Looking Back: A Timeline Recap
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Direction of Policy, Politics |
Expiration of and efforts to reform 421-a |
In 2016, 421-a in its current form expired. It is currently not applicable to new building permits in New York City. However, Governor Cuomo and the state legislature have agreed that they will be updating 421-a and passing it in a version not so different to what it was until it expired this year. Despite opposition from affordable housing advocates, the state legislature refuses to get rid of 421-a legislation as it is very popular among real estate developers in the city.
According to Terrence Cullen of the Observer “There was a big rush at the end of last year to apply for a building permit,” said William Rudin, the chief executive officer of Rudin Management Company. A DOB spokesman noted that new building by square footage in the first six months of the year is “lower in 2016 because a huge amount of new projects started in 2015 before the 421-a expiration.” Developers rushed to permit new developments before 421-a expire at the end of last year, showing again to the city and state the opportunity to reform the tax law if they insist on doing so to use the leverage that exists for the city to require much more by way of affordable housing for the city. NYCHA Money StrugglesAs of 2015, NYCHA allocates a third of its annual budget to debt relief. As funding for Section 8 and Project-Based Section 8 continues to dwindle from the federal government, NYCHA and the city are forced to pay up front for years of urban decay. On top of debt relief, NYCHA requires an estimated 6 billion dollars to cover all of its necessary building repairs across the city, a number it does not currently have in the budget. This will be increasingly important as neighborhoods become gentrified and income levels increase with new housing developments. Chelsea is a good example of this: the coop and the projects contrast their surroundings more than ever and have come to represent the majority of affordable housing units in Chelsea. If the projects cannot be funded by NYCHA going forward, they may soon be forced to demolish these units, and with those units will go thousands of lower income residents from the neighborhoods that for years have housed them.
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The work of U.S. Attorney Preet Bharara |
Preet Bharara, the district attorney for the Southern District of New York which covers Manhattan is on what Crain’s called a “Warpath” in 2015. Since being appointed to the DA position in 2009 by President Obama, Bharara has investigated dozens of state legislators, bringing over a dozen to federal trial and indicting 10. Of those whom he has successfully prosecuted include Sheldon Speaker, the former Speaker of the State Assembly and Dean Skelos, the former Majority leader of the State Senate.
As Benjamin Weiser of the New York Times says: “The sentencings of Mr. Skelos and Mr. Silver made them the latest in an almost unending parade of disgraced New York lawmakers — elected officials tempted by greed and brought down by prosecutors, most notably Preet Bharara, the United States attorney in Manhattan.” Bharara has indicted and convicted in federal court 11 state senators and counting since taking his office in 2009. Much of these instances of corruption and bribery, especially in the case of Sheldon Silver, were cases involving backdoor deals favoring real estate developers and the real estate lobby. It is viable to believe that greed and corruption and the power of the real estate lobby in Albany has had a major hand in the inability of affordable housing advocates to convince the state legislature to finally rid of the 40 year old 421-a tax policy. |
Local Policy Matters |
Local politics matters. At the local level in Chelsea, Community Board 2 and 4 are doing good work. City Councilmember Corey Johnson and Brad Hoylman are dedicated to housing preservation and affordable housing, as well as rent freezes on subsidized units (with housing vouchers or otherwise), historic district land-marking and contextual rezoning, and more. Away from Chelsea, there are efforts that those in Chelsea can take from.
