New York City

Report Confirms Obvious: Rent Control Works

(cssny)

(cssny)

Now that the new legislative session has opened in Albany, the Housing Justice for All campaign has ratcheted up its fight for Universal Rent Control, a platform of bills that strengthen and expand tenants’ rights across the state. Even with united Democratic control for the first time in decades, there are a lot of structural obstacles in place that could derail the campaign over the next few months.

Half of all renters in New York City and the vast majority in the state don’t have any protections and aren’t typically activated in the fight for tenants’ rights. The real estate industry has millions of dollars to spend on lobbying and media influencing. And many legislators, just like the average person, have a lot of outdated misconceptions about rent control.

Changing the popular narrative of rent control is one of the most important, and hardest, challenges facing the Housing Justice for All campaign for Universal Rent Control. We only need to look to California, where the real estate lobby spent $80 million exploiting the same misconceptions to help defeat a rent control initiative called Prop 10.

This week, help came in a big way from Oksana Mironov of Community Service Society of New York who published a timely report on rent control in New York City that should help every activist fighting for Universal Rent Control frame their arguments for the general public.

It’s no secret that housing policy is a vast and confusing assortment of policies, agencies, acronyms, and formulas that scares off most people. Rent control (broadly used here to incorporate all rent regulations) is one of the most confusing aspects of this larger very confusing space.

That makes it hard to step back and understand the bigger picture of rent control, which is really quite simple and positive. This report shows why that is the case. It makes three important points that deserve quick focus:

Rent Control is the best affordable housing policy

As the report points out, there is an inherent power imbalance between landlords and tenants. Landlords will always have more information, more control, more political access, and more money than a tenant, particularly in a stressed market (which NYC has always been and most cities have become). The marxist critique would go further and highlight the absurdity of tenants providing the capital that gives the landlord power over them.

Rent control is the best way to offset this dynamic by securing real protections and power for tenants. One of the biggest achievements of the report is how clearly it explains how rent regulations do this and why it matters. Put simply, it shows that rent control is the best affordable housing policy we have (aside from expanding public housing).

Rent control is a legal structure that helps cities and towns stay affordable without massive direct public subsidies. They restrict a landlord’s ability to raise rents, they guarantee a tenant’s right to a lease renewal, and they provide legal resources to combat abusive behavior. These tools together give tenants the power to negotiate with a landlord that they simply don’t have when they can’t easily move to a cheaper or better apartment or fear getting kicked out.

It also has a larger impact on the health of a city. Rent control provides tenants and communities of color long-term protections against displacement in rapidly gentrifying neighborhoods. It offers more housing security for seniors, lower-income workers, and formerly homeless families than market rate housing. It also scares off speculators like private equity firms that raise property values, which gives non-profits, community land trusts, and other local ownership models the opportunity to own buildings.

The report also goes through a brief but widely unknown history of rent control laws in the US and in New York particularly, showing how widespread it used to be and why it was so necessary as a policy. It’s worth reading, but the gist is simple: we’ve always been in a housing crisis because housing doesn’t function like a normal market.

If the market was even somewhat designed to incentivize affordable housing, we’d have more affordable housing. But it isn’t and we don’t and never will by relying on it. Our solution now is to give billions of public dollars to private developers to subsidize “affordable housing units” that aren’t affordable, aren’t permanent, and aren’t built enough.

The report makes the overwhelming argument that rent control is a much sounder policy for private affordable housing policy.

Current laws suck, Universal Rent Control is the fix

Even though rent control works, it doesn’t take a housing nerd to see that current laws…don’t. They don’t “work” in a number of ways that the report covers well. It also shows how Universal Rent Control fixes them.

First, rent control doesn’t protect enough tenants. Of 8 million renters in New York state, only 2.5 million have any type of protections. The vast majority of those folks live in NYC, but still less than half of all rental units are regulated. That doesn’t leave a lot of tenants protected or interested in fighting for them.

Second, the current laws basically undermine the entire point of rent control. This is largely because the real estate lobby has effectively written these laws from the beginning. Their biggest problem is called vacancy decontrol, which allows units to exit the system and return to market rate when they reach $2733. This gives landlords a powerful motive to find ways to raise rents to that threshold. They have means through a series of loopholes that allow landlords to raise rents on existing tenants or in between leases.

Throw in the fact that oversight is flimsy at the state and city level (one issue that URC needs to address better) and you’re left with a system that does not protect tenants as much as it suggests it would. Since 1994, almost 300,000 units have been deregulated. That offsets all of the units protected under Mayor de Blasio’s housing plan.

The problem isn’t rent control as a concept, it’s rent control that is designed to fail slowly. Given this analysis, it’s no surprise that the report endorses the full platform of Universal Rent Control because it fixes these problems (ending vacancy decontrol, eliminating every loophole, expanding legal rights.) Most importantly, URC extends new protections to all renters, including market rate tenants, across the state.

Rent control critics are wrong either on purpose or by accident

The final part of the report is the most important for housing activists because it debunks the lazy talking points against rent control. These will absolutely be used by the real estate lobby and will likely be repeated uncritically by the media. Much like the emerging debate over marginal tax rates, this is either because critics don’t actually understand how housing works or they are operating in bad faith.

I encourage you to read the full section, but I’ll highlight one of the most important myths debunked in the report: rent control limits the supply of new construction, which raises rents for everybody.

Ignore for a moment that new construction isn’t even covered under rent regulations (unless they receive tax subsidies) and focus on the logic. If rent control magically vanished, would rents go down and would construction boom?

Well, no. We can look at examples like Cambridge, MA, where rent control vanished in 1994. Property values went up dramatically, and rents doubled in just three years. But there was and remains no construction boom that lowered rents. Rents continue to rise and displacement of low-income residents has increased, especially over the last five years, sparking housing protests from the Movement for Black Lives.

Rents are going up in Cambridge and plenty of other places without rent control and construction isn’t keeping pace. So what is driving that? Scarcity of land, speculation, and zoning restrictions. Even without rent control, these factors still exist. You can debate solutions to those problems, but rent control doesn’t impact them and it’s absurd to suggest that it does.

The only obvious way to protect tenants right now is capping rents. The only way to make it an effective policy is to have strong protections that reach all tenants.

Now that Governor Cuomo has announced his intention to address “aggressive rent regulations reforms” during the budget process over the next few months, it is crunch time to make the case for strengthening and expanding rent protections. There are many obstacles ahead, including the governor. Every member of Housing Justice for All and every housing activist should read and share this report to make sure people know why we must pass Universal Rent Control.

The Mayor's Plan to Fix NYCHA Will Nix Public Housing (But Don't Blame Him)

Isaacs Houses (homebodynetwork)

Isaacs Houses (homebodynetwork)

Yesterday Mayor de Blasio announced an updated plan to fix the crumbling public housing stock in NYC before it falls into federal receivership — and even more uncertainty. The plan calls for selling air rights, allowing developers to build on NYCHA land, and most radically of all, transferring 1/3 of all NYCHA homes to private manage. 

If all goes according to the plan, these programs will still only account for 75% of the $32 billion in needed upgrades for NYCHA, leaving the remaining funding in the hands of an uncommitted Governor Cuomo and an openly hostile federal administration. 

It also doesn’t provide any new housing opportunities for the 360,000 New York families on the waiting list for NYCHA or Section 8 vouchers or the more than 60,000 homeless New Yorkers.

I don’t envy the Mayor’s position. This is his best option to find the significant cash infusion for upgrades to a vast system. NYCHA manages 176,000 homes across 2,400 buildings. Almost half of NYCHA developments are 50 years or older. Decades of underinvestment from the federal government (and years of mismanagement at NYCHA) has compounded to put many buildings on the brink of permanent decline and eventual condemnation. Over 400,000 New Yorkers live in NYCHA and deserve dramatic and fast solutions. The fact that this is the best option is not on the Mayor.

But let’s be clear what this plan represents: this is an admission that the idea of public housing in the US is over — from a progressive mayor in a progressive city with a long history of successful stewardship of public housing. 

There are 1.3 million publicly owned homes in the US, but NYCHA is by far the largest concentration of them. For 80 years, it has stood out as a well managed bastion of affordable housing, in sharp contrast to other cities that never had the political support to properly invest in a system. For every Pruitt-Igoe or Cabrini-Green in another city, there is a Queensbridge or Williamsburg Houses here. These developments aren’t perfect, but they are providing affordable homes and stable communities for thousands of New Yorkers. NYCHA showed that public housing worked.

The real story of NYCHA is how resilient it has proved to be despite a hostile federal government and indifferent public that have betrayed it at every corner over the last forty years. Just since 2001, the federal government has cut over $3 billion in operational funding. It’s only recently that NYCHA has started to fracture and it’s miraculous that it endured as well as it did under the circumstances.

 If after all of that, we’re throwing in the towel on NYCHA now, we’re throwing it in everywhere. At a time when virtually the entire country is feeling the pain of the affordable housing crisis, this is the exact opposite of what we need to do. 

One out of three American households (38 million) are cost burdened. Half of all renters are cost burdened (which has doubled over the last 50 years) and a quarter are severely burdened. Since 2000, the number of Americans living in poverty has increased by 28% to 12.8 million. In 2016 alone, 1.4 million people (including 175,000 families with children) were homeless at some point during the year. 

In New York City, it’s even worse. Half of all renters in NYC are rent burdened, including virtually all low-income households. Homelessness is at record numbers. Displacement of low-income communities is rampant. 

What is truly scary about all of this is that it is happening during one of the longest periods of economic growth in our history. 

At precisely the time where we need bold, transformative federal leadership on housing, when we need more public housing, the federal government under the Trump administration is retreating even further. 

Last month, HUD Secretary Carson sent a letter to public housing authorities outlining HUD’s plan to dramatically reduce the stock of public housing in the US. Housing advocates fear that next year they will see severe budget cuts to public housing and other housing programs.

It’s not enough to blame President Trump or Republicans. The Democratic Party doesn’t support public housing either. Despite champions like Rep. Barbara Lee, Nydia Velazquez, or Hakeem Jeffries, the party overall, and particularly during the Obama Administration, has actively supported privatization of public housing which demonstrably leads to a reduction of affordable housing. The Democratic Party has never made public housing the priority it should be and millions of Americans, not just NYCHA residents, have suffered as a consequence.

Instead, both parties have embraced subsidizing homeownership and incentivizing the private market to build affordable housing units for decades. The result of this bipartisanship is skyrocketing home and rental prices and millions of missing affordable homes.

The mayor’s plan in part reflects this ugly reality. The central component of the plan is the expansion of the controversial Obama-era Rental Assistance Demonstration (RAD) program. The mayor proposes transferring 62,000 homes — one third of the system — into private management supported by Section 8 vouchers. NYCHA would still own the properties, but private developers would be able to leverage private capital markets to make repairs and then collect rents on a 99-year lease. The mayor estimates that this process (which includes non-RAD programs as well) would generate $12.8b in repairs.

RAD has become liberal’s “best idea” for a long-term solution for public housing. That’s understandable. Given the way public housing is framed nationally, it represents the only idea to raise large amounts of capital for public housing right now. Many cities, like San Francisco, have or are in the process of converting their entire public housing stock into the RAD program. 

In NYC, developments have already been converted. The biggest so far, Ocean Bay in the Rockaways, has been viewed as validation for the program. The infusion of capital has led to renovations for all apartments and a palpable improvement in the quality of life for residents. This is of course welcome for the New Yorkers in these buildings. 

But what Ocean Bay proves is, wait for it, the quality of buildings and the quality of life for residents improves when you invest money in them. There is nothing intrinsically better about private management, other than there is political support to subsidize it. NYCHA used to be a model of property management because it used to have enough money to do it well too. 

In the short term, RAD-fueled private management might be a godsend to residents compared to a slowing and staggering NYCHA. But this is an illusion. The reality is, housing low-income residents is massively expensive, especially in older large-scale buildings. Adding the need for private firms to profit only increases the cost to the public in the long run.

At some point in the not too distant future, these private firms will no doubt come back to the table looking for more money. Roofs leak, elevators breakdown, boilers need replacing and investors change their expectations.

Incomes aren’t likely to increase for these residents, especially as the population ages, to cover higher costs. The cost of climate change (either adaption or mitigation) will eventually materialize and will likely be prohibitive given the location of so many developments near water. 

No amount of current tenant protections within RAD will stop the need to either raise rents or increase public subsidies to keep these private firms in business. 

No institution other than the federal government can handle the nation’s housing needs now or tomorrow. It is simply more efficient and more equitable to build, own, and manage these homes publicly through federal funding. 

It is bad enough that our society can’t produce economic prosperity and security for all of its citizens, but it is especially perverse to allow private interests to profit from the housing of the poor and working class, especially when it is clear that the private market is utterly incapable of meeting the affordable housing needs of our nation.

You might argue that the public shouldn’t be concerned about doing this, but you would be wrong. Unless our economy is rebooted to spread wealth and security to everybody, the increasing winner-take all society we live in will cease to have any legitimacy for the poor and working class (to the extent that it has any left). At its mildest the resulting pain will cause an exorbitant cost in social services and lost economic productivity. At its most severe, it will cause mass unrest and social revolution.

The Mayor has many flaws, but he can not carry all of the weight for NYCHA’s misfortunes. We’ll find out tomorrow in court if the Mayor’s plan is enough to avoid federal receivership. Surly the federal government doesn’t want to take responsibility for NYCHA.

That’s not good enough. We must demand that the federal government provide the funding necessary not only to upgrade existing NYCHA properties, but to expand public housing to guarantee that all Americans have a safe, clean affordable home where ever they need it. But until enough Democrats wake up about the housing crisis, we’ll keep seeing the steady, miserable erosion of public housing in the US.

5 Reasons to Support Universal Rent Control

(stoprebnybullies)

(stoprebnybullies)

Election Day is here and, depending on your perspective and persuasion, our country will be saved or doomed. Maybe both, maybe neither. On a personal note, I’m proud of playing a small part in a cycle that has seen the emergence of a progressive left as a growing electoral force.

In the spring, I started hearing about a young woman running for Congress in the Bronx, and it was a single tweet from her talking about housing as a right that hooked me. It was something I believed, but never thought would become an actual rallying cry in American politics.

Since then, over the last 6 months, I’ve knocked on countless doors across 4 of the 5 boroughs (sorry Staten Island) for Alex Ocasio-Cortez, Julia Salazar, and for many other progressive candidates that believe the same thing.

I’ve met amazing, committed activists of all ages and backgrounds that have come together to talk about important issues, promote great ideas, and elect amazing candidates. For a housing nerd like me, I’ve especially been inspired by the community of housing organizers that I’ve come to know.

There were a lot of important issues that got people fired up this cycle. However, universal rent control is one of the most exciting movements that has started to come into focus. It is an opportunity to radically change the political landscape in Albany, but has a long way to go, even if things go right on Election Day.

I wanted to make one final pitch to voters about what universal rent control means, why its so important, and why supporting the candidates who believe in it is so important. Here are 5 reasons to support universal rent control:

1. It’s the first step in breaking the rigged the political system

Everybody complains about how corrupt Albany is, but it really is, and real estate is the reason why. REBNY (The Real Estate Board of New York), one of the major political arms of big real estate developers, spends like crazy every election cycle on politicians from both parties and gets its members to spend even more.

It’s money well spent. It gets its members generous tax incentives, weak tenant protections, and a stable, predictable political landscape that favors developers. Then they take advantage of extreme gerrymandering, lax campaign finance laws, and voter suppression measures to keep their preferred candidates in power and to keep voters out of the process. (Many of the candidates they back also block other progressive issues in Albany.)

This means that renters, the homeless, small landlords, and low-income communities across the state are blocked from expressing meaningful political power. There are just enough politicians speaking for these groups to give the appearance of a fighting chance, but the supremacy of the status quo is undeniable.

This election cycle is challenging the status quo. During the Democratic primary in September, pro-tenant progressive candidates beat a slate of establishment Democrats, including 6 out of the 8 state senators of the now defunct Independent Democratic Conference (IDC).

