New York City’s uphill battle to save manufacturing

New York City, with its booming technology sector and gleaming (if lately empty) office towers, doesn’t get much stage time in the long and pained lament for the death of U.S. manufacturing.

When politicians appeal to Rust Belt voters with promises to bring back factory jobs, they’re not often stopping by Greenpoint or the Garment District to announce new investments in the business of making things. Last fall, President Joe Biden did make two visits to upstate New York semiconductor manufacturers in a month’s time.

But like in much of the rest of the country, manufacturing jobs have steadily declined in New York City for the past half century, leaving the sector a shell of its former self. Once home to all kinds of manufacturing – and a powerhouse in areas like clothing manufacturing – New York City manufacturing jobs numbered just under 57,000 in 2022, down from roughly 172,000 in 2000. At the peak in 1947, more than a million New Yorkers worked in factories.

Nationally, there have been some recent signs of cautious hope for a long promised industrial renaissance. Manufacturing saw an upswing since the COVID-19 pandemic, championed in part by the Biden administration. National manufacturing employment has not only recovered from losses during the pandemic, but added new jobs. (That rebound started to level off this spring, however.)

The story has been a little different in New York City. There are still roughly 8,000 fewer manufacturing jobs in the city than there were before the pandemic, according to quarterly figures. And despite anecdotal and isolated successes – innovative garment makers setting up shop in the manufacturing-heavy Brooklyn Navy Yard or small-batch liquor distillers buoying employment in beverage manufacturing – champions of the sector are hard-pressed to produce evidence that manufacturing is a growth area for the city. Some 20 years ago, Jonathan Bowles, executive director of the Center for an Urban Future – a group that studies pathways to middle-income jobs – thought that it could be. “I started out thinking we could do something about this,” Bowles said of his hopes for a manufacturing comeback. “But given the continued losses, I think that this is not going to be a major growth engine for New York.”

That hasn’t stopped some city lawmakers and economic development groups from pushing hope. At the very least, the existing sector is worth preserving, they argued, citing its history of providing middle-income careers that don’t require advanced degrees. More skeptical observers agreed that those jobs were worth protecting, too, but whether further declines in employment can be prevented is still an open question.

As New York City Mayor Eric Adams’ administration pursues a citywide zoning text amendment aimed at supporting small businesses and commercial corridors, some City Council members and development groups are hoping that one answer to maintaining – if not growing – manufacturing jobs in the city lies in its land use policy.

“I know it’s not the most sexy thing,” City Council Member Amanda Farías said of the topic. Council Member Jennifer Gutiérrez said the same in a separate conversation. Nevertheless, the two hope that the city will focus some of its attention on planning for a future in which manufacturing can be a steady provider of jobs and not a bleeding wound. Farías and Gutiérrez are co-sponsoring a bill that would require the city to develop plans for Industrial Business Zones – nominally protected space for manufacturing – with the goal of maintaining or even growing manufacturing activity in the city. “We’re joking, like, ‘Oh, it’s so sexy,’ but we really want to elevate it a lot more,” Gutiérrez, who like Farías has an Industrial Business Zone in her district, said of the city’s manufacturing future.

The existence of Industrial Business Zones, developed under the Bloomberg administration, may have helped to slow some of the job losses the city experienced due to offshoring and automation. But the zones haven’t reversed that decline. Some experts and advocates for the sector said the city has missed opportunities to protect manufacturing jobs through land use policy and other measures, like commercial rent control. Others suggested manufacturing jobs in the city never stood a chance against those larger economic headwinds.

But in a city with a finite amount of (very expensive) land and plenty of other worthy uses for it, even backers of the bill aren’t envisioning an expansion of manufacturing-zoned land. Right now, the priority is protecting the existing land and holding on to the jobs that can come along with it. “I know we aren’t going to get more industrial land, that’s just not the way it goes here. There’s only less,” said Leah Archibald, executive director of Evergreen: Your North Brooklyn Business Exchange, a local development corporation that supports manufacturing and industrial businesses. “We simply can’t lose what we’ve got right now. I don’t necessarily want to come off like I’m playing defense, but I am kind of playing defense.”

The survivors

Reports of manufacturing’s decline haven’t exactly been exaggerated, but you don’t have to look too far to find a company that makes something in New York City. Furniture makers, fabricated metal facilities and even garment makers are still active in the city – albeit employing a fraction of the people they did 20 years ago.

The work itself looks different too. The Brooklyn Navy Yard – a former center of American shipbuilding – is operated by a nonprofit development corporation that manages the space on behalf of the city. It now includes a wide array of uses, from more traditional businesses like construction aggregate companies making sand and stone, to advanced manufacturing, to a film studio. “We have people that make kombucha, we have people that make jewelry, we have people that make garments – and that ranges from fast fashion-type stuff to very highly engineered and technically sewn apparel for the military,” said Brooklyn Navy Yard President and CEO Lindsay Greene.