There is also power in other local boards like the Rent Guidelines Board, appointed by the Mayor and tasked with regulating rent adjustments and guidelines for the rent stabilized units in the City. In the summer of 2015, the RGB voted for the first time in decades to "freeze" the rent on rent-stabilized units -- a major win for affordable housing advocates in the City. Elsewhere in the City, there are interesting proposals being reviewed by the City Council, including one from District 34’s Antonio Reynoso. According to Reynoso in an article for Crain’s, "Under my process, [the community's] concerns hopefully would have been known and addressed earlier," Reynoso said.” which would be a win-win because many of these projects have been willing to add up to ⅓ of units as affordable.”” His plan came on the heels of a failure in his neighborhood to take advantage of potential new affordable housing deal with local developers. The developments proposed were rejected by the local community board after they were not included enough in the process of negotiations for affordable housing and neighborhood benefits. As was the case in 1996 with Community Board 4’s community zoning proposal, the best and most mutually beneficial plans going forward will be those reviewed, negotiated and approved of by the local community boards and Councilmembers. So long as zoning laws remain intact in many parts of New York, local political powers still have much capital to leverage over developers looking to build in their neighborhoods. |
A Problem of Repetition: The old and still new Affordable Housing Approach |
De Blasio states in his letter from the Mayor that, “If you’re in a community where affordability is disappearing, we want to protect it.” But as we have investigated up to this point in this project, it is worth considering the meaning of that term ”affordable”, and how it is relative to the neighborhood, to each family, to the median family income of any various district. In neighborhoods like Chelsea, affordable units were all but depleted by 2015, and in poor neighborhoods in Brooklyn, Queens, and the Bronx, affordable housing is oftentimes not even affordable.
Ginia Bellafonte of the New York Times summed this up wonderfully in 2013 in her article titled When ‘Affordable’ is Just a Word: “Just as shocking, arguably, as the $44 million four-bedroom duplex in TriBeCa that turns up in the real estate listings of The New York Times is the $1,400-a-month, two-bedroom rental apartment in the Belmont section of the Bronx. According to the National Low Income Housing Coalition, which calculates what it calls the housing wage — the earnings necessary to pay no more than 30 percent of your income on rent, the threshold usually used to define affordable housing — you would need to make $26.92 an hour, or $56,000 a year, to afford the apartment. If you held a minimum-wage job, a likely circumstance in a neighborhood where the poverty rate is 43 percent, twice the city’s on the whole, and median household income is just over $22,000, you would have to work 149 hours a week to meet the cost. Alternatively, you could clone yourself 2.7 times.” So in 2015, De Blasio set out on a mission with his own Housing Legacy at stake to do what Koch and Bloomberg set out to: create affordable housing by teaming up with developers and the private sector to create housing and in the process, include affordable housing. We will see if this can work under newly nuanced policy, but history says it will be difficult; history says with increased development of any kind that incorporates public and private funding, gentrification of the kind that vastly increases housing prices and neighborhood living prices will increase, making greater again the need for a new affordable housing threshold and new housing that can be considered “affordable”, and then again, a new project to increase affordable housing. This is recurring and especially pertinent today as ideas are running out with actually affordable units, while expensive housing is on the rise. |
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The Final Frontier, Until the Next. |
Hudson Yards Overview: NYC.gov: “There is one last frontier available in Manhattan - Hudson Yards, the underutilized area bounded roughly by West 42nd Street and West 30th Street, Eighth Avenue to the Hudson River. It is in these 360 acres that the City can meet its public responsibility to continue to provide job and housing opportunities for all New Yorkers.”
“Increasingly, people are moving into, and back to, Manhattan - to be closer to work, and to feed off Midtown's cultural and entertainment energy. The demand for new housing in New York City is great and is expected to grow. Hudson Yards provides not only for future commercial development in Manhattan, but also for approximately 12,600 new housing units." The next frontier will be land reclaimed and reused, starting with the coop and the projects when their time comes to face the open market. This, it seems, cannot be avoided. We can, however, and must utilize local political power to keep these lands affordable for middle and lower income residents as they have been for the last nearly 60 years. If we cannot do that, Chelsea will lose much if not all of the economic diversity it still has today. What has happened in Chelsea and what will continue to take place was inevitable without any major change in the focal point of housing development policy. The state continued to rely on 421-a tax abatements until, as nyc.gov reported earlier this year, the Hudson Yards was the last frontier. This is not true, of course, as plenty more frontiers will surface as gentrification continues and zoning restrictions are loosened uptown and in the outer boroughs. In a sense, however, the Hudson Yards does seem like a last frontier; it is the largest development project in the United States in already one of the richest neighborhoods in the world. It is the city within the city, so to