These candidates (and even candidates from other parties) all ran on a platform that rejected real estate money and most embraced universal rent control. These candidates are pro-tenant, but as importantly they are pro-democracy. By taking rightful power from a tiny group of wealthy developers and giving it back to the broader population of New Yorkers, we can start to solve the deeper political crisis in our state that is fueling the housing crisis.

URC is the first and biggest opportunity to turn this momentum into law, just as our current rent regulation laws are set to expire in 2019.

2. It’s the only immediate way to slow down rents

Universal rent control will apply to every renter in New York state and is designed to block extreme rent increases, prevent unfair evictions, and eliminate perverse incentives to kick out tenants. This is the only way, right now, to protect tenants from increasing rent pressure. When half of all rentersare already burdened, help is needed fast.

URC will improve on the existing rent regulation protections in two critical ways. First, it will apply to all renters. Current laws apply to less than half of all renters in NYC and a tiny fraction outside of the city, so the benefits are not widely shared and understood. Second, it will remove the many loopholesthat allow landlords to raise rents in regulated units and to remove units from regulations altogether.

By closing loopholes and spreading protection to all renters, the housing market in New York will change dramatically. Every renter will gain meaningful protections against the type of stress and abuse that have become typical for too many.

It is a blunt tool for sure, and it must be part of other large reforms in land use policy, property tax law, and occupancy requirements, among others. But on its own, right now, it will help protect tenants from the onslaught of the housing crisis and show them that political change is possible if they remain united.

3. It’s the best way to stop the homelessness crisis from getting worse

There are a record 89,000 homeless New Yorkers across the state, 62,000 of them are in NYC. A large portion of them are families. Many of them are veterans. Lots of these adults are working. This is happening while our economy has been “booming” for ten years.

This is a moral failure. If that’s not enough for you, then it’s also a policy failure. The number one reason for the spike of homelessness is a lack of affordable housing. People can’t afford to stay in their homes and can’t afford to move and/or secure new housing.

New York spends millions of dollars trying to fill the gap with shelters and supportive housing, but we should be working on keeping people in their homes to begin with. Eviction prevention is a proven method to improve outcomes for housing insecure individuals and is a substantially more cost effective policy for taxpayers.

URC includes the expansion of eviction protections currently underway in NYC like right-to-counsel and anti-harassment measures, but it can also include a streamlined system for short-term rental assistance before eviction proceedings start. Many of the existing rental assistance programs at the state level are difficult to navigate and apply to a narrow pool of applicants. Federal programs are even worse.

Simplifying and expanding these programs under a URC platform will be a net benefit for these New Yorkers and for the state. Ending homelessness is a choice and one that we can do with a relatively small operational lift.

4. It will spur competition and innovation in housing construction

URC is a drastic intervention in the housing market and flies in the face of every 101 econ class lesson, but it is also necessary and justified because the housing market in New York, and especially NYC, has always been broken. It might be counterintuitive, but URC can actually fix this.

In a classic market simulation, perfect competition between rational actors creates an equilibrium between supply and demand cancelling out profits. No capitalist actually wants that and, historically, capitalists have worked very hard to prevent that from happening. Our current form of late capitalism has perfected this.

This is especially true in the housing market. Simply put, the market doesn’t build enough quality affordable housing because it isn’t interested in doing so. It only does so with expensive public subsidies. Every activist agrees that we need a greater supply of housing, but our reliance on this method has produced few affordable units relative to need at truly astronomical per unit costs. The only winners here are developers.

As much as developers complain about it, the cost and complexity of building in NYC benefits them because it prevents new developers (big or small) from entering and competing. A restricted supply and complex regulatory landscape raises profits and limits competition, leaving a small, wealthy community with a lot of power and incentive to maintain the status quo, which is what REBNY does well.

This hardly makes for a healthy market. Tenants don’t have corresponding market power because they don’t have the power to “vote with their feet” to change this status quo. Without a “pure” market (never gonna happen) to even the playing field for tenants, the argument for URC becomes obvious.

URC would remove the worst predatory actors from the market by restricting rents, but if it includes complimentary reforms that create more competition, (things like reforming occupancy laws, zoning restrictions, property tax law, but there are many ideas to pull from) it could spur a renaissance in construction practices and productivity that have been slow to materialize under the current status quo.

We need to encourage more innovation and competition within the development community to add housing more responsive to the public’s changing needs. This includes more use-specific options for seniors, special needs individuals, families, and young singles, as well as incorporating more sustainable construction and energy-use methods.

URC is a rejection of the current structure of the housing market, but that doesn’t mean it can’t be a vehicle for innovation. By establishing Housing for All as the goal of the housing market, URC is challenging who gets to compete and what ideas get to compete.

5. It will stop displacement and encourage local ownership

The post-recession emergence of foreign and institutional investors at the high-end and the growth of house flipping platforms at the low-end have created unprecedented competition for real estate in many corners of the state. These forces have particularly targeted low-income communities of color, triggering levels of displacement that we are only just starting to understand.

It’s no surprise that large scale investors have turned to single-family properties and small multi-family portfolios in cities like NYC. They are safe, highly privileged assets in American tax law and are the benefactor of the larger trend of people preferring to live in urban environments. High debt levels and stagnant wages have further increased the demand of rental housing for younger and older Americans. The prospect of weakening already leaky rent regulation laws only creates more interest in these buildings.

URC will obviously change the calculation on rising rents. This will in turn have a potential impact on the attractiveness of housing as an investment asset overall. Removing the speculative value of housing will lower the costs not only for renters, but for local landlords and community groups to take on ownership.

If URC gets passed, making it easier for these types of local actors to own the land and buildings in their community will prevent displacement and retain prosperity within these communities. The same coalition could support alternative equity models like community land trusts to further empower community-led ownership.

The fight is just beginning

I am too burned from 2016 to want to hear, let alone, make predictions about Election Day. But at the local level in New York, there is a real chance that progressive change can take hold in Albany after the election. If the Senate flips, there is a credible chance to enact universal rent control.

But the fight will be brutal. REBNY, RSA, and high-influence developers were clearly caught off guard by the rebellion in the primaries, but they have considerable structural advantages in Albany. Governor Cuomo will be a particularly vexing wild card.

Whatever happens on Election Day (I may update this as needed) I hope that voters, long-time or first-time, continue to stay involved with other activist groups. The coalition for universal rent control is still in its early stages, but the housing rights and tenants rights communities have been around for a long time. Channeling the experience of these groups with the energy of newly engaged local voters could produce some truly remarkable change in 2019. Here’s hoping.


Public housing works, it can help the housing crisis, but The New York Times isn't helping

This Richmond Barthe sculpture near the Johnson Houses contrasts the image of intended residents (white families) with the current racially diverse demographics of NYCHA residents, which is part of why support for public housing has vanished. That must change. (homebodynetwork)

This Richmond Barthe sculpture near the Johnson Houses contrasts the image of intended residents (white families) with the current racially diverse demographics of NYCHA residents, which is part of why support for public housing has vanished. That must change. (homebodynetwork)

Over the weekend, the New York Times came oh-so-close to writing a fair, nuanced story about NYCHA. Most of the time, the paper of record ignores the 80-year old agency, the 2,500 buildings it manages, and the 400,000 New Yorkers who live there. When the paper does write about it, it is almost always in the context of failure, scandal, and waste. There’s plenty of that to go around, which is fair game, but there are many other positive facets of the agency’s story that remain, at best, alluded to while the core problem fueling these issues — federal abandonment — is only referred to passively.

The paper’s approach to public housing does a disservice to NYCHA residents and the agency, but it also does a disservice to public housing in the US in general. The simple truth is that public housing works and should play a larger role in solving the affordable housing crisis. In order to leverage public housing’s vast potential, we must first change how we talk about it.

I find this particularly frustrating because at the same time, there are elements within the Times that are (slowly) changing the conversation around housing. It published Matthew Desmond’s work on how the federal government spends $134 billion a year subsidizing $1million dollar homes across the country. Emily Badger and Quoctrung Bui wrote a devastating series on the eviction machine in much of America.

These provide important context to the affordable housing crisis, but public housing never seems to get that same coverage. The paper certainly doesn’t put all of these elements together to show why public housing (and other models like community land trusts) need to be part of the solution.

The problem with the Times coverage on public housing can be captured almost entirely in the title: “After Years of Neglect*, City Public Housing Is Poised to Get US Oversight.” Two problems jump right out.

(*The online edition appears to have replaced “Neglect” with “Disinvestment” after I started writing this. The print edition’s title is “US is Expected to Get Oversight of City Housing”. In either case, the problems remain obvious.)

First, it is bizarre to refer to impending federal oversight of a domestic government agency as “US oversight.” This might strike you as nitpicking — and I’m not blaming writers for editor’s decisions — but this falls into the much longer problematic history of how the Times (and the media at-large) adopts colonialist language when writing about housing in the US. Think of every real estate section story about mostly white “urban pioneers” moving to neighborhoods that…have been lived in by (mostly non-white) New Yorkers for decades.

Framing the built environment like this completely warps the public discourse around housing, specifically on gentrification and displacement. These are complex topics with significant policy trade-offs, but we aren’t presented with equally-weighted narratives to consider them responsibly.

This may be because the press, at any given level in an organization, is uninterested, only partially informed, or even ideologically opposed to public housing (its hard to see how corporate media would be inclined to support it). As much as the press gets labeled “left wing” or accused of having a “liberal bias,” public housing is a good example of that simply not being the case.

So much of the media adopts a real estate-centric language that the public conversation has already been shaped to internalize the virtues of market outcomes exclusively. (This is also true because poverty barely gets written about in the press. And that’s because poor and/or minority writers are absent from pressrooms.)

When minority communities speak about feeling like they live in occupied territory, particularly in the context of excessive-force by the police, this type of real-estate centric language is also what they are referring to. It either erases existing communities or otherwise “others” them into feeling like they are part of some imperial conquest that views them as an inconvenience. This language has real world impact and the Times should know better by now.

It should also be noted that no NYCHA residents were interviewed for the article. It quotes Ritchie Torres, the councilmember from District 15 in the Bronx and chair of the committee that oversees NYCHA, who grew up in public housing. Not for nothing, he suggested, correctly, that NYCHA should sue the federal government for neglect.

That brings us to the second problem with the title — where is the blame for neglect placed? And what neglect is actually being referenced? Just reading the headline makes it seem that the city is to blame. Even within the article, it largely frames the neglect as failures of the agency. That. Isn’t. True. For all of the many flaws that NYCHA is guilty of, they are not guilty of neglect (nor is the city.) They are obviously trying to manage their buildings. But they are doing so under untenable and inexcusable circumstances.

The true neglect, as Councilmember Torres pointed out, comes from the federal government. The federal government helped fund the creation of NYCHA and public housing for the first 30 years of its existence but (as it became less-white) subsequently abandoned it and demonized it (and its residents).

In NYCHA’s case, since 2001, the federal government has cut an estimated $3 billion in operational funding. This is a catastrophic loss. Out of NYCHA’s $3 billion annual operating budget, almost 2/3 comes from the the federal government, either from direct federal budget support (29%) or Section 8 subsidies (30%). These are existential cuts that compound quickly across such a large and old system. When the premise of public housing is based on continued federal funding, it doesn’t work when that funding dries up. Pretty simple.

The article dutifully mentions these cuts but frames it as background on the agencies’ problems rather than central to them. While the failures of NYCHA are presented as direct fact from the writer, the funding cuts are presented as “city estimates” and even the issue of racial prejudice is mentioned in a quote by a professor. Those are apparently not facts. This may be unintentional (the Times and much of the media generally shies away from calling something “racist” or “a lie”) but it means the narrative of this story (like every other NYHCA story) misses the more salient point.

The real story is the federal government slowly abandoning thousands of Americans. Adding in the fact that these Americans generally aren’t white deepens the scandal, but not much more.

Just as problematically, this narrative absolves the federal government from responsibility for fixing NYCHA and presents the only real solution implicitly or explicitly as privatization. That’s been the editorial board’s position for some time.

This article, despite its detailed analysis, is no different. It mentions the city and state squabbling over increased funding but also says (accurately) that neither can fill the gap in funding. It discusses some of the public/private options being explored (which also won’t cover the gap) but doesn’t entertain the idea that the federal government could return to previous funding levels, let alone why it should. What is the solution other than the slow death of public housing?

It matters when no one at the paper of record is explicitly defending the idea of public housing. It’s not a reporter’s job, but they should at least be covering the many people who are. Ignoring the argument for it robs the public of the full housing policy landscape.

It matters further because most Americans, including many well-meaning liberals and even housing advocates, are guilty of holding decades of media-fueled negative stereotypes of public housing that harm residents and harm our prospects of solving the housing crisis: Public housing equates to scary looking, crumbling brick towers by the highway. Crime and rodent invested buildings. Poor and lazy minorities. A well-meaning but failed experiment from another age. A poorly run government program that should be privatized. But these images are bullshit.

There’s a more accurate way to think about public housing’s legacy and future. A civic treasure that has provided affordable homes for 80 years. A collection of buildings that have held up remarkably well and just need proper maintenance. A refuge for a population that the government and the market has otherwise ignored or exploited. A well-meaning but failed promise that should be renewed. A solution to a failed market that will always fail to provide enough housing. A vision for a more equitable republic.

The biggest tragedy of NYCHA’s recent history — which has included federal investigations for fraudulent lead inspections, boiler failures in the dead of winter, the slow selloff of assets, the unfortunate resignation of its Chairperson, Sholya Olatoye (who wasn’t exactly set up to succeed), and now a cynical state takeover — is that its viewed as a failure at all.

Its frankly remarkable that NYCHA is standing with such gaps in funding, indifference from the public, and flagrant neglect from the federal government. In a city where there are over 60,000 homeless and the average rent in Manhattan is over $4,000, the average rent in NYCHA is $509. That’s incredible. NYCHA is a success story. (The article points out that NYCHA is a “relative success” compared to other housing authorities.)

The truth is that NYCHA has been a victim. One that is as resilient as it is flawed. It has been a victim of federal neglect but it is also a victim of terrible federal policy, which is why the affordable housing crisis exists and persists. Without making the story about the federal government failing in its responsibility to fund public housing (while giving away billions of tax dollars to wealthy homeowners) nothing will improve for public housing or for the housing crisis.

Housing advocates should place more effort on making the case that public housing works and call out the media for lazy tropes that keep it off the political agenda. Even more importantly, they should help the already highly organized tenants groups within NYCHA have the reach they deserve to improve their homes.

Finally, we should all outline what public housing could look like in the 21st century if we force the federal government to return to its basic responsibility. We should then make the case that a reboot of public housing can help Americans all over the country have secure affordable housing.

The real estate section shouldn’t be the only place the average American reads about housing issues. And failures shouldn’t be the only thing they read about public housing. As the paper of record, the Times must do better.

3 Reasons Local Landlords Should Support Stronger Tenant Protections

(@homebodynetwork)

(@homebodynetwork)

Cynthia Nixon, the former actress and longtime public education advocate who is mounting a primary challenge to Governor Cuomo, announced a progressive housing plan that continues her disciplined assault on the governor’s dismal track record from the left. The plan, called Rent Justice for all, outlines many long-sought after reforms to protect renters across the state. A few real estate publications, including the Real Deal, have been quick to point out that landlords won’t like it.

I think this is partially true. Some landlords will absolutely hate these proposals and many of those landlords are quite powerful. However, I’m here to argue that I believe there are other landlords that should welcome stronger tenant protections — the majority of landlords, in fact.

Small, local landlords own more than half of the 2.18 million rental units in NYC and most have very little in common with bigger developers, publicly traded property management companies, or private equity firms that have flooded parts of the NYC market. However, small landlords don’t come close to having the same political power, which often means their interests are ignored or actively subverted.

Despite this contradiction, these more powerful interests continue to successfully flatten the perception that all landlords are the same homogenous blob (buffered by the generally uncritical real estate press in NYC). This narrative is obviously false, but big developers and Governor Cuomo trade in it freely. For example, the Governor’s Affordable New York plan does nothing for small landlords and gives away millions of public dollars to major developers (while failing to provide enough actual affordable housing).

This narrative maintains the strict landlord vs tenant political divide that feeds the toxic decades-old political status quo in New York: A small contingent of highly dedicated tenant groups fight to maintain tenant protections while the affordable housing stock slowly disappears. Small landlords get squeezed. Big developers get more tax concessions and rezoning opportunities. And the affordable housing crisis continues on unabated.

