Tackling Economic Inequality WE ARE NEW YORK’S LAW SCHOOL www.nyls.edu/impact

www.nyls.edu/impact
WE ARE NEW YORK’S LAW SCHOOL
Tackling Economic Inequality
FRIDAY, APRIL 17, 2015
9:00 a.m. – 9:15 a.m. (Auditorium)
WELCOMING REMARKS
Anthony Crowell, Dean and President,
Professor of Law, New York Law School (NYLS)
Ross Sandler, Professor of Law and Director,
Center for New York City Law, NYLS
11:30 a.m. – 12:45 p.m. (Auditorium)
HOME AND COMMUNITY
(This session is accredited for 1.5 CLE hours
in Areas of Professional Practice)
Moderator: Andrew Scherer, Policy Director,
Impact Center for Public Interest Law, NYLS
Andrew Scherer, Policy Director, Impact
Center for Public Interest Law, NYLS
Panelists:
Vicki Been, Commissioner, New York City
Department of Housing, Preservation, and
Development
9:15 a.m. – 10:00 a.m. (Auditorium)
BREAKFAST ROUNDTABLE
Benjamin Dulchin, Executive Director,
Association for Neighborhood and Housing
Development
Moderator: Errol Louis, Political Anchor,
NY1 News, and host of “Inside City Hall”
Panelists:
Eric Alterman, Author, Inequality and One City
Richard Buery, Deputy Mayor for Strategic
Policy Initiatives, City of New York
Maya Wiley, Counsel to the Mayor, City of
New York
10:15 a.m. – 11:30 a.m. (Auditorium)
INCOME AND WEALTH
(This session is accredited for 1.5 CLE hours
in Areas of Professional Practice)
Moderator: Carlin Meyer, Professor of Law,
Emeritus, NYLS
Panelists:
Steven Banks, Commissioner, New York
City Human Resources Administration/
Department of Social Services
Andrew A. Beveridge, Ph.D., President and
CEO of Social Explorer; Professor of Sociology
at Queens College and the Graduate School
and University Center of the City University of
New York
Lance Freeman, Professor, Graduate School
of Architecture, Planning and Preservation,
Columbia University Rachel D. Godsil, Eleanor Bontecou
Professor of Law, Seton Hall Law School;
Chair, New York City Rent Guidelines Board
1:00 p.m. – 2:00 p.m. (Events Center)
LUNCH
Keynote Speaker: Governor Howard Dean
Introduction: Deborah N. Archer, Associate
Dean for Academic Affairs; Professor of Law;
Co-Director, Impact Center for Public Interest
Law; and Director, Racial Justice Project,
NYLS
2:15 p.m. – 3:30 p.m. (Auditorium)
FAMILY AND CHILDREN
(This session is accredited for 1.5 CLE hours
in Areas of Professional Practice)
Moderator: Lisa F. Grumet, Director, Diane
Abbey Law Institute for Children and Families,
NYLS
Panelists:
Gladys Carrión, Commissioner, New York
City Administration for Children’s Services
Melanie Hartzog, Executive Director,
Children’s Defense Fund—New York
Sophia Pappas, Chief Executive Officer,
Division of Early Childhood Education,
New York City Department of Education
Kim Sweet, Executive Director, Advocates for
Children of New York
3:30 p.m. – 4:45 p.m. (Auditorium)
ADMINISTRATION OF JUSTICE
(This session is accredited for 1.5 CLE hours
in Areas of Professional Practice)
Moderator: Deborah N. Archer, Associate
Dean for Academic Affairs; Professor of Law;
Co-Director, Impact Center for Public Interest
Law; and Director, Racial Justice Project,
NYLS
Panelists:
Elizabeth Glazer, Director, Mayor’s Office of
Criminal Justice, City of New York
Hon. Jenny Rivera, Associate Judge, New
York Court of Appeals
Nicholas Turner, President and Director,
Vera Institute of Justice
David Udell, Executive Director, National
Center for Access to Justice; Visiting
Professor from Practice, Cardozo Law School 4:45 p.m. – 5:45 p.m. (Fifth Floor Café)
RECEPTION
Saskia Sassen, Robert S. Lynd Professor of
Sociology, Columbia University
Paul Sonn, General Counsel and Program
Director, National Employment Law Project
001
Tackling Economic Inequality
Economic Inequality in New York City: Causes and Solutions
TABLE OF CONTENTS
HOME AND COMMUNITY PANEL ............................................................................ 3
TACKLING ECONOMIC INEQUALITY POWERPOINT BY LANE FREEMAN, PHD ................... 3
NYC OFFICE OF THE MAYOR; HOUSING NEW YORK: A FIVE-BOROUGH, TEN-YEAR
PLAN REPORT .................................................................................................................. 6
AFFORDABLE HOUSING AND THE STATE OF THE CITY .................................................. 123
POVERTY & RACE, AUTONOMY, MOBILITY, AND AFFIRMATIVELY FURTHERING FAIR
HOUSING IN GENTRIFYING NEIGHBORHOODS ............................................................... 129
MANAGEMENT INFORMATION EXCHANGE JOURNAL; OCCUPY THE JUSTICE SYSTEM: THE
CIVIL RIGHT TO COUNSEL AND THE EQUITABLE DISTRIBUTION OF JUSTICE ................. 134
002
4/16/2015
Tackling Economic Inequality
Lance Freeman, PhD
Columbia University
April 17, 2015
Residential Inequality
• Residential Segregation is one manifestation of inequality
• Segregation by socioeconomic status
• Segregation by race • One result has been the American Ghetto
• Discrimination
• White Flight
• White Avoidance
Residential Inequality
• Residential Segregation has been persistent
• Black/white segregation in NYC declined from .83 to .81 from 1980‐2010
• Despite policy
• 1968 Fair Housing Act
• Equal Credit Opportunity Act of 1974
• HUD’s requirement to affirmatively further fair housing
• Efforts to promote integration have had limited success
003
1
4/16/2015
What of the Reverse? Trends in White Influx
Figure 1. Proportion of Black Neighborhoods Experiencing White Influx
12.00%
10.44%
Proportion of Black Neighborhoods
10.00%
8.00%
6.00%
5.49%
5.29%
Neighborhoods 90% black at start of decade
4.71%
Neighborhoods 50% black at start of decade
4.00%
2.00%
0.93%
0.39%
0.00%
1980‐1990
1990‐2000
2000‐2010
Decade
4
Cities with Largest number of 50% or Greater Black Tracts Experiencing White influx (2000‐2010)
1980‐1990
1990‐2000
2000‐2010
New York city, NY
15
13
Washington city, DC
16
2
52
Philadelphia city, PA
0
4
32
89
Chicago city, IL
4
6
25
New Orleans, LA
3
3
23
Atlanta city, GA
2
9
Oakland city, CA
5
2
15
Richmond city, VA
6
4
15
20
Indianapolis city, IN
4
2
12
Savannah city, GA
2
5
11
SOURCE: AUTHOR’S TABULATION OF LTDB
5
Racial Composition of NYC Tracts Experiencing Influx of Whites
6
004
2
4/16/2015
Causes: Why Now?
 Part of a Larger Demographic shift
 Second Demographic Transition
 Increased Racial Tolerance?
 Surveys (e.g. Detroit Area Study) show increasing acceptance of integration
 But, white influx limited to inner-city
 Increased Housing Prices (i.e. gentrification)
 Declining crime
7
What are Long Term Prospects?
Racial Composition of 1970 Black tracts that experienced influx of whites 1970‐
1980
80%
70%
60%
50%
White Percent
40%
Hispanic
30%
Black
20%
10%
0%
1980
1990
2000
SOURCE: AUTHOR’S TABULATION OF LTDB
2010
8
Implications?
9
005
3
006
Table of Contents
Executive Summary
Introduction
5
14
Chapter 1: Fostering Diverse, Livable
Neighborhoods
30
34
Pursue Affordable Housing and
Community Development Opportunities
in All Five Boroughs
Make Strategic Investments to Support
New Housing and Neighborhood
Revitalization
36
Promote Mixed-Used, Mixed-Income,
Communities Anchored by Affordable
Housing
40
Create Quality Jobs and Workforce
Development Opportunities for New
Yorkers
Chapter 2: Preserving the
Affordability and Quality of the
Existing Housing Stock
46
Ensure the Safety and Habitability of the
Housing Stock
49
Adopt a More Strategic Approach to
Preservation
50
Preserve Government-Assisted
Affordable Housing
52
Preserve Rent-Regulated and
Unregulated Affordable Housing
53
Create New and Improved Preservation
Tools
55
Promote Sustainability, Resiliency, and
Long Term Affordability While Helping
Building Owners Reduce Operating Costs
Chapter 3: Building New Affordable
Housing for All New Yorkers
62
Enable a Wider Range of New Yorkers to
Benefit from the City’s Affordable
Housing Efforts
64
Capitalize on Public Assets and
Partnerships to Maximize Affordable
Housing Opportunities
69
Change Zoning and Land Use
Regulations to Promote Housing Creation
72
Remove Unnecessary Barriers and Delays
to Developing Housing
74
Ensure That Housing Production Is
Sustainable and Aligned with the City’s
Changing Demographics
Chapter 4: Promoting Homeless,
Senior, Supportive and Accessible
Housing
78
Assist Homeless Individuals and Families
80
Expand Supportive Housing
82
Improve Housing Options for Seniors
84
Ensure Accessible Housing for
Individuals with Disabilities
Chapter 5: Refining City Financing
Tools and Expanding Funding
Sources for Affordable Housing
88
Target and Strengthen City Tax
Incentives
92
Identify New Funding Streams to Fund
Affordable Housing
92
Increase Private Leverage and Expand
Existing Financing Tools
94
Strengthen Public/Private and
Philanthropic Partnerships
96
Re-Evaluate HPD and HDC Programs to
Stretch City Housing Subsidy Dollars Further
Chapter 6: Implementing the Plan
104
Notes
106
Glossary
116
Acknowledgements
007
Letter from
the Mayor
nyc.gov/housing
Housing New York: A Five-Borough, Ten-Year Plan
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To My Fellow New Yorkers:
We have a crisis of affordability on our hands.
It’s a crisis in many ways built on New York City’s success. We are a safer, more
welcoming city than we were decades ago. People from all over the world come to
study, to work or to start a business here. And that success story has put pressure
on our housing stock. Coupled with ever-rising economic inequality, it has created
a painful reality where more and more New Yorkers are spending more and more
to cover their housing costs, and entire neighborhoods have lost their affordability.
Affordable housing is part of the bedrock of what makes New York City work. It’s
what underpins the economically diverse neighborhoods New Yorkers want to live
in. It’s critical to providing financial stability for working families, helping them
get ahead and build a better life.
And that is why today, we are laying out a comprehensive plan to build and
preserve 200,000 affordable units over the coming decade, to support New
Yorkers with a range of incomes, from the very lowest to those in the middle class.
This is a plan to get ahead of the curve, to protect neighborhoods, and build our
city’s next generation of affordable housing. It’s about knitting communities
together.
Our affordable housing policies must reach every New Yorker in need, which is
why this plan thinks big about the changes we need to make—in government and in
the private sector—to make this a city where everyone rises together, and everyone
has a safe and decent home.
If you’re in a community where affordability is disappearing, we want to protect it.
If your family lives in a rent-regulated apartment, this plan is focused on helping
you keep it.
If you’re a senior trying to remain in the neighborhood you helped to build, we are
fighting to help you stay.
If you are a building owner or developer intent on building or preserving affordable apartments, we will support you.
This is a five-borough, ten-year plan. It will marshal people and resources from
every corner of this city behind a singular purpose: to make this city again a place
where our most vulnerable, our working people, and our middle class can all
thrive. Together, let’s make that vision a reality.
Mayor Bill de Blasio
009
Executive
Summary
nyc.gov/housing
Housing New York: A Five-Borough, Ten-Year Plan
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Executive Summary
Affordable Housing for Every New Yorker
Every New Yorker deserves a safe and affordable place to live, in a neighborhood
that provides opportunities to get ahead. The market alone is not always able to
meet that need, and, accordingly, governments at all levels must work together to
help. Mayor Bill de Blasio has made affordable housing a top priority of his administration and has committed the City to “build or preserve nearly 200,000 affordable units, and help both tenants and small landlords preserve the quality and
affordability of their homes.”
Facts about the
Affordability Crisis
• Between 2005 and 2012,
rents rose by 11 percent
while renter’s incomes
stagnated, after adjusting
for inflation
• In 2012, almost 55 percent
of all rental households were
rent-burdened (spending
more than 30 percent of their
incomes on housing costs).
The share of households
who are rent-burdened
increased by more than 11
percentage points since
2000
• More than 30 percent of
rental households are
“severely rent-burdened”
because they spend more
than 50 percent of their
incomes on housing
New York City’s shortage of affordable housing has reached a crisis point. The
crisis has many causes, starting with the erosion of New Yorkers’ purchasing
power in the housing marketplace. Wages for the City’s renters have stagnated
over the last 20 years, increasing by less than 15 percent, after adjusting for inflation. During the same period, the average monthly rent for an apartment in New
York City increased by almost 40 percent. As a result, most New Yorkers now have
limited options for housing and have to spend an unacceptably high share of their
income just to put a roof over their heads, which means having too little left over
for other basic needs. High rent-burden affects nearly every income group in every
neighborhood across the five boroughs.
Another cause of the affordable housing crisis is the mismatch between demand
for, and the supply of, housing. This stems, in part, from the increasing desirability
of calling New York home. For the first time in decades, more people are moving to
or staying in the City than leaving: our older residents are aging in place rather
than moving after retirement; our young families are remaining in the City rather
than moving to the suburbs when their children reach school age; empty-nesters
are returning to the City after their children are grown, and people are moving to
the City from all over the United States, as well as all over the world. The attractiveness of the City is a hard-fought victory, and we must continue to retain and
attract residents in order to prosper.
The private marketplace, however, has not produced enough housing for existing
residents, let alone enough to accommodate the growth that the City has experienced. And, despite considerable public investment to stimulate the production of
housing that is affordable to low- and moderate-income New Yorkers, the supply
of publicly subsidized housing meets the needs of only a fraction of the people in
those income groups.
The continued mismatch between the demand for affordable housing and its
supply also exacerbates the rising income inequality that threatens the City’s
progress. When more than 50,000 New Yorkers sleep in homeless shelters and
hundreds of thousands more struggle to pay high rents with meager earnings, the
City fails to live up to its promise of opportunity.
nyc.gov/housing
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Supply Is Not Meeting
Demand
•There are nearly one million
households who earn less than 50 percent of Area Median Income (AMI),
or just under $42,000 for a family of four
•There are only 425,000
housing units available with rents suitable for that
income level
Things must change. A bold approach to increasing and protecting the supply of
affordable housing is needed for New York City to retain the diversity and vitality
of its neighborhoods and its edge as the world’s leading destination for opportunity. And it is needed to house the incredible and multidimensional talent pool that
attracts employers and drives the City’s economic growth.
Housing New York is a five-borough, ten-year strategy to address the City’s affordable housing crisis. The plan, which was created through coordination with 13
agencies and with input from over 200 individual stakeholders, outlines more than
50 initiatives to support our goal of building or preserving 200,000 units of
high-quality affordable housing to meet the needs or more than 500,000 people.
We will do this by:
• Fostering diverse, livable neighborhoods
• Preserving the affordability and quality of the existing housing stock
• Building new affordable housing for all New Yorkers
• Promoting homeless, senior, supportive and accessible housing
• Refining City financing tools and expanding funding sources for
affordable housing
What is Affordable Housing?
Income Band
Percentage of AMI
Monthly Rent Required to
Prevent Rent-Burden
Annual Income (for a
four-person household)
Extremely Low Income
0- 30%
Up to $629
< $25,150
Very Low Income
31 - 50%
$630 - $1,049
$25,151 -$41,950
Low Income
51 - 80%
$1,050 -$1,678
$41,951 - $67,120
Moderate Income
81 - 120%
$1,679 - $2,517
$67,121 - $100,680
Middle Income
121 -165%
$2,518 - $3,461
$100,681 - $138,435
nyc.gov/housing
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Guiding Principles
1. Our housing policies must address the 5. We must strategically protect past
City’s changing demographics and
expand the range of those we serve.
We must recognize the unique needs of
growing populations of small households and
seniors, as well as those of larger families. We aim to broaden the range of New Yorkers
who benefit from our affordable housing
programs to include both the City’s lowestincome residents and the middle-income
workers who increasingly cannot afford to
stay in our city.
2. The City’s planning processes and
land-use policies need to be
revamped. To become a more affordable
city, we must become a denser city, and
better plan for growth by staging investments
in infrastructure and services that will make
our neighborhoods more livable. Such a
place-based approach must be guided by
early and regular input from the communities
themselves.
3. Economic diversity must be a
cornerstone of housing development.
