Still Standing: What Leadership Looks Like Under Pressure

[Music] Brian Lair on WNYC, New York City controller Mark Levine is back with us now. He's been in the news for several reasons in recent months. We were just talking about extreme AI scenarios in our previous segment. Levine put out a report saying the city is "sleep walking into the AI future." And he modeled five scenarios from a productivity boom to what he calls an AI shockwave. On housing, Levine created a shockwave of his own last month when he went on conservative WABC radio and blame New York's rent laws for so many rent stabilized apartments sitting vacant. He said, "Why would a landlord leave an apartment vacant?" Well, unfortunately the law is very difficult. When an apartment becomes vacant and they need very expensive renovations, sometimes a six-figure price tag. The owners of the buildings are not able to raise their rent enough to cover the cost of that renovation. Now that's a price some people coming from a largely progressive Democrat who had endorsed Mayor Mamdani's election. He also said, "We've got to up our game to get job growth going again in New York." In that interview, he said, "It's partly because there's a lot more competition from other parts of the country, places like Texas or Florida." Now, as the former chair of the city council's Jewish caucus and intending to resume investing in Israel bond as controller, which Red Lander had stopped, Levine has criticized those protesting that intention, referring to other countries with questionable human rights records. He said, "We have had no protesting about our investments in Saudi Arabia, our investments in Pakistan or China, only this one little tiny sliver." And as the watchdog over the city's finances, he's expressed concern that this year's big budget gap was closed with one-time fixes that leave the city vulnerable in the future. But on the brighter side, he was able to announce a 13% return on the city's pension fund so far this year, much better than the average 7% return. And he supports the mayor and governors Pianatertax on high-value second homes in the city. So there's a lot to talk about with controller Mark Levine since his last appearance just after we took office in January. Some of which is very supportive of the Mamdani administration, some of which puts him at odds, some of which has nothing to do with the mayor. Controller Levine, always good of you to come on. Welcome back to WNYC. Brian, it's great to be here. That was quite an epic intro. Thank you for that. I think there may be some context missing from some of those topics. I'm sure we'll get into it though. And you can go right there. What do you have in mind? Well, my goodness on rent stabilization, I strongly support a system which protects 1 million households in New York City and has spent much of my career making sure tenants have a fair shake whether in housing court with HVD and dealing with difficult landlords. We have a housing affordability crisis in New York, which is driven by a housing shortage. And I like many advocates are looking for every potential supply of housing we can bring on the market so we can help empower tenants and bring rents down. And there are apartments now in rent stabilized stock that are sitting vacant partly because they need large renovations and the current rent laws don't really provide a way to finance them. It's something that I and I think many people want to fix that does not and should not undermine our rent laws and it shouldn't mean that those units exit affordability either. I think there's a win-win scenario here where there's a little flexibility to renovate these vacant apartments when we have such a desperate need for housing but also keeping in enough protection to ensure they remain affordable. But did you mean to suggest that New York City or state law has become too anti-landlord in your opinion and that it works against the interest of rent stabilized housing availability because the law is too onerous for them to have incentive to fix up those apartments. I certainly never have made such a broad statement and never would the 2019 rent laws had many many provisions which I had been fighting for and strongly support and has dramatically reduced the pace of evictions in rent stabilized housing in New York City and that's something that I celebrate. But a package is large and complicated as that it's not surprising that there be some things we have to iron out and one provision that I think this consensus we have to work on is just what we do about apartments which are left vacant after a long time occupancy have potentially tens of thousands or even more of backlog repairs that are needed. And how to get the number I've seen the number reported is 57,000 apartments that landlords are not renting out rent stabilized apartments is that your number. Well, I think that that for some data on this is hard to get by and we have a number of requests into HCR the state agency that we're we're still waiting for data on that number Brian I believe would be the total vacancy now in a million apartments it wouldn't be surprising that with natural turnover you are going to have some vacancy. And then the number of vacancy between when someone leaves and when the new tenant comes in so the question is what portion of those vacant apartments are really sitting empty for a long period of time because the landlord doesn't or can't better make them. Brian, are you still there? Yeah, we're losing your line a little bit you were breaking up a bit can you still hear me. Brian, can you hear me? I can hear you can you hear me control room can you hear me. Yes, so I'm still on I think Mark Levina still on but somehow he can hear me so I guess we will have to fix that control. Okay, good. So so to follow up. So if you have a vacancy, the warehouse warehousing framing overstates the problem they cite a 2024 report from the controller's office your predecessor's office that found the number of stabilized units actually classified as dilapidated or uninhabitable had fallen sharply to just over 3000 citywide