In Long Island City, a third of businesses are industrial use, said Long Island City Partnership President Laura Rothrock. The waterfront neighborhood is home to companies that make communications equipment for the Metropolitan Transportation Authority, recycled asphalt used to pave city streets and fortune cookies used by restaurants across the country. (Industrial work that isn’t necessarily captured in manufacturing employment data, like waste transfer facilities, are also part of manufacturing districts in the city.)

“I go really hard for it, because I understand the value,” Gutiérrez said of the manufacturing sector, noting that it has employed a large share of immigrants. “I know people whose parents, when they got here, were employed in (manufacturing-zoned land) and whose family have really been able to thrive.”

Cracks in the factory walls

Manufacturing is still largely happening at the same locations where it did a half century ago, after the 1961 Zoning Resolution designated a series of manufacturing districts to locate industrial work. But as jobs have disappeared, so too has some of the land dedicated to manufacturing. A series of rezonings of manufacturing space for commercial, residential and mixed uses in the early 2000s and 2010s reduced manufacturing districts by just over 5%, according to the city.

An effort to preserve industrial space led to the establishment of Industrial Business Zones in 2006 under Bloomberg. These 21 zones – all in existing manufacturing zoned space in the outer boroughs – didn’t actually change or tighten any restrictions in the zoning text. Still, they’re billed as “safe havens” for manufacturing and other industrial companies, and the city has agreed not to support residential rezonings within their boundaries. They also offer some tax credits.

But planning experts, industry advocates and elected officials said that manufacturing-zoned land has seen an encroachment of other businesses – from hotels to nightclubs to self-storage buildings and last-mile delivery facilities – that diverge from the goal of preserving industrial jobs. “There are all these kinds of cracks in the protective walls around manufacturing,” said Brian Coleman, CEO of the Greenpoint Manufacturing and Design Center, a nonprofit industrial developer. “The biggest crack is, in our opinion, the zoning isn’t tight enough.”

Under the city’s zoning, plenty of other commercial uses are allowed in a large swath of manufacturing-zoned land – a fact industry leaders like Coleman said can lead to smaller manufacturers being priced out. City Council Member Rafael Salamanca Jr. said his South Bronx district has seen last-mile delivery facilities owned by e-commerce giants like Amazon take over some of the neighborhood’s largest warehouses. Farías and Gutiérrez noted that nightclubs have moved into areas zoned for heavy manufacturing.

In some cases, of course, the new businesses were taking over buildings that had sat idle.

Some steps have been taken to slow that encroachment. Rather than hotels being allowed to build in areas designated for light manufacturing, for example, a special permit is now required. But observers said the city has passed up opportunities to patch up “porous” zoning and take other steps to maintain more manufacturing jobs.

The council legislation sponsored by Farías and Gutiérrez would require the Department of City Planning to come up with a plan for Industrial Business Zones every five years that, among other things, would analyze current uses of the zones, identify strategies to support industrial development, and lay out frameworks for land use, investments and workforce development.“Maybe that was the big missed opportunity, when the IBZs were created, that they didn’t do this at the time,” said Adam Friedman, chief strategy officer at the Pratt Institute’s Provost’s Office for Research and Strategic Partnerships. “They didn’t have enough information to put the land use restrictions in place, or to plan what type of investment was appropriate, including workforce development.”

Centers like the Brooklyn Navy Yard and the Brooklyn Army Terminal, operated in partnership with the city, are outliers – havens for manufacturing where small and growing companies don’t have to contend with landlords searching for the highest-paying tenant. Some suggested there was an opportunity to fund more centers like that, or other nonprofit industrial developers that offer below market rent.

Others said certain rezonings for residential development accelerated the loss of manufacturing. In 2005, the city approved the Greenpoint-Williamsburg rezoning, opening up a swath of the North Brooklyn waterfront to the residential towers that line it today. Gutiérrez, whose district now overlaps with that waterfront area, said the rezoning instilled a fear of being priced out on manufacturers still in the neighborhood. “Speculation alone has a huge impact, it drives people out, it drives landlords to be more harmful to their tenants,” she said. “I think that that really started to set the tone, unfortunately, for North Brooklyn.”

While residential rezonings have created housing – something the city is in desperate need of today – new developments haven’t usually prioritized affordable units. Proponents of the push to find ways to support industrial zones agreed that the city was in a housing crisis, but they downplayed the possibility of tension between the city’s housing goals and their own interest in maintaining its industrial space. They said the city can create new housing and invest in preserving manufacturing jobs at the same time. Some of the areas that the bill sponsors were most interested in preserving for industrial use were heavy manufacturing areas that aren’t accessible or attractive for residential development. “I think the areas that are suitable will make headway on their own to be converted for housing, but I don’t think there’s tension or a direct conflict in our housing goals and trying to maintain and protect our manufacturing areas,” Farías said.