In future re-zonings that unlock substantial
new housing capacity, the City must require,
not simply encourage, the production of
affordable housing in order to ensure
balanced growth, fair housing opportunity,
and diverse neighborhoods.
investments and lock in affordability in
changing neighborhoods. We must
ensure that billions of dollars already invested
in subsidized affordable housing are not lost
because of market pressures and the
expiration of regulatory agreements. We also
must protect the affordability of the existing
rent-regulated and unsubsidized housing
stock as neighborhoods change.
6. The City needs to protect tenants in
rent-regulated units more aggressively.
We cannot allow landlords to harass tenants
and drive them out of our rent-regulated
housing stock. Keeping those units affordable
is critical to our overarching goals of
addressing inequality.
7. We must leverage today’s favorable
markets and adapt quickly to future
conditions. The City must derive maximum
value from today’s low interest rates and
strong real estate market, while maintaining
flexibility to respond to market downturns.
8. We must increase capital funding to
our housing programs. The City will
expand its financial commitment to affordable
housing and leverage its capital dollars and
tax expenditures. We will call on the State
and Federal governments to do the same.
4. Our municipal tools and public assets
should be deployed more effectively.
The City must rationalize and streamline its
incentive programs, eliminate inefficient
regulations and reduce delays and
redundancies in regulatory and permitting
processes. It should also seize opportunities
to thoughtfully develop affordable housing at
public sites.
nyc.gov/housing
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Achieving these goals will require strategic planning and intensive collaboration
among City agencies and with the State and Federal governments, in partnership
with community based organizations, service providers, for-profit and not-for-profit
developers and property owners, and financial institutions. It will require neighborhoods in all five boroughs to embrace housing development when it is tailored to
enhance a community’s livability and character. It will require making more
efficient use of City capital and incentives as we work with developers to build the
very best affordable housing. And it will require overcoming numerous obstacles,
from high construction costs, inefficient and outdated regulations and cumbersome
permitting processes, to uncertainty about future market conditions and funding
availability. It will be a challenge, but New Yorkers never shrink from a challenge.
Key Policies and Programs
Fostering diverse, livable neighborhoods
• Identify opportunities for affordable housing in all five boroughs
The City will work with communities to identify areas that can support new
development or provide opportunities for preservation. These developments will
leverage investments to meet the neighborhood’s infrastructure and service needs.
• Implement a Mandatory Inclusionary Housing Program
In rezonings that substantially increase potential housing capacity in strong
markets, the City will require a portion of the new housing developed to be
permanently affordable to low- or moderate-income households in order to
ensure diverse and inclusive communities. To ensure the effectiveness of
mandatory inclusionary zoning in transitioning neighborhoods, the City will
provide flexible options for meeting the requirements.
• Harness affordable housing investments to generate quality jobs
The construction and preservation of 200,000 units of housing is projected to
create 194,000 construction jobs and nearly 7,100 permanent jobs. The City will
work with communities and local stakeholders to ensure that these are quality
jobs, targeted toward local hiring and integrated with the City’s broader workforce development initiatives.
Preserving the affordability and quality of the existing housing
stock
• Protect tenants and stem the tide of rent deregulation
The City will coordinate across all agencies and use every tool at its disposal to
protect tenants in rent-regulated housing from landlord harassment. In addition, we will work with the State as rent regulation comes up for renewal in
2015 to prevent abuses of the vacancy and luxury decontrol provisions and
capital improvement rules.
nyc.gov/housing
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• Adopt a more strategic approach to preservation
Working with community groups, the City will identify neighborhoods and
portfolios that are at risk of becoming unaffordable and proactively work
with owners, lenders and investors to assure that City resources are appropriately targeted.
• Introduce simple and flexible incentives to preserve long-term
affordability
The City will standardize and simplify its preservation programs to make the
pathway to preservation more certain for building owners and Community
Development Corporations. In addition, we will work with the State to develop
easy to use tax incentives for buildings that do not have extensive capital needs
but are at risk of leaving rent regulation or being converted to condominiums.
• Preserve the affordability of unregulated housing where rents may
rise because of changing neighborhood conditions
The City will develop new incentive programs to encourage landlords in
transitioning areas to restrict incomes and rents, in order to lock in the affordability of housing before the neighborhoods in which that housing is located
become more expensive.
• Pilot a new program to incentivize energy efficiency retrofits for
affordable housing in need of preservation including small and midsize buildings, creating energy savings and long-term affordability
To help mitigate rising utility costs and preserve affordability, the City will
launch a new program, in concert with local utilities and existing subsidy
programs to target buildings that are at risk of losing their affordability including small and mid-size building to incentivitize energy retrofits in exchange for
affordability commitments from building owners.
Building new affordable housing for all New Yorkers
• Significantly increase the number of units serving the lowest income
New Yorkers
The City will allocate additional resources to its housing programs to ensure
that a higher percentage of units in affordable housing reach the neediest
people. As a result of this commitment, the City will serve more than four times
as many of the lowest income New Yorkers (those earning below 30 percent of
AMI) over the 10 years of this plan as were served over the previous 12 years.
• Develop affordable housing on underused public and private sites
We will perform a comprehensive survey of all vacant sites in the City. We will
use this tool to encourage affordable housing and mixed-use development on
underused sites within our own portfolio, as well as in partnership with the
State, public authorities, not-for-profit institutions, faith-based organizations,
and private owners who have land that could be deployed for affordable housing.
nyc.gov/housing
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• Create two new programs to develop small, vacant sites
The City will launch two new programs, the Neighborhood Construction
Program (NCP) and the New Infill Homeownership Opportunities Program
(NIHOP). These programs will aggregate sites to develop affordable
housing, including one- to four-family homeownership opportunities and
up to 20 unit rental buildings. These programs will focus on developing
capacity among smaller developers with a particular focus on local not-forprofits and CDCs.
• Introduce new mixed-income programs
The affordable units in traditional “80/20” are targeted to a narrow band of
households. To promote long-term community revitalization and economic
diversity, we will pilot a new mixed income program that targets 20 percent of a
project’s units to low-income households, 30 percent for moderate income
households, and 50 percent for middle-income households. Middle-income
housing is essential to support our economy and workforce, which increasingly
cannot afford to live in our city.
• Engage New York City Housing Authority residents and the
surrounding communities to identify local needs and opportunities
Over the coming months, the City will engage the residents and neighbors of
NYCHA developments in a respectful conversation about local needs and opportunities. This collaborative process will focus on the preservation of NYCHA units
and assess the potential for underused NYCHA land and development rights to
benefit existing residents, increase affordable housing, produce local retail, and
community facilities, and serve other shared goals. The City will produce a series of
recommendations that will create the framework for future planning.
• Reform zoning, building and housing codes, and other regulations to
lower costs and unlock development opportunities
Some regulations have become outdated or have created impediments to new
housing. We will re-examine parking requirements, zoning envelope constraints,
and restrictions on the transferability of development rights, among other regulations. Similarly, regulations governing affordable housing programs will be re-examined to identify inefficiencies and to streamline the development review process.
• Stretch the City’s housing subsidy dollars further
We will revise the terms of our existing subsidy programs, and better align tax
exemptions and other incentive programs to ensure that City resources are
leverage the maximum amount possible from other sources, are no greater than
absolutely necessary to incentivize the production of housing, and promote
production of units for New York’s neediest families.
• Ensure sustainable affordable housing tailored to the City’s demographics
The City will commit to being a leader in developing new technologies and
building standards that ensure the City’s affordable housing stock is both sustainable and appropriate for the needs of the City’s changing demographics.
nyc.gov/housing
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Promoting homeless, senior, supportive, and accessible
housing
• Shift funding from high-cost homeless shelters to lower-cost
permanent housing
The City will pilot programs to reallocate a portion of shelter funding to finance
lower-cost permanent housing for homeless individuals and families.
• Develop more supportive housing to improve health outcomes and
save public dollars
Investment in housing that is accompanied by supportive services can improve
outcomes for people with mental health and substance abuse issues, while
yielding significant taxpayer savings by reducing demand for high-cost shelters,
hospitals, and other emergency resources. The City will seek to renew its
partnership with the State to expand the supply of supportive housing and to
broaden the target populations it serves.
By the Numbers
This plan lays out targets for new construction / preservation and the incomes of
households we will serve. The Plan will focus on households falling into four
income categories: Very Low Income (below 50 percent of AMI) (including
Extremely Low Income, or below 30 percent of AMI); Low Income (50 to 80
percent of AMI); Moderate Income (81 to 120 percent of AMI); and Middle Income
(121 to 165 percent of AMI).
New Construction vs Preservation
Households Served
Share of Housing Units Created or Preserved by Income Band
90%
11% Middle Income
11% Moderate Income
70%
60%
Preservation
40%
New
Construction
50%
58% Low Income
30%
10%
nyc.gov/housing
12% Very Low Income
8% Extremely Low Income
Housing New York: A Five-Borough, Ten-Year Plan
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Implementing the Plan
Funding
Creating and preserving 200,000 units of affordable housing over 10 years is a
significant undertaking. We estimate the total cost, including all possible public
and private sources, will be $41.4 billion. This plan lays out a series of steps we are
taking to ensure this effort is a success:
• The Mayor’s 2015 budget will propose to more than double the Department of
Housing Preservation and Development’s annual capital budget in the 5-year
plan, a substantial down payment on this commitment
• The Mayor’s budget will also propose additional funding for infrastructure
investments needed to make land available for significant new housing
opportunities
• Through a series of new loan securitizations—immediately and over the course
of the Plan, the City will maximize the resources available at Housing
Development Corporation (HDC) to contribute to the Plan
• The Mayor’s 2015 operating budget will increase staffing at the Department of
City Planning and HPD to ensure that the Housing New York plan can be
efficiently and quickly implemented
• We will make more efficient use of the City’s resources to maximize their impact
• Working with financial institutions, pension funds, financial intermediaries
and philanthropy, we will also seek to leverage private capital on a greater
than 3 to 1 basis
• We will work in partnership with the State and the Federal government to
identify new resources to fund affordable housing in the City and help us meet
these critical objectives
The need for State and Federal action
The City will act now, but it cannot accomplish these goals on its own. The State
and Federal governments have been stalwart partners throughout many years
and across multiple administrations, and their renewed commitment to affordable housing is absolutely crucial to address the City’s affordability crisis.
Accordingly, the Plan relies upon the State and Federal governments to continue
to fund affordable housing programs. And because we are dramatically increasing
the rate at which the City will build or preserve affordable housing, we will ask
our State and Federal partners to step up their efforts to fund new programs and
indentify additional resources like the proposed National Housing Trust Fund
that can help the City achieve our goals. The Plan also lays out a comprehensive
State and Federal legislative agenda for needed reforms and authority.
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Renewing Our Collective Commitment
New York City has long been an innovator in the affordable housing field. The
City enacted the nation’s first tenement laws and is home to its first public
housing development; and for the past few decades, the City’s spending on
affordable housing has dwarfed that of all other large American cities combined.
To be sure, the City has not acted on its own. New York is home to a large
community of capable and experienced nonprofit and for-profit developers and
service providers, as well as leading neighborhood organizations that have served
as critical partners, and the City has also benefitted from substantial State,
Federal and philanthropic support.
Still, collectively, we need to do more. As Mayor de Blasio has made clear:
“We have to remember that the best and the brightest are born in every neighborhood, in every zip code. And what marks a just society is that it allows them all to
reach their potential.”
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Introduction
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Overview
Affordable housing is critical to the City’s future
New York City’s pre-eminence as the world’s leading city stems in large part
from its unparalleled diversity. That diversity allows people from every imaginable background to live and work side by side, share aspects of their cultures,
exchange ideas, then mix, match, and innovate to generate the art, literature,
fashion, technology, and conceptual breakthroughs that are the envy of the
world. And that diversity drives economic growth, as employers decide to locate
in the City to take advantage of its incredible and multidimensional talent pool.
However, the City’s diversity is imperiled by the fact that more and more people
struggle to afford to live here. New York attracts newcomers from around the nation
and from every corner of the globe in part because of the opportunities it provides
for people to make better lives for themselves and their families. But our role as a
beacon of opportunity is threatened because people cannot afford to give the City a
try. Too many existing residents also are shut out of opportunities because they are
living in a neighborhood that lacks good schools and good jobs, are homeless, or are
going without medical care and other essentials in order to pay the rent.
Wages for the City’s renters have stagnated over the last 20 years, increasing by less
than 15 percent, after adjusting for inflation. During the same period, the average
monthly rent for an apartment in New York City increased by almost 40 percent. As
a result, most New Yorkers now have to spend an unacceptably high share of their
income just to put a roof over their heads, which means having too little left over for
other basic needs like health care, transportation, and even food. Housing costs,
quite simply, are an increasingly serious threat to the future of our City.
New York City’s investments in affordable housing
Because affordable housing is so central to the City’s ability to thrive, the City has
always led the nation’s municipal housing programs. We enacted the nation’s
first tenement laws and established its first public housing development. In the
late 1970s, the City launched efforts to combat the arson, neglect, and abandonment that had led to wholesale neighborhood decline. In that same decade, in the
face of a fierce debate over “planned shrinkage”—depopulating and fencing off
blighted areas and leaving them to die—the City took a more daring approach,
seizing more than 100,000 distressed housing units from tax delinquent owners
and investing its own resources to save them. Mayor Edward Koch committed
the City to manage and rehabilitate these “in rem” properties as part of the
visionary ten-year, $5.1 billion housing plan he launched in 1986.
The administrations of Mayors David Dinkins and Rudolph Giuliani continued to
move the City’s in rem properties into private, responsible ownership and preserve
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the units as affordable housing. By the early 2000s, the in rem stock was largely
back in productive use, but a booming economy made housing unaffordable to
growing numbers of New Yorkers. Mayor Michael Bloomberg launched the New
Housing Marketplace Plan (NHMP) in 2003, and expanded it in 2006, committing
to build or preserve 165,000 units of affordable housing between 2003 and 2014.
Following the economic collapse of 2008-9, the NHMP pivoted from addressing
boom time challenges to dealing with the threat of large scale disinvestment,
foreclosure, and neighborhood destabilization.
Our current affordable housing crisis
Housing costs are rising much faster than incomes
Between 2005 and 2012 (the most recent year for which consistent data is available), the median monthly rent across the City increased by about 11 percent, after
adjusting for inflation. Over the same time, the real income of the City’s renters has
stagnated, rising from $40,000 in 2005 to just $41,000 in 2012 (both figures are
adjusted to 2013 dollars. When rents go up, but incomes remain stagnant or
decrease, housing becomes less affordable.
Data Source: 2005- 2012 American Community
Survey (1-Year Estimates); Bureau of Labor
Statistics CPI- NYC
Median rents have risen since 2005, but
median incomes have remained essentially
stagnant.
Even those numbers fail to capture the extent of the problem, however, because
households looking to move to a new apartment generally face higher rents than
existing residents. Renters who had lived in their units for five years or less (recent
movers) typically paid about $230 more per month than all renters typically paid in
2012. Thus, newcomers to the City or households who need to move because of
rising rents or a change in household status may face an especially daunting housing
market. And of course, median rents vary from neighborhood to neighborhood.
Index of New York City Median Gross Rent and
Renter Household Income, 2005 - 2012
Median Gross Rent
110
105
Median Renter Income
100
95
90
2005
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2006
2007
2008
2009
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2011
2012
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Median Monthly Utility Costs, 2002 and 2011
$120
$114
$100
$90
$94
$60
$40
Data Source: Housing and Vacancy Survey
(U.S. Census), 2002 and 2011.
In addition to rising rents, renters also face
higher utility costs.
$20
$0
2002
2011
Further, renters face increasing utility costs: monthly utility costs increased by 20
percent from 2002 – 2011.
More New York City renters are seriously rent-burdened
The increase in rents and utility costs, combined with stagnant income, has resulted
in a larger share of renters suffering from rent burdens. A general rule of thumb for
affordability is that a rental unit is considered affordable if a household pays less
than 30 percent of its gross annual income on rent and utilities. A household paying
more than 30 percent of its income on rent is considered “rent-burdened.”
Households that pay more than 50 percent of their income on rent are considered
to be “severely rent-burdened.” In 2012, almost 55 percent of all rental households
were rent-burdened, which is an increase of more than 11 percent since 2000.
Number of Rent Burdened Households, 2000 and 2012
Rent Burdened Households
Severly Rent Burdened Households
1,200,000
1,000,000
800,000
600,000
400,000
Data Source: Census (2000) PUMS data;
American Community Survey (2012) PUMS Data.
The share of moderately and severely rent
burdened households has increased since 2000.
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200,000
2000
2012
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Annual Median Household Income of Renter Households Compared to
Annual Income Needed to Afford Typical New York City Apartment
Annual Income Needed to Afford
Typical NYC Apartment
Actual Median Renter Income
$60,000
$50,000
$49,932
$40,000
$39,916
$30,000
$20,000
Data Source: Housing and Vacancy Survey
(U.S. Census), 1991 and 2011.