Breaking this toxic political status quo is the first step towards addressing the affordable housing crisis on a meaningful level. Housing advocates can start by rejecting the narrative that all landlords have the same shared interests and recognize that small, local landlords are hurt by this dynamic too.

We must do more to convince small landlords that they have more cause to work together with tenants. There is no meaningful solution to the affordable housing crisis that doesn’t incorporate small landlords and doesn’t make it easier for them to operate. As Matthew Desmond points out in his Pulitzer Prizing winning 2016 book Evicted, 3/4 of all affordable housing in the US is provided by small, local landlords. We must make the argument that these landlords will benefit from stronger tenant protections.

In previous blogs, I have written how I think a universal rental control could work, but to sum up quickly, I stress that it would not represent a simple extension of the current system (to be clear, I support the measures in Ms. Nixon’s proposals but think they must go further). It would be an entirely new system that would also need to offer more diversity in housing options (from co-living to senior living) and would absolutely involve trade-offs that no doubt would appear to be painful, particularly for some older rent controlled tenants. Measures to protect these tenants would have to be included (preferably with federal aid). Clamping down on the small minority of tenants that abuse the current system would also be a necessary step as part of a new system. This is no small task and I understand that many readers will be skeptical of even engaging in this discussion.

That being said, the first step in a larger reform is making the easy argument that small, local landlords will have more success by working with tenants rather than bigger landlord interests. Here are three reasons why I think this is true:

1. Simplifying compliance reduces costs and hassle

It is no secret that managing multiple classes of tenants makes compliance more challenging for small landlords. Many of these types of owners are landlords as a second source of income and are not professionally trained or resourced. This invites a lot of mistakes that can turn into costly problems that hurt both parties.

Having all renters fall under the same level of protection would remove a number of the steps that most small landlords trip over. Rather than having to follow every evolving law, loophole, MCI exemption, or annual RGB guideline and see how that impacts certain units, both sides would know exactly what to expect and what is required under a universal system.

A system where protections are offered across the rental landscape for every unit would potentially alleviate a lot of the tensions between rent stabilized tenants and landlords, particularly on fixing infrastructure within units. Much of the distrust that arises between both parties comes from a landlord’s reasonable need to make upgrades to a unit and a tenant’s reasonable fear that this will trigger a rent increase that may lead to a larger decontrol. Without the fear (and perverse incentive) of vacancy decontrol and bonus, both sides can operate in good faith.

It could also offer tenants more options. In many cases right now, landlords and neighbors change while a rent stabilized tenant remains. In a classic example, a tenant might age while their neighbors get younger. This might not be the ideal environment for that tenant, but moving to a better-suited location is virtually impossible financially. Knowing that a system is in place that could provide a similarly priced unit (again, presumably with some federal or state aid) with similar long-term protections could make moving more attractive.

2. More tenant protections mean fewer expensive eviction processes

Eviction is an ugly, painful process for all parties involved. However, the loss of shelter is simply nowhere near the loss of rental income. Greater tenant protections mean more resources to keep tenants in their homes — and to keep the rent checks coming to landlords.

This is already happening in NYC. Mayor de Blasio signed a Right to Counsel bill last year that guarantees tenant legal aid in housing court. These resources mean that fewer disputes will lead to evictions (which could save the city $320m a year). Intervening earlier in the cycle gives the tenant more opportunity to receive the necessary help to maintain good standing with their landlord.

No doubt there are bad actors in real estate (more on that later) but for the most part, small, local landlords aren't; they don’t have the resources for a lengthly eviction fight and don’t want it to get to that point. Landlords also generally don’t want to kick people out of their homes outside of the most extreme cases. They want peace and quiet.

More resources for tenants means a greater ability to intervene at critical junctions when a tenant may be at risk of falling behind on rent payments. Every landlord can support a process that appeals to their humanity and their bottomline.

3. Discouraging bad actors from the market opens up space for more local landlords

One of the biggest, if perhaps abstract, benefits of universal tenant protections to small, local landlords would be the shift in the market that would transpire over time.

The vast commodifcation of the American housing market caused the Great Recession. Instead of solving that crisis by reducing the incentives to speculate on homeownership, the economy has morphed into exploiting rental housing.

Large investment companies, private equity firms, and foreign capital all compete on small-scale properties in NYC. It’s difficult information for the casual observer to find, but, particularly in neighbors facing displacement concerns, these entities are forcing out small landlords who are often local, community-connected operators (which is why I have been stressing the ‘small, local’ modifier.)

The idea that the best, highest use of capital is virtuous on its own merits doesn’t hold up when you see the practical implications of this trend in housing. In many neighborhoods across NYC, poorer residents (many of them minorities) are being replaced by wealthier (largely whiter) residents. (This is a particularly shocking reality in California as well.) Many of these properties sit vacant as investment shields or as Airbnb cash cows.

NYC is already one of the most economically stratified cities in North America. Continuing this trend (which mirrors other trends of disinvestment in public institutions and local infrastructure) is simply not sustainable. The long-term viability of the city, let alone a given neighborhood, is at risk if it is simply closed off to all but a select wealthy population.

NYC is a city of immigrants, entrepreneurs, and artists — many of them start out poor. Many of them start out renting from small, local landlords. This can not end.

I will continue to advocate for more public housing and alternative forms of ownership, but I also believe that the private market must play a central role in property management in NYC. But this must be in the form of local landlords. New Yorkers should be able to cycle into ownership and renting in their communities. As housing advocates, we must acknowledge the importance of local landlords and reach out to them as allies.

Latest Trump Attack on Cities Shows We Need a Constitutional Amendment to Recognize Them

(federalistpapers)

(federalistpapers)

Last week the Trump Administration announced that it will be adding a citizenship question to the 2020 Census for the first time since 1950 (it has been part of the smaller, more targeted American Community Survey). By loudly adding this question, the administration is clearly hoping to suppress participation by immigrant communities, which is part of its broader effort to demonize, marginalize, and ultimately reduce immigrants in the US — legal or illegal.

If the plan works, the overall populations of cities across the country will be undercounted, leading to a loss of political power and financial resources. This is just one of many ways that this administration has purposefully (although sloppily) tried to undermine America’s cities since taking office.

The best way to stop this is to change the Constitution.

Before you eye roll your way off of this blog post, hear me out on two points. First, I know this is unlikely to ever be a serious political conversation. Second, this argument has little to do with President Trump and more to do with states.

Cities don’t exist in the US Constitution. Any governing power not explicitly allocated to the federal government, the people, or the states rests with the states as outlined in the 10th Amendment. This structure is a product of the country’s origins as separate (competing) colonies and the Founding Father’s fears of centralized government.

Those fears are wildly misunderstoodth to be a product of the Revolutionary War’s struggle against a despotic monarch, but the story is more complicated than that. There were many factions within British and American political life that get flattened by that narrative. I don’t want to go off on a historical tangent (actually, I’d love to), but the point is the war and the aftermath that led to the Constitutional Convention can really be seen as a conflict over local control.

All of this is to say that the Founding Fathers designed our system to prevent the concentration of power in any single person or people (that’s why we are a republic and not a democracy). It was also obviously designed to prevent the majority of the population from participating in government or to even be counted as people, so we can take a lot of this rhetoric with a grain of salt and adjust accordingly (RIP Anthony Scalia). Regardless of these failures in practice, the overarching theories embedded within the Constitution are based on principles of personal liberty, self-government, and checks and balances — at the federal level.

State governments were viewed as a check against an overly aggressive federal government. However, the opposite was not true. The US Constitution did not protect citizens from their state governments.

The Guarantee Clause in Article 4 Section 4 outlines that the federal government will guarantee a republican form of government in each state but fails to elaborate on what that means and what agency the government has to enforce it. The Constitution doesn’t even require state’s to have their own constitution.

This seems like a pretty big oversight if the point of the Constitution is to maintain personal liberty, self-government, and a system of checks and balances. But the Founders were primarily concerned with limiting the power of the federal government to act harshly and the people to act rashly. As strange as it seems to us that the founders would be skeptical of federal government, but not state government, it makes more sense contextually.

States had their own forms of charters or constitutions that predate the Revolutionary War (shout out to my home state of Connecticut for being the first). The Founding Fathers were already used to the role of state governments and saw their state as their default identifier. It was clear that a states-first arrangement failed with the Articles of Confederation, but it still served as the primary organizing principle for the Constitution.

This is why they are silent about the role of state government and their obligations to individuals within states. It was largely an afterthought that simple proximity would make state governments more responsive to its citizens. As far as these men were concerned, state governments were more responsive (virtually all of them were highly powerful in their respective states). This assumption seems laughable given how domestic US history has played out for most other people.

This issue of ignoring the responsibility of states to their citizens wouldn’t be addressed in law until the the first civil rights era (resulting in the Reconstruction Amendments) and the 20th century Civil Rights era, (the last great achievement, the Fair Housing Act, is celebrating its 50th anniversarythis week). Outside of these radical (and ultimately short-lived) moments in US history, the idea that the federal government is the protector of individual liberty, including from state repression, has had a drastically smaller following than those who think the federal government impedes personal liberty.

I don’t have much time for people who argued that the federal government became despotic under President Obama or who argue for states’ rights in general. Historically and, alarmingly, contemporarily, that term has been a racial dog whistle or partisan war cry more than a concrete philosophical argument. The inherent distrust of federal government and unjustified trust in state government has been embedded in our political DNA with disastrous results.

That brings us to cities. Yes, President Trump is nakedly hostile to the political power of cities and their residents. He wants to punish sanctuary cities; he wants to drastically cut affordable housing funding; he wants to cut transportation funding; That he has failed so far shouldn’t make us less vigilant. The weaponization of the Census is certainly a way to harm cities for a generation to come.

But the real problem for cities is at the state level. Many conservative state lawmakers who protest federal overreach into local control have no such qualms about superseding cities’ governing power within their states. Bathrooms in North Carolina and gun laws in Florida have made national headlines, but many state governments have blocked cities from attempting to address local issues that reflect their population’s preferences.

This is true even in seemingly liberal states. Globally powerful cities like NYC or Chicago are handcuffed by state governments who control spending on major policy decisions and are often dominated by rural political interests or well-funded and coordinated special interests. NYC has a particularly challenging environment dealing with Albany, but also must work with New Jersey and Connecticut with limited success, particularly on transportation policy.

The US Constitution has always favored smaller, rural populations by vesting so much power in the Senate and granting each state two senators regardless of population. This divide has consistently undercut the political power of cities (and of minorities, immigrants, and the working class who historically concentrated in cities) but much of the economic power of the country was still split evenly between agricultural and industrial interests, giving some cover of justification. That is no longer true.

As the economy increasingly moves into technology-based services, cities have become the undeniable economic and cultural engines of the US. The 20 largest metro areas produce over 50% of the national GDP.

The 2016 Presidential Election exposed this deepening split dramatically. Secretary Clinton won less than 500 counties (to President Trump’s 2,600), but won the popular vote by over 3 million votes. That’s because most of her support was concentrated around major metropolitan areas. These counties represent 64% of US GDP, but have much less political power than that.

I’m not claiming that economic output should dictate political power (although that has been the de facto reality in our late capitalist age as witnessed by the disproportionate power of wealthy individuals and corporations) but clearly our political system is dangerously unresponsive to the reality of how we are organizing our society in the 21st century.

Without recognizing the unique role that cities play in our evolving society, the US will continue to be flat-footed on issues of environmental degradation, economic inequality, and ethno-nationalism that represent existential threats to our republic.

But what would a constitutional amendment that recognizes cities look like? How much would we need to define a “city”? How would we prevent the erosion of state power? These are complicated questions and deserve a more detailed follow up and debate. However, I think any amendment should tackle two specific topics.

First, it should acknowledge the unique importance of cities to the nation’s health and future by preventing state governments from unfairly superseding the republican outcomes desired by city residents. States may have once been the great laboratories of democracy but today money and the nationalization of politics have ended that. Cities are leading the way on environmental policy, immigration, public safety, and other policies because federal and state politics have failed to lead. They must be allowed to experiment more freely based on the will of their citizens.

An amendment doing so might be something as simple as an add-on to the Guarantee Clause preventing states from superseding cities of a certain size or definition or on certain local matters. In practice, we could use the Voting Rights Act of 1965 (before it was gutted by the Supreme Court in 2013) as a template for how the federal government could review and intervene on such matters as a right.

Second, it would recognize that many cities span beyond their historic city and state lines and must be allowed to coordinate public policy as a cohesive entity accordingly. Cities should have political oversight into areas that reflect their natural domain, perhaps defined by their commuter-shed or their metropolitan statistical area. Whether this means greater annexation powersor more formal regional organization or both would need to be hashed out, but Congress has created similar entities before like the Appalachian Regional Commission.

You can see from these relatively moderate suggestions that I’m not suggesting ripping up the Constitution or devaluing the state as a political entity. And unlike others who champion modern localism, I don’t believe in giving up on the federal government. Quite the opposite — we need what I have called a national reboot along the lines of the New Deal to create a federal government much more responsive to the challenges and opportunities that will define America in the 21st century.

The Constitution has structural flaws but I believe it is philosophically admirable and has grown when it needs to. Now is such a time. Recognizing cities is an important start but any lasting change must come from removing the power of money in politics. We are fooling ourselves if we think anything else will have the necessary impact to make our republic more representative and more innovative.

Finally, President Trump, his approach to cities, and the larger backlash to cities within the conservative movement are symptoms of a deeper malady facing America. At some point in the next century, we will stop being a majority-white country. For many Americans that fact is met with fear, but it shouldn’t be. If we are as committed to the principles outlined in the Constitution, as we have claimed to be, then we have nothing to fear from more diversity and everything to gain.

Indeed, what is happening demographically in the US could perhaps be considered the Last Great Experiment in self-government. Is America committed to its republican principles that span color and creed or are some of us more committed to a majority-white identity? Cities are already the front line in this battle. The Constitution must be on the right side of it.

Cuomo is Full of It On NYCHA and Has Always Been Full of It On Housing

They haven't aged well (nymag)

They haven't aged well (nymag)

Governor Cuomo is apparently shocked, shocked that NYCHA is crumbling. He has spent the last couple of weeks visiting a few buildings, surrounding himself with cameras, taking shots at Mayor de Blasio, and touting his resolve to bring in more state money. No doubt this money will help residents who have been suffering greatly this winter and beyond, so it is welcome, but the fact that these trips represent the majority that the Governor’s has made to a NYCHA property since he took office in 2011 should tell you all you need to know about his commitment to public housing. The truth is, Governor Cuomo has always been a cynical opportunistic when it comes to housing. He’s built his career on it and hopes to carry it all the way to the White House (he won’t.)

Cuomo rode his name to the top of HUD and then abandoned it’s legacy

It is one of those obvious things that gets lost over time, but Governor Cuomo is Governor Cuomo largely because his father was Governor Cuomo. The son worked on the more popular father’s campaigns and what he lacked in his father’s robust liberal principles, he made up for in sharp insider elbows.

It was housing where Andrew stepped out from his father’s orbit (as much as you would want or need to when your father is a popular governor toying with the presidency) by setting up a non-profit, Housing Enterprise for the Less Privileged (HELP). The organization did good work then and still does today and I make no suggestions otherwise, but its clear that Cuomo saw housing as a means to score liberal cred while building relationships with powerful developers, a play he has repeated many times since.

This cred led to a position under Mayor Dinkins (where he came into contact with future nemesis Mayor de Blasio) as chair of the Homeless Commission where he backtracked Dinkins housing-first policy goals and claimed that homelessness was a “human” problem not an economic one. 

After Dinkins lost re-election, this “tough thinking” led to a position in the Clinton Administration as an assistant secretary at HUD. His father’s legacy as a working class ethnic liberal from the northeast made his son an easy choice for the southern, conservative Democrat. Both were cynical politicians fluent in empty gestures.

Contrary to his father’s robust liberal legacy, Cuomo’s record at HUD is very similar to his later record as governor — lots of big talk, lots of press coverage, some decent ideas, but little follow-through that would challenge powerful interests in finance or politics. 

