Foundations
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The Foundation of the Modern Chelsea |
Chelsea was the name given to the original Clement Clark Moore residence (a writer and developer, he owned and rented out a mansion in modern Chelsea in the 18th century). Since then, the borders -- never official, but consistent to the general location, corresponding to the culture embodied in any era characteristic of whatever Chelsea meant to New Yorkers in that time -- have changed.
Chelsea was a manufacturing neighborhood in the early 20th century. It became a lower to middle income housing destination in the middle of the century. An overground rail carried goods from one warehouse to the next along the West side of Manhattan. In the 70s, it became an artist destination and provided cheap housing and warehouse space. Recently, those old warehouses and the rail line would be re-purposed and made beautiful -- into parks and commercial business. Chelsea has most recently become a popular destination, but what preceded that was years of federal, state and city policies which would open the door for new development and a changing landscape. The foundational period of the early 1960s to the late 1980s would see the development of large housing projects and a labor union housing cooperative. Federal funding would enter the city for housing vouchers and development, leaving a vacuum for city and state government to fill when that funding dissipated. Mayor Ed Koch's housing plan would direct city housing plans for years to come. Natural trajectories of rent and wealth increases as net housing units increased in the neighborhood toward the end of the 80s would serve as important indicators of the changes to come in the decades that would follow. |
Chelsea Affordable Housing Landmarks Preceding the '70s |
What provides a fascinating and unique juxtaposition in today's Chelsea is the contrast between new development and old housing structures. During the mid 20th century, the city and many union-led agencies pushed for affordable housing havens in New York, prompting the development of large complexes of either city-funded public housing or union-backed middle class housing cooperatives. Three of these major developments still exist in Chelsea, housing thousands of middle and lower class residents who increasingly contrast the new developments going up around them -- but more on that later. Below are the three important and foundational affordable housing havens still in Chelsea:
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Robert Fulton Houses
A 945 unit public housing complex built by the New York City Housing Authority (NYCHA) in 1962. The Robert Fulton Houses continue to serve thousands of residents and include a Hudson Guild, senior center, dilapidated basketball court and a yearly block party with local politicians. Average rent in the projects in New York is based on income, and residents do not typically pay more than 30% of their yearly income on rent. Penn South Coop
In 1962, the International Ladies Garment Workers’ Union sponsored the development of this 2,820 unit, 10 building development. It sits right next to the Chelsea-Elliot Housing development. Today it is one of the largest Naturally Occuring Retirement Communities (NORC) in New York and has a lively senior center, a childrens park, a blacktop park and basketball courts open to the public. |
Chelsea-Elliot Houses
Ten blocks north of the Robert Fulton Housing, the Chelsea-Elliot public housing project was erected in 1964. It's a 1,015 unit project combining the already existing John Lovejoy Elliot Houses with the Chelsea Houses. The Chelsea-Elliot complex was built as well by NYCHA and includes a Hudson Guild, a NYC Recreational Center, a large fake grass track and field, basketball courts and public school 33 -- where many kids from the neighborhood (including my mom in the 60s) may go to elementary school. Today:
All three of these affordable or public housing developments remain intact in Chelsea, and the median rents of those who live there differ incredibly from the median rent of Chelsea as a whole. For instance, average monthly rent in NYCHA housing in NYC remains under $500 per family. Whereas, in 2015, the median monthly rent for a 1-bedroom in Chelsea was nearly $4,000. |
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A City in Need of a Spark |
Despite the push for public housing and affordable housing, many neighborhoods in the city were reeling from lack of people and lack of economic development. In Chelsea, older neighbors of mine recall to me, west of 9th avenue was off limits during their young adults lives. West of 9th avenue during the 70s and west of 10th avenue during the 80s was a part of the neighborhood not yet developed. That part of the neighborhood contained only less than a fourth of its population today, and population increase at this time seemed to stagnate as housing development remained for the most part a non factor. The city was in need of a spark and the government saw an ample opportunity to achieve this through incentivizing housing development.
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421a Tax Exemption, 1971 |
The 421-a tax abatement program was created in 1971 as a state-wide response to the lack of economic development in the city and elsewhere. By the time 421a was instituted in New York, the New York City Housing Authority (NYCHA) was just about done building public housing. With a halt in building by NYCHA came a similar stop to building for Coops and similarly structured shared equity housing which, by and large, was affordable housing for middle to low income citizens as well.
