Regulating the Regulations: How NYC’s Rule Review Keeps Regulations Just

By Neil Padukone • November 18, 2013

This post is part of the Regulatory Reform for the 21st Century City project.

Cities are complex environments, with large numbers of people living and working in limited amounts of space. As a result, governments designed standards and regulations to ensure safety and health and to guide people’s interactions effectively in these dense areas. Over time, the number of regulations developed to ensure these important factors has exponentially increased at the local, state, and federal level. This expansion has applied pressure on local government related to inspection and monitoring and also on local businesses trying to enter or grow in the marketplace. As additional regulations for new and innovative sectors are designed and implemented, opening a business---from a technology firm to a food cart---can be exceptionally difficult.

Cities like New York have taken steps to more carefully evaluate new regulations. . In 2010, the City Council passed Local Law No. 46, requiring the Law Department and Mayor’s Office of Operations to review proposed regulation before it is submitted for consideration as a law.

The Law Department must ensure that the proposed regulation addresses the primary goal at hand, does not have any loopholes, enforcement would not produce unintended consequences, and that its requirements do not conflict with associated rules that are already in existence. Additionally, the Office of Operations must ensure that the proposed regulation will result in a specific set of outcomes, is clear and concise for compliance and enforcement, and does not require high or prohibitive compliance costs to those that are affected.

According to Local Law 46, each rulemaking agency must conduct outreach to the community most affected by the regulation---restaurants, or hardware stores, for example---before the public hearing that would bring the law into force. Regulations associated with emergency procedures, however, are exempt from this kind of scrutiny. As of March 2012, the Office of Operations had reviewed and certified over 100 proposed rules before they became laws.

Of course, there are a number of statutes, licenses, and regulations that already impede business and are just as ripe for revision. So in early 2013, the City Council passed INT-0949, a local law that requires a retrospective review of city agencies’ regulations. The legislation requires the Office of Operations to go through and assess existing agency policies and submit a report on each department to the Mayor. Each report must take a particular look at violations, penalties for violating standards, and any ameliorative actions violators can take.

If the process unfolds as intended, the next step for the city will be to streamline these regulations: to assess which ones make sense and are cost-effective, and which ones need to be reformed or even removed. Only those regulations that bring real public value to the city and its people should remain---and making change in New York won’t be stymied by a long list of regulations that restrict more than they enable.  A system will, of course, only be as effective as those that administer it. Yet at this stage, the NYC structure provides a pattern for those wishing to achieve a better balance between regulatory costs and benefits.

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