Wednesday, July 27, 2016

de Blasio takes another affordable housing victory lap; experts skeptical (+ AY disconnect)

A mayoral press release yesterday (after a New York Times exclusive) announced Mayor de Blasio: NYC Sets Affordable Housing Record, Highest Production Since 1989, with the subheading "23,284 affordable homes financed in Fiscal Year 2016 – second highest in history." (This follows up on last year's triumphant press release.)

The lead:
NEW YORK—Mayor Bill de Blasio today announced that his administration secured 23,284 affordable apartments and homes during Fiscal Year 2016, the second highest production in New York City history and the most since Ed Koch was mayor.
The Mayor’s Housing New York plan now is ahead of schedule, with 52,936 affordable homes financed so far, enough for 130,000 New Yorkers. Affordable housing for the very poorest New Yorkers – those earning less than $24,000 per year – surged with 3,500 new apartments. More than 4,000 affordable homes for low-income seniors are also underway.
The City is protecting neighborhood affordability on every front. The City is investing more than ever in NYCHA and its 600,000 tenants, evictions have declined 24 percent in two years, and the Rent Guidelines Board just passed its second consecutive rent freeze affecting 2.5 million tenants.
But how much of an impact can this make? Consider that preservation, while certainly important, doesn't help those hoping to get an affordable apartment, and the city has started only 17,341 units, according to the chart in the press release.

Note this paragraph:
One-quarter of all affordable housing financed since 2014 will reach New Yorkers making less than $31,100 for an individual or $40,800 for a family of three. Of these homes, 50 percent are for New Yorkers making less than $19,050, or $24,500 for a family of three. This progress reflects the traction of new programs and initiatives targeting the very lowest-income families, including the formerly homeless.
That's progress, but how significant? The chart below counts "starts" as either new construction or preservation. So we don't know how many new apartments there were for extremely low and very low income households.

The middle-income anomaly

Of course--though it's often not mentioned--"affordable" means that people pay 30% of household income on rent, so it can range from low-income to middle-income.

So, why did I highlight middle-income housing? Because in the upcoming two "100% affordable" buildings in Atlantic Yards/Pacific Park, 65% of the units, or 390, are middle-income units.

That's not where the need is greatest. Nor is it the focus of de Blasio's program. As announced in 2014, only 11% of the total were supposed to go to that cohort.

From Housing New York, Mayor de Blasio's 10-Year Plan, 2014
Several elected officials praised de Blasio's progress, including Assemblymember Walter Mosley and Council Member Brad Lander.

The coverage

In De Blasio Administration Says It’s Ahead of Schedule on Affordable Housing, the Times reflected the administration's line, but then noted criticism from housing activists and pointed out that "nearly a quarter of affordable apartments preserved with city financing last year were in two Manhattan projects, both devoted to middle-class tenants: Stuyvesant Town-Peter Cooper Village, on the East Side between 14th and 23rd Streets, and the Riverton Houses, in East Harlem."

The article concluded:
“We are pleased to see that the administration has increased the pace of production of housing for low- and extremely-low-income New Yorkers,” said Barika Williams, deputy director of the Association for Neighborhood and Housing Development, a nonprofit advocacy group. “But the need and demand for that kind of housing has only increased. And it won’t be met by the administration’s housing plan.
AM New York, in Mayor Bill de Blasio announces affordable housing progress, met with mixed reviews, supplied significant skepticism, pointing to the amount of new construction:
“The key figure for me is NOT 23,284 — which includes 17,187 units that received additional subsidies to extend already existing rent caps — but 6,097,” the number of new affordable homes actually built, said Matthew Lasner, co-author of “Affordable Housing in New York: The People, Places and Policies That Transformed a City.” 
While de Blasio’s affordable housing creation is 11% higher than the average annual output of Mayor Michael Bloomberg, it falls short of De Blasio’s stated goal of 8,000 new units per year, said Lasner, an associate professor of urban studies and planning at Hunter College.
The 421-a issue