421-a is a city-run and state financed program that offers property tax abatements and partial exemptions to developers of residential buildings in New York City as an incentive for them to build on empty, unused or vacated plots of land. If a development applies for and is approved for 421-a tax abatement, developers can pay property taxes starting at the rate of the empty lot they initially began development on. In some cases, this reduces property taxes from $3,000 a unit to around $30. Abatement decreases over the course of usually ten years, until property taxes return to normal market value. 421-a would make developing and investing in New York City less risky, allowing new landlords and tenants to pay vastly minimized property taxes on new developments and encouraging them to build. 421-a would be hugely successful in bringing housing development to the city, albeit slowly at first. It was so successful, in fact, that it has remained in effect until today. Even as the city changed and became far more prosperous, 421-a at its core serves the same fundamental purpose. In 1986 it was revised to include an affordable housing requirement, and in 2008, it was revised to ensure those affordable units created in exchange for any 421-a tax exemptions would be created on site and with increased durability -- that is, with the assurance that fewer would become market rate units through loopholes, evictions, and apartment turnover. It recently expired in its current form at the end of 2015, and state government is in the process of passing another version of it. 421-a remains a staple of housing policy in New York today and is used, still, by approximately 36% of new developments in the city. According to the Pratt Center, the affordable housing requirement has been largely unsuccessful, as just around 8% of units built are affordable to low and moderate income families (units can be available for families making anywhere between $30,000 and $165,000). Simultaneously, the program costs the government over 300 million dollars of lost tax revenue a year. |
Section 8 Vouchers Allow Lower Income Residents Easier Housing |
As would become a defining issue of housing development, with new development came an increased need among poor communities to afford rent. In 1974, there was a major change to the way affordable housing would be approached forever. The federal government passed the Housing and Community Development Act of 1974 which, in its Section 8, established federal rent subsidies to help those who could not afford to pay rent at market rate pay a lower cost of rent. Section 8 provided city agencies in New York with vouchers which tenants who sat between 50-80% of median family income in the area qualified for, and which would subsequently be given to landlords to be redeemed for cash. This helped replace funds for public housing in New York with a voucher system that would reserve space within private developments, ensuring that those making less money could still afford to live where they work.
These vouchers allowed residents with lower incomes -- below the median family income of the borough or city -- to receive a subsidy to put toward rent on a unit they would not otherwise be able to afford. These are paid for by the federal government and aid the city in creating affordable units for lower to middle income city residents. NYCHA, which controls all public housing in the city, cites that still today: "NYCHA administers the largest Section 8 program in the country. Approximately 90,000 Section 8 vouchers and over 29,000 owners currently participate in the program." Also today, 258,880 families on the waiting list for Conventional Public Housing and 147,033 families on the waiting list for Section 8 Housing. It remains a useful subsidy for thousands of families in the city, and the city continues to work with developers to create "affordable" units for residents but providing these subsidies on units that are already at expensive "market price" in the city. As market rate goes up (and if the new Trump administration lowers the funding for this program and others like it) the amount of vouchers will go down. |
Ed Koch Housing Plan, 1985 |
In 1985, Mayor Koch’s deputy Mayor Stan Brezenoff, wrote a letter to the City’s Commissioner of the Department of Welfare, stating: "We cannot preserve the city's long-term health if we do not address the needs of the middle class by putting public resources into creating housing for this group. If we don’t, who will be here to fill the jobs and pay the taxes that support services and housing creation for the poor?"
Between 1983 and 1984, the city saw a net gain of only 118 units. During this time, 67% of renters in the city were paying over 35% of their income on rent. This is important to note because in 2014 in Chelsea, a neighborhood which today is no longer in need of the development its situation merited during Koch's time as Mayor, 42% of residents pay over 30% of their income to rent, and nearly 20% pay half of their income. In the 80s, Koch's housing plan came on the heels of a revelation at the time that the federal government, headed by Jimmy Carter, would be pulling back on federal funding for cities (a trend which continues to this day). Koch's ambitious plan would be the first attempt in New York City to create housing and economic prosperity simultaneously for and by the city, without reliance on help from the fed. Koch's Ten-Year Housing Plan of 1985 intended to merge the efforts of government -- through tax incentives, zoning regulation changes, reduction of construction costs, and allocation of more money to the Capital budget for housing -- with the cooperation of private developers and nonprofit organizations. From 1984 to 1987, there was a net increase of 37,000 units under Koch’s new program. It was a spectacular upgrade to housing development and one that would carry real weight in the years to come. Koch’s plan did not focus on the development of low-income housing and instead worked to create middle and higher income housing. There was backlash as to the program’s neglect toward low-income housing development, but as Jonathan Soffer points out in his book Ed Koch and the Rebuilding of New York City, "The Koch housing program, though, was primarily an economic development program, not a welfare program. Koch aimed to rebuild areas devastated by abandonment and neglect into neighborhoods that were viable and self-sustaining..." Economic development, they saw, had to go through the middle class, and that was only possible if the middle class were first and foremost able to afford living. The plan was supplemented by a revised version called the Ten Year Capital Plan, which intended to create 10,000 new affordable units, allocating 5.1 billion dollars over ten years from the city's capital budget. Since 1986, Koch's innovative and ambitious plan has been used as inspiration for many of the housing development plans undergone by mayors like Bloomberg in 2002 and De Blasio in 2014. In the graphs below, you can see some of the ways in which these revelations of housing and development policy impacted demographics changes in the Chelsea neighborhood from 1970-1990. |
Housing and Rent Changes, 1970-1990
Even over the course of 1970-1990, rent (adjusted for inflation) between the entire Chelsea neighborhood can be seen to contrast the average rent of the census tracts which feature the Penn South Coops, the Elliot-Chelsea Houses and the Robert Fulton Projects. Naturally, rent increased in the neighborhood while simultaneously, rent regulated and tax exempt units of the projects and coops stayed relatively low. Not yet had these census tracks -- several blocks by an avenue or two -- inhabited by the projects and coops seen the inclusion of new luxury development so as to skew the data. The rest of the neighborhood saw a steady increase in rent numbers and the rent regulated tenants do not.
