A Plan for an Affordable New York: Building a Sustainable City for All New Yorkers

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INTRODUCTION:

While information is the new gold, it still needs a physical space to occupy, and those creating it a place to live. While New York is a “state of minds,” they still need a place to rest their heads at night.  History teaches us that the most important economic resource is “location, location, location,” because history has largely been an economic battle over the distribution of scarce resources, usually land. And any New Yorker can tell you that land is in short supply. Many will share the common story of a person calling the house of a grieving family to express interest in renting the apartment of the dearly departed, because the obituaries have long been the real estate ads for the most desperate amongst us. Anecdotes aside, getting into an affordable home can seem as difficult as winning the lottery.   

But what is “affordable housing”?  The Department of Housing and Urban Development (HUD) defines “affordable housing” as costing 30 percent or less of a household’s income.  According to the National Low Income Housing Coalition methodology, the fair market rent for a two bedroom in New York City is $1,313 a month, which would require a household earning $52,520 a year or $25.25 an hour to be affordable.  To put that in perspective, a person earning minimum wage would need to work 140 hours a week and two people would need to work 70 hours per week.  The fair market rent generated through this methodology is not far off from the median monthly non-regulated rent of $1,200 a month. For perspective on whether either of these rents are affordable or whether $50,000 is a high household income, according to the last Census more than half of all households in New York City earned less than $40,000.  According to HPD’s 2008 Housing Vacancy Survey, the median rent-to-income ratio is 31.5 percent, meaning half of New York households pay more than 30 percent of their income and almost one third of households spend half of their income on rent. 

Earlier this year we released “Change for America: A Progressive Blueprint for Our 44^th President,” in which Henry Cisneros, the former Housing and Urban Development (HUD) Secretary and four term Mayor of San Antonio stated: 

The inadequate supply of low-cost housing also plays a role in the affordability crunch. Although the overall housing supply is still expanding, its growth is not keeping pace with population and household growth, so that the net stock of low-to moderate-cost rental units is steadily shrinking. One reason for the lag is the disproportional focus on the building of for-sale homes during the homeownership boom that began in the early 2000s. Local zoning laws, land use controls, and other regulatory barriers also limit total housing production, raise the costs of new units, and often prevent the production of low-cost units. Threats to the continued affordability of housing financed under federal assisted- housing programs in the 1960’s and 1970’s, shrinking support for public housing and housing vouchers, and HUD’s single-minded focus on completing new accounting systems and oversight reforms amid a dramatic housing market crisis have all exacerbated the situation. 

Second, there is a spatial mismatch between the location of affordable housing and employment and educational opportunities in metropolitan areas. As metropolitan areas sprawl outward and jobs become increasingly dispersed, fewer low wage renters can find housing near their work. While employment growth is fastest in the low-density counties on the fringes of America’s metropolitan areas, affordable housing—and affordable rental housing in particular—remains disproportionately located in inner-city and older suburban neighborhoods. 

Nationally, 45 percent of all renters and two-thirds of poor-renters live in central cities. The stratified and unbalanced nature of metropolitan housing patterns places enormous strain on urban and suburban households as commutes lengthen and gas prices rise. Given the distended nature of metropolitan communities, the true “affordability calculus” should include the combination of housing and transportation costs, which now average near 60 percent of income for working families in metropolitan areas. 

Shaun Donovan New York City’s former Housing Preservation and Development (HPD) Commissioner and the new HUD Commissioner, has heeded the advice of his predecessor. His view is that the United State has “effectively had a national housing policy only about home ownership, with not even a focus or discussion in Washington about the importance of rental properties,” as he has recommitted to a Federal policy providing rental housing for low-income families. 

On various aspects of housing, in my 11 years as your Consumer Affairs Commissioner and then as your first Public Advocate, we: 

• cracked down on unlicensed home improvement contractors and predatory home improvement lending, recovering hundreds of thousands of dollars;
• exposed the dangers posed by renovations to public housing residents and school children;
• documented the deadly impact of lead-based paint in New York City residential housing, schools and daycare centers;
• reported on long waits for seniors who qualified for the Senior Citizen’s Rent Increase Exemption (SCRIE) program and proposed new ways to streamline the process;
• fought alongside Housing Works against the Human Resources Administration for terminating the contracts for housing of HIV infected people;
• exposed the influence of organized crime in the shelter system, failures in the emergency homeless hotline, and prime co-sponsored Local Law 19 of 1999 creating the Department of Homeless Services, limiting populations in shelters, and requiring beds for emergency assistance units;
• proposed a plan to reduce citywide electricity use and costs by funding City-owned facilities and providing rebates to landlords for energy-efficient appliances, which would have saved tenants an average of $100 a year; and
• criticized banks for deceptive home equity loans whose ads “violated at least the spirit” of the “Federal Home Equity Loan Consumer Protection Act.”