which would be far cry from tens of thousands. So most vacant units aren't in that condition if that number is accurate you can tell me if you think it is. Why frame it as much as you did as a renovation cost problem rather than landlord simply holding a lot of units off the market. Well, so I don't know where I got cut off before Brian but 57,000 number you cited for vacant apartments is about what you'd expect when you have a million units and there's going to be turnover. So if you have a tenant leaves there'll be a delay before a new tenant comes in so you're always going to have some vacancy. The question is how much of them are in this very difficult situation of being held off the market because they're in a bad state of repair. I have been seeking data from the state agency on this we haven't gotten it yet so I can't give you a more recent estimate than 3000 but accepting that in the midst of the worst housing affordability crisis we've faced in the city when landlords are empowered because there's literally bidding wars on vacant rental apartments. If we could bring 3000 affordable units online that should be considered an urgent policy priority and it's why I've raised this issue. One more thing on this topic before we go on to other things you said in the wabc interview that this can be fixed in a way that still keeps the apartments affordable. What kinds of fixes do you have in mind? Well, we're not talking about these units going market right we're not talking about them leaving the rent regulation system. We are just asking the question whether the rents can float to a slightly higher level so that the renovations can be financed and there are a number of really thoughtful efforts in Albany to solve this. By the way, one proposed solution is that landlord would be able to write off renovations from their property taxes that would avoid having to raise the rent and would get the unit back on the market. So there's a variety of policies out there any one of which would be better than leaving these apartments vacant and I expect this will be a big topic in Albany once the session begins in January. Let me get one call on this topic a few people are calling in listening to you Chris and Harlem who says he's the president of attendance union. Chris you're on wmwc with controller mark Levine. Hi. Hi, can you hear me? Yep. Hi. So I just want to point out that you know in a bunch of you know we're not floating a vacancy tax around which I think we should but the city in the state offers landlords up to $50,000 that they don't have to pay back as long they open their books to get these severely under repaired regulated vacant apartments back online and not a single landlord is taking advantage of it. So I think we have to really ask ourselves whether or not we're doing the plan on the working day. of the vein. - Yeah, of course, I really appreciate you calling and thank you for stepping up for your building. The program has not produced almost any movement, and I think the reasons are various. Landlords will tell you that the requirements are onerous and that sometimes the cost is greater than 50,000. So it's something I'd like to look in more to find out why that program has failed, but it just hasn't produced results so far. We did our previous topic on kind of scary AI scenarios, and so I wanna ask you about your report, released in May titled, AI in New York City's Fiscal Future. You write that the city is sleep walking into the age of AI, strong words. Your office modeled five scenarios, I see, from a productivity boom to what you call an AI shockwave. Can you describe a little of the best and worst scenarios there? - Absolutely, Brian, and your previous guest, Mattel Wong, talked a lot about cyber risk, which I'm certainly concerned about, but our report was really asking the question of what AI's impact will be on our economy, on jobs in New York City, on the budget of city government. And we talked to various technologists and economists, and we found the challenge that there's really not consensus, they disagree with each other on the trajectory, so we embraced that uncertainty, and we actually produced five different scenarios, and we gave a probability weight to each. And Brian, they arranged from pretty positive, a case in which AI could lead to strengthen the economy and actually an increase in jobs, to extremely negative, including the AI bubble bursting, leading to a drop in the stock market in the recession. And I think most worries, some potential rapid loss of jobs, as much as a quarter of a million jobs, in just a few months lost because of displacement by AI. And we raised the point that we're just not doing much to prepare for this whatsoever, and there's a lot that we need to do, but focusing on the budget for a moment, any of these negative scenarios would also mean that our budget would take a huge hit, and that if we're not prepared, would mean that we'd have to cut critical services to vulnerable New Yorkers. And I know that this concerns people, and so we proposed strengthening our cities, and the training day fund, exactly for this reason. And I've continued to fight on that front, beyond the AI concern as well. But in the meantime, we have much, much more work to do to prepare for the uncertainty that's ahead, coming from AI. - When you came on the show earlier this year, you predicted a $2 billion, made fiscal year gap, and a $12 billion combined gap, I guess the fiscal year that ended, in the fiscal year that started July 1st, that gap is now closed, but with your reference to the rainy day fund, would you say it was closed in the right way, or just closed for now? - Well, it's a real relief that based on, compared to where we were in January, we've met a lot of economic progress in New York City, by many measures, New York City's economy is quite strong, Brian, and that helped deliver some wins in our tax revenues, which helped close the gap. I want to acknowledge that this economic strength is not reaching all New Yorkers. I know those families that are really struggling now to make ends meet, and maybe we can