UPDATED Hurricane Sandy Recovery Dollars--How to Make Them Count
As New York, New Jersey and Connecticut begin the painstaking process of recovering from Hurricane Sandy, experts are estimating that the cost of cleaning up and rebuilding may top $50 billion. It’s likely— considering the dire state of roads, subways, bridges, commuter rail and other infrastructure--that the figure will escalate.
Using past disasters as an example, we can also expect that big business will seek to dominate the conversation and benefit most from the use of relief and rebuilding funds.
Billions of dollars in federal economic development aid was made available to New York after the attacks of September 11, 2001. Left out of much of the allocation and all of the decision-making were small businesses and low-income residents, especially in nearby areas of Chinatown and the Lower East Side. Much of the cash grants went to large business or wealthy “small” businesses like hedge funds and brokerages with few employees. Billions in Liberty Bonds went to building luxury housing in Lower Manhattan and new headquarters for powerful financial firms like Goldman Sachs. Good Jobs New York tracked these funds as part of our Reconstruction Watch project and in our Database of Deals.
How does this bode for an impending flood of rebuilding aid for the area? The answer is good and bad. Technology could be a great democratizer, and opportunities to educate taxpayers about proposals and get feedback are widely available. While acknowledging the existence of the digital divide, it has lessened dramatically since 9/11. Town halls, literal and virtual, are more accessible, (expect opinionated New Yorkers to chime in loudly once electricity is back online). The bad part is that powerful business interests will be using their influence with policymakers to set the agenda while the rest of us are still preoccupied with recovering from the storm.
This week New York City announced two Hurricane Sandy recovery programs. A loan program capped at $10,000 for small firms and tax breaks for large firms spending more than half a million dollars on rebuilding. There are also “swing” spaces available in Brooklyn and The Bronx for displaced firms. Right out of the box, it looks like little has changed: small firms offered more debt and big firms with big checkbooks get tax breaks.
UPDATED Sunday, November 4: The New York City Economic Development Corporation (EDC) alerted us to the following:
- The emergency loan program for mid to small business has increased from $10,000 to $25,000 with a 1% interest rate starting at 6 months; zero interest before then.
- Free swing office space is now available in all boroughs.
- The EDC has established a business exchange. If you have goods or services to offer for free to impacted companies, the EDC will connect you.
- The New York City Industrial Development Agency is waving its fee for firms applying for benefits.
We will update this post as new details emerge. For more information and how to apply for these programs or to help visit the EDC's Back to Business webpage.
Keeping in mind that these programs will most likely evolve and new ones created, we urge officials to use this tragic storm to make accountability, equity and transparency central to rebuilding our communities:
- Prioritize small businesses over giant ones.
- Hold public hearings and allow citizens to help shape how funds will be allocated.
- Post data on the web about which companies are receiving aid, whether there are any conditions on that assistance and whether those conditions are met.
- Use resources to leverage high-road job standards (good wages and benefits).
- Require funds for rebuilding to be sustainable for the environment and for future storms. Wise public investment now will pay off in the future.
- Include stringent work-safety rules.
- Include clawback – money-back guarantee – provisions. This is especially important when it comes to large firms, which often make extravagant job-creation promises and then fall short.
- Existing transparency practices should be maintained, or even improved, for storm-related subsidies.
The allocation of discretionary economic subsidies has become more transparent in New York City in recent years (a fuller explanation is here), yet policies that include democratic planning principles is badly lacking in New York City and many surrounding areas. There is a long road of rebuilding ahead and public funds must be used efficiently. To help ensure this, leaders must bring community members to the table while decisions are being made.
If history is any gauge, the interests of big business have already landed on the table of decision makers. But there’s still time to create a future that gives priority to the creation of good jobs for people that need them and the rebuilding of sound infrastructure for all.