Transcript: Mayor de Blasio Delivers Keynote Speech at New ...
To:Carl Weisbrod, Chariman NYC Planning CommissionVicki Been, Commissioner NYC Housing and Preservation DevelopmentFrom:Roy Frias, Norrisa Noel, Rosy Perez and Cicely RamsaySubject:Affordable HousingDate:October 6, 2016__________________________________________________________________________POLICY OPTIONS BRIEFPROBLEM: ???? Lack of Affordable Housing in New York CityThe administrations of past Mayor Michael Bloomberg and current Mayor Bill De Blasio have attempted to tackle the problem of affordable housing in New York City. However, the demand for affordable housing continues to destabilize low-income communities throughout New York City. This problem has seen several public initiatives over the past 15 years and has had many unintended effects in New York City such as gentrification, increased homelessness, and a continued rise in housing prices. ?History of Recent Affordable Housing PolicyOne of the promises made by Mayor Bloomberg at the beginning of his third and last mayoral term was major investments by New York City government into affordable housing. In his 2003 State of the City address, he said , “We will continue to transform New York physically—giving it room to grow for the next century—to make it even more attractive to the world’s most talented people. We’ll invest in neighborhood livability…”To this end, he instituted programs designed to both increase the supply of affordable housing and eliminate what he perceived to be incentives to homelessness. The programs include Housing Stability Plus (HSP) and the Advantage program, both of which provided low- income tenants with subsidies ranging from one to five years, ultimately leaving them responsible for the entire rent. These tenants were unable to take on the whole rent once the subsidies expired. The failure of Bloomberg to support a right to counsel in Housing Court, where 250,000 families are evicted each year, most financially unable to retain a lawyer, further compounds the inefficiencies of these programs.Bloomberg carried out his programs with community zoning laws that changed what could be built in neighborhoods throughout New York City. His strategy was to mostly rezone areas in New York City in order to boost the incentive for new developments in the area. ?Some of his planned rezonings have been contested because they disproportionately affected low-income communities of color.Bloomberg’s major plan was the New Housing Marketplace Plan (NHMP), launched in 2002, aimed at building or preserving 165,000 affordable units. However, according to a 2013 post-analysis of Bloomberg’s Housing program compiled by the Association for Neighborhood and Housing Development (ANHD), this plan lacked affordability. There was a disconnect between the plan’s goal and the reality in many neighborhoods. The majority of units were too expensive for a household earning the local median income. In fact, the number of new units created by the plan is less than 10% of the affordable units lost in the decade prior due to weak rent-stabilization laws.The results of these initiatives carried over past his mayoral administration; one of which was gentrification. ?Gentrification can be characterized as the process of the gentry moving into an area. In several neighborhoods that saw zoning changes under Bloomberg, the landscapes and community identities were changed. ?People were forced out of their homes by landlords looking to make new and larger profits, thus exacerbating the affordable housing crisis.The current Mayor, Bill De Blasio, has made more strides in making housing affordable than his predecessor. According to , De Blasio’s ten-year housing plan, called “Housing New York”, has committed $8.2 billion to subsidize affordable housing. The adoption of Mandatory Inclusionary Housing (MIH) was landmark legislation that mandated developers to create permanently affordable housing as a condition of development in targeted areas. Programs like HPD and HDC’s new Extremely Low and Low Income Affordability (ELLA) program exceeded its target of 8 percent of housing for the lowest income New Yorkers in City fiscal year 2016. Housing affordability for the senior citizen population was considered through the passage of new programs like Zoning Quality Assurance (ZQA), which seeks to modernize zoning laws to promote both affordability and quality, and Senior Affordable Rental Apartments (SARA).De Blasio’s housing plan, in contrast to Bloomberg’s, focuses on both developers inclusion of affordable housing and sustainability. The problem with reliance on private developers is that rents cannot be so low that it discourages developer participation, which may exclude the lowest income groups.The Effects of Inadequate Affordable HousingThe lack of affordable housing has resulted in hardworking families being unable to afford to live in their neighborhoods and epidemic proportions of homelessness. According to advocacy group, Coalition for the Homeless, in April 2011, the number of homeless people in NYC shelters was approximately 39,000, but just 5 years later in April 2016, that number increased to 60,000. In fact, homelessness in New York City has reached the highest levels since the Great Depression of the 1930s and the number of homeless people in NYC shelters each night is now 87% higher than it was 10 years ago.Other negative effects associated with the lack of affordable housing include overcrowded homes, poor academic performance and health of children of low-income families due to housing instability, decreased purchasing power and lost tax revenue since most of their income goes toward housing. Also experienced are changing neighborhood landscapes as low-income families are forced out in preference of wealthier families, thus promoting a form of segregation.Mayor De Blasio’s housing plan is progressive and to be commended, but if making the City a fairer and more affordable place for everyone is a priority of this administration, then further steps are necessary to remedy the crisis of insufficient affordable housing.OPTIONS / RECOMMENDATIONS TO INCREASE AFFORDABLE HOUSING“Affordability” needs to be more representative of a community and different households. ?The city uses Area Median Income (AMI) as the measure to determine eligibility for subsidized housing or affordability. AMI was chosen as the best reflector of what income most people in a designated area would earn, but it fails to capture the lowest income bands. There is a mismatch between the AMI the City