He became HUD Secretary in 1997 (Mayor de Blasio was hired to run HUD in NY-NJ) and served till the end of Clinton’s administration very much in the fashion its neoliberal triangulation that has haunted the Democratic Party ever since.

That triangulation helped lead to the Mortgage Crisis in 2008, which Cuomo played a role in creating. While half-heartedly warning against lowering standards for mortgages and against the rise of pernicious lending practices, he raised the benchmarks for banks and Fannie/Freddie to issue more mortgages to lower-income households that the agencies ultimately couldn’t back when the market tanked. Some have argued that he is more responsible for the crisis than any other single person. That might be a stretch, but he has never accounted for his role in the crisis.

He also did nothing for public housing. This is partly because the Clinton Administration embraced homeownership over rental assistance, which itself was very much a bi-partisan standard given the general dominance of conservative ideology during the era, and also because the Clinton triangulation required the deconstruction of the welfare state. Along those lines, public housing was seen as a place people needed to be moved out of, not into.

There were positive efforts to address extremely distressed public housing during the Clinton Administration, but much of it occurred while Governor Cuomo was assistant-secretary in community development. Those efforts lost steam when he became Secretary, despite his claim otherwise

For the most part, HUD abandoned the mission of public housing and oversaw the destruction of many public develops and the withering away of funding for remaining ones. Cuomo didn’t cause the current crisis in NYCHA, but he did nothing to stop the squeezing of federal funds that has crippled it. He has also never accounted for this legacy.

The governor has always been a generic product of the political times he exists in and his effort to promote homeownership (a disaster that both parties were guilty of) along side the Clinton Administration’s dismal record on affordable housing, came at the expense of public housing funding and later the nation’s economy.

Then he rode his housing experience at HUD to Albany and abandoned that

His spotty record at HUD didn’t stop Cuomo from running for governor (again) on his housing cred and name, winning in 2011. Given that he ran on that experience, his subsequent disinterest in housing policy is even more egregious.

He could have used that experience, especially the lessons learned from the crisis, to become a major leader in changing national and state housing policy away from subsidizing homeownership and towards funding sustainable affordable housing by supporting NYCHA, rent regulation laws, and alternative housing policies like community land trusts. His campaign narrative could have turned into transformative, highly-experienced governing.

Instead, Governor Cuomo ignored housing issues. When he did have to address them, he was lukewarm on protecting let alone extending rent regulation laws and unquestionably friendly to subsidizing big developers. His big public talk always resorted back to closed-room deals with private interests. Not surprisingly, that’s why it costs taxpayers $400k–$600k per unit under the Governor’s affordable housing plan.

Governor Cuomo has also completely ignored NYCHA for 7 years. While threatening to declare a state of emergency for the housing authority (which would put its 178,000 homes under state control, bypassing the existing leadership in the agency and the city) and touting an additional $250m for the agency, he keeps reminding us all that the state has no obligation to fund NYCHA. Aside from the obvious shot at Mayor de Blasio, this statement shows on some level the Governor knows his lack of support looks bad. Because it is bad.

It also looks bad that the state had already approved $200 million for NYCHA but hasn’t allocated it. He had previously committed $300m in 2015 that hasn’t materialized yet either. This pattern of promising lots of resources for housing but failing to deliver them is a long-established habit. We should be extremely skeptical that these announcements will turn into funding that helps residents any time soon.

 We should also be concerned that these funds will come with strings attached. He has also already entertained the idea of bringing in private developers if he does declare an emergency. This would only reinforce the perception that for all his talk, he is interested in helping his powerful developer-backers first. Any help for NYCHA residents is welcome, overdue, and deserved, but the fact that we are left to wonder if, when, and to whom it will materialize is a scandal.

NYCHA faces a truly daunting list of challenges, some of which are entirely self-inflicted. But it is short $20 billion dollars in maintenance and capital costs. The Governor’s pledge, especially as the former head of HUD, is a sick joke compared to that.

And now he wants a promotion

Many people have noted that the timing of the Governor’s new found interest in NYCHA comes as he is preparing for re-election and a potential run for the Democratic nomination in 2020 thereafter. He knows Mayor de Blasio is unpopular in many circles (for some self-inflicted reasons, much like NYCHA) and hopes folks that haven’t paid attention to his own indifference for years will see his efforts now and line up to support him. It is an insult to New York voters, but it has worked in the past.

But it’s not clear that Cuomo will get much traction or credit for his intervention in NYCHA now (or how sincere he will even be in the long run). Residents know that as rough as they’ve had it under Mayor de Blasio, they haven’t gotten help from Cuomo. It won’t take much to remind them that Cuomo ignored them at two different jobs.

It will also be fascinating to see what the governor says about rent regulation laws which are up for renewal in Albany again next year. The annual Rent Guidelines Board meetings will be taking place over the next few months and we can expect many advocates to press the Governor on his position now. 

His record, as I’ve already stated, has been dismal. Expect him to tout his support for the laws and to mention his $20 billion five year plan for housing in the state but to angle for concessions to developers as he tried to get during the 421a renewal last year. It could blow up in his face this time.

This is because, after all these years of triangulation, the Governor is in trouble. He had a taste of this last year during the budget shutdown. Whatever he decides to do with NYCHA and rent regulations, he will alienate a key element of his re-election strategy. He needs Democrats, especially progressives, to back him (or at least remain divided), but he also needs his usual wealthy backers. There are few plausible scenarios where he can secure both.

The Governor has never had a strong constituency or political base either in NYC or outside of the city. He has relied on New York’s horrendous voter apathy and deep-pocketed developers to aid his re-election before. Now, however, in the Trump Age, progressives have woken to enemies within both parties and many are gunning for him on the left (even before former-actress, qualified lesbian Cynthia Nixon announced her primary challenge.) Even if he continues his cynical lurch left, very few progressives will buy it and many more voters will be paying closer attention for the first time.

Governor Cuomo’s record on affordable housing is clear. He has been at best indifferent and at worst hostile to policies that don’t include massive subsidies to private developers. Under his administration, help for public housing, rent regulation laws, and alternative housing models like community land trusts has been largely ignored, slow-walked, or superficially supported.

That hasn’t stopped others from acting in his absence, but the lack of leadership has been glaring given that his entire career is based on his alleged housing expertise. Trying to make up for years of indifference now might get him some press, but it won’t erase a career of opportunism around housing. That isn’t the only reason will never be president let alone the nominee in 2020, but it might very well jeopardize him even in 2018.

Making the City’s Vacant Land Work for the Public (via Gotham Gazette)

(photo: Sofie Hecht/Gotham Gazette)

(photo: Sofie Hecht/Gotham Gazette)

This post was first published in Gotham Gazette

Last month, the city’s Department of Housing Preservation and Development (HPD) announced that it selected developers to build affordable housing on 87 city-owned vacant lots, which could produce almost 500 affordable homes. This came the day after Comptroller Scott Stringer released a report criticizing the city for moving slowly on developing such lots.

As New York City staggers through the unrelenting affordable housing, homelessness, and displacement crises this plan is a missed opportunity that we can not tolerate. The city has repeatedly squandered the most value asset - land - it has in fighting these crises. Instead of giving away these vacant lots, the city should keep them and create a public land trust.

New York City owns 1,125 vacant lots. For decades it has relied on an insider-favoring process that turns over vacant properties to private developers and some non-profit developers. That number doesn't include city-owned distressed properties, which is bound to spike as foreclosures are nearing great recession levels. In either case, the transfer comes with laughable requirements for (and definitions of) affordable housing.

This process is the result of a long retreat from the public ambition that defined New York City during its period of great growth in the first half of the 20th century. An activist city government - albeit one tainted by machine politics and systemic racism - built institutions that expanded the very idea of what public life could be and made modern New York City possible. That all ended in the 1970s and left subsequent leaders wary of ambitious public growth and reliant on powerfully connected private actors.

This must change. Our over-reliance on the private market has demonstrably failed the public interest and carries much of the blame for the mess we are in.

Using the community land trust model, the city should retain ownership of the land - removing it from the speculative market that drives up prices - and contract out development based on a fixed equity model that incentivizes construction while limiting costs. It would then directly own and manage this housing stock, guaranteeing that 100% of it is permanently affordable for low- and middle-income households.

Make no mistake, what I am suggesting is public housing. A new, 21st century form that avoids the previous century’s mistakes of massive public housing developments while retaining its public virtues.

Public housing, for all of its problems (thanks to a loss of $1 billion in federal funding since 2000, with more reductions on the way), is still the best vehicle for providing New Yorkers with sustainable affordable housing.

Despite its operational failures, NYCHA currently offers an average monthly rent of $509 to over 400,000 New Yorkers in 176,000 homes and has a waiting list of 257,000 families. Public housing works and we need more of it.

A public land trust that takes advantage of small-site development on vacant lots would work even better as a public housing model in today's economic, political, and social landscape. Instead of the discredited 'shotgun' approach of megablock development that destroyed existing communities while isolating its newly created ones, this approach would be a syringe-sized injection of affordability into existing communities and landscapes.

Neighbors would barely notice the physical changes while enjoying the practical protections of permanent affordability taking root across individual sites. Most of these lots are in distressed neighborhoods that are at high risk of displacement as speculative developers (many of them private equity firms) swoop in. The best, fastest way to address displacement in these neighborhoods is through public-owned land anchoring their development.

The community land trust model works, too. It has successfully provided permanent affordability across the United States for decades, notably in Burlington, Vermont (initially supported by then-mayor Bernie Sanders) and in Dudley Square in Boston (created by local residents who were granted eminent domain). Even here in New York City, the city's first trust, Cooper Square, has quietly managed hundreds of homes in the Lower East Side as a community land trust since 1994.

Speaking of Cooper Square, through its efforts along with the New Economy Project and NYCCLI, the community land trust model has finally started to get the attention it deserves in New York. Last year HPD and Community Enterprises announced $1.65 million in initial funding for the creation of new CLTs and training programs. Many elected officials like Borough President Scott Stringer, Council Members Donovan Richards and Margaret Chin, and Attorney General Eric Schneiderman have all worked to expand CLTs in the city.

These developments represent the chance for a fundamental shift in how to create permanent affordable housing in New York City. The land trust model does not rely on excessive tax-subsidies to private developers, flimsy definitions of affordability, or unenforceable protections for maintaining affordability over time. It is simple and sustainable. We should all be excited that the city finally sees this as a viable policy tool.

However, if Mayor de Blasio wants to deliver on his promise to build or protect 300,000 affordable housing units while also recommitting to public housing and NYCHA, he should take the next step by transferring the city’s many vacant lots into a public land trust.

We know the model works. The city knows the model works. Usually the hardest part is acquiring the land, but the city already has it. There is nothing to stop a public land trust from getting into the fight.

New York City was once capable of envisioning and delivering bold progress for the public good. We need this again, updated for the 21st century. The mayor has at the very least claimed this rhetoric and along the way tapped into a respondent audience in many corners of the city. Now it is time to act.

Planning Report Favors Process Over Values, No Wonder No One Listens

(inclusivecityreport)

(inclusivecityreport)

A report released last week titled “Inclusive City” outlined an extensive plan to redesign land-use policy and related community engagement in NYC. It is the result of a large working group established last year that included elected officials, community groups, professionals, and advocates all tasked with addressing the very serious issues of environmental impact, displacement pressures, and community control.

The practical goals as stated in the report are to create a more inclusive, comprehensive, and equitable land-use planning process that will ultimately allow community input in zoning decisions to build more affordable housing. It has a number of admirable recommendations, particularly around adopting New Jersey’s “cross acceptance” process of combining top-down and bottom-up planning strategies. There is a lot to like in this report in terms of process.

However, the report fails on a basic level that speaks to a broader problem in the neo-liberal technocratic model: values. First, what are the core public-minded values that can be achieved through better land-use planning? More importantly, in the larger sense, what is the role of our city self-government in defining and supporting the public good?

On closer reading, this report doesn’t have a clear answer. This harms the potential impact of the report, but it also harms our ability to identify and address the larger problems facing our city.

This is a problem that we are seeing play out at the local level and the national level with increasingly scary implications. Without clearly defined public-minded values serving as the organizing structure and source or legitimacy of our self-government, trust in that government process continues to erode dangerously. The anti-public values that fill that vacuum are even more dangerous to the public good.

As an example at the national level, most people would broadly agree that we share certain universal public-minded values: we are all created equal, no one is above or below the law, we are entitled to life, liberty, and the pursuit of happiness. These values were enshrined in the structure of our government (obviously not perfectly, consistently, or universally.)

However, the explosion of inequality over the last 40 years (you know, that whole thing about how 82% of stock is owned by 10% of Americans that made the news this week) and subsequent anger and disillusionment across many corners of the population exposed that, in practice, our national government has ceased to subscribe to those public values. When Congress talks about tax cuts or healthcare, whatever process-based discussion on benefits they turn to doesn’t ring true to most of us; rightfully so. Our national government is anti-public.

Though our national government might be failing public-minded values, not surprisingly it is very successful at supporting private profit-seeking values. But let’s be clear, favoring private interest over the public good is not an American value. Promoting the public good through the protection of private interest certainly is. That distinction has been lost in our contemporary society and we are all suffering for it.

The problem is that this erosion of pubic-minded values has coincided with the rise of technocratic methods in governing. The sophistication of processcreates the impression of greater public oversight but has actually baked in the anti-public values that undermine it.

This is my problem with the report. It first lays out a clear rationale for the problems with the current planning process: it is inconsistent across neighborhoods; it favors wealthier communities over poorer ones; it provides limited resources and recourse for neighborhood groups. It then proposes specific changes and strategies to address them that include all stakeholders. This is all true and good, but to what end? I don’t know. The process is the point of this report.

This is backwards. The values informing the process should be the point of the report. I don’t get a sense of what a better planning process will do to materially improve the major problems in the city — a lack of affordable housing leading to greater displacement, a lack of resources for public infrastructure leading to a lower quality of life and opportunity, an inability to plan ahead on climate change and other long-term issues that existentially threaten our future.

I’m not saying a better planning process won’t do that. I know it will. But I know what “better” mean to me. People reading this will say “of course the report talks about values” and, yes, it is even titled “Inclusive City” and talks about how it wants more community engagement, buy-in, and control. Inclusivity, decentralization, transparency — they certainly sound like values. But in reality, they are more Stephen Colbert “value-y” terms than actual value claims.

The authors of the report believe that a more open rezoning process is good because it encourages inclusivity. They believe that inclusivity is good because it creates more faith in government process. More faith in government process creates a shared vision for the future of the city.

Setting aside the potential challenges in executing these recommendations or if they would even address the bigger problems they aim to, none of this articulates what any of these authors think the vision of the city should be, why we should have faith in government process, and why we need that process to be inclusive.

Perhaps those values could be something like “because the city has an obligation to provide the basic foundations of prosperity. That all citizens — especially the wealthy — have an obligation to the city and each other. Because there should be more public-ownership of land and resources. Because the only way self-government has legitimacy is if it is pursuing the public good as defined by the engaged public.” That’s just one idea, but I get what a better planning process is trying to achieve then.

This report also commits another common technocratic error. It, perhaps strangely given its focus, ignores the anti-public values that in practice have created our city’s land-use problems in the first place (and presumably undermined the success of the current planning regime). It alludes to the current, flawed process but doesn’t name names as to who benefits and why. Clearly some people are benefiting under this system.

We can only really understand what this report is trying to change and if it is serious about doing so if it does challenge those that benefit from the current system. Without doing so, the process lets those actors and those anti-public values off the hook. This, unfortunately and perhaps unintentionally, reinforces the basic operating premise of anti-public values that allow that small group of private actors to benefit over the general public good in the first place.

The other related problem is that by not calling them out, the report might (again, perhaps unintentionally) allow the casual reader (or voter) to innocently assume that this report is on the pubic good side, while it’s nebulous value claims actually just allow the status quo to remain in place.

The average citizen knows how hard living in NYC is, how much inequality there is, but she can’t reasonably be expected to know how land-use policy impacts that. The authors of this report do know (or should know) but fail us by not using their expertise to articulate it and how to fix it. We need them to speak up for the public and the public good. That means speaking out against people that oppose it.