DNAinfo, in City Claims Record-Breaking Affordable Housing Despite Loss of 421-A Break, noted the challenge with the lack of restoration of a certain tax break:
[Deputy Mayor Alicia] Glen said one of the worst consequences of the loss of 421-a is the inability to build affordable housing in expensive neighborhoods.
"That's tragic, and Albany needs to be held accountable for that," she said. "Our ability to do the kind of mixed-income building and neighborhood planning that's a sort of tent of our Housing New York plan is definitely at risk."...
Glen said the administration is "ahead of schedule," though they created only 6,097 new units in FY2016, which was 28 percent fewer than in the previous fiscal year and fewer than they would need to be on track if they were aiming to build 8,000 units per year to meet the goal of 80,000 in 10 years. 
[Housing Preservation and Development Commissioner Vicki] Been also suggested that the higher number in FY2015 was a "bump up... because of the natural rush to get into the ground" before the 421-a tax break expired.
The Observer, in De Blasio Administration Now Says It Can Hit Its Housing Goals Without 421a, reported:
Nonetheless, numerous experts have told the Observer that the mayor’s grand designs are largely dependent on getting the state to create a new 421a program. The centerpiece of his housing agenda is Mandatory Inclusionary Housing, which obligates market-rate developers to set aside a percentage of new rental apartments for middle and low-income tenants.
But without 421a, there is little incentive for developers to build rental units.
“When you look at a budget for a building, if all of a sudden your taxes are running at 30 percent of your operating expenses, there’s not a lot of room for profit,” real estate attorney Steve Hochberg explained to the Observer earlier this year. “The concept of what the mayor planned was meant to go hand in hand with a 421a.”
A union head warned that the only profitable unsubsidized developments are now condominiums. And unless a new version of the exemption arrives, developers just won’t build the low-income units de Blasio’s plan requires.
Affordable Housing Surges in New York City
City has financed the construction or preservation of 53,000 low- or moderate-income apartments since January 2014
Mayor Bill de Blasio’s plan to build or preserve 200,000 units of affordable housing in New York City is on track, city officials said Tuesday.

The city says it has financed the construction or preservation of 53,000 low- or moderate-income apartments since Mr. de Blasio, a Democrat, took office in January 2014 under an initiative he has made the centerpiece of his administration.

The city has secured financing for about a quarter of the 200,000 units 2½ years into the 10-year plan, the mayor’s aides said.


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Appeals Court Rules Against Retroactive Affordable-Housing Requirements
Officials said the city built or preserved 23,284 affordable units in the fiscal year that ended June 30, the most since 1989 when Ed Koch was mayor. While advocates have criticized the administration for not targeting enough low-income New Yorkers, aides to the mayor defended the administration’s record.

Alicia Glen, Mr. de Blasio’s deputy mayor for housing and economic development, said the program had created, “an orchestra of affordable housing.”

“It’s all coming together,” Ms. Glen said at a City Hall briefing on the initiative Tuesday. “You’re talking about massive, game-changing stuff. This is, you know, getting shit done at a level the city has never seen with respect to housing.”

This past fiscal year, the city completed the financing on 6,097 new units of housing, down nearly 30% from last year’s figure of 8,485 units but up nearly 25% from fiscal 2013, the last full year of former Mayor Michael Bloomberg’s administration.

Ms. Glen and Vicki Been, commissioner of the city’s Department of Housing Preservation and Development, said the number of units created or preserved in fiscal year 2015 was unusually high because developers rushed to move forward with projects before the expiration of a lucrative tax credit program, known as 421-a, that lapsed this year amid inaction from Albany lawmakers.

The city also preserved 17,187 units of affordable housing this past fiscal year, a figure that includes high-profile deals at two older developments in Manhattan.

In one deal, 5,000 units at Stuyvesant Town and Peter Cooper Village will remain covered under the city’s rent-stabilization laws for the next 20 years.


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In another deal, 1,000 units at Harlem’s Riverton Houses will remain stabilized for the next 30 years in exchange for about $100 million in tax breaks.

