By Kate Reese
As New Yorkers look toward the next four years of de Blasio, other policy priorities on the horizon are overshadowed by one of the Democratic Mayor’s earliest campaign promises – the expansion of affordable housing. In the four years since he first took office in 2012, fervent debate between community activists, city agencies, and housing developers have continued even as affordable housing units have increased (more than 77,000 since 2014).
First, what’s considered “affordable” – i.e. affordable by lower-income residents – may be up for debate. According to city policy, individuals making $33,401 to $53,440 are considered “low income”. While it is arguably difficult to get by in New York City on a salary of $35,000, concerns of affordability for the lowest-income and underemployed New Yorkers remain. And understandably so! Of the affordable units developed so far, only 14.8 percent went to households making less than $25,770 ($24,600 is the federal poverty level for a family of four). In a more abstract long-term sense, there is concern that the addition of mixed income housing could contribute to the displacement of housing-vulnerable populations in the long run. Through a policy called Mandatory Inclusionary Housing, the city has conceded certain building limitations in exchange for their provision of added housing; the 2014 plan (“Housing New York”) proposed adding 200,000 units by 2024 easing rezonings for developers who set aside 30% of units for affordable housing. Developers are thus allowed to build taller buildings, adding a starker change to the landscape, property values, and affordability of a neighborhood.
This catch – that in an effort to provide more affordable housing, the city has incentivized development that could actually raise property values – is complicated by voters who supported de Blasio. 16 of the 26 top “bundlers” (those who aggregate campaign donations) for de Blasio’s 2017 campaign are real estate developers, or lobbyists who represent such firms. Representatives of the Mayor have indicated that the long-term vested interest from the real estate community is actually a good thing for New York City’s housing crisis. Still, the administration points to the increased impact of nonprofit and family-owned developers as evidence that affordable housing development has fundamentally changed since the Bloomberg administration. Deputy Mayor of Development Alicia Glen cited the notoriously contentious 2012 negotiation of the Domino Sugar factory and the administration’s push for developers to increase the number of affordable units as evidence that de Blasio is willing to stand-up to big developers and their lobbyists. But because mandatory inclusionary housing allowed for 70% of a building’s units to be market rate, there is evidence that, at least in Greenpoint and Williamsburg, such rezoning in the past ten years may have actually contributed to gentrification.
A few weeks before de Blasio’s reelection, the administration announced new goals for the affordability agenda. Housing New York 2.0 will look to vacant lots of land for the development of affordable housing and aim to make use of city-owned land formerly thought to be ill-suited for housing. Additionally, the original plan to add 200,000 affordable units by 2024 has been expanded to 300,000 units by 2026. These changes come after decisions in summer 2017 to focus more on housing options for New Yorkers in the lowest-income brackets. The number of middle-income units would be decreased, and housing set aside for families making less than $43,000 would be upped annually from 40,000 to 50,000 units. The plan continues its promise to incentivize new developments to set aside 10% of units for formerly homeless individuals.
Another new feature of the de Blasio Housing New York 2.0 plan is a program called Neighborhood Pillars. The program, which establishes a $275-million public-private fund, is estimated to add another 7,500 units of affordable housing over the next eight years. The fund will be used to help nonprofits purchase and preserve units in neighborhoods experiencing rapid change. The program will target acquisition at mid-sized unregulated or rent-stabilized buildings where aggressive real estate speculation could otherwise raise prices and cause tenant turnover. In addition to nonprofit housing developers, minority and women-owned firms will have access to this fund.
At first blush, Housing New York 2.0 seems to shore up the de Blasio administration’s commitment to supporting smaller developers, as a way to level the real estate playing field. In a city where space, homelessness, and affordability always seem to place different demands on both zoning and housing policies, innovative ways to finance new affordable housing while mitigating the long term effects of new development on the city should certainly be a priority. However, the current administration will demonstrate its commitment to equity and long-term strategic planning based on how the fund is managed. New Yorkers interested in housing equity should look to the private sector banking partners and philanthropic donors that will in part establish the fund. And while 7,500 homes may seem like a small drop in the bucket alongside other housing goals, a successful multi-sector housing program may provide further evidence that private-public partnerships should be scaled up.
Other initiatives include rezoning vacant residential lots in order to increase property taxes to incentivize more productive land use. Housing New York 2.0 also makes a commitment to protect subsidized housing that would otherwise shift to market rate units. One estimate for the city’s budget states that this plan will cost the city $16.9 billion over the coming twelve years, with private investment bringing the total to $82.6 billion. The updated plan gives more weight to threat of speculation and to anti-displacement strategies, and The Neighborhood Pillars program seems to indicate that the administration can be responsive to critics. Given that these tools will be pursued in addition to controversial rezonings, transparency and community oversight should be considered priority. Public-private partnerships may be an innovative way to fund affordable housing in New York, but until a stronger bureaucratic mechanism is developed to center community oversight in Housing 2.0’s progress, it’s likely criticism will remain.