Will more community control reduce displacement? Maybe, but what is the community and who gets to define it in any given neighborhood? This report doesn’t say. Will a more inclusive planning process create a more legitimate city government? This report doesn’t say what gives government legitimacy in the first place. If it is still ultimately serving private interest over public interest, who cares if the public has a nominally greater opportunity to weigh in? The powerful will still prevail and the public will still suffer.

We only need to look at previous technocratic revolutions in NYC to see that we’ve had this problem before. In 1975 — after the fallout of Robert Moses slash and burn development era — NYC created the modern community boardmodel and ULURP process (which were again reformed in 1989.) These reforms were also about improving process and about inclusivity, decentralization, and transparency. This is the process that now needs a new process.

The city does need a new land-use process. The city needs smart, engaged, and trained people to help craft it. We are lucky that so many people are already at the public’s disposal and willing to try. But we must have public-minded values that create the legitimacy of our self-government define the goals that any process should achieve. Without them, process won’t matter. Indeed, without them, process is just a weapon used against the public.

3 Anti-Market Victories for NYC Affordable Housing in 2017

Tenants and advocates had real success this year (ANHD)

Tenants and advocates had real success this year (ANHD)

For affordable housing advocates in New York City, 2017 was a sum-of-all-fears kind of year. The affordable housing crisis continues to touch all corners of the city (and America) leading to a shocking increase in homelessness, foreclosures, and rent burdens. The election of Donald Trump and the placement of Dr. Ben Carson at HUD have expedited the federal retreat from housing aid and removed the possibility of national solutions for affordable housing (and for helping NYCHA.) Finally, the squabbling of Mayor de Blasio and Governor Cuomo has nearly paralyzed efforts for reform and relief at the state level.

But it hasn’t been all doom and gloom. Largely through the tireless efforts of local tenants and advocates, the cause has seen several key victories at the city-level. 

Further more, these three victories show that even modest tweaks to the existing political and legal framework can lay the foundation for the type of profound change that we need to address the crisis at a structural level. Namely, we need to reject the market ideology that has caused the crisis and continues to exploit it.

1. Community Land Trusts have arrived as a powerful affordability tool

Any reader of this blog knows how important homeBody thinks community land trusts are to ensuring permanent affordable housing in the city. CLTs separate the value of the land from the value of the structure on it by placing the property in a trust, permanently removing it from speculation. After many years of organizing by NYCCLI and New Economy Project, it finally seems that NYC gets it too.

In July, the Department of Housing and Preservation announced a request for information on CLTs for the first time and has partnered with Enterprise Community Partners NYC to offer $1.65 million for the formation of three new CLTs in the city: Interboro CLT, El Barrio, and a brand new coalition CLT through NYCCLI.

Just last week, the City Council passed a law recognizing CLTs in the city’s administrative code, which opens them up to working with city agencies on a more formal basis.

These are modest steps, but incredibly important ones in helping the model take off in the city. The fact that it has taken almost a decade for these measures to happen, shows what a slog it has been. But it also shows how quickly things are starting to happen.

Building off of Cooper Union (the first and longest tenured CLT in the city), the newest CLTs have a long way to go to grow, but the necessary roadmap, administrative tools, and advocacy groups now in place will help to do so.

The hope now is that other community organizations will become aware of the model and have the tools to go forward with their own CLT. I also hope that the city beings to think seriously about turning over city-owned land to CLTs or even forming a municipal land trust as quasi-public housing.

Either way, introducing a model that removes speculation on land values in the city is a major win for affordable housing and sustainable communities.

2. Right-to-Counsel will prevent evictions and reshape housing court

In August, the city radically reshaped its housing court structure by becoming the first city in the US to guarantee legal representation for low-income tenants in eviction fights. For a relatively modest $155 million over 5 years in legal aid, tenants that were previously outgunned in housing court now have a greater chance of avoiding eviction altogether. As of 2015, 90% of landlords had legal representation, while only 10% of tenants did. This rebalancing will have a profound impact on the cost to families facing homelessness.

With the homeless population now exceeding 60,000 people in NYC, keeping families in their current homes also becomes the most important homeless policy tool for the city. Right-to-counsel will reduce the cost of providing homeless services by an estimated $320 million and will hopefully alleviate some of the political pressure associated with homeless shelters and clustering that is crippling the city’s ability to meet the sadly growing homeless population. Keeping families in homes is the key.

The larger hope with this move is to alleviate the equally crippling pressure on the housing court division. There were over 350,00 filings last year for only 50 judges. This backlog locks thousands of landlords and tenants in slow proceedings that ultimately undermine the ability for the city to ensure transparency and accountability. The rule of law is only as good as a government’s ability to enforce it and creating more balance on the tenant side will hopefully recalibrate this dynamic for the better.

3. No Harassment Certification is a small step towards decommodifying housing

The other big development on enforcement occurred at the end of November, when the City Council passed the Certificate of No Harassment (CONH) legislation, largely through the efforts of ANHD. This law, along with the larger Stand for Tenant Safety package also passed this year, aims to stop the common and pernicious practice of landlords harassing rent-regulated tenants out of their units in order to increase profits.

With the skyrocketing value of property across every borough, there is large incentive for speculators to buy a building and force out rent-regulated tenants. The goal in many cases is to either demolish a building or increase the rent-roll in order to flip it. This practice has been difficult for tenants and the city to prevent.

The CONH is intended to disincentivize this speculation by putting the pressure on landlords to prove that they are not harassing tenants. Buildings that fall into certain categories of risk (related to speculation) must receive this certificate if they are to begin construction projects or otherwise impact the quality of life of existing tenants.

It is ultimately still just a speed bump rather than a roadblock against speculation, but it shows that tenants and advocates fighting back against more powerful financial interests can win. Removing the worst actors from the housing market by raising the risk and cost of harassment is a necessary first step in radically reforming the property landscape in NYC.

 

I don’t want to suggest that these three events were the only “victories.” There are other events this year that I could have spoken about, such as Mayor de Blasio’s Housing 2.0 plan for his second term, or Governor Cuomo’s new housing budget.

However, I chose them because these three items speak to the larger hope that we can reduce the suppressive power that “the market” has over our housing discussions. Market solutions have their place in any affordable housing policy discussion but only after we reposition the basic premise of housing as a basic right.

Speculation destroys cities by devouring neighborhoods and dehumanizing housing. It really is that simple. Treating housing as an asset-first policy has led us to the affordable housing crisis and has scarred many communities in NYC, perhaps permanently.

If enough people force the discussion on housing to return it to shelter-first, we absolutely can find practical and lasting solutions to the affordable housing crisis. As many tenants and advocates have shown this year, it is also absolutely possible.

3 Ways Landlords Can Save Money on Heating Bills (and Save the Planet)

 
Space heaters ain't cutting it (shanleystudios)

Space heaters ain't cutting it (shanleystudios)

 

Recently, we gave landlords the head's up about Heat Season starting Oct 1. This week, we're going to focus on how you can save money on your heating system.  Some ideas will probably be nagging points that you've heard before, but others might surprise you.

1. Hear Your Tenants

Last week we mentioned that you should consider your tenants your first line of defense. We mean that (it's pretty much our thing.) Good communication with tenants might alert you to a problem before it costs you a lot of money. If you encourage your tenants to reach out to you, here are some things they might tell you about your heating system:

Pipes clanking -  When water builds up over time in pipes and comes into contact with hot steam, it bursts (it's called a "water hammer").  At best, this means your system isn't operating efficiently and at worst it means your pipes could be damaged to the point of replacement.

Wild temp differences -  Upstairs is freezing, downstairs is boiling.  It's common, but could be a big problem: your heat timer is broken and/or needs to be reset. Your system is working overtime to produce heat that isn't getting distributed properly or at all. 

Funny smells - We all remember the East Village gas explosion in 2015.  Make it easy for your tenants to tell you something is out of the ordinary and make sure you or your tenants quickly report it and contact ConEd.  Wasting money is one thing, wasting lives is another.

 
Chances are you have steam (energy.gov)

Chances are you have steam (energy.gov)

 

2. Clean and Inspect

Heating systems are a complex matrix of machinery and good old fashioned science.  It's actually pretty fascinating when you think about how they work. But they age, get dirty, and break down.

Without proper maintenance you lose money twice - first on inefficiency and second on expensive equipment replacement.  Maintenance isn't sexy, but it's savvy. 

An old system can still work well if it's clean. So use data from tenants to help identify what parts of your system need attention.  Scheduling a deep clean for your system at least once a year (off-season) is a great way to increase fuel efficiency and extend the life of your system. 

Additionally, the city has to inspect your boiler, but there are other parts of your system (the outdoor weather-head, pressure and temperature controls, return-line sensor) that you should also get inspected annually. 

Stay ahead of these issues by setting up personal reminders to check these instruments. The bare minimum of system maintenance gets the bare minimum of system efficiency. 

 
50% of the energy used in multi-family buildings goes to heating (nycmayorsoffice)

50% of the energy used in multi-family buildings goes to heating (nycmayorsoffice)

 

3. Upgrade for the Environment

A 2015 report states that the energy NYC buildings use accounts for 75% of the cities' greenhouse emissions - and 50% of that energy goes to heating.  

It also says that NYC landlords could save $147 million annually by taking small steps to improve their heating systems.

The city has set up the NYC Retrofit Accelerator to help landlords find ways to improve their buildings heating system. 

Some solutions are bigger projects like downsizing your boiler or transitioning to other fuels, but others are small and high-impact.  Installing heat sensors and smart thermostats to control distribution, or better insulation can improve efficiency. 

Even involving your tenants can help. Installing a simple orifice plate in each unit's radiator takes 5 minutes and can lower costs while providing tenants with greater discretion on heating their apartment. Asking them about this could save you a lot of money and help all of you save the planet!

 

 

homeBody is the free communication app for landlords, tenants, and neighbors

Why New York Should Have a Constitutional Convention, But Still Needs the Feds

Not exactly what we had in mind (newamsterdamny.org)

Not exactly what we had in mind (newamsterdamny.org)

Since the election of Donald Trump, a lot has been made about the need for more localism.  With the federal government either locked in partisan paralysis or actively cutting back on services, there is a compelling argument for letting states run their own affairs – after all, states are the great laboratories of democracy.  However, we can look at the recent talk of holding a Constitutional Convention in New York to see why this argument is ultimately flawed.

There are two main reasons that localism can’t help improve how our cities/states are governed. First, our society has evolved into a highly complex, integrated national and global environment where the actions of distant players have local consequences.  We need a strong, active federal government to manage the needs of loosely connected people and places.  Despite what many would argue as too many onerous regulations from the federal government (on things like environmental policy), the larger trend over the last 40 years is the retreat of federal policy (on financial policy as one example), which has produced some of the greatest inequality in our country’s history.

Second, this assumes that states are functional enough to handle more responsibility, which is, sadly, not at all clear.  Part of this goes back to the first reason. Our economy and society are too complex and integrated for state-level governments to be able to address all of their citizens’ concerns. Even well run states can be left behind as the economy and demographics shift. But part of it is bad governance.  New York State is a prime example.

I’ve written a lot about the flaws within New York State’s governance (and though I’ve been highly critical of Governor Cuomo, most of those flaws are structural and not his fault per se.)  The quirks of history and geography have put a mostly rural state together with the country’s greatest city.  It has also separated commuters across three states that have more in common with each other than their other fellow citizens.  These issues are beyond the reach of a (state) Constitutional Convention, but show the limits to what a state can address.

However, here is a brief list of what could and should be fixed in New York.  These changes, along with many others certainly, could improve on the quality of governance in the state, but the larger point is to demonstrate that they still couldn’t address the larger trends that pose current and future problems for the state.

1.     One Full-Time Legislature

Many states have a two-body legislative system with part-time legislators based on logic from the US Constitution intended to spread out political power across regions and classes. The idea of the citizen-legislator has romantic undertones, but in practice it means you get an unprofessional class of elected officials who are ripe with conflicts of interest.  

The increasing nationalization of all politics and flooding of out-of-state money into local elections further undermines this quaint notion.  Post-election, lobbyist groups like ALEC often write legislation word-for-word in many states and provide funds and perks for many elected officials all to eager to lighten their load.

The "Three Men in A Room" Era of New York politics has been the opposite. Not only have two of those three people ended up in jail, but also the system made a mockery of both bodies of representation.  The dynamics of New York politics dictate that downstate voting power dominates the Democrat-led Assembly and downstate financial power dominates the Republican-led Senate. This unholy alliance works because we have too many weak legislators.

Paying professional politicians and staff to govern our state through one representative house would produce better outcomes with more transparency.  Singapore has shown how paying comparable private-sector salaries can improve the efficiency and efficacy of government.  We get what we pay for, and I’d rather pay fewer people more to do a better job. 

2.     Home Rule

Localism as it is described in many circles calls for cities to control more of their destinies in the Trump Age. That belies the fact that they can’t.  The US Constitution does not mention cities at all and empowers states exclusively outside of the federal level.  This means that a city like NYC doesn’t control its own transportation, taxation, or even education. 

The honest truth is that NYC is special (obviously I have fully embraced my NYC-centric worldview) and needs to run its own affairs.  It’s one of the world’s premiere cities and needs to have autonomy to run its own affairs to complete with global cities like London or Hong Kong.  That it can’t manage its sprawling obligations and opportunities as easily as Paris or London can costs NYC, New York, and the US. 

Some ideas have been floated for the Convention about returning limited home rule to NYC or as radical as creating autonomous regions (see the picture above) or even succession.  If there was some compromise that cut out a special designation for the 5 boroughs given its unique nature, but would still guarantee some upstate financial exchange - that might just work. But if such a scenario that could benefit both the city and the rest of the state (and the rest of its cities) even exists remains to be seen. And I for one don't want to create a scenario where one region suffers because the other separates.

Furthermore, it’s unlikely that upstate communities would want to surrender access to NYC tax dollars. More importantly, it’s unlikely that upstate politicians would want to surrender access to downstate political money, which would evaporate if upstate influence wasn’t needed.  And no governor, certainly not the current one, would want to surrender the power, and access to the spotlight, that NYC provides. 

3.     Debt Service

Technically, this is more about transparency, but how the state borrows money is in need of a major overhaul.  Right now the Constitution says that voters must approve any state borrowing over a certain amount but that hasn’t happened in decades.  This is because most state borrowing comes through sub-state authorities and agencies that are explicitly exempt from voter referendums. 

Many elected officials, including at one time Governor Cuomo, have criticized this “back-door” borrowing but when push comes to shove, it is a very convenient tool to get projects funded, so the practice continues.   At $300b, New York has the second highest state debt in the country (although, it has been on sound footing for several years.) 

It should be said that debt is not a bad thing for a state to have, especially when it is borrowing for infrastructure and public services that have long-term benefits. The problem is less the outright number or the state’s current ability to fund its debt service and more the ability to determine priorities. The assumption is that most voters won’t know enough or care enough about the state borrowing for a new bridge and might vote it down with enough protest.  This is unfortunately true in some cases. 

However, this is myopic.  The larger truth is that New York, like most states, gives money away for terrible projects all the time without facing voters’ wrath.  The city and state gave close to $500m to Yankee Stadium, without a “yes” from voters.  The Governor gave billions of dollars to upstate, without a “yes” from voters.  Just two weeks ago, it was announced that Aetna, the publicly traded insurance giant, will receive $34m in city/state money to move 250 jobs to Chelsea. Without having to justify expenses to voters, the state has wasted billions and will continue to. 

This all while expansion of public education, transportation, and pension funding all suffer.  It’s always the big-ticket items that get political pushback, but too many little things get through the cracks. This happens because the state thinks voters are ignorant and lazy when in reality they are ignored and misinformed.  Only by changing the way we control our taxes will that change.

There are a lot of other issues that could be addressed in a Convention and there are risks that silly ideas or even bad ones will get traction or distract the process.  These potential issues don’t outweigh the need to reboot the state of New York.  It is entirely healthy for citizens to revisit the organizing documents of its government. I hope that we do this fall. But it’s clear to me that without stronger federal action, cities and states can’t fend for themselves no matter how well run they are.