talk about why that is and it's so much prosperity. But for our budget, this helped close the gap, and made it possible for us to pass our budget imbalance for FY2027, but there's still real serious underlying problems in our budget that really can be summarized quite simply to say that we're spending more than we're bringing in. And we haven't resolved that, and in fact, our projection for the following fiscal year, which would be FY28, is we're facing a gap of over $7 billion. So, clearly we have more work to do to solve the structural problems. But in the meantime, because of all the uncertainty out there, with AI, with the Corbawar and Iran, and inflation, and crazy terror of policy, I think we've got to be prepared for the fact that we could have an economic slowdown. And we want to make sure we don't have to cut critical services to New Yorkers when that happens. And the best way to do that is to have a strong rainy day fund that's there to fill in the gap when we need it. And right now we don't, Brian. We have two billion in the rainy day fund that hasn't moved a dollar in years, despite the fact that we've had year after year of great revenue, and it puts us behind every other major city in America, other than Chicago. So, we've called for taking advantage of the relative good time on Wall Street right now and investing in this critical reserve so that we're ready when tough times head. - We had that tenencing in President Call-in. Here's John and Brooklyn, a landlord, who wants to respond to him, John, you're on WNYC, hello. - I'm glad you picked up that to go. Yes, I want to respond to something that the controller said about that, sorry, the caller, the tenant advocate said about that program that's offered, that's different reasons why landlords don't want it besides what the controller accurately pointed out that it's onerous. The other reason is that you have to take whoever they give you for lack of a better term in terms of a tenant. In other words, you can't put the apartment on the market, pick your own tenant and give them a rent stabilized apartment. You have to take whether the city gives you. They could get somebody off the train, a homeless guy, you don't know, and you're stuck with them. That's number one, number two, they want you to lay out the money for the entire renovation and then apply to get that money. No one's gonna do that. And the third thing, and then I'll stop, the third thing is that once the tenant, once you, if you allow someone that the city gives you, like say someone on thefts or section eight, whatever, which is nothing wrong with, there's no guarantee of the rent continuing if the subsidy expires. So if the subsidy expires or it gets reduced, you're stuck with that person in dealing with them to get it back and no landlord wants to do that. That's it, thank you. John, thank you very much. Controly your response. Well, it's helpful to hear from John about his individual perspective on this. I think a little more scrutiny is due on the program. All I know for sure is that it hasn't reduced results and it's why I'm trying to think about bigger solutions. On being the highest ranking Jewish elected official in the city, I saw you were quoted in the Jewish newspaper The Ford in the spring, on your intention to resume investing in Israel bonds, which your predecessor, Brad Lander, had stopped. And to those protesting that, you refer to other countries with questionable human rights records and said, we have had no protesting about our investments in Saudi Arabia, our investments in Pakistan or China, only this one little tiny sliver, unquote. Are you saying Israel is being singled out and held to a unique standard politically by the mayor or anyone else? Well, Brad, I do want to talk about that. I just want to first acknowledge the horrible incident that occurred Friday night at Central Senegal during Shabbat services when a suspect started screaming obscenities, including after Jews and assaulted a 63-year-old woman and assaulted the security officer. It was quickly detained. Thank goodness. This is not an isolated incident. Unfortunately, part of an alarming trend arise in anti-Semitism in New York City. We've actually had 205 anti-Semitic hate crimes so far in the year as of the end of July, which is up about 3% from last year. So we have a growing problem of anti-Semitism in New York City and I don't think it can be entirely separated from the rise of demonization of the Jewish community from online. You hear it in the street, you hear it on subways. It's true that the suspect of the central Senegal incident was likely emotionally disturbed, but just one has to ask what individuals like that are absorbing in the culture. And look, on Israel, I absolutely think criticism of any government, my own government in the United States, the Israeli government, any government, criticism is fair and needed. That's how we get to better policy. And I myself have many, many deep criticisms of the current Israeli government and its policies, which I've voiced openly, have literally been in the streets protesting against this government a number of times. I think that the relentless attack on Israel that sometimes veers into anti-Semitism and sometimes goes beyond policy to attacking the very core of this country can sometimes make Jewish New Yorkers feel unsafe and contribute to this climate. And so I think all of us need to be careful about our words and do everything we can to tone down on the rhetoric so that everyone in this city including Jewish New Yorkers feel safe. - But people who are very critical of Israel right now would say overwhelmingly that they don't condone any anti-Semitism, certainly not. the kind of anti-Semitic violence attack that took place at Central Cinnigargon Friday. But that doesn't mean they should be quiet about genuinely held views about the morality of the Israeli-Palestinian situation of the ongoing occupations, of what many people see as genocide with 70,000 plus by most accounts having been killed in Gaza. Many of them civilians since 2023, and that they shouldn't be asked to be quiet