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Executive Summary
Introduction
The Citywide Industry
Study provides a policy framework for land
use planning in industrial areas and for zoning
affecting industrial-sector activities; it presents
an analysis of economic trends over the past thirty
years and a snapshot of New York City's industrial
sector today. This sector includes businesses
in manufacturing, construction, wholesale trade,
transportation, communications and public utilities.
The study consists of five technical reports:
Industry Trends; Labor Force; Geographic Atlas
of Industrial Areas; Transportation; and Zoning.
The study was prompted by the Department of City
Planning's desire to understand how much industrial
activity continues to take place in the city's
manufacturing-zoned areas, in light of the marked
decline in overall industrial activity in New
York City since the mapping of these areas in
the early 1960s.
Industry
Trends
Since the late 1950s, private-sector industrial
employment has declined from 1.7 million jobs
to approximately 800,000. Losses were particularly
heavy in the manufacturing sector, which had nearly
one million jobs in 1960, but only about 300,000
in 1990. Most of the city's industrial-sector
businesses have historically been located in Manhattan,
which lost the greatest share and largest number
of jobs during the decline. In addition, jobs
losses in Manhattan, as well as citywide, were
particularly severe among manufacturing production
workers, who now number approximately 180,000
in the entire city. Manhattan alone had nearly
300,000 manufacturing production workers in the
early 1960s, and the citywide total was twice
that number. The other industrial-sector industries
declined less severely, from about 750,000 to
500,000 jobs over a thirty-year period.
The
causes of these declines were largely beyond the
city's control: broad national and global economic
shifts resulted in relocations of major New York
City industries to Sunbelt cities and overseas;
import competition and technological changes reduced
the need to produce many goods either locally
or nationally; transportation and trade industries
decentralized around the rest of the country;
and population moved to the suburbs, the South,
and the Western United States followed by business
and industry. These events combined to greatly
reduce the city's role as a national center of
industrial production and distribution. As a result,
the economic role of the city haschanged from
one of exporting goods to one of exporting services.
The industrial sector, once the engine of growth
for the city's economy, now primarily serves the
needs of local businesses and households.
Similar
trends occurred in much of the nation, particularly
the older industrial cities of the Northeast and
Midwest. However, during the 1980s, non-manufacturing
jobs in the industrial sector -- particularly
wholesale trade -- boomed in the New York City
metropolitan area suburbs, but not in the city,
in response to the rapidly expanding services
sector and the increase in household income. The
city's inability to capture its share of this
growth was due primarily to poor freight transportation,
high crime, obsolete industrial buildings and
a lack of suitable sites, and, to a lesser degree,
high taxes. Most of the remaining industrial-sector
employment in New York City is in construction,
wholesale trade, transportation and utilities,
as well as manufacturing for a more local and
regional market. In addition, some exceptional
export-oriented manufacturers continue to find
New York City an advantageous place to do business.
Provided
that the city can addresses the crucial issues
of transportation, crime, and the availability
of sites and modern buildings, a potentially stable
core of industrial-sector activities could remain:
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1) Building, rebuilding, maintaining, and operating
the city's physical plant;
2) Transportation of people and distribution
of goods into, out of, and around the city and
metropolitan region;
3) The segment of the city's fashion-related
production and distribution industries that
is tied to fashion design, trade, and marketing;
4) Custom manufacturing for local and regional
markets, generally consisting of the assembly
of parts or components fabricated elsewhere;
5) The collection, processing and disposal of
solid waste; and
6) The maintenance and repair of consumer and
producer durable goods, especially motor vehicles.
Labor
Force
The number of industrial-sector jobs available
to New Yorkers has been halved since the early
1960s, dropping from almost 50 percent to barely
one-quarter of the city's total employment base.
Land use policies and many of the city's economic
development policies have focused on promoting
industrial-sector activities as a way of preserving
"blue-collar" jobs for city residents.
These activities have historically generated a
proportionately greater share of jobs for unskilled
workers, workers without high school diplomas,
and workers with limited or no English-language
skills. In addition, blue-collar jobs have been
perceived as providing better wages and benefits,
greater stability and more mobility for unskilled
workers than entry-level jobs in the services
sector of the economy.