 

In the years since, we’ve had a real estate boom, partly fueled by the lending market, and mostly fueled by skyrocketing prices due to the scarcity of New York City’s most limited resource, land.  But even in those prosperous economic times, while the public called for more parks and public schools, our City has handed over some of those that we do have to provide a windfall for private developers under the guise of preparing for an additional million residents by 2030. In exchange for these windfalls, some developers promised to build as much as 20 percent affordable housing and asphalt parks to replace neighborhoods that were once 100 percent affordable and boasted bountiful parks with grass and trees.  

Mayor Bloomberg called for fifteen thousand new housing units for lower Manhattan; he provided Liberty Bonds and other public financing with the promise of 20 percent or three thousand units at or below market rate.  But as of 2004, only 76 had been built, or 1 percent of the almost six thousand units approved by the New York City Housing Development Corporation and New York State Housing Finance Agency where “affordability” is defined by Mayor Bloomberg as a unit suitable for a family earning over $90,000 a year.  While the Lower Manhattan Development Corporation has set aside $50 million for 300 affordable units, they are likely to be the only ones created and will only be affordable for families earning $85,000 a year.  Similar stories exist in Midtown, Greenpoint-Williamsburg, Downtown Brooklyn and Park Slope with estimates that fewer than 5 to 8 percent of these new so called affordable units are actually affordable for low, moderate or even middle-income families. 

Opponents to rent regulation and affordable housing argue that if we simply build more housing, the market will self regulate and real estate prices will come down as supply meets demand.  Following this philosophy, our City has been on a development blitz building affordable, market rate, and luxury housing everywhere and anywhere with the City’s total housing stock rising to more than 3.33 million units, the most since we began measuring housing stock.  But despite this massive increase in housing stock, housing vacancy rates dropped from 3.09 percent to 2.91 percent, meaning that despite all the building, the supply has not kept up with the demand.  This demonstrates that we can’t just raze all of our industrial, manufacturing, commercial, and low-income residential neighborhoods replacing them with luxury development to somehow create affordable housing based on some over-simplified economic theory.  

Affordable housing shouldn’t be a lottery and marketing line to sell luxury development to poor communities.  It is a necessity in our City and the solutions are all around us.  We’ve touched on affordable housing in our previous policy paper “A Plan for Greener City,” suggesting funding for green roofs and alternative energy, a smart grid and smart meters to make home energy more reliable and less expensive, and weatherization to lower energy use. In “Our Next Economy: THE Creative City,” we identified affordability as essential for our economy and for retaining the creative class that is our City’s future.  Throughout both we emphasized abandoning the current trend towards vertical development in just one borough and instead facilitating horizontal development across all five boroughs along with providing transportation infrastructure improvement and development.  While we have also released “Change for New York: 100 New Ideas for a Better City,” many if not all of our ideas for affordable housing are solutions already being implemented throughout our nation and the world. 

If we give away much of our land now in exchange for 10 or 20 years of affordable housing, what hope are we leaving the next generation?  We need to abandon the CEO mentality of creating short-term gains at the expense of long term losses that will leave this City in the same shape as Enron.  The problem is that we haven’t been demanding enough from developers.  We must stop giving our City’s land to developers for a wink and a handshake.  We must guarantee that eminent domain is actually used for a public benefit.  We must make sure that affordable housing isn’t just a sticker we place on luxury development for offering a handful of affordable units in a sea of thousands.  

While the Public Advocate has a single appointment to the City Planning Commission’s 13 member commission, that cannot be the sole opportunity for the Public Advocate to help direct the development of our City. At a minimum it provides for a sympathetic ear amongst a minority of appointees fighting for affordable housing in a sea of commissioners appointed by a pro-luxury development Mayor. 

Instead, we must expand affordable housing in New York City by reclaiming local regulation of affordable housing from Albany, protecting tenants, preserving existing affordable housing and through responsible development.

 

IDEAS INDEX 

RESTORING RIGHTS

1. Restoring New York City’s Right to Rent Regulation by Repealing Urstadt’s Law.

 

PROTECTING TENANTS

2. Protect tenant health by passing the "New York City Asthma-Free Housing Act."
3. Prohibit “tenant blacklists” through the New York City Commission on Human Rights by adding a protected class to New York City Human Rights Law.
4. Reform the Housing Court and the New York City Housing Authority eviction process.

