As the innovation- and resilience-themed Smart Cities conference begins this week, questions include how well New York is prepared for another catastrophe.
Not very well, said city Comptroller Scott Stringer.
According to Stringer, a lag in resiliency spending has left the city dangerously exposed to another Hurricane Sandy-type storm. His report said the city has spent only 54% of nearly $15 billion in federal Sandy funding intended to help New York recover and boost resiliency.
Sandy struck on Oct. 29, 2012, killing 43 people and inflicting nearly $20 billion of damage.
Stringer called on New York State lawmakers to consider an insurance surcharge on high-value policies. Estimates by think tank Regional Plan Association suggest a $25 to $60 levy for a policy with a $1,000 annual premium could yield up to $145 million in yearly dedicated revenue for state resiliency projects.
“By issuing bonds based on an insurance surcharge, the state could realize millions more in additional funding for resiliency projects,” Stringer said. “While building resilient infrastructure is costly, investments in resiliency are far less expensive than the costs associated with inaction. A dedicated stream of funding earmarked for resiliency could ultimately help guard against rises in insurance premiums associated with future disasters.”
An insurance surcharge, according to Stringer, could also yield a revenue stream to fund debt service on green or “blue” resiliency-oriented bonds. Stringer called on the city and state to jointly pursue a framework to develop such revenue.
Stringer said the New York City Housing Authority and Health + Hospitals have spent only 41% and 20% of Federal Emergency Management Agency funding, respectively.
The Smart Cities conference started Monday at Cornell Tech on Roosevelt Island. It will resume the following two days at Pier 36 along Manhattan’s Lower East Side.
Key themes are innovations in technology and infrastructure that make cities sustainable. Talking points will include sustainability, governance, cybersecurity, autonomous vehicles and affordable housing.
“This year they’re really focused on resiliency, which has become more than just simply a statement in a mayor’s speech,” said Alan Rubin, a resilience financing expert and a principal at Blank Rome LLP. “It actually has teeth in it now.”
Related research, Rubin said, focuses on mitigation. “They’re saying $1 worth of mitigation money equals $8 worth of disaster money, so it’s an 8 times multiple."
The searing memory of Sandy still resonates with many New Yorkers.
Mayor Bill de Blasio invoked it in March when he announced a $10 billion Lower Manhattan resilience, which hinges largely on whether large-scale federal funding will be available. A key component is extending the Manhattan shoreline into the East River by 50 to 500 feet, depending upon financing and engineering variables.
The City Council, meanwhile, last week passed the Climate Mobilization Act, a series of resiliency-related bills, the centerpiece of which would require large and medium-sized buildings to reduce their emissions 40% by 2030 and 80% by 2050.
“It’s not a question of whether New York will be hit by another superstorm like Sandy, but when,” said Stringer. “Yet six years after Sandy hit, we still haven’t fully recovered.”
Despite property values increasing along the city’s vast coast, the city’s shoreline remains dangerously exposed, said Stringer. His analysis projects the value of properties within the floodplain to rise to $101 billion in fiscal 2020, up by 73% from 10 years earlier.
City transportation Commissioner Polly Trottenberg called the East Side coastal resiliency project, a collaboration among several city departments, a possible blueprint for the five boroughs, using parks and roadways as potential buffers.
“As we do now our new bridge designs, we clearly look very much to how we can protect operational infrastructure involved with our bridges,” Trottenberg said at a City Council budget hearing on Friday.
“It’s an enormous challenge,” she said, adding that city infrastructure agencies meet often. “We think about best practices and how we can harden our infrastructure for what unfortunately is clearly a changing climate.”