about that because some people are committing anti-Semitic attacks. Do you disagree? Well, of course, Brian, as I said, I think that criticism of Israel is acceptable and warranted, and people should speak out. And I share many of the concerns that you just articulate, and I'm certainly horrified at the level of human suffering amongst civilians in Gaza. And we need to have that debate publicly. But sometimes this veers into darker places. Sometimes it results in the direct targeting of Jewish institutions, regardless of any direct connection to Israel. Sometimes it results in the direct targeting of any Jewish person who feels a connection to the Jewish state or feels that there should be a Jewish homeland, regardless of what that person's view on the policies of any given government are. It's that kind of rhetoric that we have to guard against, and it's out there. If you spend a minute online, you'll see it. We hear it on the streets. We hear it on colleges. And I think all of us have to be more careful about our words on this issue. On this topic, we're off the L and Forest Hills. You're on WNYC with Comptroller Mark Levine. Hi, LaFayette. Good morning, guys. Thank you for taking my call. I'm a Jewish New Yorker watching you vow to reintroduce Israeli bonds that were allowed to expire by Bradlander for good reason, because New Yorkers, including the city workers whose retirement fund are entrusted in your hand, are against investing in Israel right now. You just said that we are singling out Israel, compared to all these other nations where bonds are purchased. However, we feel like you're singling out Israel for investment. The returns are lower. We do not support morally on moral grounds like investment in them, including city workers and everyone that you poll, including Jews. Yet you are forcing us to invest our retirement fund in a country because of your personal views. And there's no place for that in someone charged with our financial future. Raphael, thank you. Comptroller, respond. Raphael, thank you for the call and for your heartfelt comments. Appreciate the dialogue. Look, what I've made clear in past appearances on this show is that I don't allow politics to interfere with investment decisions. I have the solemn obligation to be the fiduciary for the retirement savings of three quarters of a million current and future retirees. I'm not sure whether you're one of them, Raphael, but if so, thank you for your service to the city as well. And so I approach every decision just based on what's best for those 750,000 people. By the way, Brian, I'm really, really proud that we announced last week our annual returns totaling 13% across our funds. This is almost doubled our target of 7%. Maybe we can talk about that, but really, really proud of the performance. Is that just because the stock market is doing so well this year? Dieted that our performance in the US stock market and overseas stocks has been very, very strong. We are quite diversified. We have to be. We own almost every kind of asset class. Stocks, bond, private equity, real estate, infrastructure, etc. Different classes do well in different years. But yeah, the fact that the stock market has been so resilient despite all the global disruptions is surprising to some people and certainly helped lift our returns. But anyway, we've built a really diverse robust portfolio. And I'm proud that it's done so well. It's actually done so well, Brian, that we're able to reduce the amount taxpayers are going to have to pay into the pension system over the coming five fiscal years by over $6 billion. So this is a win for retirees and also a win for taxpayers. Great. But on your statement that we have no one protesting about our investments in Saudi Arabia, Pakistan, China, only this one little tiny sliver as you put it referring to Israel. Some listeners pushing back on those in different ways, on that statement in different ways. And asks, do we really have investments in Pakistan or Saudi Arabia and another listen to rights? Well, New York City shouldn't be investing in Saudi Pakistan or China, etc. Either if suggesting that if they're committing human rights violations, you should divest from all of them. So what do you say to those listeners? We have almost a third of a trillion dollars under management in our pension funds. Brian, it's kind of an astounding amount. And there's no way to deploy that in the way that's diverse and robust without essentially owning the global economy. And we do. I talked about every asset class we own, but we're also invested in every major economy on Earth, including all of those that you just mentioned because we need that diversity and we need that depth of investment. And we are constantly analyzing market conditions in every one of those countries and we're pretty do do diligence on every investment decision. But we need a diversified portfolio across all those countries. But there are social investment standards that the city adheres to on some things like think no tobacco company investments. I think no fossil fuel investments at the moment, correct me if I'm wrong. So there are things like that. Why wouldn't countries that are major human rights violators be in that category for you? Well look, Brian, we have made some historic moves on climate that I strongly support. Three of our five pension funds have divested from fossil fuel companies. And that was done because the funds concluded that this was an industry that was going to decline and be displaced by clean energy. And I stand by that decision was made before I got here, but I think it was the right one. And I have confidence that it will be born out over time. So even in cases like that, it was fundamentally an economic decision based on our fiduciary responsibility. Now owning gives us power. I've exercised that power. And standing up for workers at Starbucks, we supported a slate against the severely anti-union board members who were up for reelection. We've used our power shareholders at AT&T and let it campaign to force them to release diversity data on their staff. I helped to lead