Stuyvesant Town

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.

Zoning: The Phantom Menace or The Force Awakens?

NYC Re-zoning under Mayor Bloomberg (The Real Deal)

NYC Re-zoning under Mayor Bloomberg (The Real Deal)

The average New Yorker walking around their neighborhood probably has a general sense that the size of and relationships between buildings, streets, parks or other features have been organized by some rational structure - certain parts of the city have very tall buildings, other parts have single-detached homes for example.  

They would be right in the sense that, yes, we have zoning laws, but they would be wrong in assuming that that structure is as 'rational' as they would imagine, or as some policy makers would argue.

In this post, I will give a very brief overview of zoning laws and their history in NYC, but I will also try to provide the broader context of forces governing how, why, and when neighborhoods were built in the city to make a larger criticism of how we view and regulate the built environment.  The current orthodoxy and resulting regulations play a leading role in the affordability crisis that we're currently in. 

(And yes, I will explain my tortured Star Wars analogy.)

Virtually all major American municipalities (except Houston!) have some type of zoning laws designed to oversee land usage.  That's a pretty reasonable idea because you don't necessarily want a coke smelting plant parked next to an elementary school.  Well, there's nothing more American than resisting reasonable forms of regulation, so it wasn't until the Supreme Court ruled in Euclid, Ohio vs. Ambler Realty Co. (1926) that local governments were allowed to adopt regulations to separate land use.  This landmark case codified zoning as we now know it across the country. 

The Equitable Building (Daytonian in Manhattan)

The Equitable Building (Daytonian in Manhattan)

New York City, however,  got a head start on Euclid by passing the first land use regulations in the country with its Zoning Laws in 1916. The completion of the Equitable Building (above picture), a large full-lot skyscraper completed the year before, made many New Yorkers fear an Inception-like future of dark, narrow streets blacked-out from the sun.  The law created height and set-back limitations (resulting in the famous "wedding-cake" look of buildings from that era) and designated distinct residential and industrial zones. More importantly, it established the precedent that policymakers, and by extension the public (in theory), had a say over the built environment in the city. 

The laws were comprehensively updated in the 1961 Zoning Code which further defined height limits, introduced floor-to-area ratios (FAR), parking-requirements, and the inclusion of privately owned public space (POPS) for FAR bonuses, along with other items. (POPS would become famous in 2011 when Zuccotti Park, became the center of Occupy Wall Street.) 

Though there have been significant amendments over the years - notably in regards to allowing more community involvement with the formal creation of Community Boards in 1968 and the adoption of the public review process ULURP (see image below) in 1975 -  the 1961 laws are still on the books.  There have been some calls to create a new code to reflect the significant changes industry, transportation, and residential trends have undergone in NYC since the 1960s, while others have said the amendment process has worked to keep the 1961 Code relevant (including the Bloomberg administration, which rezoned of over a third of the city). 

The ULURP process (nyc.gov)

The ULURP process (nyc.gov)

This argument about the current Code is basically over semantics and misses larger questions: can a city be 'rationally' organized in the first place? Who defines what is or isn't rational?

Taking the 30,000 ft view for a second, governments pass laws that basically fall into two camps - reactive or proactive.  I concede that there is plenty to quibble about with this characterization, but it generally vibes with the "Two Liberties" dichotomy that there are positive liberties (freedom to do something) and negative liberties (freedom from something).

Examples of proactive laws would be the Morrill Act passed by Lincoln in 1862 laying the foundations for the modern public university or the National Aeronautics and Space Act of 1958 which created NASA.  These laws wanted to encourage actions and activities deemed to be in the public interest and had sweeping impact on society.  

For the most part though, governments, particularly local entities, pass reactive laws. An action or activity is seen to negatively impact the community, or parts of the community, and there is a movement to suppress or remove it.  Mayor De Blasio has gotten some heat for two such controversial issues recently in Times Square and Central Park.  

Zoning laws fall firmly into the reactive/negative liberty camp, which is not a bad thing at all, despite how loaded those words are.  City governments are much more closely linked to their constituencies and their quality of life concerns.

The problem is that zoning laws are inherently subjective - a 'proper use' of land will mean one thing to the person who owns the land, another to the person who wishes to develop it, and yet another thing to the people that live near it. So who should be able to decide? This tension is the lifeblood of a democracy and when institutions are properly organized to channel that tension, the result more often than not will be just and positive for the most amount of people. 

However, in reality, there are two glaring problems that distort this process - power and purpose.  It's no secret that well-funded entities or individuals exert an immense amount of power over the political process.  I won't get into the 'why' for now, but the 'how' impacts zoning considerably.  Whether it's by supporting sympathetic candidates, hiring highly-connected lobbyists to exert influence over legislation, or just knowing how the system works and how to exploit its nuances - if you have the means, you can likely get the outcome you want. It might take a while and cost you a pretty penny, but you can do it. Not everyone has that type of time let alone money, so it narrows the list of people who can benefit from the process.  

