housing

Carson Heading HUD Would be an Insult to Everybody

Asleep, but figuratively or literally? (fallssociety)

Asleep, but figuratively or literally? (fallssociety)

In 1966, Dr. Robert C. Weaver became the first Secretary of Housing and Urban Development (HUD) and the first black man to have a Cabinet-level position in the federal government.  He had a Bachelors, Masters, and PhD from Harvard University and started in government during the New Deal as a member of FDR’s famous “Black Cabinet.”  He later worked in the Kennedy Administration and helped lay the groundwork for HUD, which was eventually created during President Johnson’s “Great Society” platform with Dr. Weaver envisioned at its head.  Though largely forgotten today (though his name is on the HUD Building in DC) Dr. Weaver’s influence on government and civil rights, forged through years of government work and policy execution, is a testament to what talented individuals can overcome and accomplish through a dedicated federal government.

So it is in surprisingly stark contrast this week that there have been strong indications that President-elect Trump has picked another black doctor - Dr. Ben Carson - for Secretary of the US Dept. of Housing and Urban Development.  Though no official announcement has been made, Mr. Trump has floated the name on twitter and Dr. Carson, a former Presidential hopeful and accomplished brain surgeon with no government experience, has signified that he is considering the position.  If this does pan out, it would be an insult to every American.

Let’s start with the obvious: Dr. Carson is not at all qualified to run any government agency. Just ask him - a week earlier he took himself out of the running for any cabinet position because he didn’t think he was qualified to run a federal agency.  He is right. He has no experience in government and no experience in managing a large agency of any type, let alone one concerning housing.

Dr. Carson was clearly a talented doctor and an inspiring speaker, but he has never worked in housing (and has not show much aptitude for politics).  He has only commented on housing issues publicly a few times. In those cases, he has come out against fair housing policies and the Supreme Court ruling on disparate impact in Texas because they are ‘social engineering.”  That either shows a shocking ignorance towards the legacy of housing policies on economic segregation and inequality or a deep cynicism. I will give Dr. Carson the benefit of the doubt and assume it is ignorance.

In any case, Dr. Carson is not prepared to take over one of the most important federal agencies in government – tasked with managing $1 trillion of home mortgages and a $50 billion annual budget towards fair and affordable housing policies and legal defense for hundreds of thousands of Americans.

Apparently, Mr. Trump felt Dr. Carson was qualified because: 1. He was born in a city (and presumably has lived in a few houses) and 2. He supported Mr. Trump early.  You could also easily add in a third reason: Dr. Carson is black.  Given Mr. Trump’s clear preference for older white men for his top positions (and the growing criticism for it), this was an easy, if entirely empty, gesture to make.

Unfortunately, it is not uncommon in any Presidency for cabinet positions to be filled by unqualified loyalists or isolated figureheads. It has been especially true at HUD where many Presidents have placed token minority hires or personal loyalists who have been ignored (George Romney, Jack Kemp) or guilty of massive corruption (Samuel Pierce). So while there have been accomplished Secretaries in the past (Shaun Donovan comes to mind), HUD has largely been an afterthought for most Presidents. The fact that Mr. Trump has picked Dr. Carson is sadly not unprecedented.

However, what is unprecedented is the affordable housing crisis gripping the nation and crippling its long-term economic potential.  This blog has documented just how bad the crisis is and just how much it could damage our economic and social prosperity for generations.  It is simply too important an issue to be dismissed with such an abysmal appointment.

Picking Dr. Carson tells us much about what a President Trump will do for housing. At best he appears uninterested and likely to simply ignore the problem. Dr. Carson, unless he surprises, would not be a powerful advocate for housing and will not have a powerful voice in the administration.  Whether it’s the still-troubling status of Freddie Mac and Fannie Mae or the systemic lack of affordable housing in our cities, there are too many issues in housing for President Trump to take such a dismissive approach about it.

At worst, President Trump will use Dr. Carson as cover while appointing undersecretaries like Rob Astorino from Westchester who would very likely peel back affordable housing policies and cease to enforce fair housing laws.  Dr. Carson could oversee HUD as it quietly retreats into underfunded irrelevance.  The federal government could stop defending poor residents against discrimination at the local or city level and allow the continued resegregation of our communities.  HUD could also likely enrich the private sector by dismantling mortgage assistance and other housing programs without addressing the needs for poorer homeowners and renters.

It remains to be seen what Dr. Carson will decide on, but that it is up to him – after just stating he wasn’t qualified for such a position – shows a troubling sign for what the Trump Administration will prioritize.  Rather than acknowledging the scale of problem facing the nation with housing and finding qualified people with the experience and ideas (whether one agrees with them or not) to tackle it, Mr. Trump has evidently thought little of policy implications and a lot about personal loyalty. This does not bode well for Americans across every type of home.