The income needed to pay for median rents has
risen steadily over the last two decades, but
actual incomes have increasingly fallen short.
$10,000
1991
2011
Another way of thinking about housing affordability is to compare the income
needed to pay no more than 30 percent of one’s income towards the median rent
and utilities of apartments in the city with the actual incomes of New Yorkers. The
gap is substantial and growing.
The lowest-income New Yorkers can afford very few of the
available units
While the need for affordable housing is deep and growing across most income
groups, some feel the pressure more than others. In 2011, there were about one
million Extremely Low Income and Very Low Income households but there were
only 425,000 rental units affordable to those households.
The number of units affordable to Very Low Income households includes the
public housing maintained by the New York City Housing Authority (NYCHA).
NYCHA’s 180,000 units house more than 400,000 New Yorkers. Sixty-two
percent of these households are Extremely Low Income, and 37 percent of
heads of households are seniors. NYCHA housing is extraordinarily important
in providing affordable housing to our neediest households.
Though the affordability gap exists across the income spectrum, it is particularly acute for these Extremely Low Income and Very Low Income households
who often struggle to find affordable housing on the private market. Indeed, a
higher share of the households earning up to 50 percent of AMI are severely
rent burdened than in any other income range—more than 35 percent, or
360,000 households. When we also consider households that are moderately
rent burdened, a total of 500,000 households in that income range are paying
more for housing right now than they can really afford.
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Supply and Demand among Extremely Low Income and
Very Low Income Renter Households
900,000
792,857
979,142 Households
700,000
500,000
Data Source: Housing and Vacancy Survey
(U.S. Census), 2011.
There are more than two Extremely Low
Income and Very Low Income households
for every one housing unit that is affordable
to them.
424,949 Units
300,000
100,000
Rental Units Affordable to Extremely Low Income and Very Low Income Households
Income Limits and “AMI”
The U.S. Department of Housing and Urban Development
(HUD) sets annual limits for various funding uses and
eligibility guidelines. HUD calculates the limits based upon
median family income, then makes adjustments based on
household size, local housing costs, and other geographically specific factors. The result is a set of limits for
households of various sizes and income levels in different
metropolitan areas, which are typically described as “Area
Median Income” or “AMI.”
In FY 2014, in New York City, HUD has set the limits as
follows:
Extremely Low Income, or 30 percent of AMI, for a family
of four is $25,150
Very Low Income, or 50 percent of AMI, for a family of four
is $41,950
969,224
Extremely Low Income and Very Low Income Renter Households
Low Income, or 80 percent of AMI for a family of four is
$67,100.
Housing agencies use these limits to qualify applicants of
different income levels to live in affordable housing
developments and to set maximum rents for subsidized
units. The specific limits that apply to all five boroughs of
New York City are calculated including Putnam, Rockland,
and Westchester Counties incomes. Because those
counties have higher median incomes than the City
(Rockland County’s median income is about 50 percent
higher than that of New York City, and Westchester
County’s median income is about 65 percent higher than
that of New York City), the resulting income limits for the
City are higher than would be the case if the income limit
area were restricted to the five boroughs. This results in
income limits that are higher than the median incomes in
some New York City neighborhoods.
Income and Rent Requirements by Income Band
Income Band
Percentage of AMI
Monthly Rent Required to
Prevent Rent-Burden
Annual Income (for a
four-person household)
Extremely Low Income
0- 30%
Up to $629
< $25,150
Very Low Income
31 - 50%
$630 - $1,049
$25,151 -$41,950
Low Income
51 - 80%
$1,050 -$1,678
$41,951 - $67,120
Moderate Income
81 - 120%
$1,679 - $2,517
$67,121 - $100,680
Middle Income
121 -165%
$2,518 - $3,461
$100,681 - $138,435
Based on the U.S. Department of Housing and Urban Development’s Estimate for Area Median Income (AMI) in 2014
($83,900 for a four-person household)
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Number of Rent Burdened Households by Income Band
1,400,000
Owner Occupied Households
Non-Rent Burdened Households
1,200,000
Rent Burdened Households
1,000,000
Severly Rent Burdened Households
800,000
Data Source: Housing and
Vacancy Survey (U.S.
Census), 2011
Rent burden is a problem
for New Yorkers across
various income levels, but is
particularly prevalent
among Very Low Income
Households (those earning
below 50% of HUD Income
Limits).
600,000
400,000
200,000
0-50% ($41,950)
51-80% ($67,120)
81-120% ($100,680)
121-165% ($149,655)
The growing problem of homelessness
The homeless population in New York City is increasing and has more than doubled
since 2000. The growing gap between the cost of living and rents, on the one hand,
and wages on the other, has led more people to resort to the City’s shelter system
for help. There are over 50,000 individuals, including more than 10,000 families
and more than 22,000 children currently residing in City shelters. Living in shelters
leads to instability for families and singles and can disrupt educational outcomes for
children. Additionally, the City shelter system has to expand to accommodate new
entrants, and bringing on new capacity is both costly and challenging.
New York City Shelter Population
50,000
40,000
30,000
20,000
Data Source: Coalition for the Homeless
Report on New York City Homeless Municipal
Shelter Population, 1983-present (available
online at www.coalitionforthehomeless.org)
The number of people—children and
adults—residing in municipal shelters has risen
over the past 30 years.
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10,000
1990
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2010
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New York City Population: Past, Present, and Future
Past
Projected
9,025,145
9,000,000
8,242,624
8,000,000
7,000,000
6,000,000
Data Source: New York City
Department of City Planning,
Population Division
The Department of City
Planning projects that New
York City’s population will
grow from 8.2 million in
2010 and is expected to
exceed nine million in 2040,
which amounts to a 9.5
percent increase over 30
years.
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
1950
1960
1970
1980
1990
2000
2010
2020
2030
2040
What’s going wrong?
The current affordable housing crisis is rooted in many factors. Housing is considered unaffordable when housing costs consume too much of a person’s income. As
the discussion above shows, both sides of that equation have worked against the
City’s households in recent years. Wages have inched up slowly, while rents and
utility costs have risen dramatically over the past two decades. One of the major
drivers of those rent increases is a mismatch between the demand for, and the
supply of, housing in general, and a gap between the demand for, and the supply of,
affordable housing in particular.
Demand is increasing
Our seniors are finding New York City a more hospitable home in which to age in
place. Young families and empty-nesters are finding the City’s vibrant culture and
transit-oriented lifestyle more attractive than the suburbs. People from every
corner of the nation and globe continue to pour into the City, seeking opportunities
for themselves and their families. As a result, the City has grown to 8.4 million
people and the population is expected to continue to rise, surpassing 9 million
residents by 2040. This population growth is a reflection of the City’s success in
attracting and retaining people from all over the world, but it also brings with it a
growing need for housing.
New construction is insufficient to meet the demand
Although the City’s current housing stock of approximately 3.4 million units is the
largest it has ever been, recent additions to the stock have not been sufficient to
accommodate the growth in demand. The foreclosure crisis and Great Recession
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New Housing Units Permitted and New Housing Units Completed
35,000
Building Permits
Certificates of Occupancy
28,000
21,000
14,000
7000
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Data Source: New York City Department of
Buildings; New York City Department of City
Planning, HEIP Division
Building activity rose steadily from the
mid-1990s through its peak in 2008 and
declined after the Great Recession.
led to declines in housing construction, limiting the supply of new housing.
Hurricane Sandy destroyed or damaged many homes. Constrained credit markets
in the aftermath of the foreclosure crisis have slowed the lending necessary to
generate additional construction.
In addition, the supply of new housing in New York City is constrained by the high
cost of building here. In many neighborhoods, land values are at record highs, so
that developers face high upfront costs to acquire land for new buildings. New
York City is also one of the most expensive construction markets in the country. As
the cost of building increases, housing developers respond by building fewer
housing units, charging more to rent or buy a home, or both.
Consequently, there has been less new building activity since 2008 than in the
years before the Great Recession. New building permits authorized nearly 35,000
units in 2008, but that number fell dramatically in 2009, and only began to recover
in 2011. The number of units authorized by new building permits rose substantially
in 2013, to nearly 18,000 units, but this is still far below the number of units
necessary to meet demand.
The number of units subject to the protections of rent
regulation is plummeting
The size and quality of the housing stock evolves not only through new additions,
but from the deterioration and demolition of units. Further, the affordability of the
stock changes as properties convert from rentals to cooperatives or condominiums,
or exit from rent regulation or from subsidy programs.
Data from the Rent Guidelines Board reveals that since 1994, almost 250,000 units
of rental housing have lost the protections of rent regulation. While some units
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Net Loss of Rent Stabilized Units, 1994 – 2012
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
0
-30,000
-60,000
-90,000
-120,000
-150,000
-152,811
-180,000
Data Source: Rent Guidelines Board Reports,
Changes to the Rent Stabilized Housing Stock
in NYC in 2012.
The city has lost more rent regulated units than
it has gained.
have been added as a condition for tax incentives and other subsidies the building
owners received, there has been a huge net loss of rent regulated units. Between
1994 and 2012, the city suffered a net loss of about 150,000 rent-stabilized units, or
16 percent of the total rent regulated stock.
Many units have opted out of subsidy programs and are no
longer affordable or income restricted
As the City and its State and Federal partners developed affordable housing over
the last 50 years, affordability requirements expired after a specified number of
years. When the buildings reach the end of that period, the property owners can
choose to either renew the subsidy (or another form of subsidy) and accept a new
period of affordability, or “opt out” of the program and either take the units up to
market rents (or in some cases to rent regulated rents) or convert them to home
ownership. According to the Subsidized Housing Information Project maintained
by the Furman Center for Real Estate and Urban Policy, which tracks the four
largest subsidy programs, 68,000 units of subsidized affordable rental housing
have opted out of those programs over the last few decades. While some of those
units remain affordable because they entered programs not tracked, or because
they became subject to rent regulation, many are now market rate rentals or
cooperatives and condominiums. The loss of those affordable units has been a
serious blow to the supply of affordable housing.
The units being supplied don’t match those in demand
The current supply of rental units is not well suited for the City’s changing households. Our residents are aging: the Department of City Planning projects that the
population aged 65 or older will increase by 175,000 from 2010 to 2020. Housing
needs change over a household’s life cycle. Some older adults need housing that
provides special support services, while others prefer to ‘age in place’ in age-integrated settings. Many struggle to make ends meet because incomes frequently
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decline after retirement. To address these changes, we must develop housing
options that are affordable to older New Yorkers and that meet their special needs.
Our households also are changing in size, and there is a disconnect between the type
and size of available apartments and the housing demands of modern households.
There are 1.9 million one- and two-person households in the City (more than 60
percent of all the City’s households), but only 1.25 million studios and one-bedroom apartments. Of course, some of the households will prefer to stay in, or move
to, larger apartments. But the demand for smaller units also comes from individuals who would prefer to form their own household, but who are forced by high
rents to live with roommates or family. When individuals can’t afford studios and
join up to rent multi-bedroom apartments, they also drive prices for those apartments out of the reach of families with children. To address these challenges, we
need not only more housing, but also a mix of new housing types that reflects the
diversity of New Yorkers’ needs.
New York City’s Households
Data Source: American Community
Survey 1-Year Estimates (U.S.
Census), 2012
11%
New York City households are
diverse. One third are singles and 27
percent are families with children.
16%
40%
Below graphs:
Data Source: Housing and Vacancy
Survey (U.S. Census), 2011.
Single Parent with Children
Two or more Adults with Children
Families without Children
Singles
There is substantial mismatch
between the units available and
household size, so that there are not
enough studio and 1-bedroom units to
house smaller households.
33%
Household Size and Unit Type
Household Size
1 Person
2 Person
3 Person
4 Person
5+ Person
32%
29%
17%
12%
10%
Unit Type
Studios
1 Bedrooms
2 Bedrooms
3+ Bedrooms
7%
34%
33%
26%
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Department of Housing Preservation and Development (HPD) HOME Grant
Funding, FY2009 - FY2014
$140,000
Data Source: U.S.
Department of Housing
and Urban Development.
The reductions in
Federal spending
resulted in a 52 percent
cut to the HOME grant
awarded to New York
City between Fiscal
Year 2011 and Fiscal
Year 2012.
IN THOUSANDS
$112,000
$84,000
$56,000
$28,000
FY09
FY10
FY11
FY12
FY13
FY14
Dwindling federal resources for the construction or
preservation of affordable housing and for housing vouchers
Federal funding plays a critical role in the creation and preservation of affordable
housing; more than 85 percent of HPD’s operating budget comes from Federal
funds. Between Federal Fiscal Years 2011 and 2012, acts by Congress resulted in a
52 percent reduction in the New York City HOME grant and a 23 percent reduction in the Community Development Block Grant (CDBG). HOME funds are a
key resource that HPD uses to develop supportive housing, and to support the
construction of new low-income units. CDBG funds provide critical support for
our enforcement services programs. In 2013, Congress passed the Budget Control
Act, which implemented a “sequester”—an across-the-board cut to discretionary
programs. The result of the sequester was significant reductions in 2013 to key
housing programs, including HOME. Although a short-term Congressional
budget deal increased funding in 2014, the agency still faces challenges in the
2015 budget and beyond. Without Congressional action, the draconian sequestration cuts will return in 2016.
Further, the Federal government provides the funding for “Section 8” or Housing
Choice Voucher program. Under the program, housing assistance is provided to
Very Low or Extremely Low Income tenants to enable them to rent housing on
the private market. Tenants pay approximately 30 percent of their income
towards rent, and the voucher pays the difference between that amount and the
amount the government determines to be reasonable rent for the unit. Vouchers
are critical, not only to make housing more affordable to the families receiving
them, but also to ensure that subsidized affordable housing and supportive
housing projects can reach the lowest income families. Generally, even with
subsidies for the construction or preservation of housing, rents the owners of
affordable housing must charge are out of reach for Very Low Income and
Extremely Low Income households unless they have vouchers. nyc.gov/housing
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Under the sequester, HPD’s allocation from HUD for Housing Choice Vouchers
was cut by $37 million, or almost 10 percent in 2013, and NYCHA’s allocation fell
short by $81 million. While the 2014 budget deal restored some of that funding
for 2014 and 2015, if the sequester returns in 2016, there will be very serious
consequences for our ability to provide vouchers, and to reach the lowest income
households through our supportive housing and new construction or preservation programs. NYCHA provides about 91,000 households, and HPD provides
about 32,000 households, with Housing Choice Vouchers every year, so maintaining (and indeed, increasing) HUD’s budget for vouchers is critical to the
City’s ability to provide affordable housing to the neediest families.
Things must change
Normally, when demand for a product exceeds supply, the market reacts by
producing more of the desired goods. That is not happening in the housing market
for many reasons, but the government certainly bears part of the blame. Local
regulations sometimes stand in the way of innovation. The uncertainty of approval
and permitting processes sometimes cause developers to miss market cycles. Our
property tax system discourages the production of rental units and encourages
conversion of units to cooperatives or condominiums at a time when homeownership is out of reach of most families due to high costs and limited access to credit.
In part, the problem is caused by market failures. When investors and developers
decide to build housing aimed at the highest end of the market, and when employers decide to pay wages too low to allow their workers to live in the City, they do
not sufficiently take into account the effect that those decisions will have on the
City’s vitality, diversity, and economic strength.
Further, the affordable housing crisis is exacerbated by (and compounds) inequality. In some of the City’s neighborhoods, median household incomes are as high as
$122,222, while in others, the median household income is only $21,562. Often,
both the highest income and the lowest income neighborhoods have little income
diversity. Similarly, some neighborhoods have tremendous racial and ethnic
diversity, while others are racially homogenous. Indeed, nearly half of the city’s
neighborhoods remain dominated by a single racial or ethnic group. The inequality
and lack of diversity in many neighborhoods means that some families do not have
access to the education, jobs, and other opportunities others enjoy. It also means
that low income households often are unable to find homes in the neighborhoods
in which they would like to live.
The cost of these failures—both the harm to the families struggling to make ends
meet and to get ahead, and the threat to the City’s character and future—are simply
too high to continue business as usual.
We must do more to ensure that all New Yorkers have a safe and affordable place
to live, in neighborhoods that provide opportunities to succeed.
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Housing New York: A Five-Borough,
Ten-Year Plan
To address these challenges, Mayor Bill de Blasio has devised a bold, five-borough
housing plan that will create and preserve 200,000 units of affordable housing for
approximately 500,000 New Yorkers over the next ten years. The plan builds upon
ideas for new programs or improvements of existing programs, proposed by
industry leaders, advocates, and experts and it represents our renewed commitment to tackling the City’s affordable housing challenges head on. Because the City
does not act alone, but has benefitted from substantial State and Federal support
and innovations over decades, the plan also relies upon collaboration with our
Federal and State partners.
