organize a party there.

        The metronit, Haifa attempt at BRT, is nice – but not very rapid inside haifa as it doesn’t drive in a straight line, and doesn’t climb on the mountain at all, which leaves the majority of the city without it. It mainly serves people from the krayot (near by cities) who go to work at haifa, since the metronit can bypass a lot of the krayot traffic.
        The project was also way over budget and extremely late.

        There is a lot of new construction at Neve David, which seems nice, haven’t been there. Lots of towers.

        • Alon Levy

          I saw the Metronit construction from the road a while ago. It seemed like a lot of infrastructure, more like light rail than like BRT.

          That said, I don’t think the Metronit (or the Jerusalem blight rail, or the Tel Aviv disaster) is a prestige project. It’s a transportation project that has a lot of problems; it’s not the same as fluff like the Bridge of Strings, or Huldai and Barkat’s luxury tower compounds and other projects meant to attract rich foreigners.

          • Yoav

            I think the stadium is a prestige project.
            Though the stadium at kiryat Eliezer is kind of old.

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  8. Sascha Claus

    > »While the political system at the national level is parliamentary, on the local level it is effectively presidential (I guess mayoral?), with separate elections for mayor and city council and a coordinated date on which all municipal elections are held nationwide.«

    Sounds familiar to me, although municipal elections in Germany are held only statewide on the same day, with differing term lengths and dates between states. Some pinned it on the same day as European elections. However, …

    > »The mayor has extensive power, […]«

    … German mayors are elected directly, but have to beg the councils for money; not much power without the monies. Mayors of the city-states (Berlin, Bremen, Hamburg) are elected by the state parliament after each election, just like prime ministers.

    I’m not familiar with the local issues and politics in the largest cities, but the occasional project sheds some light on this, be it concert halls, subways, an airport or some
    railway station.

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