Why Mayors and Governors in New York Rarely Get Along and Why it's a Problem

Leave the bonds. Take the Cannoli. (north country public radio)

Leave the bonds. Take the Cannoli. (north country public radio)

Several news outlets in the city are reporting on the latest beef between Mayor de Blasio and Governor Cuomo and how it could harm upcoming housing projects in the city.  This particular beef is over federal tax-free bonds made available to states to encourage construction of affordable housing, but it represents just one rift of many between the two Democrats.  Troubling as this feud is for residents of NYC, it is part of an old, long-standing Great Game between the two most visible elected offices in the state and represents a much bigger problem with politics in New York.

First, the details of the bond feud matter a great deal in the ongoing affordability crisis in NYC. For decades, federal bonds (worth about $900m in 2014 and $700m in 2015) have been dolled out from New York State to New York City with little state interjection. These funds are tax-exempt on the federal, state, and city level which makes them attractive to developers and generally follows certain guidelines ensuring the creation of affordable housing units. The city has used these bonds in about 40% of recent affordable housing projects according to the NY Times article.

However, starting last year the state has begun to withhold money, which already delayed a city plan to develop 1,200 units. This trend has continued as state officials have been quietly informing city officials and developers over the last month that the city will no longer receive the same levels of money.  The funds that the city will get will now be micro-managed by the state through the Empire State Development Corporation and Public Authorities Control Board.  City officials and developers appear to be confused about why this change has occurred and are uncertain about how it will affect developments that have been approved or are close to construction. 

The Governor has downplayed the changes stating that they are intended to "supplement" rather than "supplant" the city's plan but so far has not made any of his own $20b housing plan's details public (he is expected to do so in April.) Given that Mayor de Blasio has made affordable housing a signature policy focus, these changes in funding options clearly put his housing plan at risk and the timing of the announcement has certainly raised eye-brows across the city and state.

The big question is if the money will still eventually be allotted to the same projects with the same goals that the Mayor has laid out.  If that is the end result, it will be hard not to view the move as a petty power grab by the Governor.  If, on the other hand, the Governor's housing plan is radically different than the Mayor's then it would be easier to claim that it represents a new policy focus, but could still have severe consequences for current projects. Either way, it is very public rebuff of the Mayor's agenda and throws many affordable housing projects up in the air.

Though some of the feud between the Mayor and the Governor might be chalked up to personality clashes or political differences, the reality is that this dynamic has been common in New York state politics for decades and speaks to a larger issue of political disfunction. The main culprits for this dynamic are New York State's unique history and geography.

New York State counties by geography and relative population size (maps4office)

New York State counties by geography and relative population size (maps4office)

The modern state border of New York evolved through a series of (still contested) treaties with the Iroquois Confederacy before and after The French and Indian War and the British after the Revolutionary War but also through equally contested agreements with Connecticut, Massachusetts, Pennsylvania and New Jersey. This has created a widely varied geographical entity with little practical cohesion.  In 1797, Albany was chosen as the permanent capital city because it was central enough for state legislators to travel to and it didn't overly bias the state's business towards the dominance of New York, which by 1835 became the largest city in the country. This tension defines the state to this day.

As a result of its geography, New York State is better viewed as two distinct sub-states which are referred to as "upstate" and "downstate".  The definitions are debated, but generally Upstate New York is considered everything north and east of Westchester County and made up of smaller cities and rural communities while downstate consists of the metropolitan region of New York including Westchester and Long Island.  Out of 19.7 million state residents, 63% live downstate with 40% living in NYC. 

Politically, upstate has generally been more conservative than the downstate metropolitan region but the population difference has made New York an uncontested blue state, voting Democratic in every presidential election since 1988.  However, at the state level, given the structure of the State Senate, Republicans have held power almost exclusively since WWII, balancing out the large population difference between upstate and downstate.

This creates a unique political dynamic that some have even argued should be formally separated. That's not going to happen, but it shows just how different the two sub-states are in reality.  It also explains the different constituencies that a mayor and governor have to play to.  Even though Governor Cuomo and Mayor de Blasio are both Democrats, and both broadly agree on many issues, they have to navigate vastly different political territory and interests. 

This is absolutely true of any governor/mayor relationship, but the size of New York City and its importance both nationally and internationally create different perceptions of the two offices. With the potential exception of Illinois/Chicago, no other state has a situation where the mayor of its major city is better known than its governor. That can create some bruised egos.

Further complicating the relationship is the fact that, though the mayor of New York City is generally higher profile, in reality the governor has significantly more power over the city.  Whether its tax policy, economic development funds, the MTA, the Port Authority, or housing laws the Governor controls much of New York City from Albany.  This creates a lot of tension between the offices, especially when they are held by the same party - whether it was Mayor Lindsay-Governor Rockefeller in the early 1970s, Mayor Koch-Governor (Mario) Cuomo in the 1980s, or Mayor Bloomberg-Governor Pataki in the 2000s.  If you're the mayor and the governor is the same party, you almost have to expect more opposition given the structure of power in Albany.