The chapters that follow outline, in broad strokes, the strategies we will use to
address the affordable housing crisis that threatens our families and our city. The
challenge before us is a daunting one, but New York City has never shied away
from a challenge. We have inherited the world’s greatest city from the generations
that came before us, and we must take decisive action to build a just, equitable,
inclusive and prosperous city, today and for the generations to come.
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Chapter 1
Fostering
Diverse, Livable
Neighborhoods
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Overview
New York is a city of neighborhoods that are as diverse as its residents—from leafy
communities containing low-rise detached homes, to blocks of stately row houses
and fire escape clad walk-ups, to higher-density, mixed-use districts comprised of
tall apartment buildings and commercial towers. Each neighborhood has its own
distinct culture and rich history. Yet like our city as a whole, neighborhoods are
constantly undergoing change.
Over the past decade, as the City has become home to hundreds of thousands of
new residents, neighborhoods have felt the impacts of population growth, even if
their physical surroundings have not changed. The supply of new housing—particularly affordable housing—has failed to keep up with demand, and as a result, greater
competition for limited supply has driven up housing prices and made many of the
City’s neighborhoods less affordable. These pressures are making it increasingly
difficult for moderate- and middle-income workers to remain in the City, and they
are placing particular strains on the lives of lower-income New Yorkers.
In addition to our current challenges just to keep pace with population growth
over the next decade, New York City will need to add about 100,000 new market
rate units in addition to the 80,000 new affordable units the City will build under
this plan. To meet this challenge, we must ensure that housing development is
guided by meaningful community engagement and coordinated with public
investments in infrastructure and services.
Although communities often raise concerns about new housing, thoughtfully
planned development has the potential to build on the strengths of neighborhoods
and help fill their unmet needs. New housing and mixed-use development can
bring life to stark and inhospitable streets. It can help reinvigorate struggling retail
corridors and reconnect neighborhoods that were historically linked but later
severed by highways or other obstacles. And it can promote economic diversity
and protect existing residents if accompanied by targeted preservation efforts, as
well as the right mix of targeted incentives.
Key strategies:
• Pursue Affordable Housing and Community Development
Opportunities in All Five Boroughs
• Make Strategic Investments to Support New Housing and
Neighborhood Revitalization
• Promote Mixed-Use, Mixed-Income Communities Anchored
by Affordable Housing
• Create Quality Jobs and Workforce Development
Opportunities for New Yorkers
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Pursue Affordable Housing and
Community Development
Opportunities in All Five Boroughs
10 9 6
5
3
2
1
11
4
Case Studies
1. East New York and
Cypress Hills
2. Hunters Point
3. East Harlem
4. St. George
5. Harlem River Waterfront
6. East Concourse
7. Arverne View
8. Spring Creek
9. Melrose Commons
10. Hamilton Heights
11. Markham Gardens in
Richmond Terrace
8
Work with communities to identify
opportunity areas and plan for growth
Over the course of the next ten years, the City will identify
areas across the five boroughs where coordinated planning
7
with communities—including changes to land use and
zoning, and improvements to infrastructure and services—
can promote substantial opportunities for new housing that
complements and enhances neighborhood character. The
Department of City Planning’s borough offices will work in close coordination with
the Department of Housing Preservation and Development as well as the
Departments of Parks and Recreation, Environmental Protection, Transportation,
and Small Business Services, and the Economic Development Corporation to launch
community development initiatives around new and existing housing, and to plan
for other improvements needed to support growth.
The City will reach out to engage communities at the early stages of this process.
We will collect, analyze, and share data on land use, housing, infrastructure, and
services with communities as part of the planning process. We will solicit guidance from local residents and businesses, community organizations and elected
officials about their concerns and first-hand experiences to identify existing
community needs, set priorities, and shape the plans. This “ground up” planning
process will be coordinated with the Office of Management and Budget, and the
process of assembling statements of citywide and Community District needs, to
mesh necessary neighborhood investments with community growth. The
Department of City Planning will play an active role in the formulation of the
City’s Capital Budget to assure that community growth is accompanied by appropriate public investments. And, of course, all land use actions initiated as a result
of these community planning processes will be subject to a full public review
process, which will provide additional opportunities for input from Community
Boards and elected officials.
Establish a Mandatory Inclusionary Housing Program to
promote economic diversity and affordable housing
development
The City will establish a new mandatory Inclusionary Housing Program to ensure
that the housing marketplace serves New Yorkers at a broader range of income
levels. The program will be applicable in all medium and high density districts
where rezonings provide an opportunity for significantly more housing. The City
will require a portion of the housing developed to be affordable.
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Opportunities for new housing are likely
to come in a variety of forms:
Area-wide zoning changes – The City will
work together with local communities to
identify corridors or portions of
neighborhoods where changes to zoning
can enable additional housing
development. For example, currently
permitted residential densities often do not
reflect an area’s full potential based on its
accessibility to transit and centers of
employment.
Site redevelopment – New housing can be
constructed on specific sites that have
fallen into disuse or are not being used
intensively or appropriately, and have
development potential. The redevelopment
of brownfields is an example of this type of
opportunity.
Underutilized land redevelopment– In
developments where unused or lightly
used land exists, opportunities may be
found to locate additional housing. These
areas often include sites with large and
underused parking lots. Adaptive reuse – Obsolete buildings can
present opportunities for conversion to
residential use or mixed use.
Planning for As-of-right Development
The majority of new housing in New York
City is constructed “as-of-right”— building
permits are issued for construction that
complies with the zoning in place for the
area. However, in some areas zoning
prohibits or discourages new development
or unnecessarily limits the amount of
housing that can be built. Neighborhood
zoning changes or site-specific land use
approvals can be sought; however, these
actions are time consuming and add
uncertainty to project development, which
increases the cost of development.
In a city where vacant and underutilized
land is in short supply, we must identify
new opportunities to increase the number
of sites on which new housing can be
created without costly, time-consuming
one-off reviews. Through a comprehensive
community based planning process,
zoning changes can enable new housing
and other uses to be built as-of-right, in a
way that is responsive to neighborhood
character and supported by appropriate
investments.
The mandatory program will incorporate one of the successful features of the
existing voluntary program, by requiring that affordable units remain permanently affordable in order to provide for long-term stability and economic
diversity in neighborhoods. It will offer flexible options for fulfilling the
mandatory affordable housing requirement, including on-site and off-site
options to promote a range of housing choices, and will target a range of
affordability levels to ensure the program’s effectiveness and applicability in
both stronger and weaker housing markets throughout the City.
The Inclusionary Housing Program can become even more powerful by
aligning it with tax policy. Currently, in many central areas of the City,
valuable 421-a tax exemptions are provided only when the developer makes
a share of the units affordable. In these areas, the exemption provides a
significant incentive for affordable housing. In neighborhoods with strong
housing markets, tax incentives should be limited to situations where they
would: a) result in the production of more affordable housing than would
otherwise be required under Inclusionary Housing; or b) target otherwise
hard-to-reach income levels or household sizes. Rezonings that add substantial capacity for new housing in transitioning neighborhoods may require
incentives to encourage developers to reach lower income levels, or may
be able to promote permanently affordable moderate-income, housing
without incentives.
Producing diverse neighborhoods with affordable housing requires a balance
between zoning requirements and incentives. A carefully crafted approach
will support continued housing production by the private marketplace while
significantly expanding the pool of affordable units across the City–particularly in redeveloping areas. Immediately following the release of this plan, the
City will conduct the analyses required for development of a mandatory
inclusionary zoning program that satisfies sound land-use planning and legal
principles, then will engage a broad group of housing stakeholders to solicit
their input into the modifications and expansions of the Inclusionary Housing
Program, and will work with stakeholders moving forward to ensure that the
program functions smoothly to support development while also meeting the
needs of communities.
Improve the effectiveness of voluntary inclusionary zoning
The City currently has a voluntary inclusionary zoning program in which
developers who agree to build affordable housing can build additional floor
area on site. The effectiveness of this program has varied among neighborhoods and depended in part on the availability of financial incentives.
Developers have identified challenges they face in using the current
Inclusionary Housing Program, including inconsistencies between the requirements of the Inclusionary Housing Program and tax incentives,
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Case Study:
Planning with Communities
Brooklyn
Community members and City Planning staff during a public visioning event held in March 2012.
East New York and Cypress Hills
In collaboration with community partners, the City is planning for new
mixed-use, mixed-income development to support the vitality and livability of East New York and Cypress Hills.
In recent years, the neighborhoods in Brooklyn’s Community District 5 have rebounded
from a period of disinvestment and decline with stabilized residential areas and a
growing population. In the context of these changes, the community identified needs for
more diverse and affordable housing choices, improved access to jobs and services,
and safer streets with better connections to transportation and services.
Through the HUD-funded Sustainable Communities East New York initiative, the
City has worked closely with neighborhood residents and institutions (including
Cypress Hills Local Development Corporation), as well as several public agencies, to establish a plan to address these needs together. The City and its
partners conducted over 50 outreach events including half-day workshops and
visioning sessions open to all area residents and businesses. A Community
Advisory Committee, consisting of residents and local community-based
organizations helped guide the process. DCP developed a framework of shortand long-term strategies for changes to regulations and public investments that
promote a sustainable, equitable and inclusive future for the Cypress Hills and
East New York neighborhoods in Brooklyn.
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BEFORE: Pitkin Avenue
AFTER: A vision of Pitkin Avenue depicting long-term land use changes which
could create a vibrant mixed-use corridor at the heart of East New York.
Project Objectives
• Promote new, mixed-income housing
and mixed-use development along key
transit corridors. Atlantic Avenue, a broad
boulevard, offers the greatest opportunity
for higher-density, mixed-use development
with several large opportunity sites. The
transit corridors of Pitkin Avenue and
Fulton Street can also support new housing
as well as neighborhood shopping and
services. By marshaling the City’s range of
housing resources and applying the
proposed new Mandatory Inclusionary
Housing Program, the City would promote
the preservation of existing affordable
housing and ensure that new housing
includes permanently affordable units.
• Build on neighborhood strengths to
preserve longstanding residential
neighborhoods and promote contextual
infill development. Contextual zoning
would promote the retention of the existing
housing stock and ensure that new infill
development complements the current
residential character of row houses and
small apartment buildings.
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• Encourage economic development
opportunities to support job growth New
mixed-use development would increase
demand for local services such as grocery
stores, banks and restaurants, which in
turn, working with both the City’s
Economic Development Corporation and
the Department of Small Business Services,
will support existing and new businesses,
support the viability of retail corridors, and
create opportunities for local jobs.
• Pursue street safety enhancements in
tandem with streetscape improvements
DCP is coordinating with the Department
of Transportation on the addition of new
sidewalks, curb extensions, traffic signals,
street trees, benches, bus shelters and
other amenities in strategic locations that
would enhance neighborhood safety and
walkability for pedestrians, transit users
and motorists alike. Improvements of
intersections near transit, schools and
community services would ensure safety
for students walking and biking to school
and for residents walking to essential
services. All of these efforts are in concert
with the administration’s Vision Zero plan
to work collaboratively with communities to
improve street safety for all New Yorkers.
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bottlenecks and cumbersome processes for securing approvals. The City will work
with industry groups and other stakeholders to review the process from start to
finish and then make the necessary improvements and provide the resources
needed to ensure an efficient approval process.
Make Strategic Investments to Support New
Housing and Neighborhood Revitalization
Invest strategically in infrastructure and services to unlock
potential for new housing creation and to support the livability
of neighborhoods
Across the City, there are neighborhoods where the hard work of planning and
consensus-building for new housing development has already been completed. In
recent years, a number of area-wide rezonings and large-scale development plans
intended to foster new mixed-income housing and supporting activities have
received land use approvals. This creates an avenue for millions of dollars in
private investment to support new development. However, in some of these areas,
the potential for new housing can only be fully realized if improvements to infrastructure such as upgrades to storm water and sanitary sewers, or the construction
of new streets and public open spaces, are made. In neighborhoods such as
Hunter’s Point South in Queens, Stapleton in Staten Island, and Coney Island in
Brooklyn, the City will work with local elected officials, residents, businesses, and
community organizations, to make a series of targeted infrastructure investments
to unlock the potential for thousands of new affordable housing units and accompanying retail, services, and community facilities.
Address neighborhood needs in new development projects
When City-sponsored housing developments are initiated, the City will identify
opportunities to incorporate facilities and services into the projects that directly
address local needs. This process will begin with agencies reaching out to community stakeholders during the planning stage, and will continue through construction and occupancy. For example, to meet the need for better retail opportunities,
HPD can work with EDC to help affordable housing developers improve the
design of commercial spaces, understand local market conditions, and develop
better leasing strategies. At the same time, SBS can reach out to local businesses to
help them secure retail space in new housing developments. The housing agencies
will also work with other agencies and institutions to co-locate employment
centers, libraries, day care centers, pre-K programs, schools, and other vital
services in the new developments. This would result in a dual benefit: the integration of important services into housing developments and help for developers in
ensuring the best use of their non-residential spaces.
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Case Study:
Strategic Investment
Queens
BEFORE
AFTER
Hunters Point South Mixed-Use Development
Hunters Point South is a mixed-use, affordable housing development situated on
approximately 30 acres of prime waterfront property in Long Island City, Queens.
When complete, the project will be the largest new affordable housing development to
be built in New York City since the 1970s and will include approximately 5,000
housing units, 60 percent of which will be affordable to middle
income families, local retail, community facility uses, a new public
school, and new public open spaces.
The City created this new housing opportunity through a neighborhood rezoning and by funding critical infrastructure work including
site clean-up, demolition, installation of sewers and storm water
management systems, and roadways. In addition, the City funded
an 11 acre waterfront park and a new, 1,100-seat public school.
Together, these investments will transform this formerly underutilized
waterfront area into a new enlivened and affordable residential
neighborhood that will provide significant benefits to the Long Island
City community.
nyc.gov/housing
Hunters Point South
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Enhance mobility and connectivity
Economic opportunity depends not only on affordable housing, but also access to
schools, employment, shopping and other services, both within the neighborhood and beyond. Consequently, our planning will be based upon a transit-oriented development approach. The City will promote a range of options to
improve mobility, connectivity, and safety. First and foremost, the City will
make streets safer and more hospitable to pedestrians as part of its inter-agency
Vision Zero campaign to eliminate pedestrian fatalities and serious injuries. The
City will also continue to expand its bike lane network to new neighborhoods
and, in collaboration with MTA New York City Transit, add 13 new Select Bus
Service routes to enhance transit access, improve the speed of slow transit trips,
and accommodate future growth. Although still relatively in its infancy, the
City’s growing ferry service has the potential to improve access to housing and
employment destinations along the waterfront. The City will also continue to
support MTA efforts to extend and expand the capacity of the subway and
commuter rail systems, including signal improvements that would increase
subway service frequency as well as major capital projects like the construction
of the Second Avenue Subway and the Penn Station Access project, which will
provide new Metro-North access to neighborhoods in the Bronx.
Coordinate planning and public investments to build resiliency
for coastal flood risks
In areas affected by Hurricane Sandy and coastal flood risks, as detailed in One
City, Rebuilding Together, the City will make investments necessary to improve
the resiliency of critical infrastructure systems and operations so that all New
Yorkers live safely in stronger communities. The Mayor’s newly formed Office
of Recovery and Resiliency has initiated projects within the first phase of a $3.7
billion program of investments in coastal protection measures for critical areas,
and will expedite efforts to secure additional Federal funding and expand
resiliency upgrades. Housing recovery and capital investments in coastal
protections and other infrastructure will be coordinated together with neighborhood planning efforts to support the physical, economic, and social resiliency of communities.
Promote Mixed-Use, Mixed-Income
Communities Anchored by Affordable Housing
With new housing comes increased demand for a wide range of services—including transit capacity, retail and business services, as well as community
facilities such as day care, outpatient health care, houses of worship and other
institutions. These businesses and facilities are part of the lifeblood of neighborhoods, and when properly located along well-designed streets that welcome
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Case Study:
Adaptive Reuse for Affordable Housing
Manhattan
BEFORE
AFTER
Artspace El Barrio @ P.S. 109
In 2003, a Minneapolis-based developer, Artspace, received two major grants from
the Warhol Foundation for the Arts to identify a suitable site in New York City and
create affordable spaces for artists to live and work. In 2004, Artspace approached
HPD for assistance in identifying a site. By early 2005, Artspace had concluded that
P.S. 109 in East Harlem, a former public school building, was its first choice. In
October 2005, the project was presented and unanimously endorsed by Community
Board 11. Working with the local New York City Councilmember, Artspace partnered
with El Barrio’s Operation Fightback, and in 2012, the partnership closed construction
financing for the adaptive reuse of PS 109 into 90 newly-constructed units of affordable rental housing and community space.
Artspace El Barrio @ P.S. 109 will include 18 units affordable to households earning
40 percent of AMI and 71 units affordable to households earning up to 60 percent of
AMI. There will also be approximately 13,000 square-feet of community space that
will house galleries, performance space, and not-for-profit offices. Additionally, the
site will incorporate green building practices and amenities including a community
garden, a community kitchen and a farmer’s market and be certified through
Enterprise Green Communities.