 

PRESERVING AFFORDABILITY

5. Protect tenants in rentals facing foreclosure by transforming properties into community assets.
6. Provide tenant associations and community based non-profits with a right of first refusal.
7. Create “Pathways from Poverty” to help low income families join the middle class.
8. Preserve affordable housing through an intelligent inventory of housing in New York City.
9. Create an online affordable housing list with a simple unified application.

 

RESPONSIBLE PLANNING

10. Empower communities through local neighborhood planning.
11. Reform eminent domain in New York City by launching a taskforce.
12. Provide homeowners with a new source of income by allowing them to offer affordable housing through a new building code for an "accessory dwelling unit."
13. Leverage public-private partnerships through an Employer-Assisted Housing (EAH) program to make more affordable housing available.
14. Develop new affordable housing by improving the 421-a tax benefit.
15. Expand affordable housing by improving Inclusionary Zoning.
16. Update the affordable housing from a construction model to an opt-in model.
17. Bring increased federal funding for affordable housing into New York City.
18. Reduce homelessness by expanding supportive housing.

  
RESTORING RIGHTS 

Rent regulation began in 1946 to deal with the severe housing shortage in New York City after World War II.  Since then different rent regulations have been created to help during a “housing emergency” that occurs when housing vacancy rates are below five percent, which they have been since the initial laws were passed.  In 1971 the New York State Legislature passed the Urstadt Law, named for Charles Urstadt, former Governor Nelson Rockefeller’s housing commissioner, robbing New York City of the power to pass local rent laws and placing that power in the Assembly and Senate where roughly 60 percent of their 150 and 62 respective members are from outside New York City.   

In 1993 and again in 1997 with rent regulations set to expire, the laws were severely weakened with changes to vacancy, high rent and high luxury decontrol that are estimated to have cost New York City more than a quarter million rent regulated apartments.  The number of unregulated rental units also increased from 26.2 percent in 1991 to 35 percent in 2008.  At the same time, of the 270 Mitchell-Lama middle-income housing projects built in New York City that produced 139,004 units only 29 percent remain due to the expiration of the mandatory affordability period with 40,080 units in 99 projects.  Similarly many developments that provided up to 20 percent affordable housing are also completing their mandatory affordable housing time periods and are going market rate. 

Ÿ Restoring New York City’s right to rent regulation by repealing Urstadt’s Law. 

In order to get affordable housing back on track and restore our City’s right to regulate our own housing, we must pressure Albany to repeal the Urstadt law.  In the meantime we should also support Assembly Speaker Sheldon Silver’s and Assembly Housing Committee Chair Vito Lopez’s “Keeping Housing Affordable for New York’s Working Families” legislative package on housing that includes: Assembly Member Rosenthal’s bill that would repeal vacancy decontrol on units over $2,000 and re-regulate units that rent for $5,000 a month, Assembly Member Bing’s luxury decontrol bill that would adjust the rent and luxury decontrol thresholds for inflation, and Assembly Member O’Donnell’s major capital improvement bill that would extend the length of time for payments and remove surcharges upon repayment. (Back to Index)

PROTECTING TENANTS 

Ÿ Protect tenant health by passing the "New York City Asthma-Free Housing Act." 

A 2003 study from the Department of Health and Mental Hygiene (DOHMH) states that children in New York City are nearly twice as likely to have been hospitalized for asthma as kids in the United States as a whole.  We must reintroduce Public Advocate Betsy Gotbaum’s “New York City  Asthma-Free Housing Act,” Introduction 750 of 2008, to require owners of multiple dwellings, where a person with respiratory problems resides, to prevent and immediately remove indoor allergen hazards such as mold, cockroaches, mice, rats, and dust mites.  While HPD considers some mold conditions to be a violation of the Housing Maintenance Code, there is currently no established or enforceable protocol for mold assessment and remediation.  We should also consider updating this legislation to force landlords to notify tenants of the presence of indoor allergen hazards and pests in other units in the building so that tenants can be educated and identify the threat if they spread between apartments, as they often do.  Through this proactive legislation, tenants would gain a healthy living environment and landlords would have a better chance at fighting infestations with the help of educated tenants who were on the alert. (Back to Index)

Ÿ Prohibit “tenant blacklists” through the New York City Commission on Human Rights by adding a protected class to New York City Human Rights Law. 

The New York City Housing Court hears over 365,000 cases per year.  All of these cases are noted by tenant screening bureaus, resulting in a blacklist for any assertion of legal rights or defenses.  Mirroring Assembly Member Bing's State version, this proposal would amend the New York City Human Rights Law to prohibit the use of court records to form blacklists.  Tenants could then assert legal rights and remedies without fear of retaliation through the blacklist and the New York City Commission on Human Rights could enforce this new provision without forcing tenants into costly litigation to get off the blacklists. (Back to Index)

Ÿ Reform the Housing Court and the New York City Housing Authority eviction process. 