The analysis of labor force, employment and wage
data conducted as part of this study revealed
a number of important findings. First, while the
shrinking industrial sector continues to provide
a large proportion of its jobs to unskilled workers,
the non-industrial sector now provides a higher
absolute number of the city's jobs to those workers.
Second, the labor-intensive industries that dominate
the city's industrial economy do not provide substantially
better jobs (i.e., higher wages, full-time hours
and more security) to unskilled workers than those
provided by the non-industrial sector.
Since
growth in the industrial sector is now generated
by growth in the services sector and by expanding
the city's aggregate personal income, the best
opportunity for increasing blue-collar employment
in New York City is through policies that promote
overall economic growth in all sectors: services,
finance and retail trade, as well as traditional
blue-collar industries. Therefore, economic development
policies must focus on expansion of the total
economy -- industrial and non-industrial sectors
-- to successfully generate (or retain) blue-collar
jobs.
The
study also found that in both the industrial and
non-industrial sectors of the New York City economy,
whites were concentrated in higher-paying jobs
and industry divisions, and minorities of equivalent
educational attainment earned less than similarly
educated whites at all levels. Opportunities for
minorities in the industrial sector were disproportionately
concentrated in lower-paying jobs and less-stable
industries. Wage disparities between whites and
minorities were no smaller in blue-collar jobs
than in the services, retail, and finance sectors.
These findings demonstrate the importance of eliminating
discrimination and reducing wage inequalities
in all industries, and also the need to encourage
all New York City youths to graduate high school.
Geographic
Distribution of Industrial Activity
Despite the dramatic loss of industrial employment
over the past thirty years, New York City continues
to have over three-quarters of a million jobs
in construction, manufacturing, wholesale trade,
transportation, communications and public utilities
--one of the largest concentrations in the country.
The geographic distribution of the city's industrial-sector
businesses today is surprisingly similar to the
pattern that has existed historically: over half
of the city's industrial-sector employment continues
to be located in Manhattan, and nearly two-thirds
is located within a three-mile radius of the Midtown
Manhattan central business district (CBD).
The
tendency for these businesses to locate in or
near Manhattan reflects their desire to be close
to their customers (mostly CBD businesses), and
thereby reduce the time necessary to deliver goods
or services. The density of industrial-sector
jobs in these areas is frequently higher than
100 per acre -- undoubtedly the highest job densities
in the country.
Relatively
job-intensive industrial areas are also found
near neighborhoods with above-average household
incomes and low crime rates, reflecting the opportunities
created for businesses that provide services and
goods to households and the attractiveness of
secure areas to industrial-sector businesses.
Conversely, proximity to areas where the population
is relatively poor and crime rates are high has
a strong negative influence on job density and
business development -- even in areas with good
transportation linkages; this becomes particularly
significant in high-crime areas of Brooklyn and
the Bronx. Generally, areas with good access to
major highways, suitable sites and modern buildings
are especially attractive to construction and
distribution businesses, except in high-crime
neighborhoods.
Many
of the city's healthiest industrial areas are
mixed-use in character, with nearby commercial
and residential districts generating compatible
office and retail activities that improve the
overall environment for employees and customers.
Although land values are higher in these thriving
areas, industrial firms appear to be willing to
pay a higher price to reap the added benefits
generated in these mixed-use areas.
An
important exception to the general location pattern
is airport employment: LaGuardia and JFK airports
account for over 40,000 industrial-sector jobs.
These jobs are particularly well remunerated and
the airport facilities themselves bring billions
of dollars a year into New York City. Although
air passenger transportation has lagged in recent
years, air cargo has been one of the fastest growing
industries in the city. The value of air cargo
passing through Port Authority facilities is now
nearly twenty times higher than the value of oceanborne
freight shipped through New York Harbor.
Transportation
The difficulty of moving goods into, out of, and
around New York City has been a contributing factor
to the dramatic decline of the city's industrial
sector. Modern industry's overwhelming reliance
on trucks creates a critical dependence on the
city's overburdened, outdated highway network.
Trucks now carry over 90 percent of the region's
freight. Therefore, a major determinant for locating
new industrial developments is proximity to the
interchanges of major highways. Unfortunately,
only eight major truck routes enter New York City
from the rest of the United States, and, of the
six New York-New Jersey crossings, only the George
Washington Bridge can accommodate the largest
modern trucks.