a national effort against SpaceX, which has gone public and has quite dictatorial rules for Elon Musk's role. There's no democracy for shareholders there. We've been pressuring, palantir, the drop in its contract with ICE. We can do those things because we're shareholders in those companies. So do you try to use shareholders leverage against Israel when you object or Saudi Arabia or China? I don't know about against nation states, but certainly against individual companies potentially. And we link arms with other pension funds to do that. We have a really good network of blue city and blue state treasures and controllers. And increasingly we're teaming up and using our power to fight, to push companies to be better by workers, by consumers, for climate. Because we think those are good business practices over the long term and I'm really proud to be active in helping to lead that joint effort nationally. One more topic before you go. I cited in the intro your comment that the city has to up our game to get job growth going again in New York. That's a direct quote. And that quote, it's partly because there's a lot more competition from other parts of the country, places like Texas or Florida. Now you know, Republicans finish statements like that by saying New York City and state taxes are too high, giving places like Texas and Florida an advantage on job creation. Is that your position at all? I might be a little more nuanced than that actually, Brian. And I'll say this, it's a really tough job market in New York City right now. And you know that if you talk to a young person getting into the workforce, especially for entry-level white collar jobs is pretty brutal right now. And that's born out in the data. It's not just anecdotes. Job creation in New York City is essentially flat for 2026. If you exclude the single area of health care and specifically home health care aids. And we actually have a striking statistic that the unemployment rate for New Yorkers in their 20s is higher for those with a college degree, Brian, than it is for those without a college degree. So young people who have done everything right and have gone to college, they're not going and had a good major and got their degree are now unable to find an apartment they can afford and unable to find a job that can pay the bills as a double wami and no wonder that they're angry. So we've got to do better on both fronts. We've got to create more housing and housing that people can afford and we've got to create more jobs that pay the bills and you know it's not true what you might see on social media that we have a mass exodus of corporations but it's also the case that most of the hiring is happening elsewhere the job growth. So JP Morgan Chase famously has a big new tower on Park Avenue but they have more employees in Texas than they do here. American Expresses thank goodness broken ground on a big new tower at the World Trade Center campus that's a major investment in New York but for many years most of their job growth has happened in Nevada and other states around the country. So we've got to do something to make sure this is a city where people want to start businesses and move businesses and grow and invest in higher and we've got to send that message. So what we're going to run out of time soon but what things would those primarily be in your opinion if you're not calling for reduction in tax rates and you do support the new Pieda tear tax. There's a lot we can do to reduce cost here and government itself is part of the problem often because of the bureaucracy and regulatory paperwork that it requires to start and grow a business here we've got to do better on that. We need to make our schools and our ensure that our public schools and our public colleges are better aligning curriculum to the skills that employers actually need so that those jobs are going to local people more than they currently are and I think messaging is important as well. We have to very clearly send the message that New York City is going to compete that we want people to move here. This is a great place to do business. We have the most amazing talent. We have the deepest capital market. We have the coolest and most exciting culture and the energy here are second to none and we have to be out there telling that story. Just one one of the push back on on talking about Texas and Florida's competitors and I know they're real competitors and I hear you about a lot of jobs being created there and some of the industries that New York is well known for but your own offices, filer data as I read it shows something that cuts against the millionaires are fleeing narrative that low income filers actually decline by 11% in New York City since 2019 while every bracket above $100,000 income grew and the number of million dollar plus a year filers alone is up 34%. So, yes, but I was talking about corporate hiring and we're seeing that hiring growth in other states. We have not seen a mass exodus of population of high net worth individuals from New York City despite what you might read. Now there is faster growth in other parts of the country and that demographic but the biggest loss for New York City has been low income and working class people who are facing an affordability crisis and we've got to do better on housing and other costs that they face to stem that flow. And jobs are part of the picture too. We have what one of your favorite guests Greg David described in a previous episode as a barbell employment market here where we have a lot of jobs at the top, a lot of jobs at the lower end of the pay ladder and service workers and we've lost a lot of that middle tier of back office. So to help keep low income and working class people in New York we've got to push on all fronts. We've got to ensure they can afford life here with housing they can afford. We also have to ensure they can find jobs and we have more work to do on on both fronts. New York City controller Mark Levine thank you for answering questions on so many topics from me and our listeners today we really appreciate it. It's a pleasure Brian thank you.