uses and the median incomes in many neighborhoods, resulting in the City subsiding housing that is unaffordable to the income groups most in need and a community that is not in line with new construction. According to , housing is considered affordable when a household spends no more than 30% of its income on rent. However, according to , it is estimated that more than 12 million renters and homeowner households pay more than 50% of their annual incomes for housing. The City needs to rethink the way it calculates AMI, if the goal of affordability is to be met. It is also important that the unit size match the number of units that will be residing there. The majority of affordable units are one to two-bedroom units, which rule out the notion of larger families qualifying for affordable housing. For every three affordable one-bedroom unit, at least one affordable three-bedroom apartment should be built.Mandatory Inclusionary Housing needs to be modified to encompass lower AMIs. Permanent affordable housing is now mandatory for residential developments being built in an MIH zone. Incentivizing developers to create affordable housing has been largely unsuccessful; therefore expanding mandatory requirements like MIH would be more conducive to increasing affordable housing. The City Council adopted MIH in March of 2016, at 40% AMI (or $31,080 for a household of three). This threshold still leaves out many low-income families in poorer communities where the median income is lower. This is a real problem in New York City where wages are stagnant as compared to housing costs. Support for The Right to Counsel in Housing Courts for tenants facing eviction is needed in the effort to preserve affordable housing. Advocacy group, Right to Counsel NYC, () cites than in 2015, nearly 30,000 families were evicted in New York City and 37% of homeless people in shelters have admitted that eviction was the immediate cause of their homelessness and subsequent entry into the shelter system. ?Up to 90% of tenants facing eviction do not have legal representation, while conversely, 98% of landlords do. Once these tenants are evicted, landlords can increase the rent, thus decreasing the supply of affordable housing. A cost-benefit analysis of adopting a Right to Counsel shows that the City would experience a net savings of $320 million.The tax incentive of 421A needs to be overhauled to ensure that affordable housing requirements are met. 421A is a partial tax abatement on new construction containing multiple dwellings, created to encourage development, but according to the Pratt Center for Community Development, only one-third of new construction utilized the program. In fact, over the past 20 years, 64% of new construction has taken place without the incentive of 421A, evidencing that it may either by unnecessary or insufficient. ?And less than 10% of the apartments subsidized through the program were actually affordable to the low to median-income families. Critics of 421A have long argued that the program gave developers decades-long tax breaks but did not ensure adequate affordable housing. Due to stalled labor negotiations, the program expired in January 2016, and to date has not been revived. The program should be reinstated, but in order to receive the tax benefit, there must be systems in place to guarantee that the required level of affordable housing is met and preserved and tenants of affordable units are not treated as inferior, such as with a “poor door policy”. A solution would be to modify 421-A to centralize its focus on creating affordable housing. One way this could be done is allowing a mix of levels of affordability, e.g.: allowing units affordable at 20% as well as 60% AMI, would provide developers with more flexibility and willingness to participate in the program. In addition, 30 - 40% of the units should be made affordable for developers to receive the tax benefit. This would also promote accommodation of a wider range of income levels. Creating mixed income communities throughout New York City will improve the welfare and security of low-income residents, create diversity within schools and close academic performance gaps between economic classes.A new fund for homeowners could be created throughout the five boroughs to retrofit basements and increase the supply for affordable housing. Renting out basements is currently still illegal, but this provision would create a fund for current homeowners to undergo a process to create legal apartments they could rent out for profit. ?Many homeowners however still do rent out basements anyway illegally, often with hazardous conditions, for e.g. many violate NYC Fire Code. This fund could be a grant or loan from the Housing Preservation Department (HPD) containing measures to ensure safety and affordability. ?Homeowners would be incentivized to make new apartments that people could apply to, which would boost the income potential of their property. ?This is an entire untapped market that could help ease the lack of affordable housing. ?For many neighborhoods with homes to make retrofitted basements, they would see an increase in their affordable housing supply.CONCLUSIONThere are those who argue that inadequate affordable housing is an accidental by-product of the fair market and a booming economy and the problem is not severe. But there have been systematic policy shortcomings over the past two mayoral administrations that have worsened the current crisis and the severity is evidenced by the low-income communities who are feeling the effects of increased homelessness and gentrification. ?Approaches to this problem would include redefining “affordability” and shifting the way capital is invested in New York City real estate. Specific ways to achieve this include refiguring more representative AMIs, overhauling the property taxes in order to create more incentive for creating affordable housing, slowing down/deterring evictions, and creating new opportunities for homeowners to create more income through affordable housing. Granted the solutions will be costly, but we believe that the benefits of an inclusive, affordable “city for everyone” greatly outweigh the financial costs. The next steps at the local level would include organizing new legislation voted on by our city government. We need to remedy this problem of affordable housing, and in so doing, a large vulnerable portion of our citizens will not have their fundamental need for shelter at risk.??? ??? ??? ??? ................
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