The New York City Civil Court’s Housing Part popularly referred to as “Housing Court” has almost a quarter-million non-payment filings each year, with a quarter in special part devoted to the New York City Housing Authority (NYCHA), which is the largest landlord in the City.  Interestingly enough only ten percent of all of these filings result in an actual eviction, which indicates potential waste of 90 percent and a clear need for investigation and reform.   

Many tenants who are sued in Housing Court are often too poor to pay rent, can’t afford a lawyer, and represent themselves, which the court calls “pro se.” By virtue of their self representation, they rarely understand proceedings, have difficulty completing technical paperwork or various deadlines they must meet.  We should reform “pro se” procedures to make sure that any court orders or decisions include simple multilingual explanations, deadlines, instructions and a simple prepared legal form that tenants can sign and submit back to the court to bring an “Article 78” appeal or whatever the next step might be. 

Included in the quarter-million non-payment filings are also a unique class of cases where a tenant has stopped paying rent because of poor living conditions that a landlord has failed to repair, which is called a breach of the “warranty of habitability.”  When you don’t have heat, hot water, electricity, or face another problem with your rental, you are entitled to withhold a certain amount of rent.  The problem is that even if the court orders the landlord to make all necessary repairs, if the tenant has withheld too much rent, the court will order the tenant to pay the outstanding amounts and they will be treated as the losing party under the law and subject to paying attorney’s fees that they often can’t afford.  Rather than allow this counter intuitive process to continue, we should model other areas, like Worker’s Compensation, by introducing a schedule of violations to the warranty of habitability listing the percentages of rent that can be withheld for each violation.  By introducing this element of certainty, it will empower tenants, reduce litigation by landlords who fail to make necessary repairs, and streamline the Housing Court process. 

With regard to NYCHA, most tenants have their rent covered by a government program such as Section 8. When the government fails to make on time payment, NYCHA’s outdated computer system automatically initiates a lawsuit against them, often for circumstances beyond the tenant’s control.  These cases are soon cleared up, but not until after costing NYCHA, the Court, a tenant and often legal services time, money and resources.  This situation could easily be corrected by working with NYCHA to modernize their computer system and asking that NYCHA leave tenants receiving rent subsidies out of the equation by contacting the government agency responsible for paying the tenants, thereby avoiding the expense of a lawsuit. 

The remaining NYCHA cases often involve units that are in severe disrepair for which a Housing Court Judge will often refuse to order an eviction, let alone full payment, until repairs are made, which can often take months or years.  While NYCHA is obligated by Federal Law to bring suit even for units in disrepair, the New York City Civil Court could require an affidavit in good faith from NYCHA that the unit is free from defects.  Through this one change NYCHA would be relieved from having the burden of filing lawsuits, be encouraged to make repairs in order to recover payments, tenants would gain quality living conditions, and the Court would avoid wasting its valuable resources. 

On the topic of poor living conditions, HPD currently inspects NYCHA housing units for violations, but doesn’t fine NYCHA or force it to correct the violations.  HPD should begin fining NYCHA and credit the amounts recovered to “Rental Assistance Asset Accounts” to help tenants on their “Pathway from Poverty” to be discussed later in this policy paper. 

Last, in the 10 percent of cases that do result in evictions, NYCHA tenants are then usually able to qualify for emergency assistance from government or a non-profit that pays their arrears and expenses to put them back in their homes.  Unfortunately, NYCHA has a practice of costly “full moves” where moving costs are included in these expenses instead of just the minimal expense of changing the locks for a “lock out.”  By eliminating the practice of “full moves” we can save money for tenants, government agencies, non-profits and NYCHA. (Back to Index)

PRESERVING AFFORDABILITY 

Existing affordable housing faces the overall challenge that most of it was built between thirty and fifty years ago, with most developments facing increased maintenance costs from deterioration or expiring affordability periods allowing for them to rise to market rate. 

Ÿ Protect tenants in rentals facing foreclosure by transforming properties into community assets. 

Communities throughout New York are facing foreclosures, and as as a result, many renters living in affordable housing are facing eviction by banks seeking to auction their homes.  However, a vacant building only harms the bank and the community by reducing property value for the building and the surrounding neighborhood.  Rather than losing this affordable housing and having the buildings sit empty, HPD should work with non-profit, limited-profit and tenant association organizations to acquire the units prior to foreclosure, at foreclosure in bids far below market rate, or after foreclosure while units sit as real estate owned (REO) properties prior to deterioration.  The City could provide grants, financing, technical assistance and a framework for tenants and the community to take ownership of these properties in exchange for a promise of permanent affordability. (Back to Index)

Ÿ Provide tenant associations and community based non-profits with a right of first refusal. 