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East Harlem
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pedestrian activity, can create community focal points and meeting places.
Using a range of strategies, the City will promote vibrant, mixed-use
neighborhoods.
Pursue zoning changes to support mixed-use communities,
in which housing, quality jobs, and retail support the vitality
of neighborhood
Neighborhood planning and zoning changes can open up a wide range of opportunities for mixed-use neighborhoods. Inducing a mix of uses alongside or within
housing in locations that are highly accessible to public transportation can create
centers of employment, commerce, and services that expand economic opportunity for residents within and beyond the neighborhood. In some industrial or
commercial areas, opportunities exist to expand centers of employment and
business activity.
Zoning can encourage vibrant, mixed-use neighborhoods in additional ways. In
some areas, stringent parking requirements for commercial uses discourage new
buildings from also including housing. Reducing these requirements would
encourage vibrant local retail streets with housing on the upper floors of buildings. In addition, the height of ground-floor retail spaces in mixed-use buildings
is often constrained by current zoning limits for building height and setback,
especially for buildings receiving bonus floor area through the Inclusionary
Housing Program. These requirements will be updated to allow for modern,
high-quality retail space while preserving the full potential for housing above the
ground floor.
Expand and refocus tools that incentivize commercial and
community facility components of mixed-use projects
To support essential commercial uses, community facilities and other uses that
create employment opportunities, City agencies will work to maximize the
use of available financing tools that provide assistance to the commercial
components of mixed-use projects. The City will also explore reviving HPD’s
Alliance for Neighborhood Commerce, Homeownership, and Revitalization
(ANCHOR) Program and will look to expand the use of public financing tools
such as Federal New Markets Tax Credits (NMTC). In addition, by helping
developers plan strategically in the early stages of a project, we will ensure that
mixed-use projects advance specific neighborhood goals, realize full value of
their commercial space, and leverage opportunities to cross-subsidize affordable housing.
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Case Study:
Adaptive Reuse & Mixed-Use Development
Staten Island
BEFORE
AFTER
St. George Mixed-Use Development
Through site redevelopment and adaptive reuse, this project will
transform the site to create a vibrant mixed-use and mixed-income
waterfront community.
Lighthouse Point site is the former home of the U.S. Lighthouse Service
Depot, which [from 1863 to 1939] served as the administrative and
technical center for lighthouse operations nationwide. The Lighthouse
Point project will restore and repurpose the six historic structures on
the site and will accommodate two new towers on the vacant parcels.
This dynamic mixed-use project will ultimately create approximately
500,000 square feet of retail, residential, and hotel development. The
redevelopment will also bring significant economic activity to the St.
George area.
St. George
The residential portion of the project will provide 109 units of new
housing across a range of income levels, with at least 22 units (or 20
percent of the total) permanently affordable to individuals earning up to
60 percent of AMI.
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Some examples of programs we will work to scale:
Edward J Malloy Initiative for Construction Skills
This Construction Skills program is a unique program
built on strong partnerships between fourteen career
and technical public high schools throughout the five
boroughs and the building trades. Over 12 years, the
program has provided training and entry into preapprenticeship programs in the building trades for over
2,300 graduates, and has enjoyed an 82 percent
placement rate.
NYCHA Resident Training Academy (NRTA)
In the fall of 2010, Robin Hood Foundation funded
NRTA, a four year initiative to work with multiple
partners, including CUNY, Brooklyn Workforce
Innovation, and Building Skills NY, to provide NYCHA
residents with employment training and skills.
Administered by NYCHA’s Office of Resident Economic
Empowerment and Sustainability (REES), the NRTA has
offered training in the Construction, Janitorial and Pest
Control fields, placed graduates in jobs at NYCHA, and
linked them to affordable housing developers seeking
construction workers.
Construction Works
Through the Center for Economic Opportunity, the
Mayor’s Fund and private philanthropy, Construction
Works funds nonprofits to connect low-income workers
to meaningful Sandy-related construction opportunities.
The one-year program provides hard skills occupational
training that results in certifications, as well as job
placement services post-training.
Building Skills NY
Building Skills NY is a nonprofit organization which
seeks to help underserved and underemployed New
Yorkers access the many job opportunities made
available through affordable housing construction
projects. The program provides quality construction
industry education and hands-on training, followed by
career opportunities for residents who live in New York
neighborhoods where affordable housing is being built.
Building Skills NY has placed approximately 40
graduates to date.
Engage NYCHA residents and the
surrounding communities to identify local
needs and opportunities
Over the coming months, the City will engage the residents
and neighbors of NYCHA developments in respectful and
balanced conversation about local needs and opportunities. This collaborative process will assess the potential for
underutilized NYCHA land and development rights to
benefit existing residents, increase affordable housing and
local retail services, and reintegrate developments into the
fabric of their surrounding neighborhoods.
Create quality construction jobs
and workforce development
opportunities for New Yorkers
The objective of Housing New York is to make it possible
for working people to find a decent, affordable home in a
thriving and inclusive neighborhood in the City. Producing
this housing will necessitate a substantial investment of
City resources, and we are committed to ensuring that this
investment leads not only to quality affordable housing, but
also good jobs—both direct and indirect—for New Yorkers
across all five boroughs.
As we undertake this substantial public investment, we are
committed to ensuring:
• Quality construction jobs with fair wages, safe
working conditions and advancement
opportunities for Low-Income residents
• The City’s investment in housing is aligned with
our workforce development strategies
• The City capitalizes on the opportunity not just to
build affordable housing but to do so in a way
that helps traditionally disadvantaged
businesses, including Minority- and Womenowned Business Enterprises (M/WBEs).
Create quality construction jobs
We estimate that the construction and preservation of
200,000 units over the next 10 years will generate a
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Case Study:
Leveraging City Property to Seed
Neighborhood Development
Bronx
BEFORE
AFTER
Harlem River Waterfront Redevelopment
This site (located at 63 Exterior Street) is a City-owned parcel on the waterfront south
of 149th Street that serves as a prominent gateway to the borough; the site sits just
north of the Metro-North viaduct bridge and south of the Third Avenue Bridge. With
strong community support, the site was rezoned to allow residential and commercial
uses as part of the Lower Concourse rezoning. Community representatives have long
envisioned redevelopment here, and the area is just seeing the start of investment on
some of the upland sites. The waterfront, which has the greatest promise for transformation of this neighborhood, has not yet seen private investment, but the City’s use
of its land holdings can help spur the way to revitalization.
The site could be developed with a 26-story tower, including almost 500
units of mixed-income housing and more than 100,000 square feet of
commercial space, plus a new waterfront esplanade along the Harlem
River. The redevelopment plan has the strong support of the Borough
President and Community Board 1. The City’s lease with the current use
(secondary site for a storage and moving company) expires this year.
Harlem River
Waterfront
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substantial number of new jobs. Our analysis shows that the investment in
housing will create approximately 194,000 construction jobs and 7,100 permanent
jobs. This includes over 132,100 direct jobs and an additional 69,000 indirect jobs.
Link investment in affordable housing to the City’s broader
workforce development programs
The City will develop new programs coordinated through the Office of Workforce
Development to ensure that our housing investments are incorporated into the
City’s broader workforce development efforts. Specifically, the Office of Workforce
Development will:
• Create a designated workforce development Senior Contractor Manager who
will ensure that developers implement hiring practices and work in partnership
with City agencies to connect individuals with job opportunities.
• Partner with local intermediaries who conduct outreach to and screening of
local jobseekers
• Develop a City-wide hiring database through the launch of a centralized on-line
job application system that improves screening at local access points and
enables follow up for other construction jobs outside of local areas.
• Expand promising construction workforce programs and integrate them into
the affordable housing construction investments.
Build affordable housing while promoting the growth of
Minority and Women-owned Business Enterprises
The City’s investment in affordable housing will be tied to greater M/WBE participation in housing development. Expanding opportunities for these organizations
not only reflects our values, it also expands the pool of developers that can build
affordable housing in New York City and strengthens the housing industry. HPD
will implement a program to expand M/WBEs’ access to capital, build their
capacity, and provide opportunities to compete for a targeted pipeline of development projects. Portions of this program require state legislation, which has been
introduced in the legislature. The City will continue to lobby for its passage. The
City has also allocated funding to HPD and SBS to expand SBS’s Compete to Win
Program to provide capacity building to M/WBE affordable housing developers. In
addition, EDC’s Blueprint to Success and SBS’s Compete to Win have provided M/
WBE contractors with technical assistance, business curriculum education and
networking opportunities. EDC and SBS will endeavor to scale these successful
programs in support of the Plan. EDC will also seek to have greater participation
by M/WBEs on its real estate projects by requiring developers to include M/WBE
participation through appropriate M/WBE construction goals. EDC, SBS and HPD
will coordinate all M/WBE efforts.
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Chapter 2
Preserving
the Affordability
and Quality of
the Existing
Housing Stock
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Overview
Maintaining the quality and affordability of housing that is currently affordable to
low- and moderate-income New Yorkers is critical to meeting the City’s long-term
housing needs. That stock includes publicly subsidized units, privately owned
units, public housing operated by NYCHA, rent-regulated units, and housing that
is market rate, but in a neighborhood where market rents are currently affordable
to many families.
A variety of factors put this housing at risk: New York City’s subsidized affordable
housing stock faces significant threats from expiring rent restrictions. Many NYCHA
units are falling into physical disrepair and Federal funding for NYCHA has nearly
been cut in half over the last decade. The rent-regulated stock has shrunk dramatically over the last decade as vacancy and luxury decontrol have resulted in rent
increases to market levels. Unusually high turnover in many rent-regulated buildings
suggests that some landlords are disregarding tenants’ rights in the pursuit of market
rents. Many categories of the affordable stock face increasing operating costs, and
many buildings have serious maintenance and rehabilitation needs.
While the construction of new housing is a key component of the Plan, efforts to
ensure the quality of existing housing and preserve the affordability of the currently affordable stock also are critical. Preservation is often a more cost-effective
way of securing affordability and protecting tenants from the risks associated with
poor maintenance and disinvestment. On average, the preservation of existing
affordable housing requires fewer government and private resources, and can
leverage past investments. And most critically, both the enforcement of quality
standards and the preservation of affordability provide the families who live in the
units with stable and affordable housing. The City’s efforts to build new housing
must go hand-in-hand with efforts to protect and promote housing quality and to
preserve the affordability of existing units so that all New Yorkers can live in safe
and healthy environments.
Key strategies:.
• Ensure the Safety and Habitability of the Housing Stock
• Adopt a More Strategic Approach to Preservation
• Preserve Government-Assisted Affordable Housing
• Preserve Rent-Regulated and Unregulated Affordable Housing
• Create New and Improved Preservation Tools
• Promote Sustainability, Resiliency, and Long-Term
Affordability While Helping Building Owners Reduce
Operating Costs
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Ensure the Safety and Habitability of the
Housing Stock
Perform a comprehensive review of the Housing Maintenance
Code
The Housing Maintenance Code (HMC) ensures minimum standards of health,
safety, fire protection, light, ventilation, cleanliness, repair, maintenance, and
occupancy in residential buildings. While specific updates to the HMC have been
implemented over time, the City has not undertaken a comprehensive review in
recent years. Many stakeholders believe that requirements of HMC should be
better coordinated with other relevant codes and rules so as to streamline the
design and review process, benefitting both building owners and tenants.
Additionally, the HMC does not incorporate some industry best practices, such
as issuing electronic notices to owners and promoting green building
technologies.
We will conduct a comprehensive review, working with tenant advocates, organizers, building owners, and property managers to identify problems with the existing
code. Based upon that review, we will propose an update of the HMC to ensure
that it reflects current technologies and best practices and is consistent with other
codes relating to housing quality and safety
Increase tenant awareness of how to report housing violations
Well-informed tenants can help to ensure that violations, unsafe conditions, and other
HMC compliance issues in their buildings are reported so that they can be addressed
in a timely fashion. Using posted notices and an extensive outreach campaign, we will
inform tenants about how to identify and report unsafe conditions.
Strengthen enforcement of the Housing Maintenance Code by
leveraging the City’s procurement and compliance reviews
Before entering into contracts with or providing financing to property owners, or
awarding developers site control of City owned property, the City will examine
the violation status of their New York City real estate portfolios and conduct
additional reviews of those violations where appropriate. We will insist that
property owners and developers must cure violations if they want to do business
with the City.
Facilitate rehabilitation by adopting a new building code for
existing buildings
Since 2008 there have been significant revisions to the New York City construction
codes, but the current scheme remains complex and time consuming.
Rehabilitation of existing buildings are subject to a complex regulatory structure
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that includes state law, the applicable provisions of the Bulding Code and interpetive regulations and guidelines. In addition, although several statutory amendments related to building resiliency have been made Post-Sandy, the provisions
governing alterations to maintain or increase resiliency, such as those related to
flood- and wind-resistance, need to be studied further.
We will establish an Existing Buildings Code Revision Committee, consisting of
relevant experts and stakeholders, to propose a comprehensive Existing
Building Code based on the International Existing Building Code (IEBC), as has
been done in the rest of New York State. Adopting a separate code for existing
buildings will streamline permitting and simplify regulations governing building
upgrades and resiliency improvements for the existing housing stock. Once the
code is adopted, we will also establish and maintain industry-wide training
programs on the new code.
Offer training for building owners
Some property owners, particularly small landlords, may benefit from training on
best practices for maintaining their residential buildings in safe and habitable
conditions and from information about resources that are available to improve
building performance and reduce operating costs. We will work with nonprofit
partners to provide comprehensive training programs for owners of residential
buildings and explore the feasibility and potential benefits of providing financial
incentives (such as grants, loans, and in-kind assistance) to owners who successfully
complete an education program and implement best practices.
Leverage private capital to rehabilitate distressed, formerly
abandoned properties
Under the Article 7A program, the City offers limited financial assistance for
rehabilitation to administrators of distressed, formerly abandoned residential
buildings that have conditions that endanger the health and safety of their
tenants. We will explore ways to incorporate private capital into this program in
order to expand its capacity and increase the number of homes that can be
rehabilitated.
Explore cost effective approaches to address conditions in
informal dwelling units
There are thousands of unsanctioned housing units across the city, primarily in
basements and above garages. The conditions of these units may represent a threat
to health and safety of their occupants and to the first responders who may be
called to respond to emergencies in those units. The engineering and fire safety
challenges created by these units are extremely complex. The City will work with
the relevant stakeholders to examine how best to bring these units into the regulated housing system, including a review of other cities’ best practices to bring fresh
ideas to the discussion.
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Case Study:
Rehabilitation of Financially and Physically
Distressed Buildings
Bronx
College Avenue Multifamily Rehabilitation
These three buildings along College Avenue in the Bronx were considered among the
City’s worst maintained properties when HPD entered them into its Proactive
Preservation Initiative. The agency pursued litigation over safety violations and
obtained orders against the landlords to require them to repair unsafe conditions.
HPD also actively supported the tenants’ 7A proceedings by seeking the appointment
of an administrator.
HPD committed to providing low-interest rehabilitation loans through its Preservation
Loan Program to cover the costs of renovating all three properties. With
HPD’s commitment secured, new owners with a responsible track record
were able to reach an agreement with the existing owners and their
lender to take over the building. The current households earn 70 percent
AMI on average, and the new owners will be required to keep all the units
in the building affordable.
East Concourse
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Adopt a More Strategic Approach to Preservation
Target preservation and outreach strategies to neighborhood
needs
The most effective preservation strategies will depend upon neighborhood characteristics and needs. For example, in a community facing rising rents due to market
pressures, the City may be most effective in helping owners keep properties
affordable by using tax incentives or financing tools to incentivize energy retrofits
that would reduce utility costs. In a community that is experiencing high rates of
physical distress, on the other hand, the City may need to focus efforts on expanding its Proactive Preservation Initiative, which targets deteriorating properties for
increased code enforcement and works with lenders and regulators to encourage
owners to make necessary repairs in a timely fashion.
We will pursue a more targeted, neighborhood-based approach to preservation.
This will require analyzing data on housing and market conditions to identify
community needs, developing localized preservation strategies, and engaging
communities to implement these strategies.
Expand our preservation efforts to properties our current
programs do not serve
To expand our preservation pipeline beyond government-assisted housing, we will
proactively reach out to building owners, financing partners, governmental agencies
and community groups to identify preservation opportunities in the broader housing
stock. We will then design and target preservation tools to address the needs of
properties that existing programs currently do not serve. Because the owners of the
buildings targeted will, by definition, not be familiar with preservation programs, we
will partner with third parties to provide technical assistance for owners navigating
the preservation process.