The upstate/downstate divide isn't just about political personalities clashing for headlines.  It has a major impact on policy decisions because it warps voter representation and turnout.

I've already mentioned how the population tilt makes it a safe blue state nationally for Democrats while the balance of power in the State Senate has been dominated by Republicans since WWII because of redistricting.  This balance is a false and dangerous one perpetuated by both parties.  Senate districts have overrepresented upstate while Assembly districts have overrepresented downstate making sure the status quo remains intact. This has resulted in stunning corruption across the state and has frozen the political discourse.

Senate Districts (latfor)

Senate Districts (latfor)

It has also caused historically low turnout.  In Governor Cuomo's re-election in 2014 (33%) and Mayor de Blasio's election in 2013 (28%) the state and city experienced their lowest turnout on record. Some of the low turnout in those elections can be explained by the lack of a real contest.  For Mayor de Blasio, winning the primary assured a sweeping victory in the general election. Governor Cuomo had a closer race, but was excepted to sail to victory and did.  

A more troubling explanation could be voter disillusionment.  It's not hard to become cynical when Senate Majority Leader Dean Skelos and Assembly Speaker Sheldon Silver (two of the "Big 3" in state politics for a long time) were both found guilty of corruption while scores of other state officials have also been charged and convicted.  Voters don't have much faith in state politics and have turned away in New York State and beyond, which is surely fine with varied interests that benefit from the status quo. When voters aren't paying attention, a lot of deals can be made that they wouldn't like regardless of their political persuasion. 

It is natural and even healthy for tension to exist among elected officials.  Though much of the mayor-governor clashes in New York have been ego driven, some are based on policy and vision, which is how any healthy democracy should operate. The fact that the current dynamic between the Mayor and the Governor potentially distracts the media and voters from the larger issues of fair representation, transparency, and accountability at the state level is dangerous, however.  We can already see how the feud impacts affordable housing policy.  

 The ongoing calls to reform Albany must be repeated by the media to reach voters currently sitting out the process.  Only when more voters reenter the political discussion will we see the types of ethics reforms and policy changes that the state, whether up or down, needs.   

How to (Rebuild) Affordable Housing in NYC

Michael Kimmelman, the noted architecture critic (and accomplished pianist, apparently) had a piece in the New York Times today titled "How to Build More Affordable Housing in New York City" and in it he explored the post-Sandy recovery of Ocean Village (rebranded as Arverne View) in the Rockaways, Queens.  

Opened in 1972, during the final, sweeping retreat of federal funding for subsidized public housing, the roughly 1100 units were designed in the brutalism chic of the times (which, perhaps surprisingly, still has fans) and began to fall into decline almost instantly.  Ocean Village (a Mitchell Lama development) followed a similar story to many housing complexes of this era - mismanagement, neglect, and resident-flight (for those who could afford to) right up until it was devastated by Superstorm Sandy in 2012.  At the time there were over 300 vacant apartments and many residents were without basic services even before the storm hit the city.

Kimmelman for the most part maintains his architectural-gaze when discussing the property itself (by all accounts Averne View is a signature achievement for defensible-space practices for encouraging community engagement and efficiency-improving amenities) which is a shame because we don’t get to hear from the residents who endured both Sandy and the ‘silent hurricane’ of the previous decades (though this article does).

Despite this oversight, he does discuss two things that warrant further mention.  The first gets to the core of the article’s title, which is slightly misleading – how this model can ‘build’ more affordable housing in NYC.  The model in discussion is a relatively new one in that it encourages private developers to refurbish properties and capture the energy and cost savings therein rather than the more common model of inclusionary housing (which gives tax breaks to developers for setting aside a portion of newly built units in a development for ‘affordable housing’) promoted by the Bloomberg and De Blasio administrations and elsewhere. 

I will spend more time in future posts about both of these models and others but I will say that refurbishment has a compelling upside for improving the deplorable state of public housing in NYC which is perhaps more important than focusing on new development. Rebuilding these units while keeping existing tenants in them is the worthiest of housing policy goals. This model seems well suited to achieve that.

The second thing to further mention is the firm behind Arverne View – L&M Development. These guys are rock stars – for their innovative design, innovative economic models and partnerships, and innovative core principles. Though they don’t appear to be a B Corp, they are committed to ‘the double bottom-line’ as CEO Ron Moelis describes (in this Crain's article which calls them “odd”!) as doing good for the community, which is good for their business model.

It seems to be working since they have over 10,000 units and $600m under management according to the same article from 2013 (I was not able to verify more recent numbers).  L&M proves what many in the affordable housing community believe – that smart policies, strong partnerships, and good design can be good for communities as well as private developers.