Housing units increased marginally until the mid 1980s, when over 2,000 units are added, probably in response to Mayor Koch's city-wide Ten-Year Housing Plan of 1985. Simultaneously, the neighborhood sees an increase in owner occupancy, something that would continue to increase as affordable, rent-able units decrease.
Housing units increased marginally until the mid 1980s, when over 2,000 units are added, probably in response to Mayor Koch's city-wide Ten-Year Housing Plan of 1985. Simultaneously, the neighborhood sees an increase in owner occupancy, something that would continue to increase as affordable, rent-able units decrease.
Race/ethnicity Changes, 1960-1990
Total Population: Non-White/White, 1960-1990
The lighter the map, the whiter the neighborhood.
From 1960 to 1990, the neighborhood actually became significantly less 'white' in proportion to its total population. Similarly, most all of Manhattan over this duration became less proportionally white and more racially diverse. From 1970 to 1980 amidst the major state and city wide housing production allowances, the racial makeup of Chelsea shifted from 90% to 80% to White, with around 10% Black, 4% Asian, and 6% other. Race correlates strongly to social mobility and wealth attainment, as would become increasingly relevant in the decades following these.
Age Distribution CHanges, 1970-1990
Age Distribution, 1970-1990
Age distribution of Chelsea residents becomes slightly less heterogeneous following the '70s. The orange being 25-34 years old and the blue being 35-44, Chelsea starts to become a young to middle aged neighborhood. By 1990, nearly 60% of the neighborhood is 25-54 years of age. This will become a pattern in later decades, and an important theme to note. The more housing development, the more income injected into the neighborhood, the younger it becomes -- but only to a certain extent. 25-44 years will stagnate, and the percentage of those aged 45-55 will continue to steadily increase.
Income Distribution Changes, 1970-1990
Income Distribution Changes, 1970-1990
*Based on household incomes, all rates adjusted for 2015 value
Even as early as 1990, you can see significant changes in the economic makeup of the neighborhood. Between 1980 and 1990, a time in which as we saw above, housing increased for the first time by more than double the centuries prior. By 1990, just under 30% of households were earning over 100,00 a year, whereas no households in 1980 were making that much. Still by 1990, however, the neighborhood remained middle income. To 2015 standards, the neighborhood was lower-middle class. Nearly 60% of households were making between 50,000 and 75,000 a year (adjusted to 2015), under today's median family income statistics for New York as a whole and for Manhattan (61,600 and 75,000, respectively).
A Foundational Period |
The period slightly preceding the 70s was a foundational one for Chelsea as it was for New York. Thousands of units in Chelsea were built through federal funding for public housing and another 2.5 thousand units were built when the Coop was inaugurated in 1962 by President Kennedy and the International Ladies Garment Workers Union. During the 70s and 80s, today’s staples of housing, development, and affordable housing policy and strategy were formulated by city and state government.
421-a tax incentives remain the staple of housing development in the city despite the city’s lack of the type of housing needs that merited its creation -- which is not to invalidate the pressing housing needs of many of New York's cyclically poverty-stricken neighborhoods but to serve as a cautian against keeping old policies in the face of new forms of gentrification and economic divisions. Its effect on demographics, however, can be seen as early as the 70s, as during this time, we start to see correlation between housing development, rent increase, and income levels; as housing development increased, average age decreased, rent increased and median and average income levels began to increase as well. Ed Koch’s ten-year plan is another staple of the time and in a way foreshadows the predicaments of housing policy in the modern day, in which policy makers must grapple with pressures to increase housing with pressures to create more affordable housing and preserve the right of community members to remain in the neighborhood despite increasing rent prices. Next up, the 90s would be a priming period for the land rush that would come in 2005, as policy and development initiatives look to build off of the success of policy changes during the 70s and 80s. |