Coordinate preservation strategies with our regulatory and
infrastructure investments
Proactive preservation strategies can be particularly helpful if undertaken early
and in coordination with rezonings of infrastructure improvements. Those activities can often lead to increases in property values and rents, so working with
building owners early in the process to help preserve the affordability of their
properties will help stabilize the neighborhood and allow existing tenants to
remain in their communities.
Support foreclosure prevention strategies
Many low- and moderate-income homeowners serve as the bedrock of their
neighborhoods and play a crucial role in stabilizing their communities. Keeping
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these families in their homes not only protects those households, it also protects
our neighborhoods. The City will continue to support aggressive neighborhood-based efforts to prevent foreclosure and combat predatory practices targeted
at homeowners and homebuyers.
Preserve Government-Assisted Affordable
Housing
Housing assisted by City or other government programs—including NYCHA units,
Mitchell-Lama developments, Low Income Housing Tax Credit (LIHTC) projects,
and HUD-Multifamily properties, represents hundreds of billions of local, State,
Federal, and private investment. Unless the City works with owners to extend the
affordability of these units as subsidies expire, the value of these investments may
be lost and the people living in those housing units may face the risk of soaring
rents or displacement.
Ensure the long-term sustainability of NYCHA units
With over 2,500 buildings and almost 180,000 units across all five boroughs,
NYCHA currently serves more than 400,000 people. These units are critically
important to the City’s housing infrastructure. NYCHA serves many working
families and some of New York City’s lowest income families: More than 50
percent of NYCHA’s residents have incomes below the poverty line, and approximately 80 percent are Very Low Income.
The City is committed to securing the long-term sustainability of these
NYHCA properties, and will fully engage with NYCHA residents to create a
tailored preservation and development plan that will provide a full-scale evaluation of tenant needs and lay out a path forward to accomplish these critically
important objectives.
Expand Mitchell-Lama preservation strategies
There are currently over 48,000 units in the City’s Mitchell-Lama portfolio, which
is comprised of affordable rental units and cooperative housing for moderate and
middle income families. Some Mitchell-Lama developments have significant debt
restructuring and capital needs, coupled with cash flow limitations and limited
access to private financing. In the past, the City has preserved the affordability of
thousands of Mitchell-Lama units, and we will continue to seize opportunities to
extend affordability for the City’s current Mitchell-Lama units, in exchange for
low-cost financing and tax incentives. In addition, we will:
• Work with New York State to identify opportunities to assist in the preservation
of the State’s Mitchell-Lama portfolio
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• Reach out to Mitchell-Lama buildings that opted out in the last decade and are
currently experiencing challenges paying property taxes or water and sewer
charges, to explore the possibility of the building returning to an affordable
housing program
• Explore opportunities for Mitchell-Lama developments to take advantage of
their underused development rights to fund significant repairs in exchange for
extended affordability restrictions
Expand and improve HPD’s Year 15 and HUD MultiFamily
Preservation Programs
HPD’s Year 15 Program works with Low Income Housing Tax Credit-financed
projects that must comply with a 30-year regulatory agreement that imposes
affordability restrictions. At “Year 15” (the mid-point) of the compliance period,
the tax credit investors usually exit the ownership structure. The Year 15
Program then offers low-cost financing for capital needs and tax benefits in
exchange for a new regulatory agreement that extends beyond the initial 30-year
period. The Year 15 pipeline currently focuses on developments in which HPD
already has had some involvement. In order to expand the preservation pipeline,
we will target properties that received tax credits from New York State or HDC
bond financing, but had no prior dealings with HPD. In addition, we will review
our process to ensure that they are providing optimal incentives to owners to
keep the properties in good repair.
As we expand the Year 15 Program, the City’s not-for-profit building owners must
remain critical partners in our preservation efforts. The City will support the asset
management capabilities of these important partners, helping them stabilize their
projects and access capital to ensure their long-term viability where practical.
HPD’s HUD MultiFamily Program works to identify properties that have expiring HUD mortgages, including Section 236 properties, that have not had prior
HPD assistance, or Housing Assistance Payment contracts. The program then
extends affordability in exchange for low-cost financing and tax incentives. We
will expand this pipeline by improving our outreach to owners and by coordinating with HUD and other agencies, and develop tools to better encourage owners
to preserve affordability.
Improve and modernize oversight and asset management of
City-subsidized affordable housing
Without adequate and ongoing oversight, an owner’s mismanagement or neglect of
a building can jeopardize the quality and long-term stability of City-subsidized
affordable housing. HPD created the Division of Asset and Property Management
(APM) in 2009 to help ensure the physical and financial health of City-subsidized
properties and monitor compliance with regulatory agreements (including affordability restrictions), in coordination with HDC’s Division of Asset Management.
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Since that time, HPD has steadily increased its oversight of City-subsidized
properties, but more remains to be done.
We will increase HPD’s APM capacity in order to allow for ongoing monitoring of
financial performance, physical health, and regulatory compliance of an increasing
number of City-subsidized projects. We will better use technology to increase the
efficiency of our oversight functions and identify opportunities to leverage external
resources to complement our efforts.
Preserve Rent-Regulated and Unregulated
Affordable Housing
Rent-stabilized apartments are a critical component of the City’s affordable
housing stock. Approximately half of all rental units are currently subject to rent
stabilization, which provides tenants with important rights and regulates rent
increases for more than 2.3 million New Yorkers. However, decontrol provisions
implemented in 1993, along with market pressures, have resulted in the loss or
deregulation of 250,000 units from the rent-stabilized stock.
Some unregulated housing offers affordable rents without the assistance of public
subsidies because neighborhood market conditions keep rents low. However,
because these units are not bound by regulatory agreements or rent regulations,
they may become unaffordable or unavailable if the market heats up, or if operating costs increase dramatically.
Stem the tide of units exiting rent stabilization
The majority of the units that have left the rent-stabilized housing stock were lost
through high rent vacancy decontrol, which allows units to exit rent regulation
when a unit is vacant and the legal rent for the incoming tenant exceeds $2,500 per
month. A small proportion were lost through high income/high rent deregulation
(so called “luxury decontrol” which allows units to exit rent regulation when the
occupant’s annual income exceeds $200,000 for two consecutive years and the
legal rent exceeds $2,500 per month). Legal rents can escalate quickly to that
$2,500 trigger through annual rent increases, permissible increases upon vacancy,
and/or rent increases due to Major Capital Improvements (MCIs) and Individual
Apartment Improvements (IAIs).
The state law governing rent stabilization will come before the State legislature for
renewal in 2015. The City will advocate strenuously for renewal, and for strengthening rent stabilization protections. Further, the City will work with our State
partners to seek to amend the New York State Local Emergency Housing Rent
Control Act (LEHRCA) in order to effectively repeal the Urstadt Law and 2003
amendments, which limit the City’s role in the State rent regulation scheme.
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Strengthen protections for tenants of rent-stabilized housing
In 2013, over 30,000 New York City families were displaced from their homes as a
result of eviction proceedings filed in Housing Court. The lack of legal representation for low- and moderate-income tenants facing eviction limits their awareness
of their rights as tenants and makes it more difficult for them to defend themselves
against actions initiated by landlords. Legal services are a critical preservation tool
as they can prevent landlords from pursuing evictions simply to move their
apartments out of rent stabilization. Unfortunately, the current demand for tenant
legal services far exceeds supply.
We will streamline City programs that provide eviction prevention services to help
ensure that tenants in rent-stabilized units stay in their homes. In addition, we will
seek external funding to support eviction prevention programs and will ask private
law firms to provide pro bono legal services to defend tenants facing eviction or
other housing court actions. Finally, we will work with community based organizations and tenant organizations to increase tenant education in order to preserve
the affordability of the rent-stabilized housing stock.
Tenants of rent-stabilized apartments may apply to the New York State Office of
Homes and Community Renewal (HCR) for rent reductions due to substandard
conditions or services. In order to help protect tenants’ rights and encourage
landlords to provide required repairs and services, HPD will work with HCR to
determine how HPD’s code compliance efforts could assist HCR with their
enforcement of the rent reduction provisions.
Preserve the affordability of unregulated housing where rents
may rise because of changing neighborhood conditions
The pipeline to preserve housing that is currently affordable because of market
conditions in the neighborhood has been largely generated through individual
property owners coming forward to seek a tax exemption and/or subsidies for
rehabilitation. Using new outreach strategies and preservation tools, we will
proactively identify and invest in these properties in order to preserve their
affordability before rents in the neighborhood increase dramatically. Such investments will allow current tenants to benefit from improved units, and permit future
tenants to be assured that the unit remains affordable, even as the neighborhood’s
housing values and rents increase.
Create New and Improved Preservation Tools
While the City will work to expand on preservation efforts using existing tools, it is
clear that more flexible tools are needed to reach a broader range of properties and
meet the needs of different neighborhoods and building owners. We will streamline and coordinate the existing tools to provide more standardized and efficient
preservation programs.
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Create new incentives for properties that are not served by
existing programs but are in danger of converting to condos or
exiting rent regulation
Many buildings that do not have capital needs or require rehabilitation and are in
strong markets are likely to convert to condominiums or leave rent regulation.
These buildings represent a risk to the City’s affordable housing stock, but also
create opportunities for preservation. Existing tax exemptions and abatements are
too limited in scope to apply to such buildings (for example, J-51 requires rehabilitation, 420-c is only available for LIHTC-financed projects controlled by charitable organizations, and Article XI requires the involvement of a Housing
Development Fund Corporation (HDFC). The City will seek to create a new tax
incentive program to provide rental building owners a partial or full tax exemption, subject to HPD approval, in exchange for entering into a regulatory agreement that ensures affordability for the life of the exemption.
Re-examine and recalibrate the Inclusionary Housing
Preservation Program
The City will re-examine the Inclusionary Housing Preservation Program which
gives developers bonus zoning development rights in exchange for their agreement to renovate and preserve affordable housing. We will recalibrate its terms
to better match the amount of the bonus to the amount of affordability preserved.
In addition, we will review the minimum thresholds of preservation required to
qualify for the bonus, and assess whether the owners of subsidized housing
receiving funds from the sale of bonus development rights should be required to
use those funds to build or preserve additional affordable housing.
Leverage liens for City repairs/services to press for
affordability and responsible new ownership
When property owners fail to perform necessary repairs or provide required
services, the City can help to ensure that tenants are not subjected to dangerous
conditions. Where the City acts to remedy these owner failures, it files a lien
against the property to recoup the cost of those activities. Those liens, which are
the direct result of an owner’s breach of its legal obligations, currently bear interest
at a lower rate (7 percent) than an ordinary tax lien (generally 18 percent). The
City will seek local legislation to ensure that liens for such work bear interest at the
same rate as any other defaulted tax lien.
Enforcement of such liens can be an effective tool to get properties into responsible new ownership. The City will explore ways to press for, and facilitate, such
transfers and to encourage new owners to repair the buildings and devote part or
all of the property to affordable housing.
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Preserve tax-delinquent properties as affordable housing
through Third Party Transfer in rem actions
Third Party Transfer (TPT) is a mechanism that allows the City to transfer physically distressed and tax-delinquent properties taken through an in rem action to
responsible owners who will address the properties’ physical needs. Initiating TPT
in rem actions requires coordination among multiple City agencies. The last TPT
in rem actions were commenced in 2008. The City will work with the relevant
agencies (HPD, Department of Finance, the Law Department, Office of
Management and Budget, Department of Environmental Protection) to enhance
the efficiency of the TPT in rem process, and expedite a new round of TPT actions
that will prioritize not-for-profit ownership of TPT properties.
Expand opportunities to preserve affordable homeownership
The City will work with tenants, community members, and the lending community to finance affordable homeownership opportunities through our Tenant
Interim Lease Program, (which helps organized tenant associations in Cityowned buildings to set up low-income cooperatives), Affordable Neighborhood
Cooperative Program (which uses HDC financing to promote the development
of affordable cooperatives) and Real Estate Owned Program (in which a third
party acquires and rehabilitates bank-foreclosed homes for moderate income
households). In addition, the City will look at ways to expand programs to help
homeowners maintain the quality of their homes through programs such as
Senior Citizens Home Assistance Program, Neighborhood Housing Services
Repair Program, and HPD’s Home Improvement Program.
Promote Sustainability, Resiliency, and LongTerm Affordability While Helping Building
Owners Reduce Operating Costs
Create an energy and water utility cost-reduction program
Utility costs in New York City increased more than 6 percent between 2012 and
2013, while fuel oil costs rose 20 percent in the same period and more than doubled
since 2002. This has increased the rent-burden for tenants and eroded bottom lines
for property owners, which can lead to deferral of maintenance and capital needs.
Undertaking retrofits to save energy and water can help building owners control
operating expenses and maintain affordability, while also achieving broader
sustainability and health goals. However, many buildings have not undergone even
low-cost, low-effort conservation measures because owners lack technical understanding or have limited capital reserves or ability to borrow against small net
operating incomes.
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In order to mitigate rising utility costs and preserve affordability, the City will
create a pilot outreach and financial assistance program and provide grants or loans,
as appropriate, to accelerate investments in energy and water efficiency projects.
The program will target housing that serves low- to moderate-income residents,
and in particular, some of the oldest and most vulnerable housing stock, including
smaller and mid-size tenement buildings. Some of these buildings may be able to
reduce their energy and water consumption by up to 30 percent through moderate
rehabilitation. This program will also seek to leverage our workforce development
to create job opportunities for community residents.
The pilot program will seek to work with existing efforts undertaken by HUD,
Enterprise Community Partners, Green Light New York, HDC and The New York
City Energy Efficiency Corporation (NYCEEC) and will be designed to complement the resources and expertise offered by the New York State Energy Research
and Development Authority (NYSERDA) as well as local utilities, Con Edison and
National Grid. Working together will enable the City and its partners to better
understand and address the efficiency challenges unique to affordable housing
developments of all sizes. By proactively identifying a pipeline of non-assisted
affordable housing that may be in danger of becoming unaffordable, the program
will expand the City’s strategic preservation efforts while helping owners undertake improvements that will increase lower costs and improve housing quality.
Help owners implement resiliency upgrades and reduce flood
insurance premiums
In 2013, the Federal Emergency Management Agency (FEMA) updated their maps
of high-risk flood zones (flood maps) in New York City, which are used to determine whether properties are required to purchase flood insurance and conform to
resilient building standards. The updated maps increased the size of the City’s
high-risk zones by more than 50 percent, adding 29,000 new residential properties
and approximately 180,000 residents. As a result, many of these properties will
face substantially increased premiums for flood insurance.
Property owners are able to reduce their flood insurance premiums by undertaking
specific improvements to their buildings, such as elevating the ground floor and all
building systems. The standards that govern these improvements, however, were
largely conceived with free-standing single family homes in mind and they are
often physically impractical or financially infeasible in New York City’s multifamily
buildings. Federal standards also penalize affordable housing in particular because
the expenditure threshold that dictates when an owner is required to undertake
improvements—known as a “substantial improvement” is linked to the assessed
value of the property, which is typically lower than for market rate housing. This
can have the unintended consequence of deterring investments in the building.
The City will confront these challenges on multiple fronts. First and foremost, we
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Case Study:
Energy Efficiency and Moderate Rehabilitation
Manhattan
Franklin Plaza
In 2013, HDC provided nearly $37 million in loans to fund the first phase of a Franklin
Plaza, a moderate rehabilitation project that prioritizes reductions in energy consumption and pollution. Franklin Plaza is a Mitchell-Lama housing cooperative that provides 1,634 units of affordable housing in fourteen 20-story buildings, of which nearly
60% serve residents that earn less than 60% of AMI; the remainder serve households
earning up to 125% of AMI. Working closely with HDC, HPD and the NYC Energy Efficiency Corporation, Franklin
Plaza has now begun an extensive scope of work. The rehabilitation addresses
general rehabilitation needs, while following recommendations provided by an
independent energy audit to improve the heat distribution system and install decentralized hot water heaters as well as new boilers that use cleaner-burning natural gas. Collectively, these targeted interventions are expected to reduce energy use by 15%,
cut carbon emissions by 30%, and reduce expected operating expenses by well over
$1,500,000 annually.
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Case Study:
Post-Hurricane Sandy Resiliency and
Rehabilitation
Queens
Arverne View
Arverne View (formerly known as Ocean Village) is a former Mitchell
Lama residential complex located in the Arverne Section of Far
Rockaway. Constructed in 1972, the 13-acre complex consists of
1,093 units and is made up of 11 buildings. The development also
includes more than 10,000 square feet of retail and a daycare center.
For years, the property was nearly insolvent, and had significant
deferred maintenance and more than 350 vacant units.
After more than five feet of flooding during Hurricane Sandy, a
partnership between HPD, HDC, HUD and Citibank worked together
to help L+M Development Partners acquire and finance the project,
including a $60 million rehabilitation and resiliency plan in November
2012. Working with the City, L+M entered into an agreement that
ensures future affordability for households earning 80 percent of AMI
or less. The effort not only rehabilitates the residential units and
common areas, but also reconstructs the site landscape, mechanical
and electrical equipment, and insulates the buildings from levels of
future flood risk.