Barika Williams, deputy director of the nonprofit Association for Neighborhood and Housing Development, said the city wasn’t building enough housing at the lowest income levels.

“The numbers in the plan and the numbers the administration is hitting are not lining up with the need,” she said.

Ms. Been said the lowest-income units were the hardest to produce, but that the city had made progress.
City Insists Its Controversial Affordable Housing Plan Is Working
Deputy Mayor Alicia Glen announced on Tuesday that the city's latest affordable housing numbers prove that Mayor de Blasio's controversial Housing New York Plan—which relies heavily on providing subsidies to private developers in exchange for a percentage of below-market rate units—is ahead of schedule.
According to City Hall, the administration has created or preserved a combined 52,936 units of affordable housing since the plan's launch in 2014. The mayor's goal of 200,000 affordable units by the year 2024 only calls for 50,000 units at this stage.
"Many people in the housing development and real estate fields in New York and nationally thought [this] was a fairly crazy and overly ambitious goal," Glen said on Tuesday. (Mayor de Blasio himself was absent, having traveled to Philadelphia for the Democratic Convention.)
Advocates have argued that these numbers represent too little too late. Before Mayor de Blasio's housing plan was implemented, the city was short 550,000 affordable apartments for families that make less than $42,000 per year. For that income group, the plan calls for 16,000 new apartments, or less than 3% of the need. Meanwhile, NYC's population is booming. And thanks to loopholes in the existing rent laws, the Alliance for Tenant Power estimates that the city could lose 100,000 affordable units by 2019.
Over the fiscal year ending in June, the city says it created or preserved 23,284 affordable housing units—up from 20,325 units in fiscal year 2015, and the most affordable housing the city has generated since 1989.
The majority of the new or preserved units are in Manhattan—16,935 of them, followed by 16,507 in Brooklyn. According to HPD, they're concentrated in neighborhoods including East Harlem, Brownsville in Brooklyn, and Highbridge and Belmont in the Bronx.
Here's the breakdown, by affordability:
(via Mayor's office).
Preservation far outstripped ground-up construction last year, in large part thanks to the city's financing on two major preservation projects: Stuyvesant Town-Peter Cooper Village, between East 14th and 23rd Streets, and the Riverton Houses in East Harlem.
The preservation process does not insure permanent affordability—when a building is "preserved," its owner receives a cocktail of loans and tax breaks that expire after between 15 and 30 years, taking any affordability requirements with them.
In the case of Stuy Town, the city helped finance a deal between the complex's then-owners and Blackstone Group, a massive international investment firm that manages some $93 billion in properties. Ultimately, Blackstone agreed to preserve the relatively affordable rents of 5,000 of the complex's regulated units. In exchange, the investor was guaranteed one million square feet of extremely valuable air rights.
For city officials, Stuy Town is proof of the success of a housing plan that hinges on private investment.
"Some people would have said, 'What are you doing? Why are you in the middle of private market transactions? That's not the role of the government.'" Glen said on Tuesday. "We were very clear when we came into office that we were going to be strategic and [intervene] where we could."
"Blackstone is a notorious private equity company that is going to... be making money hand over fist," argued Cea Weaver, research and policy director for New York Communities For Change, a coalition of housing advocates for low-income New Yorkers. "The more we go down this path, the more we're empowering private investors to control a public resource."
Reporters pointed out this week that, less Stuy Town and Riverton, the city actually preserved fewer affordable units than it did last year.
Glen said that while there aren't projects the size of Stuy Town in the pipeline, the city will "work harder" in order to achieve similar numbers in the future.
"I can't say that [it will be 17,000], but I'm sure it's not going to be [as low as] 11,000," she said.
(Denn Ice / Flickr)
Vicki Been, head of the city's Housing and Preservation Development (HPD), emphasized today that 25% of the units produced to date, 12,970 of the total, are set aside for New Yorkers who make less than 50% of the Area Median Income, or $40,800 for a family of three. Of that total, 6,817 are set aside for extremely low income families, those that make less than $24,000 per year.
"These are the very hardest units to produce," she said.
For context, a full third of the city's households have an annual income of less than $35,000.
The Mayor's team indicated Tuesday that it is doing the best it can under the circumstances. "Land and construction costs [are high]," Glen said. "We don't have a gazillion city-owned buildings to put into the sausage maker. We have to be much more creative and work with the private sector."
At the moment, there are no plans to develop deeper city subsidies for the constriction of affordable housing.
"The fact that developers continue to want to do business with us and are able to make their margins work given where the subsidies are, generally speaking we don't have to raise subsidy levels right now," Glen added.
Advocates have argued that the city could do a better job of documenting and assessing the vacant properties already in its control, which might be converted to deeply affordable housing at a lower cost. This spring, HPD confirmed 897 vacant apartment units in just one city-owned housing program. In 2012, the advocacy group Picture the Homeless counted more than 3,500 vacant buildings across the five boroughs.
Asked if the city had plans to count and assess all of its vacant properties, Been said it did not.
"When my inspectors are on the ground they're always looking for signs of vacancy, and then... we reach out to the owner and try to understand what is going on," she said. "The city does not have a registry of vacant property, but we monitor it very carefully."