New York City lost 27 percent of its subsidized housing between 1990 and 2006 and is in danger of losing 18 percent of what’s left from Mitchell-Lama buy outs.  At the same time, the Association for Neighborhood and Housing Development has noted “HPD has aggressively turned over city properties to for-profit developers, particularly through New Foundations.  These developers have ignored the needs of local residents in terms of incomes, inflating housing costs and pricing potential homebuyers out of the market, even for hastily constructed homes at high prices.”  Rather than giving affordable housing and City properties to private developer whose goal is solely profit, we should provide tenant associations and community based non-profits with a right of first refusal to buy any affordable housing project or city property that would otherwise go to a private developer.  In exchange for this right of first refusal along with financing and technical support, these community groups would agree to maintain these properties as 100 percent permanently affordable housing. (Back to Index)

Ÿ Create “Pathways from Poverty” to Help Low Income Families Join the Middle Class. 

Current recipients of federal rental assistance pay 30 percent of their adjusted income to cover the costs of rent and utilities.  As the earnings of assisted families rise, their rent also increases, creating a likely disincentive for families to substantially increase their earnings.  This theory was demonstrated in a 2005 evaluation where public housing residents identified having to pay more rent as the chief obstacle to increased work effort, which was only complicated by concerns over losing other benefits like TANF, EITC and Medicaid.   

New York City should launch a “Pathways from Poverty” program to remove this disincentive by adopting the New America Foundation’s proposal of providing public housing tenants with “Rental Assistance Asset Accounts.”  This program would expand upon HUD’s “Family Self Sufficiency” (FSS) program – enacted in 1990 which currently serves 70,000 households nationwide – to begin serving households throughout New York City.  Under HUD’s current implementation of FSS, public housing agencies that opt-in set aside 100 percent of income increases, so that tenants are motivated to complete contracts or stop accepting cash welfare assistance in order to recover all the money set aside as part of their rent increases from increased income.   

Our “Pathways from Poverty” program could modify the traditional 100 percent set aside of the FSS in favor of shared escrow with a 50/50 split between the tenant and the public housing authority or scaled earnings targets with situational availability, like with individual retirement accounts, where money can be used for homeownership, car maintenance, job training, or post-secondary education.  Through “Pathways from Poverty,” we hope to leave behind the current model where a family will live in the same public housing unit for generations in favor of elevating families out of poverty into the middle class, freeing up public housing to help the next family join the middle class. (Back to Index)

Ÿ Preserve Affordable Housing through an Intelligent Inventory of Housing in New York City. 

Every three years the United States Census Bureau conducts a housing and vacancy survey of New York City to determine if the overall rental housing vacancy rate remains under 5 percent and continues to trigger a “housing emergency” necessary for New York State and City rent regulations to continue.  We join the Center for Housing Policy in suggesting that New York City expand its data collection from a vacancy survey to creating an inventory of all housing including projects, housing types, target populations, units, rooms, unit prices, expiration for government subsidies, funding sources, financing terms, physical conditions, HUD Real Estate Assessment Center (REAC) scores, 311 complaints, and violations amongst other information.    

Through the housing inventory we could better measure the achievement of affordable housing goals, increase resources for preservation initiatives, and provide for sophisticated outreach and ownership transfer.  For instance, Illinois is able to target outreach by identifying high risk properties based on deterioration, risk of default on financing, or the likelihood of opting-out of affordable housing.  As a result of its sophisticated inventory, identification and early outreach, they are able to provide tenant groups and non-profits with sufficient notice and time to acquire adequate funding to preserve the affordable housing.  A similar system in New York City could be used to identify high risk buildings about to buy out, facing likely foreclosure, or subject to predatory lending, providing HPD with sufficient time to preserve the opportunity to reclaim market-rate units as new affordable housing. (Back to Index)

Ÿ Create an online affordable housing list with a simple unified application. 

Affordable housing information is currently managed through dozens of Federal, State and City agencies each of which have their own affordable housing stock and programs.  Getting into one of these programs in New York City often requires people to identify affordable housing projects, inquire into waiting lists, request individual applications, submit individual applications, then wait and wonder whether they will win the affordable housing lottery.   

