Wednesday, February 10, 2016

Cuomo's attempt to intervene in NYC housing bonds widely denounced (but maybe acceptable to some?)

I'm late to this, but there's been widespread denunciation of Gov. Andrew Cuomo's effort to wrest control of affordable housing bonds issued for projects in New York City. As the New York Times editorialized 2/3/16, Mr. Cuomo’s Housing Wrecking Ball:
 It could be even tougher now that the governor has proposed placing new layers of state control over the city’s use of federal tax-exempt bonds to build and preserve affordable rental apartments. It’s not a stretch to call this sabotage.
Mr. Cuomo says it’s transparency and accountability, but it is more about intrusion and control. It would give the head of the Empire State Development Corporation, a Cuomo appointee, the power to sign off on the flow of tax-exempt bonds to New York City, which uses them almost exclusively for affordable housing. It would also require that every single affordable-housing project in New York City that uses the bonds get the approval of the Public Authorities Control Board, a shadowy entity controlled by the governor and the leaders of the Assembly and Senate.
These are the proverbial “three men in a room” who hold a death grip on policy-making power in New York State government. The phrase evokes the low-minded, chronically corrupt jockeying and deal-making that govern how the Albany game is played. That two of the three — Sheldon Silver and Dean Skelos — were ejected from the room last year, because of federal felony convictions, is about all you need to know.
Note that even the Real Estate Board of New York opposes the move.

Interestingly enough, it's plausible--though I don't expect to see it articulated publicly--that developers with particular access to Cuomo and Empire State Development (hint: Greenland Forest City Partners) might find Cuomo's policy acceptable, since it would give them a leg up on rivals.

More criticism

Added NY Slant's Nick Powell in CUOMO'S PETTY PLAY FOR HOUSING BONDS, 2/3/16:
State Budget Director Robert Mujica’s reasoning that the Control Board’s veto power over volume cap would bring additional transparency to the process is also puzzling. The PACB has never been particularly open about its approval process – the New York Times aptly characterized the body as “shadowy” in a Wednesday editorial – and typically only chimes in at the very end of negotiations, rubber-stamping bond allocation per the governor’s instructions.
Powell followed up with BRINGING HOUSING BONDS OUT OF THE SHADOWS, 2/4/16, calling for more transparency on the part of the state:
If we assume bringing the bond allocation process out of the shadows is really what this proposal is about – rather than a clear vindictive play against Mayor Bill de Blasio’s housing plan and the city’s Housing Development Corporation (the city agency that negotiates the bond allocation) – then there are more serious concrete steps that can be taken to provide more accountability.
...The state is a virtual black box as far as publicly reporting this bond-allocation process, with most of the negotiating with IDAs [Industrial Development Agencies] conducted behind closed doors. None of the IDAs publicly list the number of projects they have in their pipeline, including HDC.
Instead of giving the Empire State Development Corporation veto power over any reallocation of volume cap from an IDA to another eligible local agency – which would severely hamstring the city’s IDA from transferring those bonds to HDC – why not amend the proposed legislation to force these agencies publish detailed information on their development projects? 

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