City Hall reports nearly 53,000 new and preserved affordable housing units


07/26/16 05:27 AM EDT

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The de Blasio administration closed financing on more than 23,000 below-market-rate homes in the past fiscal year, an effort helped by the preservation of Stuyvesant Town in Manhattan and the frenzied pace of development as a lucrative tax break was set to expire in Albany.

City Hall has so far financed 52,936 units of low- to moderate-income housing since de Blasio took office, city officials said Monday. That is enough housing for 130,000 New Yorkers, they said.

Story Continued Below

One third of the total, or 17,341 of the financed units, will be new construction. The rest will be preservation of existing apartments. The preservation of Stuyvesant Town last fall ensured that about 5,000 apartments would be affordable to existing tenants for two decades to come.

The mayor set a goal for himself of building 80,000 new apartments for low- and middle-income tenants, preserving an existing 120,000 such units and creating 160,000 market-rate homes by 2024. (Should de Blasio win re-election, his second term would end 2021.)

Two-and-a-half years into his first term, the latest numbers put de Blasio on track to reaching his goal. But the recent expiration of the 421-a tax abatement presents a significant challenge for City Hall.

While below-market-rate housing can still be financed with other government subsidies, the city was counting on a tax break like 421-a for mixed-income rental buildings. Without it, many of the city's most prolific developers have said they will simply create condos with no affordable housing.

City officials could not say how many of the new units took advantage of the 421-a tax break. In March, the mayor's housing agency reported that more than one-third of the 13,929 affordable units financed at that time were to receive the 421-a subsidy.

Carl Weisbrod, the city's planning commissioner, said 421-a is just one component of the total.

The city budgeted for $8.2 billion in capital costs over 10 years.

"It's a good plan and the city is investing a huge amount of resources," he said. "Money goes a long way and we're allocating over a 10-year period, just in capital resources alone, double what was allocated in the previous 10 years."

He also said the administration has had a "laser focus on housing."

"There's no question that the expiration of 421-a got a lot of people to sort of get in before the window closed," he said. "That was a big issue too."

The city is anticipating another 12,000 apartments to be created over 10 years through the Mandatory Inclusionary Housing policy, which requires low- to moderate-income housing in exchange for a city-issued rezoning that gives developers more overall density.

The plan passed the City Council in March, despite opposition from community boards and borough presidents. It was approved in conjunction with a rewriting of the zoning code to ease rules that restricted residential development. That too was intended to create more low-income housing, particularly for senior citizens.

The city's plan provides homes for tenants earning a variety of incomes.

More than half the units — 54 percent — are for three-person households making $40,801 to $65,250, according to city statistics. Thirteen percent are for three-person families who earn less than $24,500 a year. Fourteen percent are reserved for families of three making $97,921 to $134,640.

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