In the new customer service oriented government proposed in our earlier policy paper, “Government 2.0: New Technology for a New Democracy,” we urged the creation of a centralized affordable housing vacancy database and location aware website, so that New Yorkers can easily find affordable housing based on locations and criteria as well as qualify for and apply through one online application with check offs for the projects that they are interested in.  Access to this website would also be made available at any of the participating agency locations through public terminals and the waiting lists would be public information to help stop abuses.  While affordable housing is currently scarce, making it easier to find and apply would help the crisis greatly and alleviate stress for numerous New Yorkers. (Back to Index)

RESPONSIBLE PLANNING 

A core value for responsible planning is to take into account the scope and size of a development to include the current and projected demands on infrastructure such as transportation, energy, water, education and parks.  This way we can make sure that large scale development that has been attracted to an area because of a surplus of these limited resources doesn’t overburden them through increased demand without contributing to the education, transportation, parks, education or other infrastructure.  Through a commitment to responsible planning, we can include the development of essential infrastructure such as transportation, schools and parks in new small and large scale developments. 

Ÿ Empower communities through local neighborhood planning. 

In 1975 the City of New York departed from a comprehensive centralized City-wide master plan when it recognized the importance of community planning under Section 197-a, which was further expanded in 1989 when New York City’s 59 Community Boards were empowered to develop local land use development plans and retain professional experts.  Unfortunately, Community Board offices are under-funded and under-staffed for the hundreds of thousands of people they represent and are often unable to propose a community 197-a plan, which has a price tag of $50,000 to $250,000. Additionally, of the nine proposed between 1989 and 2004, only seven were adopted by the City Planning Commission and the City Council.  But even the seven that were adopted have largely gone ignored in favor of development in response to special interests and market forces instead of actual city planning.  There are countless stories of abandoned community 197-a plans like Greenpoint and Williamsburg begging for affordable housing and preservation of manufacturing jobs only to be given luxury high-rise condominiums. 

Community Boards must be empowered to create their own neighborhood 197-a plans by providing funding, technical resources and staffing for these valuable plans so that we can encourage each board to create a 197-a plan for each of our 59 community districts.  The Public Advocate should also work with the Borough Presidents to investigate how often the City Council and Department of City Planning (DCP) abide by the few 197-a plans that have been adopted and ensure that DCP begins giving regular reports on the City’s progress in implementing those 197-a plans that have been adopted. (Back to Index)

Ÿ Reform eminent domain in New York City by launching a taskforce. 

The United States and New York State Constitutions provide for eminent domain for a “public use.”   Based on the decision by the Supreme Court’s liberal majority in Kelo v. City of New London, the definition for a “public use” is quite broad.  While we can’t change either Constitution and the Court is unlikely to do so no matter who is the “zealous advocate,” both documents empower localities to define a “public use.” In the wake of Atlantic Yards, Willets Point and the Columbia Expansion, we should create a taskforce on eminent domain to investigate recent uses, hold hearings, working with the community and propose new City laws and regulations to govern future uses of this all too powerful tool for development. (Back to Index)

Ÿ Provide homeowners with a new source of income by allowing them to offer affordable housing through a new building code for an "accessory dwelling unit." 

The Pratt Center for Community Development and Chhaya Community Development Corporation estimate that between 1990 and 2000 New York City gained 114,000 housing units that are not reflected in the number of certificates of occupancy that were granted for new construction or renovation.  These units are often unsafe, existing in private homes converted into rooming houses, unauthorized basement apartments, or commercial lofts rented as residences.  In the report researchers admit that illegal units are hard to track with landlords unwilling to reveal them for fear of fines and tenants not daring to report unsafe conditions for fear of evictions or worse.  The report notes that 1.5 million immigrants moved to New York City between 1990 and 2007, changing our City’s demographic to more than 37 percent foreign born. Members of this community have a median income of $35,500 and are three times more likely than native-born New Yorkers to live in overcorwded conditions.  While stories of unsafe living conditions for immigrants in New York are as old as the City itself, we should not need the talent of Jacob Riis and a modern “How the Other Half Lives” to usher in reforms.  With the 2010 Census coming up it is also in our City’s best interest to get these units counted so that local residents are provided with the valuable funding and resources they need.  

We can follow the lead of Massachusetts, California and seven other states that have adopted an “accessory dwelling unit” (ADU) to provide necessary safety regulation.  Tenants would gain safe conditions, regulatory protection and a rent regulated unit; existing landlords would be provided with amnesty and a grace period; both existing and new landlords would be encouraged to build new or improve old units through financial and technical assistance; and the City would gain hundreds of thousands of affordable housing units along with assurance of a more accurate Census count. (Back to Index)

Ÿ Leverage public-private partnerships through an Employer-Assisted Housing (EAH) program to make more affordable housing available. 