“I think, generally, the city has missed the boat in trying to figure out how to do those rezonings in a way that preserves more options for industrial activity,” said James Parrott, director of economic and fiscal policies at the Center for New York City Affairs at The New School. Parrott said the city has for a long time been driven by a principle of “highest and best use” for real estate based on what will fetch the highest price. “Luxury residential development qualifies for that, or very high end trophy building office space, like in Hudson Yards,” Parrott said. “To me, highest and best use ignores the kind of economic activity that’s needed to have more equitable – economically and racially equitable – economic growth in New York City.”

Parrott, who started his career in the city working for the International Ladies’ Garment Workers’ Union, said another opportunity to protect industrial jobs was passed by in 1988, when the City Council declined to pass commercial rent control. The idea had been championed by then-City Council Member Ruth Messinger – and her then-staffer Gale Brewer – Parrott said, but it failed under pressure from real estate lobbyists. Speaking to The New York Times about the idea of commercial rent control in 1985, Messinger predicted a further decline in manufacturing jobs without those protections. “The largest industries in New York, the garment and printing industries, are almost entirely composed of small shops. Those shops employ almost 100% city residents, largely female and largely minority,” she said. “If you start taking over their space and repackaging it for expensive office use, you disrupt the entire industry, and you run the risk of losing some 200,000 or 300,000 jobs.”

How much of the city’s losses in manufacturing jobs can be attributed to policy missteps versus broader economic trends is unclear. Bowles, the Center for an Urban Future director, didn’t see zoning policy as the principal driver. “I certainly don’t think that it’s zoning or real estate that’s accounted for the bulk of the losses in manufacturing,” Bowles said, attributing those losses to broader globalization trends and lower costs of operating overseas. “I think that the real estate costs certainly do contribute to the challenges for manufacturing. But I think there are bigger issues at play. It’s just expensive to manufacture in New York City.”

An optimistic outlook

For all the writing on the wall about the continuing decline in manufacturing in the city, the lawmakers pushing for this reenvisioning of Industrial Business Zones – and the city’s approach to the manufacturing sector more broadly – are doing so with unmistakable optimism. The council bill to create a strategy for the industrial sector has the backing of Speaker Adrienne Adams, and it was listed among a slate of top priorities during the recent visit of a council delegation to meet with federal government officials in Washington, D.C. The council linked that bill to the Biden administration’s own industrial agenda – and its push is well-timed. The Adams’ administration is pursuing several zoning text amendments, including “Zoning for Economic Opportunity,” a multifaceted update to the zoning text aimed at supporting businesses and boosting the city’s economic recovery. As part of that proposal, the city would permit some types of light manufacturing to operate in commercial corridors where they aren’t currently allowed, leading to the “largest expansion of space available for small-scale producers like clean manufacturers and microbreweries in 60 years,” according to a press release.

Some council members, industry advocates and development groups want to see a more comprehensive update to manufacturing-zoned land. In addition to requiring the city to come up with plans to support the manufacturing sector and Industrial Business Zones, the City Council legislation lays out a possible framework to plan for what updated manufacturing zones could look like. The designations range from “growth district” to “transition area” to “core industrial.” The last of which would align with areas where heavy manufacturing currently takes place, and that is where industry advocates want to see the most restrictive zoning for industrial use. But proponents of this approach envision growth districts and transition areas – places close to residential areas or where there is already some commercial activity – having more flexibility for mixed uses, including commercial and office space.

“For industrial advocates like myself, the first proffer I think we would want to see is a commitment to strengthening the land use in the core industrial areas,” Archibald said. “Once we saw that, then folks would be willing to say, ‘All right, in exchange for that, we can see our way to supporting some mixed industrial growth on the perimeters that touch residential.’”

Even those who are bullish about the city’s manufacturing future aren’t talking about expanding the actual geographic boundaries of manufacturing-zoned land – though Gutiérrez said they want to create flexibility to increase density where it’s needed in the zones.

For those carrying even a little optimism about New York City’s manufacturing sector, it’s not just about keeping the sector on life support, but rising to make New York City a place that can fulfill new needs. Supply chain disruptions during the COVID-19 pandemic demonstrated the need to produce more goods closer to home. And the city and state are facing tight timelines to reduce greenhouse gas emissions and electrify basically everything. The climate transition presents not just an opportunity, but a need. “People need heat pumps, people need probably dry wells to handle the downpours, people need a whole bunch of existing technology,” Friedman said. “If we can channel more of that to be produced in the city, I think that there’s some real job creation opportunities there.” The City Council legislation would require the city’s analysis and plans for the sector to include a consideration of the transition to green energy.

Those optimists also see advantages in the city’s manufacturing sector that get overlooked. New York City isn’t suitable for some kinds of manufacturing, like the microchip plants that are awash in public incentives upstate. But producers in the city bring other strengths to the table – a high design component, an eye for trends, an agility that lends itself to small-batch production, and even proximity to high-end consumers.

“Manufacturers are like hummingbirds,” Friedman said, referring to the idea that the birds shouldn’t be able to fly based on their body structure. “How is it possible that they can survive in these high-cost environments? Well, they do.”