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will continue to reinforce and expand the City’s coastal flood protection infrastructure—bulkheads, sand dunes, wetlands, and other physical structures—and
work to ensure that FEMA recognizes the associated risk-reduction benefits in
their flood maps. We will also advocate for the creation of flood protection
standards that reflect the unique characteristics of New York City’s dense built
environment. For example, we will advocate for Federal recognition of other
forms of risk reduction other than elevating structures. This recognition would
enable attached, semi-attached, and multifamily residential buildings to reduce
their flood insurance premiums cost-effectively. Larger affordable multifamily
buildings will also need to be granted flexibility to make resiliency improvements
without the risk of triggering costly additional requirements that could lead to
financial failure and residential displacement.
We will also work to assist property owners directly. We will explore the
creation of a loan program to assist low-, moderate-, and middle-income owners
in newly designated flood zones to perform resiliency upgrades. In some cases,
these loans could be combined with other forms of incentives in exchange for an
affordability agreement. We will also launch outreach initiatives to provide
information to property owners in the floodplain regarding their risks, their
requirements to purchase flood insurance, and their options for reducing risk
and flood insurance premiums. Together these efforts will support both the
City’s affordability and climate resiliency objectives.
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Chapter 3
Building New
Affordable
Housing for All
New Yorkers
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Overview
New York City’s housing affordability crisis is in many ways the manifestation of
a deeper housing supply crisis. New York City’s housing market is especially
constrained. The citywide rental vacancy rate was 3.12 percent, in 2011 (the most
recent year for which that data is available), which is far lower than the nationwide vacancy rate, which was around 9 percent during the same time. Even
worse, the vacancy rate for the lowest cost units is around one percent. This lack
of supply underpins the challenges renters face in trying to find a home they can
afford. As our population continues to grow, it is imperative for the City to
explore various ways to increase the supply of housing—both affordable and
market-rate housing—to meet current and future demands.
We recognize that developers and contractors face significant challenges when
building new housing units in New York City. The dwindling supply of privateand government-owned developable land constrains new projects, and many of
the available vacant parcels cannot easily be developed because of environmental
issues that require costly cleanup. Construction costs also are high, and the
uncertainty and complexity of approval and permitting processes further constrain new development.
Key strategies:
• Enable a Wider Range of New Yorkers to Benefit from the
City’s Affordable Housing Efforts
• Capitalize on Public Assets and Partnerships to Maximize
Affordable Housing Opportunities
• Change Zoning and Land Use Regulations to Promote
Housing Creation
• Remove Unnecessary Barriers and Delays to Developing
Housing
• Ensure That Housing Produced is Sustainable and Aligned
with the Needs of the City’s Changing Demographics
1. Source: 2011 New York City Housing and
Vacancy Survey, US Census Bureau.
2. Source:, 2011 Current Population Survey/
Housing Vacancy Survey, U.S. Census Bureau
and 2011 American Housing Survey, U.S.
Census Bureau.
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A tenant’s annual income must fit
between the minimum and maximum
allowable incomes for a particular
affordable housing unit. A maximum
household income of 60 percent of
AMI is permitted under LIHTC, the
most prevalent financing tool for
affordable housing development. The
LIHTC induces equity investments in
housing by offering investors a
dollar-for-dollar credit against a
Federal tax liability. While minimum
incomes can vary by development and
the rent of a unit, in programs with
rents and maximum incomes capped
at 60 percent of AMI, the minimum
income is generally set at or around
just over 50 percent of AMI.
Even when the City uses other
programs, most affordable housing
units are financed, at least in part, with
LIHTC. HDC and HPD programs that
use LIHTC can also leverage the State
Low Income Housing Tax Credit
(SLIHC) program, which fosters the
creation of affordable housing by
offering a dollar-for-dollar credit
against a State tax liability. The SLIHC
program can serve households with a
maximum income of 90 percent of
AMI. While using SLIHC allows the
development to serve a wider range of
household incomes, SLIHC is a limited
resource.
Enable a Wider Range of New Yorkers to
Benefit from the City’s Affordable Housing
Efforts
Existing affordable housing programs require households to meet specific income
restrictions. These restrictions can at times be too narrow to reach the income ranges
of New Yorkers in need of affordable housing. The households best served by available financing programs have annual incomes between 50 and 60 percent of AMI or
$41,951 to $50,340 for a family of four in New York City . Moving forward, we will
create and modify our financing tools to allow developments to house New Yorkers
with a wider range of incomes. This means we will also support specific efforts to
house populations who are critical to maintaining the diversity and vibrancy of New
York City, like artists and musicians who struggle to find affordable housing and/or
live/work space.
The private market does not currently produce enough housing affordable for
moderate and middle income households. We will expand the City’s tools to
finance housing for the lowest income populations, as well as for middle-income households. To do this, when appropriate, we will provide deeper subsidies for projects housing the lowest income populations (i.e. 30 to 50 percent of
AMI) and/or cross subsidize those populations through mixed-income programs that target households earning up to 165 percent of AMI. This will allow
us to serve a wider range of households, not just those between 50 percent and
60 percent of AMI.
Provide additional subsidy to allow units at lower AMI levels
In the majority of programs, the City will require developers to provide a
significantly higher percentage of units at even lower AMI levels than
currently required. We will need to “pay” for this deeper level of affordability
by increasing the amount of subsidy per project (from HPD and/or HDC). The
increased subsidies will offset the lower operating revenue that results from
providing more deeply affordable housing units, by effectively lowering the
carrying cost of all debt on the projects. Although it can be very expensive to
finance housing for the lowest AMI levels, we believe it is critical for government to enable a wider range of our residents to benefit from our affordable
housing efforts.
Advocate for the Federal government to allow LIHTC Income
Averaging
New York City and other State and City housing agencies have proposed legislation to expand the flexibility of the Federal LIHTC. LIHTC income averaging
would allow low-income developments to serve a mix of low-income households
(as high as 80 percent of AMI and as low as 30 percent AMI) as long as the mix
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What is Middle-Income?
Middle income generally ranges from
around 120 percent of AMI ($100,681
for a family of four in 2014) to a
maximum of 165 percent of AMI
($138,435 for a family of four in 2014).
averages to 60 percent AMI (whereas the current program limits all units to 60
percent AMI or less).
Under current Federal LIHTC rules, rents set above 60 percent AMI (such as 80
percent AMI) do not generate tax credits. Rents set at deeper affordability levels
generate tax credits, but are not economically feasible without additional HPD or
HDC subsidy. Income averaging will allow us to serve households in a wider
income range in any given LIHTC development, without increasing the amount of
public subsidy necessary.
Create a new middle / mixed-income housing strategy
Middle-income housing is an essential component of any strategy to promote
long-term community revitalization and economic diversity throughout New York
City’s neighborhoods. The City needs programs that can accommodate a range of
households at different income levels. Teachers, fire fighters, and police officers are
just some of the many people critical to our growing economy, and they help to
make up the backbone of our society. The City is only improved when these middle
income workers can afford to raise their families within our five boroughs. Further,
programs designed to reach middle-income families sometimes are necessary either
to keep those households in neighborhoods that are becoming more expensive, or
to encourage middle-income households to move into and help diversify developing
neighborhoods. We want to ensure that every neighborhood in the City is an
inclusive environment for households of all incomes to live, work, and play.
Producing middle-income housing can also be a finance tool to cross-subsidize
more deeply affordable units. A mixed-income model is more economically feasible
than 100 percent middle-income developments, which are costly to subsidize and
may not do enough to promote income diversity. Under mixed-income structures,
the tax credit equity and tax-exempt bond financing generated by the low-income
units benefits the financing of the entire project; in turn, the higher middle-income
rents create enough cross-subsidy to enable the low-income units to provide deeper
affordability to households at 50 percent and 40 percent of AMI (rather than 60
percent of AMI; which is the income level achieved by most tax credit projects).
Pilot M2, a new Mixed-Middle-Income housing program
The City will pilot M2, a refinement of HDC’s current mixed-income program, as a
tool to provide housing to middle-income New Yorkers while simultaneously
creating income-diverse neighborhoods. Twenty percent of a project’s units will
continue to be reserved for low-income households (at the more deeply affordable
40 and 50 percent AMI level rents) and 30 percent of units for moderate-income
households (80 percent and 100 percent AMI rents). However, the remaining 50
percent of units will be reserved for middle-income households (130 percent AMI
rents) as opposed to being rented at unrestricted market rate rents. In some areas
the middle income rents may already be at or close to market rate rent; however, by
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restricting them through program regulatory agreements and enrolling them in rent
stabilization, we will ensure that they remain affordable to middle-income households even if neighborhood rents rise.
Using 501(c)(3) bonds to finance middle-income housing
In addition to M2, middle-income housing may be financed through the issuance
of tax-exempt 501(c)(3)governmental purpose bonds. This program would be
predicated on the use of a 501(c)(3) charitable organization created with the City’s
assistance to develop and provide quality affordable housing for moderate and
middle income New York residents. HDC would then issue 501(c)(3) bonds to
provide tax-exempt financing to the non profit owner. This model assumes that
middle income housing would be developed on City-owned land in areas that can
support these rents. Use of 501(c)(3) bonds in such projects would preserve
valuable volume cap for projects targeted to lower income residents while minimizing City subsidy for middle income developments. The conservation of both
capital subsidy and private activity bonds would allow the City to finance additional affordable units for low income families. This middle income model will require
long-term credit enhancement and liquidity on the HDC bonds so that HDC could
offer particularly low rates for these developments. Potential providers of this
credit enhancement could include pension funds and insurance companies.
Capitalize on Public Assets and Partnerships
to Maximize Affordable Housing Opportunities
Vacant and underdeveloped parcels of
land still exist throughout the City.
Despite the unrelenting demand for housing in New York City, vacant and underdeveloped parcels of land are scattered still throughout the City. The City can
encourage development on these sites by investing in critical infrastructure,
making use of land use controls, providing remediation incentives, and forming
strategic partnerships.
Aggregate small sites to develop homeownership
opportunities
The New Infill Homeownership Opportunities Program (NIHOP) will streamline and continue prior efforts to promote workforce homeownership opportunities. Under the program, sponsors will purchase City-owned land and construct
one- to four-family homes, cooperatives or condominiums. The City will target
small developers and local CDCs to participate in the program and work with
financial institutions to develop homes in neighborhoods that lack affordable
homeownership opportunities. Generally, one third of the units in each project
will be required to be affordable to LMI households. Additional tiers of affordability will be encouraged for moderate- and middle-income households. The
homes will be made available by lottery under an approved marketing plan. The
City will monitor construction and work with developers to ensure delivery of
quality affordable housing.
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Aggregate small sites for rental opportunities
The City will launch the Neighborhood Construction Program (NCP), an initiative to aggregate sites to develop affordable housing in order to achieve economies
of scale in the remediation, development, financing and operation of scattered
infill lots for rental housing. NCP will seek to develop affordable housing on lots
that can accommodate up to 20 units. NCP will focus on developing capacity
among smaller developers with a particular focus on local not-for-profits and
CDCs.
Re-evaluate the approach to development on NYCHA property
The City is committed to securing the long-term sustainability of these NYHCA
properties and will fully engage with NYCHA residents to develop a separate
strategic plan that will provide a full-scale evaluation of tenant needs and lay out
a path forward to accomplish these critically important objectives. The comprehensive plan will ensure maximum benefits for residents and will be issued
within a year.
Invest strategically in infrastructure to unlock development
potential
Many sites slated for affordable housing have been delayed because the infrastructure (such as sewers, streets, and open space) needed to support the future population was not in place. In areas such as Coney Island in Brooklyn, Long Island City
in Queens, and Stapleton in Staten Island, a series of targeted infrastructure
investments and other City actions have been identified that would aid in the
production of thousands of new affordable housing units and accompanying retail,
services and community facilities. There are many other sites across the city where
there are enormous opportunities to leverage infrastructure investment to drive
affordable housing production.
Identify underdeveloped City-owned or publicly controlled sites
In addition to scattered vacant City-owned sites already identified for housing, the
City controls a portfolio of properties (such as municipal parking lots) with
residential development potential. The State and Federal government and affiliated entities also have significant landholdings and development rights that could be
harnessed to deliver housing. We will identify vacant and underdeveloped publicly
controlled properties and maintain an up to date census of the properties. We also
will undertake public outreach to facilitate their development for affordable
housing. Where appropriate, the City will finance new mixed-use buildings that
also provide commercial amenities and community facilities like those sponsored
by the Educational Construction Fund.
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Case Study:
Underused City Site
Brooklyn
Spring Creek
Gateway Elton Street Phase II is being constructed on a site that was formerly
City owned and underused. The project will consist of three buildings totaling
175 affordable rental units and approximately 24,000-square-feet of commercial
space.
When all three phases of Gateway Elton Street are complete, the project will
include a total of 659 affordable apartments with approximately 60,000 square
feet of community space. The project will include a childcare center, retail and
restaurants as part of a comprehensive effort by the City and its development
partners to create a strong, vibrant and self-sustaining neighborhood.
Spring Creek
Identify and encourage development on underused privately
owned sites through strategic partnerships and the pooling of
development rights
Many privately owned properties may have unused or underused land. With the
right set of incentives, these private owners could make better use of their land and
possibly unlock potential revenue from residential or commercial tenants.
Development in cooperation with mission-driven organizations such as trade and
membership associations, faith-based institutions, and community service organizations may be particularly fruitful. These organizations might not only benefit
from a capital influx unlocked by fully developing their land, but might also have a
mission-driven interest that aligns with the City’s goal to increase the supply of
affordable housing. The City will conduct outreach to these owners to develop
partnerships and encourage the use of their vacant land and pooling of their
development rights with adjoining sites for affordable housing.
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Align tax policies regarding vacant and underused land with
our affordable housing goals
Because taxes on vacant lots, underused lots, and shuttered residential buildings
can serve as a deterrent or an impetus to develop on vacant land, tax policy must
be aligned with the goal of encouraging development. In addition, to further
encourage development on vacant land in zoning districts zoned for moderateor high-density residential use, the City will proactively reach out to the owners
and target incentives (brownfield remediation and others) based on the site
conditions. Finally, landlords in transitional neighborhoods often keep under-occupied buildings partially vacant in order to preserve the possibility for
development in the future. Tax policy for these buildings will be reexamined to
determine whether it is providing the appropriate incentives for redevelopment.
Explore the creation of new property through land banking,
reclamation, infrastructure decking, and resiliency efforts over
a longer time frame
Although not likely to produce new housing units in the next ten years, the City can
create long-term opportunities for development of affordable housing through targeted
efforts to create buildable sites by decking over infrastructure and creating new coastal
protection infrastructure that enables more resilient coastal neighborhoods. The City
will work with the MTA and other owners of rights-of-way to explore the feasibility of
decking over rail facilities, as has been done at Hudson and Atlantic Yards. Any overbuild strategy will require careful analysis by the City and partner agencies to determine whether the number and cost of housing units and other benefits justify the
considerable expense and other impacts associated with these projects.
There also exists a real time opportunity for the city to work with the Attorney
General to receive funding to create a land bank in the City.
Offer incentives to facilitate environmental remediation on
brownfield sites
Both the New York State Department of Environmental Conservation (DEC) and
the New York City Office of Environmental Remediation (OER) can help transform
sites that are difficult to develop and require cleanup through innovative programs
that leverage City, State and Federal resources available for remediation activities.
The resources provided by OER substantially reduce the timeline to acquire
approval for remediation efforts, provide funding and other services to lower
cleanup costs and facilitate the cleanup process, and provide essential protection
against government environmental enforcement. OER’s services facilitate the
renewal of both market-rate and affordable properties. Cleanup of a once vacant or
derelict lot may allow nearby properties to reap benefits from increased property
value and improved environmental conditions.
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Case Study:
Getting Creative to Develop an Underutilized
Private Site
Bronx
Melrose Commons Redevelopment
Melrose Commons and the immediate surrounding area have been and
continue to be the most noteworthy symbol of the rebuilding of the South
Bronx, with more than 3,500 units of newly constructed affordable housing completed and another approximately 1,600 units in the pipeline. However, for four of these planned projects, with a possible total of almost
700 additional units, a complicating issue was the existence of a legally
abandoned below-grade railroad right-of-way (ROW).
The City used eminent domain to acquire the air rights over the private
land involved with the ROW and did the work to prepare the area for
construction. As a result, development of two Elton Avenue sites will bring
approximately 500 affordable residential units along with retail and community facilities.
Melrose
Commons
We will work with DEC to ensure that State program requirements and incentives
encourage development on sites in the city. For example, we will seek to increase
the reimbursement percentage for the existing brownfield cleanup tax credit and
convert the tax credit into a subsidy that can be invested in projects earlier in the
site preparation development phase, which will encourage more projects to use the
State cleanup program.