Truck
freight is also affected by constrained access
to many major roads, congestion, and by the physical
disrepair and inadequacy of the region's highway
network. These factors have severely limited the
city's ability to capture regional growth in many
goods distribution industries.
Major
improvements must be made to address this critical
constraint on economic development potential in
the city. The network of expressways surrounding
the Manhattan commercial core, beginning at the
George Washington Bridge and running across northern
Manhattan and down the western edge of Brooklyn
and Queens, provides primary access to the city's
major industrial areas and business districts.
Much of this network, particularly the Brooklyn-Queens
Expressway, needs to be brought up to modern standards.
In addition, truck traffic is not allowed on a
significant segment of this network in northern
Queens.
Truck
freight access to the city's airports is also
problematic: trucks can only access LaGuardia
Airport from local streets; there is no expressway
link directly to the airport. Trucks travelling
via expressway to JFK from the rest of the city
are limited to the Van Wyck, which is chronically
congested. In addition, the Belt Parkway, running
across southern Brooklyn to JFK airport, does
not permit trucks or commercial vans. The heavy
reliance of JFK's cargo operations on the Van
Wyck Expressway is a critical impediment to the
industry's future expansion.
Rail
and water transportation should also be expanded
to provide alternatives to trucks wherever practical.
Major priorities must include completion of the
Oak Point Link in the Bronx; providing a modern
rail-freight link to the Howland Hook container
port in Staten Island; and exploring waterborne-freight
service between New York and New Jersey.
Zoning
When the city's manufacturing districts were mapped
in the early 1960s, there were approximately 1.7
million industrial jobs located on about 20,000
acres of "M"-zoned land. There are now
less than half as many private industrial-sector
jobs, but only five percent less industrially-zoned
land. As a result, a large number of industrial
areas are vastly underutilized, many containing
fewer than ten jobs per acre.
There
have also been significant changes in the nature
of industrial-sector firms and activities. However,
in some cases, the city's zoning regulations,
as currently written, do not accommodate these
changes. As a result, outdated notions of industrial
uses have inhibited economic development in industrial
and commercial areas of the city. For example,
many industrial activities have become less noxious
due to modernization and changes in technology.
Zoning changes can be made that will accommodate
more light-industrial and wholesaling activities
in certain central business and neighborhood commercial
districts. These changes can be made without disrupting
the commercial character of those areas.
Changes
are also recommended for the city's manufacturing
zones that would accommodate the evolution of
wholesale and retail trade, without harming moretraditional
industrial-sector activities. These changes would
permit modern supermarkets, department or discount
stores, and other retail developments up to 100,000
square feet to locate as-of-right in light- and
medium-manufacturing zones. Such changes would
facilitate the modernization of retail trade in
New York City, and could revitalize some of the
city's underutilized industrial areas.
The
proposed changes would facilitate economic development
by allowing more light-industrial activities in
commercial districts and more commercial activities
in industrial districts. The liberalization of
restrictions on large retail stores in manufacturing-zones
would also expand the city's employment and tax
bases by providing local, auto-oriented shopping
alternatives to New York City consumers who presently
shop in the surrounding suburbs.
This
study also contains zoning proposals to eliminate
current restrictions on ground-floor retail in
SoHo, NoHo and Tribeca in Manhattan, and to address
a number of technical issues related to building
bulk and parking that inhibit as-of-right business
development or expansion.
Conclusion
Evidence from the Citywide Industry Study
demonstrates that the future of the industrial
sector will be contingent on the growth and stability
of the non-industrial, service economy of New
York City. The industries that drive the city's
economy --advanced financial, producer, media
and information services; fashion marketing and
design; and health and not-for-profit services
-- along with the city's households, are the markets
for locally-manufactured or distributed industrial-sector
goods and services. These services will generate
demand for industrial-sector activities and thereby
create the jobs for the city's blue-collar workers
in the future.
Despite
the thirty-year decline in industrial activity,
over three-quarters of a million jobs remain in
New York City in construction, manufacturing,
wholesale trade, transportation and utilities.
The industrial sector provides products and services
that are vital to the city's households and non-industrial
sector businesses. The city must retain and support
these industries by addressing the critical issues
of transportation, crime, land availability and,
in some cases, an unnecessarily burdensome regulatory
system.
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