What the City and State Government Financial Crisis Means for Architects

Architecture firms have been hard hit by the current health and financial crises, seeing a huge decrease in work due to a lack of clients and government-mandated construction shutdowns. However, a further threat for architects is looming due to the mounting financial troubles of state and local governments. Across the country, governments have seen their revenue sources—taxes on sales, hotels, gasoline parking, etc.—plummet instantly.

New York City has already reduced its services and functioning as a result of its cash crunch. The City instituted a work stoppage on all public projects by ending payments for design work. AIA New York and its allies in the industry called on Mayor de Blasio to reinstate design work for fear that not doing so would hinder our economic recovery. Furthermore, the City has even cut its financial aid to distressed businesses, halting the various programs it was offering through NYC Small Business Services.

Meanwhile, New York State is also under financial pressure. The recently approved State budget did not make significant budget cuts, though the State Budget Director was given significant leeway to enact major cuts. One State agency, the Metropolitan Transportation Authority (MTA), has already received a $4 billion bailout from the Federal government as part of the CARES Act. Governor Cuomo has called for further Federal funding for the State government, indicating further financial troubles for individual agencies may arise.

The financial situation for the City and State will continue to change rapidly. The signs do not look good for architects in New York. Continued government austerity will lead to a further reduction in government work, payments for work already completed, essential government services, and government employees (including architects). This could mean slower approvals, less competitive bidding, and more dangerous construction.

There is still hope that the City and State emerge from the crisis able to function effectively. Crucially, the Federal Reserve is putting up to $2.3 trillion to, among other things, buy municipal bonds. There has also been talk of a fourth bailout bill in Congress, which could include significant infrastructure spending. Either or both rescue efforts could help stabilize the finances of our City and State.

Policy Points:

• As mentioned above, AIANY and its allies in the construction industry have pressed Mayor de Blasio to restart design work for public projects. This is harmful to far more than just architects. Tradespeople will have to wait months for public sector work to restart and New Yorkers will need to wait longer for the openings of crucial public buildings. Curbed covered the story.
• AIA National is regularly updating its advocacy page regarding its work on COVID-19. This is a good resource for understanding what our national organization is doing for all AIA members.
• The AIANY Unified Taskforce on COVID-19 is engaged in discussions with the Mayor’s Office of Emergency Management and the Department of Health to provide expertise on goals related to the crisis and long-term recovery. AIANY will keep you updated as work progresses.
• NYC Comptroller Scott Stringer is offering a series of webinars on resources available for small businesses and MWBEs during the current crisis.
• The New York City Housing Authority (NYCHA) has released RFQ #122826 for Design-Build Services for Enhanced Centralized Waste and Recycling Facilities.