Fannie Mae pioneered Employer-Assisted Housing (EAH) which has grown to provide employees with grants or forgivable loans for down payments on closing costs for home purchases, subsidized second mortgages, matched savings programs, below-market interest rates or mortgage guarantees, technical assistance, credit counseling, subsidized rent and utility payments for renters and even participation in construction or rehabilitation of affordable rentals or homes.  Illinois began matching EAH programs dollar for dollar and providing tax credits in 2000 and now has 50 participating employers with 500 employees who have purchased homes and an additional 700 workers who have received credit counseling.  The EAH program has grown so successful that New York Congress Member Nydia Velazquez introduced the "Housing America's Workforce Act" (H.R. 3194), which would provide employers with business tax credits to encourage this program.   

While we wait for this federal legislation to pass, New York City should create a local version so we can partner with our business community in building more affordable housing.  The business community will benefit from the ability to attract talent, employees benefit from affordable housing and the City would benefit from the investment of businesses into the local community so that our government dollars go farther towards creating more affordable housing. (Back to Index)

Ÿ Develop new affordable housing by improving the 421-a tax benefit. 

Under the 421-a program, developers are exempted from paying taxes on the increase in property value that results from new construction on sites that were vacant, underutilized or had “nonconforming” zoning uses. For example, vacant land valued at $1 million with a building worth $9 million would only pay the taxes on the $1 million original land value for the duration of the exemption period of ten to twenty-five years.  The program was enacted in the 1970s during the height of New York City’s fiscal crisis in order to spur new construction.  This benefit is conferred as of right in most cases except in the geographic exclusion zones created during the housing boom in the 1980s for certain parts of Manhattan and Brooklyn where developers must build 5 percent to 20 percent affordable housing in order to qualify for this program.   

In 2006, the City took further steps towards reform; effective on July 1, 2008, the exclusion zone was expanded from 14^th to 96^th Street in Manhattan and the Greenpoint/Williamsburg areas of Brooklyn to all of Manhattan, portions of Claremont and Crotona Park in the Bronx, portions of Long Island City, Astoria, Woodside, Jackson Heights and the East River Waterfront, and portions of many neighborhoods in Brooklyn including downtown, Red Hook, Sunset Park, East Williamsburg, Bushwick, East New York, Crown Heights, Weeksville, Highland Park, Ocean Hill, Prospect Heights, Carroll Gardens, Cobble Hill, Boerum Hall, and Park Slope.   The 2006 changes also eliminated the practice of building affordable housing offsite, instead requiring on-site affordable housing, capped the exemption at $65,000 per unit, and required prevailing wage.  As a result of these sweeping reforms passed in 2006 but not effective until July 1, 2008, developers throughout the City rushed to break ground on projects in order to take advantage of the old rules only to discover in 2009, that they are unable to complete the project within the three years required.  Last month the Department of Housing Preservation and Development revised its rules so that developers with stalled projects relating to financing could stay in the program.   

While it is commendable that HPD has revised its rules to assist developers during this crisis, it demonstrates the City’s continued pattern of giveaways to big business without asking for anything in return.  The Public Advocate should be at the bargaining table making sure that developers gaining this benefit, who probably shouldn’t have rushed into development without proper financing, would have to make additional concessions like opting into the new 421-a rules that would require on-site affordable housing and prevailing wages. 

The 421-a tax break costs our City budget almost half a billion dollars a year just to subsidize luxury development.  A study by the Pratt Center for Community Development analyzed over fifty condos slated to receive the 421-a tax credit and found that of the over 6,100 units created, not one was affordable with a price lower than $350,000, with most priced above $600,00 and some exceeding $2 million, for lifetime costs exceeding another half billion dollars. 

We should adopt the reforms to 421-a proposed by “Housing Here and Now” and its coalition of hundreds of community and advocacy groups by defining affordable housing in the context of the neighborhood, creating permanently affordable units on-site, with the  requirement that all workers be paid prevailing wage.  We should also consider transitioning from a geographic exclusion zone that requires an affordable housing component to a more organic community related index that would trigger affordable housing for any luxury construction. (Back to Index)

Ÿ Expand Affordable Housing by improving Inclusionary Zoning. 

The New York City Zoning Resolution currently offers a small inclusionary housing program that can only be applied in R10 zones, which is the maximum density for any residential use and largely unavailable outside Manhattan.  The program provides a density bonus so that developers including affordable housing can build more housing on site.  The benefits of this program are economically diverse and racially integrated neighborhoods that provide housing for working families near their place of employment.  Boston, Denver, Sacramento and San Francisco use a mandatory system, with most cities that chose a voluntary system now transitioning to a mandatory system.  We should investigate mandatory inclusionary housing targeting luxury development by using offering and sales price of new units in relation to their neighborhood to require the inclusion of affordable housing.  We should also consider expanding inclusionary housing from R10 zones to provide bonuses to the less dense residential areas that can be found throughout all five boroughs.  In addition to these two concrete housing proposals, we should also work with local talent at Universities, the private sector and the community to propose a new zoning resolution. (Back to Index)

Ÿ Update the affordable housing from a construction model to an opt-in model. 