The second problem, purpose, is a comment on both the participants of the process and the process itself.  As I stated earlier, zoning is subjective, but the existing system places a veil of rationality over the zoning process that (1) overstates its accountability and transparency to the general public and (2) confines the parameters of the debate regarding what zoning can and can not accomplish.  

This veil allows the people that benefit from this process to maintain those benefits and reinforce the process.  I don't necessarily want that to sound as cynical as it might come off because it's more of an observation about operating within complex systems than anything else.  

But if you are a critic of the current zoning process, and for example, think that parking requirements for new developments are onerous and outdated, you might think that the zoning process is broken.  It might be, subjectively.  But objectively, the process is doing what it is supposed to be doing.  And because the zoning process is sanctioned with 'rationality' it can be very difficult to introduce concepts and ideas that are counter to the process. Inversely, it can be very difficult to resist or amend accepted concepts.

I only have to look outside of my window to see a famous example of this dynamic.  I live in Stuyvesant Town in the East Village of Manhattan, which was built during another affordability crisis in our history, the early 1940s, to house returning (white) WWII veterans.  Stuyvesant Town and its sister property Peter Cooper Village consist of 25,000 residents and 110 buildings over 80 acres.

Though ostensively a private development built by MetLife, the project was largely conceived and shepherded by Robert Moses, the 'Master Builder' of NYC who, though never elected to any office, dominated the development of the city for decades in the middle of the century.   He was able to muscle through changes in city and state laws that created tax abatements for MetLife to construct the buildings, turned over public land (including streets and schools) and enacted eminent domain for private use. 

This last point is important because there was already a neighborhood - the Gas House District - where they wanted to build Stuyvesant Town - full of warehouses, small businesses, and over 11,000 people. 

Clearing the Gas House District to build Stuyvesant Town (pcvstliving)

Clearing the Gas House District to build Stuyvesant Town (pcvstliving)

The plan was controversial even at the time particularly because it was to be segregated (which was later fought successfully by Lee Lorch and others) and because efforts weren't made to assist the existing residents who were being evicted.  Despite these legitimate public concerns, the plan was seen as a public good by those that mattered, passed by the Planning Commission, and supported by city and state officials.  The first tenants moved in in 1947.  

Though in the seven following decades Stuytown has rightfully come to be regarded as a symbol of middle class affordability in NYC, it is fair to question the efficacy of the original plan given the huge costs both economically and socially. If the desired result was to create sustainable affordable housing, can we judge the investment as successful? What types of alternatives could have been introduced to achieve the same or better result? 

Though the zoning process in NYC is vastly different today (indeed, most of the previously referenced reforms in the 1960s were in response to the excesses of the Moses era) the reality is still basically true - power defines purpose.  The governing orthodoxy behind today's zoning laws still reflects a top-down, 'big fix' view of the built environment that muddles the goals it's trying to achieve.

The current affordability crisis in NYC should make everyone pause and question whether that orthodoxy can actually achieve the clearly needed public good of housing affordability.  Is that even the point of zoning laws? The history of zoning would suggest that it is not.

I don't mean to say that zoning laws should be reimagined expressly for the purpose of affordability, many of the practical functions of zoning are necessary and serve the public interest as is.  But to formally acknowledge that affordability is a goal of zoning would likely spark the type of innovation and policy debates that are sorely lacking right now and were not present when Stuytown was built. 

That brings me back to the idea of reactive and proactive laws and my tortured Star Wars analogy.  Can zoning laws be proactive rather than reactive? Rather than narrowly and litigiously defining how land can or can not be used, or simply making room for high-end development by "up-zoning", can we step back, set up and codify broader public goals for the city through zoning? 

Think of zoning laws as the Force. As exemplified in the original trilogy, the Force is a spiritual energy that connects all living creatures and balances the universe. But in the soulless, uninspired prequels Lucas tried to rationalize the Force as a quantifiable presence of god damn midi-chlorians - nearly destroying the wondrous qualities that made it so powerful (while introducing embarrassing lapses of internal logic). That's what we have in NYC right now. 

The Force Awakens mercifully forgot any crap about midi-chlorians and embraced the spiritual awesomeness of the Force.  But it also introduced something that I think worked really well (but others disagree) - that the Force, as discovered and channeled by Rey, grew faster and more powerfully in ways not previously demonstrated in the original trilogy. The Force appears to have evolved through Rey.  

This is the Force that we need in zoning.  Taking the spiritual foundation of zoning and allowing it to evolve in new ways that work towards broader public goals, including affordability. This would truly democratize the process and allow new concepts and new actors to emerge - creating a legitimate balance of power and purpose in NYC.

The future of zoning (comicbookresources)

The future of zoning (comicbookresources)