5 Arguments to Help Change the Debate on Public Housing

A beautiful day at Mill Brook Houses (homebody)

A beautiful day at Mill Brook Houses (homebody)

Despite the unprecedented affordable housing crisis across the country, there is seemingly no popular support for more public housing. President Trump instead reflects the general sentiment in Congress by outlining a budget that would cut billions of dollars from housing assistance for millions of low-income Americans. Though many residents, housing groups, and elected officials are speaking out against these cuts, they are hobbled by a lack of national attention. Frankly, I believe it’s because their message “#nocuts” is hardly a battle cry, as important as it is.

If we are to prevent these draconian cuts from becoming law this year, we must put as much pressure on Congress as we can. It’s likely that some of these programs will be saved if we do. But simply reducing the cuts or saving certain programs is not enough to help the millions of Americans struggling to find affordable shelter.

We must fundamentally transform the discussion about housing in the US and we must once again create a national effort to support, build, and maintain public housing on a significant scale. In the spirit of “#nocuts” I have outlined 5 hashtags that describe where I believe we can succeed in doing so.

1. #HousingIsARight and Denying it is a Crime

We live in a deeply segregated country. This is not an accident. This was not an organic result of natural clustering or preferences. As Richard Rothstein has pointed out in detail in his book The Color of Law, it was the result of direct, explicit federal and local policy decisions to favor white Americans over all other types of Americans. The US Government made housing a de facto right for white people and denied it to black people and other minorities. The consequences have been devastating.

A lot of people, including the Supreme Court, do not know or accept this. This can no longer be tolerated. Just as we are finally taking down statuescelebrating an armed insurgency based on white supremacy and slavery, we must also face the blatant suppression that has been staring us in the face for generations every time we drive from a suburb to an inner-city core. The geography of our built environment must finally be accounted for with proper historic context.

Only by recognizing that housing is a basic human right and a basic obligation of our government, will we ever truly reconcile with and change the accepted narrative that downplays the scale of suppression. The God’s honest truth can tear down more than just statues in this country.

2. #RealTakers and Subsidizing Wealthy Homeownership

Once we accept how awful our housing policy was in the 20th century, we can then take a critical eye to how terrible our current housing policy is in the 21st. The specter of racism undoubtedly hangs over our current policies by the sheer scale of previous decades. However, today the true outrage is more about class.

As Matthew Desmond, author of Evicted, has recently written about, the federal government spends $134 billion a year — more than the entire budget of the Education, Justice, and Energy Departments combined — subsidizing homeownership, particularly through the Mortgage Interest Deduction. About 60% of that money goes to wealthy homeowners. The 7 million households that make over $200,000/year receive a larger share of that savings than the 50 million households who earn less than $50,000/year.

This is far from “free market” principles and in fact inflates the housing market to the benefit of wealthy homeowners. It’s estimated that removing such programs could reduce housing prices across the country by 13–17%, making it far easier for many people to purchase a home if they chose.

When a record number of Americans are rent burdened, and over 600,000 Americans are homeless, the fact that we subsidize these homes is a national disgrace. By placing a hand on the scale (again, for explicitly racist purposes) the housing market has exacerbated the economic inequality ravaging all quarters of the country.

Let’s start calling these households what they actually are: takers. Let’s remove the moralizing and euphemisms around how some politicians use that term currently and instead, by placing basic logic and fairness on it, aim it towards those who are actually taking the most from all of us.

3. #PublicHousingWorks and Has Always Worked

Despite decades of discriminatory policies favoring white homeownership (and now more general wealthy homeownership) and systemic neglect against everyone else, we can still point to an obvious truth: public housing works.

During the brief period when there was popular support for public housing and federal intervention in general, the US government built thousands of units. Though some, like Pruitt-Igoe, became shorthand for crime and neglect, the larger truth is that many more continue to be wonderful homes. And the complexed that did fail, failed because the federal government let them fail due to systemic neglect and more racial discrimination.

NYCHA is by far the largest public housing authority in the country, housing nearly 400,000 people across thousands of units. It is a bigger city than Miami and Las Vegas. Despite a rapid retreat of federal funding and larger demographic shifts that decimated NYC in the 1960s and 1970s, NYCHA has endured. Even today, as it faces billions in capital budget gaps and millions more in potential cuts in Trump’s Budget, residents are happy with their communities and the agency. And only 13% of residents receive public assistance.

The idea that Public Housing is a wasteland where people want to get out of, or where they should be encouraged to get out of, has never been true. As Affordable Housing in New York shows repeatedly, even in the hardest times when crime was high and many facilities were in poor shape, these communities survived and in some cases thrived.

NYCHA residents should be proud of where they live. Employees of the agency, past and present, should be proud of the work they did and continue to do to keep it going when no one could or would help.

Public housing residents shouldn’t be pitied or demonized and they don’t need to be romanticized either. They are normal Americans who happen to be part of something bigger than any one person or one building. Their experiences represent just how much the republic can achieve if it follows its values and how many it can fail when it abandons them. We should be telling this story everywhere to everyone.

4. The #FutureOfPublicHousing Will Not Look like the Past

There were many flaws in the design and support of public housing in the US during the 20th century that caused many complexes to fail outright or fail for a period of time. Early generations of complexes were sterile and anti-social. Many of the funding sources were fleeting and easily diverted. Sociological assumptions in design were flawed and discriminatory.

No one is suggesting that we go back and do this over again. Throw out the idea that public housing means tall brick towers isolated from neighborhoods. Instead, we should articulate a new vision for the 21st century that reflects lessons learned from the past and a broader mission for the future.

Instead of building new residential towers on superblocks, repurpose older infrastructure and combine multi-use functionality within existing city and town fabrics.

Instead of designing uniform apartments or complexes with rigid specifications, allow for innovative construction techniques like pre-fab units, modern SROs or shared living arrangements that strive for different, locally desired outcomes.

Instead of subsidizing homeownership (especially for wealthy Americans), invest those resources in community land trusts and land banks to give local communities more agency and sustainability. Take the speculation out of (at least parts) of the housing market by tipping the scale towards affordability.

We should simplify yet broaden HUD’s mission based on housing as a right. Set its goals and budget around lowering the cost of shelter across the country in whatever forms that shelter is needed for local conditions. Make HUD about providing Public Housing whether it’s apartments or a single-family home.

The possibilities of future Public Housing are almost endless when you shed the vision of the past. Let’s start showing the country what the future could look like and how it could help everyone, whether you live in a city, a suburb, or the country.

5. #RebootTheUS Can Start With Public Housing

The polarization of our politics has increasingly bled into all corners of our public policy discussions, crippling our ability to address the challenges facing our rapidly changing nation and planet. The polarization of our economics, in the form of runaway income inequality, has also poisoned our broader civic life and national identity. We were in crisis long before President Trump and will remain so long after him unless we can do what America has always done best — reinvent itself.

As when the Gilded Age spawned the Progressive Era and the Great Depression spawned the New Deal, we must lay the seeds now for a great rebirth of national promise and purpose. We must embrace the core values and aspirations of our republic — freedom, justice, and the public interest — and shed the rot of late capitalist values of commodification, exploitation, and greed. In the digital age, no term better represents what I think we need than a great “reboot.”

And there’s no better place to start than with public housing. Committing again to a massive nation-wide effort to provide affordable housing in many forms not only addresses the moral urgency of our current situation, but it also addresses the economic urgency as well.

Public Housing is infrastructure. Its creation means jobs and economic activity on a scale unseen in decades. Its existence means more take-home income for millions of Americans who are rent burdened or underwater in their mortgages. Its location means more mobility for families and individuals in economically productive regions.

What other effort could so thoroughly demonstrate the power of a great national reboot to inject economic and civic purpose into a country that should never have to sacrifice either. We don’t need to abandon the experiment of national government to do so. We need to reinvigorate our civic intellect as well as our institutions. We start by showing how a focused federal effort in housing can promote our values, help our citizens, and share our prosperity.

None of these ideas are new or radical. They reflect an obvious truth about contemporary America: what we have now is not working. We are ultimately presented with two options. First, we can continue on with our late capitalistic doctrine that we are all consumers on our own or, second, we could revitalize our identity as citizens and recognize that we are in this together. One leads to a brutal, empty society. The other leads to something much stronger and fulfilling.

Stop Blaming the Mayor for the Homelessness Crisis, It's On Us

More like a flood (NYDailyNews)

More like a flood (NYDailyNews)

A lot has been made this week of Mayor de Blasio’s announcement of new homeless shelters around the city.  He has been criticized from all different sides, from community groups opposed to more shelters in their neighborhoods, to non-profit groups worried about getting paid for their services, and by political rivals questioning the Mayor’s effectiveness on the crisis.

However, this week also saw a settlement of a lawsuit at the state-level over rental assistance that quietly did more for the crisis than anything the mayor can do.  This speaks to the deeper structural problems causing homelessness in the city and why the political charade around the shelter system is missing the point entirely. The problem is bigger and deeper than any mayor can handle and we’re all partly to blame.

The lawsuit stemmed from the state’s Family Eviction Prevention Supplement (FEPS) program that started in 2005.  For women with children under a certain economic threshold facing eviction, the program offered rental supplements based on a formula set when the program began.  Rents have of course skyrocketed since 2004 while the payments remained flat, so many families were simply not benefiting from the program.

With the help of Legal Aid Society, two women successful sued the state to change the rent allotments to reflect the changing market.  A family of three that used to only qualify for $850/m now can get $1515 a month.  The new formula isn’t perfect, but it will no doubt help thousands of families in New York City under threat of eviction to stay in their apartments.

This is an important program because it has a simple mission: prevent eviction to prevent homelessness.  There are over 60,000 homeless in NYC of which 48,000 are women and children.  The number one cause of homelessness for this group is eviction.  Keeping these vulnerable citizens in their homes not only safeguards their well-being and future prospects, but it also saves taxpayers millions of dollars and lessens the burden on the few communities that host these shelters.

As the Mayor is finding out, it is both expensive and, at times, unpopular to shelter the homeless.  And he can’t simply ignore it.  Since 1979, the homeless in NYC have had a legal right to shelter. The Giuliani and Bloomberg administrations both fought to undermine this law, so it is a credit to the de Blasio Administration for not taking the easy way out.

It is a significant financial burden for the city to maintain the shelter system. NYC Department of Homeless Services has an annual budget of $1 billion and the Mayor’s Office estimates that it costs $44,000 to shelter a family for a year.  However, even the most ardent supporters recognize that DHS is barely a stopgap that doesn’t come close to meeting the basic sustainable needs of New Yorkers entering the system.

The shelter system also clusters in only a few communities in the city, which puts a potentially unfair burden on them relative to others.  It’s important to note that very few shelters actually cause ancillary quality of life problems for surrounding communities.  However, when only a few communities host most of them, this concentration inevitably has an impact that other neighborhoods don’t experience. It's unfortunate that many citizens don't want to help the homeless, but it's reasonable to ask all of us to share the burden equally.  We are not. 

All of this is to say that the Mayor has a nearly impossible task.  He has clearly placed too much political capital on his ability to solve this crisis, which is now costing him, but he has made progress.  Guaranteeing counsel in housing court for low-income tenants is a major victory in preventing homelessness. Finding additional resources for new shelters, however controversial, is also commendable.

Look, Mayor de Blasio can’t end the homelessness crisis. No mayor can.  The politics around the mayor’s handling of the crisis mask the larger problems that must be addressed at all levels of government.  Many people recognize this, even if most of the media only focuses on the horserace stuff.  

For example, today State Assemblyman Hevesi, a Democrat from Queens, proposed a state bill to provide comprehensive rental assistance to families receiving public aid.  The plan, called Home Stability Support, would replace FEPS and potentially help 80,000 families across the state, including NYC with real, reliable rent assistance.

The program is estimated to cost $450 million a year, but Assemblyman Hevesi makes a compelling case that it save money in the long run.  Compared to $44,000/year to shelter a family, this program would potentially cost just $11,000 per family.  Scott Stringer has estimated that the plan could the city save hundreds of millions of dollars.  Of course there are complex issues to address around intended/unintended consequences, but this seems worthy of support.

It’s not clear how much support there would be in Albany, though, and it seems very unlikely we can bank on federal help, so the future of the bill is questionable.  But it makes a strong economic argument for supporting greater rental assistance.  We are already paying an immense amount of money sheltering the homeless in NYC and that won’t end anytime soon.  Why not intervene earlier and put less money towards a more efficient policy?

It is crass to approach the homelessness crisis on economic terms, but starting there hopefully allows us to consider the issue on moral terms.  And we should.  We are making the choice right now not to help thousands of citizens who are economically insecure, who have lost their home or are close to losing it.  It is entirely in our power to solve this problem if we choose to. It is wrong that we do not. Blaming Mayor de Blasio lets us off the hook too easily.

As much as the right to shelter for the homeless has been fought by various city and state officials over the years, we must think bigger.  A right to housing for all residents should be an obligation of the state that falls under its public welfare mandate.  New York has always been a laboratory of progressive governance and we should continue this tradition when it matters this much to so many.  We need to make sure the state follows through on this obligation. 

Far from requiring huge amounts of new revenue, committing to housing as a right would allow the city and state to review the many programs and laws that currently apply money as band-aids all along the housing cycle.  It’s easy to see how such a simple policy goal could unleash innovative public programs, private partnerships, and lead to an overall reboot for thinking about housing in New York.  This is clearly what we need to do if we want to address the homelessness and affordability crises - and actually end them. It starts with every one of us deciding that housing is a right.

The Market is Failing the Public, Just Look at the High Line

Who is better off now? (Friends of the High Line)

Who is better off now? (Friends of the High Line)

Robert Hammond, the co-founder of Friends of the High Line, did a revealing interview last week where he lamented how neighborhood residents around the High Line haven’t benefited from the completion of the park and the corresponding development boom. It’s admirable that Mr. Hammond has recognized this, but, as he points out, it’s too late.  Perhaps Mr. Hammond has learned the bigger lesson from the High Line: we can’t rely on the private market to create public good. 

The High Line was originally a 1.5 mile elevated industrial railroad built in the 1930s that connected the Meatpacking District to Hudson Yards (back when they were a meatpacking district and rail yard, respectively.) It closed by the early 1980s and remained a local, grassy oddity until the late 90s.  That was when Mr. Hammond and others that started Friends of the High Line saw the potential for a unique public park and successively prevented the Giuliani administration from demolishing the infrastructure.

Mayor Bloomberg also saw the possibility of the park within his vision for the vast redevelopment of the western edge of Manhattan. The mayor helped push the park forward with a total of $123 million in city money.  The remaining $50 million came from private donations.  The first segment opened in 2009, followed by the second (2012) and final (2014) around the Hudson Yards development. It has quickly become the most visited attraction in New York City with nearly 8 million visitors last year.

As a result, the park has played a central role in the rapid redevelopment of Chelsea and the Hudson Yards area.  Hundreds of new high-end residential units and commercial space are open or opening over the next few years at a dizzying space   (not counting the multi-billion dollar project at Hudson Yards).   The High Line has fundamentally shifted the center of gravity in the city towards the west side and is expected to generate over $1 billion in tax revenue over the next 20 years.

But calling the High Line a public park is a stretch because it really isn’t public or a park.  It is a beautiful piece of repurposed urban infrastructure and offers a unique experience, but it doesn’t offer the types of programs or services that traditionally successful urban parks offer residents.   Most of those activities are prohibited. FHL has conducted surveys with local residents that show that not only do they not use it - they don’t even feel it was designed for them. They are right.

Instead, it is a pleasant conveyer belt for tourists that picks them up or drops them off in trendy Meatpacking District or the soon-to-be-trendy Hudson Yards and takes them through new trendy condos and hotels along the way.  There are a few, hard-to-find access points in between those terminals for local residents to get on or for tourists to get off.  Our tax money was given less to a Public Park and more to a private development showroom.

I have no doubt Mr. Hammond, a longtime resident of Chelsea, envisioned the High Line to be more inclusive, especially given his group’s early local organizing efforts.  But the truth is that redevelopment is not helping existing residents and was never going to. Gentrification is complicated, but the High Line is clearly putting pressure on many people in the area.  

