One Big Problem with Mayor De Blasio's Housing Plan Isn't Even His Fault

 Deputy Mayor Alicia Glen (center) City Planning Director Carl Weisbrod (far left) and Housing Preservation and Development Commissioner Vicki Been (near right) testify before City Council (newyorknimby)

Deputy Mayor Alicia Glen (center) City Planning Director Carl Weisbrod (far left) and Housing Preservation and Development Commissioner Vicki Been (near right) testify before City Council (newyorknimby)

Over the last two days, top officials in the De Blasio administration have been testifying before the NYC City Council about the mayor's proposals to increase affordable housing in the city through changes in zoning laws.  The Mayor has promised to construct or protect 200,000 affordable housing units over the next ten years but has faced some political opposition from tenants groups, unions, and elected officials who argue that the proposals will only encourage more gentrification and high-end development while failing to meet the mayor's goals or the city's needs.

The two programs under review by the City Council, which were approved by the City Planning Commission last week, include the Mandatory Inclusionary Housing (MIH) and Zoning for Quality and Affordability (ZQA) programs.

There are two big policy proposals in MIH that would break with the current orthodoxy - setting aside affordable housing units in new developments would be mandatory and those units would be permanently affordable. As it is now, setting aside affordable units is voluntary (part of a FAR bonus program for 20% affordable units) and those units have a defined 'sunset' where they return to market rate (35 years has been the standard).  These developers would be eligible for subsidies from the city and state.

The ZQA begins to touch on some points that I made in an earlier blog about zoning with proposals to encourage affordable housing by relaxing some zoning requirements for specific types of housing (including elderly housing) and incorporating the MIH proposals into the zoning code.  There are also proposals to encourage better street-level design and pedestrian experience (even bankers hate all the bank branches in Manhattan). 

 At least it's not a bank. (NYC DCP)

At least it's not a bank. (NYC DCP)

What defines 'affordable' is usually where programs like these run into controversy, which presumably explains a lot of the protests occurring during and around the hearing. Inclusionary housing policies in the city base their definition of affordable on two factors - the income threshold to be eligible and a cap of rent-to-income percentage. Generally, as is the case with the highly controversial 421a tax exemption state law, the income level is set at 60% of the Average Median Income of the NYC region according to the US Census.  The cap on rent has generally been 30% of monthly income. 

The key point about AMI here is that it is based on the NYC region (which includes Westchester and Long Island) and not just the city's five boroughs. So for the purpose of policy creation, the AMI is $86,300.  However, the AMI of just the city is actually $50,700.  The AMI calculations are set by the US Department of Housing and Urban Development (HUD) and are obviously grossly unreflective of the nature of income in the city.

There are many people who have beef with this calculation, including Congressman Jose Serrano from the Bronx 15th District.  This number egregiously distorts policy decisions and their impact on New Yorkers who are rent burdened across the entire city, but it particularly impacts low-income families concentrated in poorer parts of the city.

Mayor De Blasio is obviously aware of this (probably has beef with it too) and has outlined for developers to set aside 25% of units for residents with 60% of AMI or 30% of units for 80% of AMI among other options. However, this can't change the fact that the baseline numbers increase the cost of subsidies to the city while limiting the scope of units available to the New Yorkers most in need of assistance.

That's a point that bears repeating.  The distorted AMI number masks the true needs of New Yorkers but it also totally ignores where those New Yorkers live - and where they need assistance.  The AMI in Manhattan is a lot different than the Bronx, for example, but that won't mean development is going to the Bronx because it's needed there.  According to an awesome report from the Furman Center,  the city's current inclusionary housing program and all of its associated subsidizes only work in developments that are located in higher-rent neighborhoods to begin with.  You might have heard of the "Poor Door" controversy where residents of high-end luxury buildings don't want to share entrances with the "20%" low-income residents.  

The policy of removing a small fraction of poor residents from a neighborhood to live in subsidized housing in a wealthy neighborhood has long been a divisive political issue in urban politics. (Here's an interesting study from Johns Hopkins on it).  I think the premise is flawed to begin with, since it relies on private developers to create new housing in areas that are economically viable and can guarantee an acceptable return. By this definition the only way new, subsidized affordable development will reach poor residents where they live is when their neighborhood becomes attractive enough to developers to build.

Trying to squeeze developers for a small fraction of affordable units in a select amount of hot neighborhoods based on faulty calculations doesn't solve the housing problem and costs the city a lot in subsidies. Though Mayor De Blasio's plan has a number of good ideas and a lot of buy-in from various stakeholders, it still relies on a premise that hasn't proven to work.

There are alternatives that could be explored.   Reintroduce SROS.  Explore Community Land Trusts.  Or encourage local neighborhood groups that provide economic justice in underserved areas.  Some of these, and many others, can surely work in NYC.  It won't be one mayor or one plan or one idea that changes the game for affordable housing, but we need to encourage policy makers to consider every option.  It would also help if policy makers use the most accurate data for us to work with.