Our current model for affordable housing offers developers incentives to include affordable housing in new construction.  The problem with this model is that we already have more than 3 million units of existing housing and including affordable housing within new construction is small in comparison to existing housing stock.  Furthermore, this model becomes less likely to work as we have less and less land for new construction.   

Given our current economic crisis, we have a unique opportunity to provide landlords with much needed tax relief in exchange for affordable housing.  We should investigate creating a program to allow landlords to place vacant and occupied units from their buildings into rent regulation at an affordable price in exchange for tax incentives or abatements and financing.  Through this mechanism in the program we could encourage units leaving affordability periods to remain as well as encourage market-rate or luxury buildings facing vacancies or financing shortfalls to offer affordable units to help cover costs, reduce taxes, and gain access to government financing. (Back to Index)

Ÿ Bring increased federal funding for affordable housing in New York City. 

New York currently pays much more to the Federal government in taxes than we get back.  According to the Public Policy Institute, as of 2001 New York generated more than $166 billion in federal tax revenues and only receives about $127 billion back from the Federal government, an annual deficit of about $47 billion dollars.  One way to improve our local economy is to remove this disparity by bringing more of our Federal dollars home.  We can do this by making sure we qualify for merit based Federal programs, so that those dollars go to New York City businesses which are able to spend their earnings here.   

One such program is the second iteration of the “Neighborhood Stabilization Program” (NSP) initially funded with $3.92 billion for all 50 states under the “Housing and Economic Recovery Act” (HERA) and extended with an additional $2 billion to target specific neighborhoods in need.  Over 12 percent of Census tracts in New York City are eligible for funding, as opposed to six-tenths of a percent in San Francisco, 8.5 percent in Washington, D.C., and 20.4 percent in Boston and 67.1 percent in Cleveland.  Fifteen of New York City’s 59 community board districts are eligible for funding. The highest need is in Brooklyn and Queens where there is limited access to public transportation and good schools as compared with other borough and city wide averages.  Our City should seek to apply for programs like these and actively recruit non-profits to apply for these programs providing training, technical assistance and grant writing services.  This way we can win more merit based Federal dollars from programs like these to rebuild the City’s communities that need it most. (Back to Index)

Ÿ Reduce homelessness by expanding supportive housing. 

Each night an average of 34,354 people stay in our shelter system.  This number is considerably up from the average of twenty to twenty five thousand in the mid-nineties, when Mayor David Dinkins signed the historic “New York/New York Agreement” with then Governor Mario M. Cuomo.  This aggreement helped spur the development of over 14,000 units in more than 220 supportive housing residences in the City for formerly homeless and inadequately housed people with a range of disabilities.    

Supportive housing is a type of affordable housing that provides on-site service to people who may need support to live independently, including formerly homeless families or individuals, people with HIV/AIDS or physical disabilities, ex-offenders, people with mental illness or with histories of substances abuse and young people aging out of foster care who are in danger of joining 220,000 thousand disconnected youth who are not in school or employed.  New York State Office of Mental Health Commissioner Mike Hogan has noted that over 150,000 New Yorkers receive federal benefits as a result of mental illness disability, but currently only 40,000 housing units are available in the pipeline.  While supportive housing can often face local opposition, we should create programs to educate the community on how supportive housing can replace blight, abandoned and vacant property, provide neighborhood stability, and, according to NYU’s Furman Center for Real Estate and Urban Policy, increase neighborhood values by four percent in the immediate 500 to 1,000 feet.  Expanding supportive housing can generate an annual savings of $16,282 per person in costs related to public services such as hospitals, shelters and incarceration and reduce the growing homeless population to keep families from being forced to sleep on the streets. (Back to Index)

CONCLUSION 

We must abandon the recent pattern of development that has divested our City of our most limited resource, land, while stretching our existing infrastructure to the limit without adequately investing in necessary improvements.  It is only by restoring our City’s right to regulate rents, protect tenants, preserve existing affordable housing and new responsible development that we can begin to stem the tide.  And rather than relying solely on a single appointment to the City Planning Commission or lawsuits, we can fight for affordable housing through legislative advocacy and by using the Public Advocate’s bully pulpit to gain a place at the bargaining table to demand real concessions from developers to turn windfalls into fair deals that benefit the City, developers, and most importantly the residents of New York City who need an affordable place to rest their heads. (Back to Index)

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