On the other hand, I have no doubt that the Bloomberg Administration and contributing private interests underwriting the design and construction did not share Mr. Hammond’s vision or concerns.  Regardless of whatever practical structural limitations the unique nature of the park had to work around, there were demonstrably exclusive design assumptions caked into the park from the beginning.  Limited access, limited hours, and limited activity were not preordained by any means, but they shaped the design and programing for a specific audience that didn't include local residents, especially children.

These results were, of course, inevitable when private interests shape public space.  The city, despite owning the infrastructure and contributing the majority of the capital, didn’t dictate the planning and didn’t incorporate the usual public input to outline and achieve specific public policy goals.  As was generally true of the Bloomberg Administration, the project brought in a private-sector worldview to what should have been a public-centric design goal (that might have cost a lot less in comparison.) Either way, the city didn’t get a great public space out of it and most New Yorkers didn't get any benefit.

You might ask why it matters – the High Line is wildly popular with tourists and $1b in tax revenue for a $123m investment is great for the city.  There are two reasons.

First, a practical critique about government economic development: if you are a city government getting into the development game, picking winners and losers, you’d better get a good deal from the winners. If the tax revenues from the High Line area are estimated to be $1b (which based on existing tax policy is probably a giveaway), then many, many more times that will be generated in private profit during that period.  If the development of the High Line (coupled with the not-unrelated zoning changes around the area) was that valuable, then the city and taxpayers got a terrible return on $123m while a few private actors reaped the most benefits.  That’s simply an unacceptable transfer of public wealth.

Second, there is the much larger and more urgent critique of relying on the private sector to generate public good in the first place.  The experience of the High Line shows us that the private sector, even when supported by public funds, treats public space as an economic development engine rather than as a center of civic engagement of benefit.  That mindset is not a model for civic progress.  It's why you'll never see a similar city effort with the proposed Queensway.  There isn't the possibility for significant economic development that section of industrial or residential queens (at least not yet.)

You can point to different historical eras where this narrow development view wasn’t the case, or where there was a mutually beneficial balance, but it's clearly one-sided today towards private profit. (Compare the stately grandeur of Grand Central with the vapid consumerism of the Oculus for example.)  What we’re finding out is that the trade-offs leave the public sphere depleted and sickly.

This matters.  Great democratic societies have great democratic spaces. More importantly, great democratic societies are committed to funding the creation and maintenance of these spaces for the sake of civic health. 

From the early days of the New Deal to the dying days of the Great Society, New York City used to be on the forefront of this robust faith in public development.  Whether it’s the parks system, the public school system, the colossal public housing program, monuments to successful public policy surround us.  This model worked in building infrastructure, but more importantly it worked to build a sense of shared destiny and collective effort in public life. It also allowed for new voices and ideas to access those spaces to contest and change its vision, albeit wildly unevenly. This is the definition of a healthy democratic society.

Ironically, this civic model broke down not because people changed and stopped carrying about their communities, but because the private sector changed and stopped carrying about the community.  NYC suffered significant deindustrialization that triggered a mass exodus of working and middle class residents that devastated the tax base.  Industry and the deregulation-happy federal government abandoned the city (and many other cities) over the following decades in favor of a stateless global corporatism. That’s why the High Line was abandoned in the first place.

Along the way we have internalized the distrust and disrespect for the public sphere that the more unseemly segments of the private sector have always held.  It’s a self-fulfilling prophecy: we don’t think the government – at whatever level - is capable of doing great things so we keep eroding its ability to do even basic things. Despite all the physical evidence of what energized public policy can achieve (you can see three examples from the High Line: the Fulton Houses and Elliot-Chelsea houses are NYCHA developments that have provided housing for thousands of New Yorkers for decades) we think we must rely on the private sector to build our infrastructure and institutions. We end up with poor public space while enriching a few.

We won’t get the type of inclusive, free-forming public space that our society needs if we rely on the private sector to build and maintain it for us.   We need to recommit ourselves to building up the public sphere again and reaffirming our faith in public institutions to provide public good.  Good that we define and redefine ourselves.   It starts with recognizing that our current thinking isn’t working and that we must believe again in the power and purpose of public intervention.

Housing is a Right, Not a Lottery

You have better odds at this than with housing (nylottery)

You have better odds at this than with housing (nylottery)

 

This week, an affordable housing lottery in Stuyvesant Town (where I live) opened to the public, which offers a useful illustration of how backwards our thinking on affordable housing is: to qualify for a$2800 1 bedroom apartment, you must have a household income between $84k-$119k. When Blackstone bought the property for $5.3b last fall, the city gave it $221m to keep 5,000 of the complex’s 11,000 units in an affordable housing program.  This lottery is that housing program at work.

Stuyvesant Town and Peter Cooper Village were built in the 1940s by Metropolitan Life Insurance as part of a government-subsidized housing program. It was (for a time, a racially segregated) working class complex that offered nice, modest living conditions protected by rent regulation

That all changed in 2006 when MetLife, getting greedy, sensing a bubble, or both, decided to sell the complex. This caused a feeding frenzy in the real estate market and ultimately led to the largest residential real estate deal ever. Tishman Speyer won with a $5.4 billion bid.

The deal was a disaster from the beginning (and has a lot of fingerprints from city, state, and federal elected officials who should have known better).  It relied on the continuing trends of vacancy decontrol and rising rents to make the numbers work with little regard for affordability or sustainability.  

In 2006 the deal looked like a safe bet, by 2009 not so much. The twin killings of the market blowing up and the Roberts court case (which reregulated 4,400 units - including my own) led to Tishman walking away from the property.  Tishman still made a profit while taxpayers ate $2b of debt through Fannie Mae and Freddie Mac.

After a few chaotic years, Blackstone jumped in to purchase the property for a slightly less historic $5.3b.  Mayor de Blasio and other elected officials, sensing some political leverage given the previous disaster with Tishman, were able to get Blackstone to agree to ‘preserve’ nearly half of the complex’s units in an affordable housing program for 20 years in exchange for around $220m in waived fees or tax subsidies.

A lot of people at the time hailed the deal as a win for affordable housing and tenants, but others questioned the rhetoric and scrutinized the details - and weren’t so sure.  With its fuzzy definition of affordable housing, the continued market pressure on the rest of the tenants, and the underplayed granting of air rights to Blackstone (which will likely represent hundreds of millions of dollars of additional income), the victory seems firmly in Blackstone’s corner rather than the public’s.

I’m not blaming Blackstone.  They are worth billions of dollars and certainly don’t need any tax breaks, so agreeing to any type of affordability deal wasn’t necessary for them.  But if they can score $220m in subsidies by agreeing to some vague promises for political points, why not?

But it’s obvious that our elected officials at all levels failed the public interest on this deal and on the larger challenges of the affordability crisis.  The lottery in Stuytown shows why. 

No one can claim with a straight face that $2800 for a 1 bdr is affordable or that someone making $100,000 needs rental assistance.  The fact that everyone involved with this deal actually is saying that should shock you out of any remaining complacency.

Some of this “tragical” thinking stems from the flawed logic used by the Department of Housing and Urban Development (HUD) in determining affordability that relies on the Greater New York average median income (AMI) which is $90,000, rather than NYC proper which is closer to $50,000.  

That higher AMI is the basis for all state and city affordability requirements including the lottery run by the Housing Development Corporation. Even when the city requires or negotiates a certain number of units below that AMI, it still means a lot of New Yorkers can’t touch any of these units.

Fixing AMI standards would create more accessible, sustainable affordable housing, but it wouldn’t fix the other two major flaws surrounding the Stuytown deal.  Namely, relying on the private market to solve the affordability crisis and treating housing needs differently than other needs-based programs like food stamps or Medicare.

Putting it more simply, we should demand that housing be treated as a basic right and form policy from there.

For decades, New York City has been attempting to survive the affordability crisis with policies designed to promote private development first, and affordability second.  Whether its tax policies like 421a, rezoning, even occupancy laws, housing policies have been billion dollar gifts to private developers. If this created or preserved a lot of truly affordable units, fine.  But look at the recent history of Stuytown and tell me that it does.

Until our elected leaders reject the premise that the market should be driving housing policy, we’ll never get more affordable housing and we’ll never get a better return on our tax dollars. 

This doesn’t mean that the government should replace private developers altogether (though public housing is underrated and due for a cultural comeback) but it does mean the goals should be reversed: affordable housing first, profit second.  Whether it’s looking into community land trusts, dusting off limited-dividend programs like Mitchell-Lama, or creating a state-level Section 8-style program, we have proven models to explore.

For this to happen, there needs to be political change from the bottom-up. Regulated and market rate tenants should ban together with smaller landlords to counter-balance the political power of big developers who dictate state and city policy. Tenant groups and affordable housing developers should embrace new technology both to organize and to promote alternative housing models.  Landlords should actually accept the premise of rent regulation in order to reform its more outlandish abuses. 

Too many actors in housing have been divided politically and have collectively suffered in our current paradigm, while a wealthy few benefits.  Only by breaking this cycle can we introduce, or in some cases reintroduce, innovative thinking to break the affordable housing crisis as well.  We must start by acknowledging that housing is a right, not a lottery.

421a Stinks, Here's a Better Use of Taxpayer Money for Affordable Housing

Community Land Trusts to the rescue? (bedford+bowery)

Community Land Trusts to the rescue? (bedford+bowery)

This week, the Independent Budget Office of New York released a damning report on the impact of the 421a tax program. It argues that over the last 11 years, $2.5-$2.8 billion of taxpayer money has been effectively wasted.  Far from encouraging more affordable development, which has been its main justification, the policy has rewarded condo owners and developers (particularly in Manhattan) with significant tax relief. 

In case you haven’t heard, NYC is in the midst of a massive affordable housing and homeless crisis. Rather than simply rebrand 421a, which is what the governor is proposing, and continue to throw taxpayer money away, we need to examine new ideas that can actually address this crisis full on.  Luckily, NYC Housing Preservation and Development (HPD) is potentially doing that by exploring Community Land Trusts.

421a has long been criticized for being an incredibly expensive and inefficient affordable housing policy, but the simple truth is that it was never an affordable housing policy. 421a was designed in 1971 during the Bad Old Days to promote development, not affordable housing.  Those goals are not mutually exclusive, but they are not one and the same. The checkered history of 421a shows that.

Originally, the policy gave a 10-year property tax rebate on any new housing development on vacant or ‘underutilized’ land.  After Trump Tower received millions from the program to construct exclusively high-end housing, Mayor Koch revamped the policy in 1985.  It then required any housing development using the program in central Manhattan (but not outside) to provide a certain percentage of affordable housing.  The policy has gone through various iterations and lapsed enforcement since, raising the cost of the subsidy while providing vanishingly small amounts of affordable units.  Given this complacency, the Governor’s revamped 421a plan "Affordable New York Housing Program" would cost taxpayers $400k-$600k per unit and apparently that’s OK.  It’s not and this thinking is not sustainable.

The point here isn’t to keep harping on 421a (or on using tax money to promote development in general). It’s to demonstrate two things. First, that focusing on development first, affordable housing second, has failed spectacularly in addressing the affordable housing crisis.  That much is pretty clear at this point.

Second, it is to show that there are existing models that focus on affordable housing first that are much more cost-effective, community-based, and sustainable.  One of those models, Community Land Trusts, is finally getting looked at seriously in New York City thanks to HPD

Community Land Trusts (CLT) have been around for decades, most successfully in Burlington, Vermont (started when Bernie Sanders was mayor).  The basic concept is very simple – remove the value of land from the value of the dwelling. When a CLT buys a house or building, it puts the land in a trust that removes it permanently from the private market. This of course removes the speculative possibility of the land, which is the main variable in real estate deals.  (It’s why Stuyvesant Town, where I live, got bought for $5.3 billion even though the buildings are 70+ years old and showing it. The 86 acres in the heart of Manhattan is what Blackstone paid for. The tax breaks are a cherry on top.)

HPD, after meeting with community groups like the New Economy Project, the NYC Community Land Initiativehas issued a request for economic interest (FREI) to groups that are interested in forming CLTs in the city.  As reported by NextCity, a group of residents formed the East Harlem-El Barrio CLT to take part in the first wave.  The FREI is a modest proposal to see if a CLT can “improve upon, or fill in the gaps of” existing city programs, but it is a signal that the city is at least looking at CLTs.  It remains to be seen how much HPD understands the model or how committed it would be to pursuing it, but residents and developers alike should welcome this move. 

Community Land Trusts could be a much better use of taxpayer money to address the affordable housing crisis because after the initial investment of acquiring the land, the model is self-sustaining.  A trust controlled by a diverse board of interests still collects rents, it can still do major capital improvements and pass along some of the cost to tenants, and it can even offer transferable equity to residents in co-ops or condos in certain cases. Again, this model already exists and has worked in many cities (including Cooper Square, the first and so far only CLT in NYC, which has been around for decades.)

421a cost taxpayers an estimated $1.2 billion this fiscal year alone. For a fraction of that, the city could purchase foreclosed properties or neglected properties and transfer them into either a publicly administered trust or to private non-profit trusts like East Harlem-El Barrio.  Almost instantly, the city would create thousands of sustainable affordable housing units that wouldn’t require anywhere near the level of operating support currently wasted on 421a and other property tax programs.

This policy might seem like anathema to the real estate dominated political interests of the city, but it shouldn’t.  NYC is an incredibly large city with a lot of property.  Even a large presence of CLTs wouldn’t impact this landscape.

If anything, supporting CLTs would presumably remove the cumbersome requirements of affordable housing that drives up costs for developers.  By creating a separate, robust affordable housing policy, lawmakers could reform current development policies to encourage other priorities, such as mixed-use or transit-oriented development that would allow developers to maximize a development’s potential. Perhaps a developer could receive FAR bonuses or tax breaks by supporting a CLT by providing capital or professional services.

To address the affordable housing and homeless crisis, New York City needs to explore every possible idea out there.  Building new, large public housing developments will never happen again politically. Relying on the private market has made the problem worse economically.  Ungodly amounts of taxpayer money are being wasted every year on poorly designed tax, rent, land-use, and occupancy policies.  Community Land Trusts aren’t the silver bullet to address these seemingly intractable problems, but by supporting them, perhaps we can create space to finally explore truly innovative ideas from the public and private sectors alike.

Cities of Refuge, Country of Refusal

Hello or goodbye? (ericschnurer)

Hello or goodbye? (ericschnurer)

The first week of President Trump’s administration has seen a flurry of executive actions that begin to follow through on many of the promises he made during the campaign.  Though it seems to be a surprise to people, even some of his supporters, it shouldn’t be.

As troubling as this may be for opponents of the President’s agenda, and for the American economy and society overall, there are limits to what these executive actions can achieve. “Sanctuary Cities” will quickly serve as a test case on how effective they will be for the Trump Administration or how effective resistance will be.

On Wednesday, President Trump announced that sanctuary jurisdictions  (cities and counties that don’t cooperate with Immigration and Customs Enforcement (ICE)) “willfully violate the law by shielding aliens,” have caused “immeasurable harm to the American people and the very fabric of the Republic,” and will not be ‘eligible to receive federal grants.”

This means the Trump Administration intends to take draconian measures to force cities and counties into cooperating with ICE or risk losing millions if not billions of dollars of federal aid.  He now seems sincere about deporting all 11 million illegal Americans and wants local law enforcement agencies to be the foot soldiers by effectively deputizing them as ICE officers.  He has also set up a truly Orwellian department within ICE called The Office for Victims of Crimes Committed by Removable Aliens.

(This is an addition to his other executive orders on immigration outlining plans for building a wasteful wall along the Mexican border and banning Muslims (only from countries we've bombed) from entering the US.)

President Trump, the “law and order” candidate, might be unaware that the modern American concept of Sanctuary City actually started through efforts by law enforcement departments in the 1980s.  Many police officers found it difficult to work with communities with high-levels of illegal immigrants. They were attempting to do everyday community policing, but residents were fearful of cooperating.  Cops wanted to remove the fear of immigration status from hurting their greater mission of providing public safety.

Hundreds of cities and counties have followed suit over the following decades. Though there is some disagreement in law enforcement circles about this, many sherifs and chiefs continue to support sanctuary policies in the interest of public safety and budgetary limitations.  Many other social service agencies have adopted similar policies in the interest of public health and public education.  It's a federal issue, not a local one.