speak. It should be, it must be a call to action -- that the city is no longer in need of housing development to the point that it must incentivize growth without demanding affordable and equitable housing options. The city is in high demand, there is a land rush to build and to live, but the consequence is that those who already do live there, the residents who fuel the middle class and the lower class, will be pushed out. When the projects and coops are gone, we need to have in place already the protections and housing development requirements that would ensure that new affordable housing is built to sustain the working and middle class and to keep Chelsea the diverse, attractive, potentially sustainable neighborhood it still is today. Community Board 4 had it right in 1996. Their plan to rezone Chelsea for the benefit of both new development where it was needed and housing protection where history and affordable housing needed no development at all was a good plan. Further, and most importantly, the 1996 plan and special districting by the city is what has given Chelsea, in the Hudson Yards development, any affordable housing at all. If 421-a was to be relied on solely, the Hudson Yards’ affordable housing would be located completely off-site, meaning anywhere in the 5 boroughs -- the part of the plan for which Hudson Yards Group has made no advancement, and a plan which will create housing not actually affordable in a poor area of New York in which the median family income is well below that of the city’s as a whole. That is problematic, and that is a main reason why 421-a tax policy probably must go. In the meantime, however, it is up the local districts in the city, led by Councilmembers who control zoning acceptances and new development applications, community boards who can propose new legislation to protect neighborhoods through zoning and affordable housing requirements, and local people and organizations who can stay involved and voice their opinions on new developments currently on the table. In 1996, the Community Board in cooperation with the City Council did just this: they set up zoning requirements that would force a project like the Hudson Yards, should they come around, to have on-site affordable housing -- even despite outdated and well-lobbied state law. This is what we should look to as an example of good community housing development policy. This is what should be our model for policy as we prepare our communities and neighborhoods for this new frontier. |
Windows Into the World
Housing is more than shelter. It is more than a place to sleep at night. Housing dictates who lives where, how they live, and with whom they spend their time. Housing creates neighborhoods which in turn can be the great equalizers or obstacles in the way of equitable, integrated society. My grandparents lived in the neighborhood before the city approved the International Ladies Garment Workers Union's plans to develop over 2,000 units of affordable housing over a square mile of land in Chelsea. My grandparents lived in a "cold water flat" as it was called; they lived in a walk up in which cold water was the only available utility. It was the 60s, and during this time the big developments of the day were not the Hudson Yards, they were Penn South, Elliot-Chelsea and Robert Fulton. My grandparents were kicked out of the neighborhood because of this development in 1960 but they were given a deal: 'let us build these houses and you'll have the first choice of where to live once they're built.' So they chose the highest apartment with the best view. They chose to live in Building 6 on 9th Avenue, overlooking the river once the coop was built. They'd watch the boats glide up and down the Hudson, and they did so for more than 50 years. The apartment was given back to the coop when Emmy died in the summer of 2015, but that same apartment now serves a new family, a new set of lives with a unique opportunity to live in Chelsea for a fraction of the market rate. Emmy would complain about new buildings coming up as they did following the land rush of 2005. They began to sprout up everywhere, slowly blocking out her view, just as the coops once did for those buildings behind them. Except now, new developments are nothing like the coop and projects that sprouted up before them. They are "Chelsea Modern" and "West Chelsea: Redefined". They are 200 11th Avenue, where a view of the river can be rented for $157 for each square foot of space, or bought for $10,000,000. Chelsea has new types of housing now. It has new people. It has foreign investors who pay for but do not live in new housing. It has people without homes, and rates of homelessness that increase every year. The neighborhood has become a frontier and a destination for some. It has become an image in the rearview mirror for others, or an unintended retirement home. It has become safer, more prosperous, more diverse, but more unequal. It has better schools, better eateries, better tourist attractions, but fewer opportunities for those of all backgrounds to revel in them. Housing policy is important because it is, simultaneously, a window into neighborhood change. If we wish to control the trajectory of this neighborhood we must control the rules within which new developers are allowed move in. We must protect the frontier because it is a microcosm of greater change that is taking poor and middle class neighborhoods by storm. We can develop the neighborhood and we can we keep it accessible to everyone. We can't keep our views and our neighborhood accessible to all walks of life, however, unless they are kept affordable and unless changes that occur going forward are spearheaded and protected by the local community first and foremost, and those who wish to develop, second. |
Wyatt Frank is a recent graduate of the University of Michigan where he graduated with a Bachelor of Arts in American Culture. You can reach him at [email protected], on LinkedIn, or on Facebook (Wyatt Frank).