Affordability solution: a Long Island public bank
A bill under consideration would help tackle the affordability crisis by creating a framework for municipalities to charter public banks. Credit: Getty Images/Fly View Productions
This guest essay reflects the views of David Sprintzen, emeritus professor of philosophy at Long Island University and social action coordinator at the Ethical Humanist Society of Long Island.
Long Island’s affordability crisis calls for bold solutions. We are overtaxed and underfunded. We face a severe lack of adequate housing, ineffective local public transportation, and strained energy resources, with insufficient corporate investment to drive long-term economic growth.
What if the answer is not to plead with Wall Street to invest here or rely on federal outlays, but instead is something right here in our own backyard? A Long Island public bank could be that answer.
A public bank is a mission-driven financial institution that manages public deposits and invests in community development projects for the public good. Unlike private banks that prioritize profits through speculative and potentially harmful investments, a public bank focuses on local priorities such as affordable housing, small business growth, and sustainable infrastructure. It not only invests in our communities but can also generate income to help reduce our property taxes.
On Long Island — where housing costs continue to rise, small businesses struggle to access capital, and infrastructure improvements often take a backseat — the affordability crisis feels deeply entrenched. A public Bank of Long Island could channel public funds into addressing head-on the challenges facing our communities. By leveraging local resources to meet local needs, it could stabilize housing costs, support good-paying jobs, and create a more equitable, sustainable future for the region.
It’s not a far-fetched idea. North Dakota has operated a successful public bank for over a century. Established by populist farmers in the early 20th century, the Bank of North Dakota holds the state’s deposits and reinvests locally. Key to its success is its partnership model. Rather than competing with local banks and credit unions, it operates as a wholesale lender, collaborating with local financial institutions to expand lending.
In this way, public banking taps into two powerful, untapped resources: First, it leverages billions of public dollars currently sitting idle in commercial banks, putting them to use for the public good. Second, by partnering with local banks and credit unions, public banks leverage the on-the-ground knowledge and underwriting experience of these vital institutions. A Long Island credit union or community bank could make larger loans because a public bank provides additional capital and shares the risk.
The potential impact is transformative. A report by economists at The New School’s Center for NYC Affairs estimated that in just its first five years, a public bank in New York City could generate nearly 20,000 new and preserved affordable housing units, create 70,000 additional jobs, and deeply invest in sustainable infrastructure — all while generating nearly $6 billion in reduced taxes and/or new loans to consumers and small businesses through partnerships with local lenders.
Of course, banking comes with risks. But the crises we’ve seen — from the subprime mortgage meltdown to recent bank failures — stem from speculative, profit-driven behavior. Public banks, focused on public impact rather than profits, remove those motivations.
The New York Public Banking Act being considered by the State Legislature would create a framework for local governments to charter public banks.
The affordability crisis on Long Island demands bold and innovative solutions. By establishing a public bank, we can take control of our resources and reinvest them into the housing, jobs, and infrastructure our communities need to thrive. It’s time to take this bold step and unlock Long Island’s potential for an equitable and sustainable future.
This guest essay reflects the views of David Sprintzen, emeritus professor of philosophy at Long Island University and social action coordinator at the Ethical Humanist Society of Long Island.