Contrary to President Trump’s anecdotes from the campaign, illegal immigrants are less likely to commit violent crimes than Americans.  It is outright demonization to suggest otherwise let alone to set up an additional federal bureaucracy to treat a vanishingly small problem.  These men, women, and children are not threats to the republic or to Americans.  They aren’t even threats to most Americans’ jobs. They simply want to be Americans (many of their children already are) and often do jobs most Americans don’t want to do.

Turning to New York City, it’s no surprise that it is a sanctuary city.  It has been for hundreds of years.  It’s a city built by, of, and for immigrants (including my grandparents). Today close to 40% of New Yorkers are foreign born residents.  Of that, over 500,000 are illegal immigrants, which is one of the largest concentrations in the country.  Yet NYC is also one of the safest cities in America.  Where is this hellscape of crime by Removable Aliens? It’s much more likely that the city would suffer by removing these men, women, and children from our workforce, our communities, and our culture. Just ask outspoken Trump supporter former Mayor Rudy Giuliani about what he said back in 1994:

“Some of the hardest-working and most productive people in this city are undocumented aliens," Giuliani said at the time. "If you come here and you work hard and you happen to be in an undocumented status, you're one of the people who we want in this city. You're somebody that we want to protect, and we want you to get out from under what is often a life of being like a fugitive, which is really unfair."

However, NYC and other cities are breaking the law.  The arguments for doing so have always been framed in practical terms for economic and public safety reasons, but they are still flouting federal laws.  Attempts to reform those laws famously failed in 2013 and fueled the rise of Trump.  And the Trump Administration is going to make NYC and the other jurisdictions pay.

It is unclear if this executive action (or his others) will succeed. Evidently the president didn’t even consult his own cabinet about his executive actions, which makes articulating policy fairly hard. And as President Obama found out with his own executive orders, President Trump can expect a flood of lawsuits

Mayor de Blasio and many others seem confident that the courts will strike down many of the threats associated with federal funding, but there are no guarantees.   It is clearly illegal to coerce local governments to compile with federal laws through denying funds. It is possible that NYC would lose millions of dollars for direct law enforcement support, but that would likely impact anti-terrorist efforts or Trump Tower security, which could cause political or personal headaches for the President.

There is a sad irony that in today’s world of religious conflict, xenophobia, and eroding liberalism sanctuary cities are under threat. They are a concept that spans all religions across thousands of years.  Cities of Refuge can be found in the Old Testament. They were places that granted persecuted individuals or individuals under threat a save harbor under religious and/or government protection. 

The entire founding myth of America is as a sanctuary city.  It is a tragic betrayal of American values. We've had similar periods of xenophobia and anti-immigration hysteria in our past, and they have all been self-defeating stains on our history.  I've always lamented how ahistorical we are as a country, but this current vitriol is heartbreaking and entirely avoidable. 

Most of these periods shared something in common - economic insecurity.  Blaming immigrants for that is seductive because it is easy.  Tackling the actual reasons for it are hard and involve challenging long-held assumptions by the working class and the ruling class.  There have been practical solutions on the table to address our current immigration challenges. Ones that respect the current laws, hold those who have violated them accountable, but allow these men, women, and children to remain in the country that they have called home and to remain productive members of our society.  Political cowardice and cynical misdirection have lead us to this point instead. 

It is cliché to refer to America as an immigrant country, but it is and remains so.  It is cliché to say that immigration is what creates the vibrancy of American society and its economy, but it has and continues to.   What is equally true, and should be equally comforting even to those who fear immigration, is that America remains America even if Americans change.  The only type of people who threaten America are those that wrongly think America shouldn't change.  If they succeed America will still change, but it will be for the worse.

Death and Bad Tax Policy

Actually, not at all. (bizarrocartoons)

Actually, not at all. (bizarrocartoons)

NYC Housing Policy Tools Series

Over the next few weeks, as we prepare for the Trump Era, I will spend time on various housing policies in NYC in order to help frame the the affordable housing crisis.  I have picked four topics related to NYC housing laws: rent regulation, zoning, occupancy, and property taxes.  I concede that there are other policy tools that could be included (particularly around financing) but these four tend to have an immediate impact on the most people.  The hope for this blog series is to explain the current policy tool kit in New York, but also to show why questioning the underlying assumptions about housing policy might be able to expand it. 

Part 4 of 4: Death and Bad Tax Policy

For my final post about NYC policy tools, I come to perhaps the most opaque and the most frustrating topic: property taxes.  I can honesty say that after years of studying housing issues, I think the property tax system is the single biggest source of injustice in housing. The incentives are warped, the metrics are arbitrary, and the goals are backwards.

That last point is an important place to start.  What is the goal of tax policy? It is simply to allow a government to provide a baseline of services – police, fire, water, etc? Is it to encourage or discourage a particular type of activity or behavior? Is it to promote social cohesion through income distribution? Depending on your political ideology and personal experience, you probably have a clear idea of what you think it is supposed to do and not to do.

But if you think tax policy shouldn’t be designed to impact behavior or social outcomes, you might be disappointed to find out that all tax policy does that. All tax policy ever.  Anything that a government chooses to tax or not to tax obviously has social and economic consequences. Any federalist or anti-federalist can wrap their rhetoric on taxes around liberty, strong governance, and whatever they want, but they are attempting to codify subjective values. 

(There are also inherent problems with relying on property taxes to pay for things like public education that impact behavior and social outcomes, but I’ll address that at another time.)

This is what is so confounding about NYC property taxes.  What values are being projected? Nominally, it is designed to provide tax relief for homeowners but it doesn’t exactly do that. It is sort of designed to give tax benefits to condo/co-op owners, but it in fact gives huge benefits to speculators.  It isn’t expressly designed to screw renters, but it absolutely does.  For a city that is two-thirds renters, that is ass backwards.

Since 1981, NYC has split property into four classes with varying tax rates – Class 1: single-family homes (19.991%), Class 2: multiple-dwelling buildings (rentals, condos, co-ops) (12.892%), Class 3: utilities (10.934%) and Class 4: commercial (10.574%).  For this blog, I am only focusing on Class 1 and Class 2.

On the surface, it looks like homeowners get screwed comparatively.  But below the surface, these numbers are almost meaningless to compare.  How the value of each property class gets assessed, what portion of a given property can be taxed, and how often a property tax assessment can change all vary dramatically. 

There are two big differences between how this system works for Class 1 and Class 2.  In Class 1, the Dept. of Finance measures the market value of a property by matching it to comparable real estate sales in the surrounding neighborhood. This gives as close-to-market value for the land as possible.  In Class 2, instead, the DOF measures property income – ie the rent roll – rather than property value. (If you wonder why certain ground-floor retail space remains empty in buildings for a long time, here’s your answer. Unless a landlord can get exactly what they want in rent from a retail space, they have an incentive just to write it off.) 

Second, for Class 1 and Class 2, there are limits to what percentage of the market value the DOF can tax.  Instead of applying the 19.991% or 12.892% to 100% of the property value in each Class, Class 1 has a limit of 6% of a property's market value, while Class 2 has a 45% limit.  

There is also a 20% cap on how much a tax burden can go up over 5 years in Class 1. In other words, a homeowner is only getting taxed on 6% of the market value of their property and pays the 19.991% tax on that number.  And even if the neighborhood has exploded in value, there is a limit to how much the property tax can go up. These factors mean there is an effective tax rate (ETR) much lower than the stated rates.

A few years ago, City Limits showed a stark example of this inequality. Mayor de Blasio’s Park Slop home was valued at $1.4m but assessed $2,894 in property tax. A similarly valued home in Borough Park was assessed $15,000 in property taxes. The difference is how fast the value of Park Slope homes have changed compared to Borough Park.  This means that the biggest tax savings inevitably go to homeowners who live in highly valued neighborhoods. 

Owners of co-ops and condos, particularly in Manhattan, are the biggest beneficiaries in the current system. As I mentioned earlier, because Class 2 combines these with rental buildings, the DOF draws their assessment from the income streams of these buildings even though they are dramatically different enterprises.  (There is also a large tax abatement on the books since 1996 that gives back as much as 25% of property taxes for co-ops and condos.)

In some cases this means that an individual unit in a co-op can sell for more than the entire measured property value of the building.  According to the same City Limit report, a couple of years ago a co-op unit in the UES sold for $54m while the entire building was valued at $41m. That co-op owner’s property tax was on 45% of $41m divided by how many other units there are in the building, minus whatever further tax abatement they were qualified for.

This means speculators can make a killing in this market segment.  It’s why so many foreign interests buy this type of asset (see my blog on the Panama Papers.) I’ve already spent a lot of blog space talking about how 421a distorts the real estate market by giving away tax benefits to high-end developers and their buyers.  You can see how that policy on top of this tax system effectively erases any tax liability for these high-end buildings, which lends itself to favoring speculation.

Let’s talk about why renters get screwed in this system. To begin with, based on the way the Class designation works, renters live in buildings with a higher tax burden than single-family homes and condos/co-ops.  Renters ($41, 262) also have less than half the household income of homeowners ($86,468) in NYC.  As a result, you have a higher tax burden getting passed to individual households with lower incomes, causing a higher relative tax burden on renters.

Renters also don’t internalize the property tax system as much as homeowners do, even though their rent does.  This leaves renters without any political power to change the tax system. Just as I discussed how market-rate tenants don’t organize with rent-regulated tenants, very few tenants organize around property tax reform – they don’t think it applies to them.  This allows a deeply unfair system to remain in place and it robs the city of much-needed and rightfully deserved revenue.

Beginning shortly after the system came into place in the 1980s, there have been efforts by mayors, the city council, and other advocates to reform the system. The problem here is that Albany controls the tax policy.  Specifically, it controls how the classifications are defined, what % of an assessment counts towards billable tax, what the caps are, and how any corresponding abatements apply. NYC can set the specific rates in each classification, but that’s it. 

There isn’t much political will to change this system currently because it means upsetting the powerful developer interests in NYC (who benefit from the high-end speculative market segment) or upsetting homeowner groups.  Without a unified renter effort, it is difficult to change the status quo.

What would a fair property tax system look like in NYC? A good place to start would be reclassification.  Homeowners should be in one class whether they own a single-family home or a condo. This would remove the grave disparities between single-family home and condo/co-op assessments as well as separating owners from renters altogether.  In a city that is majority renter, many of which are poorer, having a system that burdens renters unfairly is self-defeating.  

Second, matching the billable percentages in each class somewhere in the middle would bring an effective tax rate in line to remove differences between owners and renters.  Additionally, this could remove the tax advantages that fuel speculation on the high-end ownership market. This distorts land-use and prevents more productive and equitable development.

Finally, removing the caps on increasing property taxes in popular neighborhoods would allow the city to capture the proportional value increase that a homeowner garners.  Given that the city is providing the same, if not better services to warrant that increase, it is entirely reasonable to do so. If there is concern that a dramatic increase in property tax might be too much for a poorer resident, institute a case-specific means-testing increase rather than a blanket cap.

These are just some of the ideas that have been floated, but there needs to be political action taken to organize renters on this matter. If there is one commonality between all four of these sections it is that point.  Renters are a sleeping giant in New York politics.  If awoken and organized, they can reframe the economic and political policy discussions in the city and create an unprecedented period of innovation and reform that could benefit all parties in the city.

No, Rents Are Not Falling in NYC

The rental landscape in today's NYC (archdaily)

The rental landscape in today's NYC (archdaily)

Even though the nation is in the midst of an unprecedented affordable housing crisis, and that 50% of New Yorkers are rent-burdened, it’s entirely unsurprising that the media seizes upon news about falling rents instead.  This is how the media covers housing and it’s almost always wrong.  One of the immediately obvious problems with the recent spate of articles about “Rent In New York Is Falling” is that it isn’t true. 

Well, not entirely true.  A more accurate title would be “Some Rents In Some Parts of New York Are Sort of Falling” but obviously that lacks click appeal.  I’ll get into the numbers in a moment but most of us shouldn’t get our hopes up anytime soon.

These types of articles are examples of my frustration with how the real estate market is covered in the media.  Frankly, I have never liked the language we default to: Real estate is property as an asset. Housing is structure as a shelter. Of course there is strong overlap in the rental market, but we shouldn’t conflate the two experiences. In some of my previous blogs (here and here) I have talked about the difference between this confusion in terms of  “asset market” and “shelter market” but generally the media doesn’t make that distinction.

This failure leads to our constipated conversation about housing policy. It also leads to false articles about rents falling.  From the perspective of a small segment of the real estate market, this might be true right now. But from the perspective of housing in general, for most renters, this isn’t true at all.  Too often the media internalizes the narrative of the asset market at the expense of addressing the broader, more troubling narrative that is the affordable housing crisis.

The recent pieces about rent falling are a good example.  They stem from monthly reports from Streeteasy, Douglas Elliman, and Citi Habitats showing that in October and November rental prices went down slightly in Manhattan, Brooklyn, and Queens and vacancy rates crept up slightly in Manhattan (from 2.02 to 2.11) compared to last year.

The media coverage of these reports have failed to provide context for this data (even though each report does.) The reports are designed for asset market participants – investors, brokers, leasing directors, etc - and are intended to be snapshots of certain sections of the market as opposed to a comprehensive view.  Most people following these closely understand that, the general public might not. There are obvious problems with the media failing to clarify.

First, these reports don’t track all rental data in the city. They only cover Manhattan and Brooklyn (Douglas Elliman covers northwest Queens too.) Even that’s misleading. Though most reports cover a decent amount of Manhattan neighborhoods, only a handful of the tonier Brooklyn neighborhoods are tracked. Drawing conclusions about the NYC market from these reports that cover less than a quarter of city neighborhoods is clearly absurd.

Second, the lowering numbers in these reports are exclusively centered around the luxury market – the sleek glass towers popping up in downtown Brooklyn, LIC, and parts of Manhattan.  Although it is a heavily capitalized and flashy segment of the market (and represents virtually all of the new-build data in the city) it still represents a small fraction of rental transactions overall.

Undoubtedly this market is softening and will continue to. The sheer volume of new inventory (either currently on the market or coming soon) was bound to impact prices in this segment.  It’s the closest the city has to an honest-to-God rational supply and demand relationship. There are simply too many units and not enough renters at these current price points.

But does that signal some crash on the horizon as some people in the media are wondering? No.  During the last housing crash in 2008, thousands of finance jobs were lost in the city, which caused a considerable rippled effect across much of the rental market. That level of economic upheaval hasn’t happened and doesn’t seem likely in the immediate future (not to say there isn’t risk of a slowdown of course.)

But even in 2007-2009 a lot of the housing market remained largely unaffected.  A longer look at the data shows that some rents at the upper-end of the market hit a bump during this period while the rest of the market continued to climb after a brief slowdown. Much as we’re seeing right now, the asset market fluctuates as any market is supposed to in relation to the rest of the economy. 

However, the shelter market hasn’t responded that way and remains under considerable, sustained pressure.  Even if prices continue to dip on the high end of the market, that won’t help most renters in the shelter market for three reasons.

First, even a dramatic short-term fluctuation won’t change the fact that those rents are still too high for most New Yorkers and will only go up considerably at some point in the future. Maybe a few types of young professionals will get a good deal on in new building right now (more power to you), but most renters aren’t in a position to capitalize on the softening.

Second, the type of housing flooding this market isn’t what most renters need in New York. The one-to-two bedroom lifestyle buildings packed with rooftop patios and gyms aren’t designed for families, older residents, working class immigrants, or most types of younger students/artists. 

Third, they (mostly) aren’t located in areas that make practical sense for many renters. Much of these developments are in areas rezoned by Mayor Bloomberg that were formally industrial centers that don’t have the typical infrastructure necessary for residential life – whether its readily accessible transit, schools and churches, or even simple bodegas.  That infrastructure might fill in eventually, but it doesn’t exist yet.

The affordable housing crisis is a national scandal. It exposes how poorly our institutions and policies have adapted to a connected, globalized economy.  Holding our leaders in the public and private sector accountable for these failures and finding new solutions to solve them should be what our media focuses on.  As 2016 has shown, our media is just as flat-footed as anything else.