New York City Mayor Unveils Big New Plank In Ambitious Affordable Housing Plan

by ALAN PYKE –

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Real estate developers won’t be able to continue ignoring the needs of New York City’s working class tenants for much longer, if a new proposal unveiled by Mayor Bill de Blasio (D) is approved. The policy goes further than other affordable housing rules in the city, setting requirements developers must follow rather than creating options they can choose to pursue.

“This affordable housing will be mandatory and it will be permanent,” de Blasio told ThinkProgress in a statement. “These are hard new requirements that for the very first time set a floor for the affordable housing communities are owed in new development.”

Under the plan, any time the city rezones an area to allow more dense construction or to convert land to residential use, all housing construction on that piece of the map would have to meet new affordability rules. The mandates for rezoned developments could potentially stack atop other affordable housing requirements for projects where a builder seeks subsidies through the tax code or public financing for construction, serving as a kind of force multiplier for existing incentive structures.

The new proposal will interact with other pieces of de Blasio’s broader affordable housing program to harness developer’s desire for profit to the city’s need to remain accessible to the socioeconomically diverse population that long defined New York City.

That civic identity is at risk of going extinct. Median rent citywide now gobbles up close to 60 percent of median income, after rents rose nearly six times faster than wages from 2005 to 2012. “One thing I like about this program is that especially when combined with the tax incentives available, it’s quite likely to produce units at a spread of incomes,” 39th District City Councilman Brad Lander (D) told ThinkProgress.

The specific operation of the plan relies on some wonky math. Public zoning officials would choose one of two separate tracks for most rezoning decisions. One requires a higher share of units in a development to be affordable while defining affordability as 80 percent of something called the Area Median Income, a federally calculated economic metric. The other affects a smaller share of units but defines affordability at 60 percent of AMI, capping monthly rent at $1,165. Lander, whoholds the Park Slope council seat de Blasio previously occupied, is concerned by a third potential track in the proposed rezoning rules whereby developers could target “affordable” units to people living above the area AMI. But the council will have plenty of opportunity to edit the proposal before it goes into effect.

The upshot of all that math is that New York City would gain between 13,000 and 15,000 new units of affordable housing over the coming decade, according to Association for Neighborhood and Housing Development (ANHD) executive director Benjamin Dulchin. (The mayor’s office is not making any projections of its own for the total housing yield of the plan, citing the inherent uncertainty of future zoning decisions.)

Dulchin stressed the mandatory and permanent nature of de Blasio’s proposal. “Voluntary inclusionary zoning was a step forward when Mayor Bloomberg did it, but this is a much bigger step forward,” he said. “The benefit is going to be there long-term for the city, just as the benefits are there long-term for the developer.”

New York’s housing market has become inhospitable even for even families above the median income. “The numbers in some ways don’t do justice to just how severe it is,” Dulchin said. “We’re getting to San Francisco levels of being in danger of killing the goose that lays the golden egg. If people can’t afford to live in the city, we’re not gonna have the kind of economically vibrant and diverse city we want to have.”

“This has been a crisis for many years, yet somehow it’s reached an even deeper level all across the income spectrum, and all across the city in those neighborhoods that are gentrifying,” Councilman Lander said. Brooklyn alone has lost more than 100,000 units of affordable low-income housing since 2002, he said.

“We’ve seen significant displacement of working-class and low-income people, especially people of color. To have that happen especially at a time when those neighborhoods are understood to be improving is really a slap in the face,” Lander said.

De Blasio’s proposal has the potential to flip that displacement dynamic on its head. Because most of the development projects the market wants to pursue are in high-income neighborhoods where rezoning drastically increases the profitability of a project, the new permanent mandates should help prevent market forces from creating sealed enclaves for the rich. Such segregation in the housing market has historically been at the root of a long list of social and economic ills. Creating mixed-income neighborhoods in New York City should help to improve social and economic mobility for members of America’s most-neglected communities.

The plan’s not perfect, of course, and Dulchin worries that the proposal sets the definition of “affordable” too high to help those most in need. Without some policy to stabilize housing options and affordability for families far poorer than the income levels set out in de Blasio’s plan, even rezoned neighborhoods will be at risk of losing some of their current flavor and population.

“The need is great all across the city and across income levels,” Dulchin said, “but it’s definitely greatest at the lower end of the scale.” Federal policymakers define affordable housing as shelter that costs no more than a third of a family’s income all-in. At the income levels targeted by de Blasio’s proposal, somewhere between half and a third of the city’s families are paying unaffordable rent. But the crisis is even more severe among people even further down the income scale than de Blasio’s proposal would reach.

That means “you’re not necessarily stabilizing the neighborhood,” Dulchin said, adding that rent subsidies, developer tax credits, and other existing tools already effectively target the income levels set out as tentpoles in the proposal.

“You’re trying to find a balance, right? You only get the affordability if you get the building. So you don’t want to squelch the market,” Dulchin said. “But I don’t want to go overboard, this is a meaningful policy step forward.”

 

Reprinted with permission from Think Progress, a branch of The Center for American Progress