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Establish the affordable housing cleanup fund
OER has been effective in acquiring Federal and State grant funding for cleanup of
brownfields in NYC and recently established an Affordable Housing Cleanup Fund
which will prioritize affordable and supportive housing projects. OER will also
work with HPD to develop proposals for EPA Cleanup grants, EPA Site
Assessment grants, EPA Revolving Loan Cleanup grants, and New York State
Regional Economic Development Council grants.
Promote use of OER’s Clean Soil Bank to lower site
preparation cost
OER received a delegation from New York State to operate the New York City
Clean Soil Bank in 2013. This program enables clean soil from remediated brownfield development projects to be transferred to other development sites with no
cost to either project. Clean soil is now available and under this program, an OER
will prioritize its availability for affordable and supportive housing projects. OER
will partner with other agencies to inform all affordable housing developers that
OER can provide clean soil free of charge for new construction use through the
newly established New York City Clean Soil Bank.
Change Zoning and Land Use Regulations to
Promote Housing Creation
Certain existing zoning restrictions, such as some requirements for parking and
the minimum size of units, unduly burden or restrict the development of affordable housing. Amending regulations to remove these impediments would encourage the construction of new housing.
Reduce parking requirements for affordable housing in highly
transit accessible areas
Studies of residential car ownership patterns have shown that, in “Inner Ring”
neighborhoods that are located outside the Manhattan core but are accessible to
transit, employment centers, and services, per-unit parking requirements for
affordable housing exceed car ownership rates among low-income households.
Where parking is built for affordable housing, spaces often go unused. The
construction of unnecessary parking spaces increases construction costs and may
deter development or reduce the number of affordable units that can be produced. The City will propose appropriate reductions in parking requirements for
affordable housing developments near public transit.
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Case Study:
Brownfield Remediation and Mixed-Use Site
Development
Manhattan
Sugar Hill Development
In 2008, Broadway Housing Communities, a New York City non-profit housing developer, acquired a half-acre site adjacent to an operating gas station that was suspected to
have buried gasoline and oil tanks. Broadway Housing enrolled in the City’s voluntary
Brownfield Cleanup Program. To speed cleanup of the site and development of the
affordable housing, the City provided a $165,000 grant to fully remediate the project.
Hamilton
Heights
Upon completion, Sugar Hill Development will include 124 affordable housing units.
Thirty percent of the apartments will be for households earning up to 30% of AMI, 40%
of the units will be for households earning up to 50% of AMI, 10% of the units will be for
households earning up to 60% of AMI, and the remaining units will be for households
earning up to 80% of AMI. Twenty five units will be set aside for homeless households.
Modernize height and setback regulations to accommodate
typical floor-to-floor heights for housing and ground-floor
retail
Because of higher standards for housing, the rise of green technologies, and new
methods including modular construction, today’s residential buildings typically
have higher floor-to-floor heights than the buildings of 30 years ago, when many of
the height and setback regulations of zoning were established. Standards for retail
space have also increased to provide an improved shopping environment and to
allow space for modern ventilation and other mechanical systems. Especially when
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combined with the floor area bonus allowed through the Inclusionary Housing
Program, these factors can make it difficult to accommodate the full amount of
housing allowed within the permitted height and setback limits. The City will
propose zoning changes that would provide some additional flexibility to these
regulations to facilitate housing creation, further encourage use of the existing
Inclusionary Housing zoning bonus, and improve the quality of both housing and
street-level commercial activity.
Easing restrictions on the conversion of older, obsolete nonresidential buildings to residential use
Over time, many older buildings have become obsolete for their original
intended purpose. To address the need to repurpose these buildings, zoning
regulations allow non-residential buildings constructed before 1961 to be
converted to housing, irrespective of current residential bulk regulations in
some parts of the city. However, in other areas, the regulations for the conversion of obsolete non-residential buildings to residences have not been consistently updated We will explore extending conversion opportunities to additional residential and commercial areas of the city. Conversion of obsolete
commercial and community facility buildings would unlock potential housing
without the need to build anew. More thoughtful zoning policies then allow for
true mixed use opportunities.
Modify “tower-in-the-park” zoning regulations to better enable
appropriate development for underused land for housing and
mixed use
From the 1940s to the 1970s, many large sites were developed under Mitchell
Lama and other programs with high-rise housing in a “tower-in-the-park” configuration. These sites are governed by special zoning rules that require large expanses
of open space, often occupied by open parking lots. These open areas potentially
provide opportunities to site new housing, including affordable units. However,
zoning restrictions would need to be eased. The City will initiate zoning changes to
facilitate development on these large sites while preserving light, air and usable
recreation space.
Amending the state multiple dwelling law to eliminate the cap
of 12 FAR (floor area ratio) on the residential component of
buildings, and allow this limit to be set instead by zoning
While the City’s highest-density zoning districts allow development at substantially higher densities for commercial uses, a cap in the State Multiple Dwelling Law
currently restricts the amount of housing that can be provided in any building to a
floor area ratio (FAR) of 12.0. Removing the statutory cap would allow more
housing, including affordable housing, to be developed in high density areas,
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provided that the zoning is also amended, a process that will entail a full public
review. The City will propose state legislation to remove the FAR cap and permit
decisions about density to be made through the local land use process.
Identify opportunities for new uses of transferable
development rights
DCP will undertake a comprehensive study to identify opportunities for using
Transferable Development Rights to promote housing development and other
public goals. The study will include consultation with stakeholders, such as owners
of historic properties and other sites with potentially transferable development
rights, the real estate industry, communities and elected officials.
Remove Unnecessary Barriers and Delays to
Developing Housing
High construction-related costs in New York City are a result of numerous factors,
including but not limited to regulatory and policy requirements, limited competition, slow adoption of new technologies, and outdated laws. Addressing these
various factors as set forth below may help contain construction-related costs and
facilitate affordable housing production.
Streamline interagency coordination to simplify and expedite
development approvals and permits
The City will convene a task force to solicit input from the industry and other
stakeholders about how to consolidate and streamline the permitting and review
process across agencies in order to reduce costs and avoid delays for developers. The
task force will focus on modernizing and automating filing, reviewing, approval and
permitting processes by upgrading technology, and on identifying opportunities to
further expedite reviews by reforming and aligning permitting procedures.
The task force will also explore how to streamline interagency coordination for
City infrastructure investments to support community development. Reforms like
better tracking of payments and change orders, more flexible contracting methods,
and more efficient project management will be a primary goal.
Implement ULURP pre-certification timeline
DCP will implement new agency rules to provide greater predictability and
transparency to the pre-certification review of land use and environmental review
applications. The new rules formalize the pre-filing submission and meeting
participation requirements of the BluePRint review process, establish timeframes
for action, and provide a clear, predictable roadmap for applicants and DCP as a
project moves from conception to filing. These process improvements will be
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assisted by a fully integrated project-based tracking and management system that
will enable electronic filing of land use applications. DCP expects that the improved process will reduce review times from between 25 and 50 percent, significantly reducing the costs associated with discretionary land use approvals. DCP is
committed to meet its charter responsibilities to certify projects into the formal
land-use review process as soon as the application is complete, recognizing that
projects may be approved with modifications by CPC or the City Council, if
appropriate to achieve housing policy objectives.
Speed the City Environmental Quality Review (CEQR) process
and improve coordination among agencies
CEQR is the process by which the City conducts environmental quality reviews
of discretionary actions, including land use and other approvals, in compliance
with city and state law. Over the years, the CEQR process has become increasingly complex, and the delays and costs associated with environmental reviews have
become burdensome to both public and private applicants seeking approvals to
build affordable housing or take other actions.
The City will review the CEQR process to make it more efficient and make
Environmental Impact Statements more comprehensible to the general public
and affected communities. It will examine how environmental reviews are
undertaken in other jurisdictions in order to incorporate best practices into the
New York City process.
Intelligently reduce construction-related costs
The City will work collaboratively with real estate developers, construction and
building trades to help reduce the costs of construction without sacrificing the
quality of our buildings or the livelihoods of those who build our City. While
improvements were made to the Department of Building’s Permitting Approval
Process in recent years, more needs to be done to remove additional inefficiencies and encourage the use of new construction technology. The City will also
study its building and fire codes to assess what changes could reduce costs
without jeopardizing safety.
Expand the pool of contractors in the City’s construction field
to encourage more competitive pricing
Lowering construction costs is also about expanding the pool of subcontractors.
This includes small businesses, especially M/WBEs. The City will work to expand
our existing programs that help these businesses grow by providing technical
assistance, matching M/WBE owners with mentors, and securing loans and surety
bonds for M/WBEs. This will ensure that the business owners have the skills and
training they need to increase capacity, grow and thrive.
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Ensure that Housing Production is Sustainable
and Aligned with the City’s Changing
Demographics
Developing housing that meets our changing climate and the evolving needs of
how New Yorkers live is critical to ensuring the City’s equitable economic development. As discussed, the City’s housing stock currently does not adequately reflect
the needs of the growing number of one- and two-person households. Moreover,
many larger families face significant rent burdens because of lack of affordable two
and three bedroom units.
Commit to building sustainable affordable housing
communities
HPD has adopted the Enterprise Green Communities standards to reflect the
City’s commitment to green and sustainable affordable housing. In addition, HPD
recognizes that the rising cost of utilities is a threat to the long-term viability of
affordable housing. As a part of this effort, we will take lessons learned from
Hurricane Sandy to implement design elements that meet the goals of long-term
resiliency in the face of climate change. Finally, we will work with leading developers who are interested in promoting cost-effective design elements that make
the housing more energy efficient, healthy and sustainable.
Expand the availability of compact units beyond the pilot phase
The City has many regulations that restrict the development of smaller housing
units. Zoning regulations establish a minimum unit size of 400 square feet for
multifamily housing in many areas, limit the density of units based on lot area, and
prevent the construction of a building consisting solely of units built at the minimum square footage. However, projects in other cities and pilots in New York City
are demonstrating that developers can build compact units that are livable, safe,
healthy and contribute a new set of housing options for small households. A
compact unit includes a kitchen and bathroom and is often smaller than allowed
under current regulations. This housing type is likely most appropriate in highly
transit-accessible neighborhoods that contain a large proportion of small households. The City will review the results of the pilot now underway once it is completed, and consider zoning changes to allow the construction of both compact
units and a greater number of small units per building.
Encourage the production of a larger variety of units to match
the current population
The City will amend its current housing policies to encourage the development
of more studios and three-bedroom units, thereby creating housing stock that
more closely meets the needs of the population. Current HPD policy requires
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new construction projects to contain either 50 percent two-bedroom units, or 30
percent two-bedroom and 10 percent three-bedroom units. Oftentimes, developers opt for the former. By promoting the latter option, 60 percent of the units can
be developed as studios and one-bedrooms, which are suitable for smaller
households, while providing increased opportunities for larger families to find
affordable housing.
Currently, there are other regulatory barriers that do not support sensible unit size
distribution. For example, the 421-a program requires that the unit size distribution
of market rate units mirror that of the affordable units or 50 percent two-bedroom
units. A developer who wants to build studio and one-bedroom market rate units is
forced to build larger units than the market may dictate in order to mirror the
requirements that subsidy programs impose for two- and three-bedroom affordable units. We will work to eliminate these inefficient regulations.
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Chapter 4
Promoting
Homeless,
Senior,
Supportive and
Accessible
Housing
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Overview
A measure of any great city is how effectively it cares for its most vulnerable
residents. New York City’s shelter population has increased to an all-time high of
more than 50,000 people, including 22,000 children. Shelters, intended to be
interim solutions for housing emergencies, are becoming fixed realities, with
families’ average length of stay increasing and resources to help them leave
decreasing. As New Yorkers live longer, New York City’s senior population is also
growing, and affordable housing is a critical concern of older New Yorkers. Despite
legal protections, people with disabilities also continue to face challenges in the
City’s housing market. The City is making efforts to provide high quality affordable housing to the most vulnerable residents not only because it is the moral thing
to do, but also because it is fiscally responsible. Investing in quality affordable
housing for the City’s special needs, homeless, and senior households, as well as for
people with disabilities will reduce the demand for social expenditures in the
long-term and provide a more cost efficient strategy for addressing this critical
housing need.
The enormity and complexity of the affordable housing crisis for populations in
need in New York City demand a dynamic and compassionate policy response. For
some families and individuals, the ability to access eviction prevention services
will make the difference between staying securely housed and entering a shelter.
Others may need a short-term rental subsidy as a bridge out of the shelter system
into permanent housing. Still others, who rely on fixed-incomes or live with
chronic disabilities, may need supportive housing or public housing. These
strategies are not only humane, but also can yield taxpayer savings by reducing
demand for high-cost shelters, hospitals, and other emergency resources.
This chapter summarizes housing policies that will help create and maintain stable
housing for homeless families, those in need of supportive housing, seniors, and
people with disabilities.
Key strategies:
• Assist Homeless Individuals and Families
• Expand Supportive Housing
• Improve Housing Options for Seniors
• Ensure Accessible Housing for Individuals with Disabilities
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New York City’s shelter population has
increased to an all-time high of more
than 50,000 people, including 22,000
children.
By 2040, the number of New Yorkers
who are age 65 and older will increase
by 40 percent to more than 1.4 million
Approximately 850,000 people, or 10
percent of the City’s total population,
are living with a disability.
Assist Homeless Individuals and Families
The City must help New Yorkers avoid homelessness in the first place, as well as
help those who have had to turn to the shelter system to return quickly to stable
housing. A multi-pronged approach including homelessness prevention and
multiple exit strategies is critical to realizing these goals.
Prevent homelessness before it happens
Preventing homelessness by keeping vulnerable families stably housed is a key
priority. The City will focus on homelessness prevention by enhancing anti-eviction legal services, neighborhood-based housing stabilization services and aftercare to prevent re-entry to shelter. For example, the Human Resources
Administration (HRA) will enhance its homelessness diversion units in HRA Job
Centers around the city. It will also increase its “one-shot” payment program
providing emergency rental assistance to eligible families and individuals, and
increase access to the program in the City’s Housing Courts. The City is seeking to
enhance the Homebase program, a five-borough network of neighborhood-based
services that has been proven to help individuals at risk of homelessness remain in
their communities and avoid entering shelters.
Creative approaches to shelter finance
Whether building new shelters or improving existing shelter stock, a new approach to homeless shelter finance is required. Strategic planning and use of
resources for emergency shelters can help save money, preserve existing shelters,
and prevent the need for new ones.
The City will pilot new models for shelter finance, using long-term contracts to
leverage mainstream sources of financing such as tax credits, 501(c)(3) bonds
issued by HDC, or private bank financing. Doing so can enable the creation of
mixed-use projects that include shelter as well as other uses, create cost savings,
allow for capital improvements in existing shelters, and increase the capacity of
nonprofit shelter providers.
For example, a nonprofit shelter provider could purchase a property, obtain a
20-year shelter contract from the Department of Homeless Services (DHS), and
use the income from the shelter contract payments to leverage permanent debt to
finance mixed use buildings that contain both shelter units and permanently
affordable housing. In some cases, income generated from the shelter could be
used to subsidize lower rents for permanent affordable housing on the same site.
Finally, we will improve coordination among the shelter systems operated by
different City Agencies including HRA, HPD, the Department of Youth and
Community Development (DYCD) and DHS. For instance, survivors of domestic
violence will be eligible for HPD homeless set-aside units both from the DHS and
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HRA shelter systems, and residents of HPD’s shelter system who qualify can be
placed in supportive housing.
Pilot new rental assistance programs for homeless families
Today, the majority of homeless households cannot afford to rent apartments on
their own. Approximately 90 percent of DHS clients earn less than 30 percent of
AMI ($25,150 for a family of four), which is below the average range of income
(between 40 and 80 percent of AMI, or $33,560-$67,100 for a family of four) that
most HPD programs serve. A targeted rental subsidy could help to bridge the gap
and connect homeless families to the housing market. Better targeting of existing
eviction prevention, credit repair, job training, and other asset-building and social
services will help formerly homeless households placed in housing to remain
stably housed. The City will work to implement a pilot rental subsidy program for
homeless families and provide targeted aftercare services throughout the length of
the subsidy and beyond. Potential sources of funding for this program include: City
tax levy funds, Federal Home Dollars and TANF funds.
Make better use of subsidized housing resources
Public housing is a critical source of permanent affordable housing for more than
400,000 low-income New Yorkers, but vacant apartments are scarce and in high
demand. As part of its plan to address the homelessness crisis, the City and
NYCHA will continue to prioritize homeless for project based Section 8 units. In
addition, for the NYCHA units, DHS will prioritize families with children who
have already been in the New York City shelter system.
HPD has long set aside units in its multifamily new construction programs for
homeless individuals and families. However, these programs are voluntary and
have in the past relied heavily on the availability of rental assistance such as
project based Section 8 units, which have been in short supply in recent years. To
the greatest extent possible, units for homeless families will be developed with
sources other than Federal rental assistance. Instead, underwriting projects to
make them affordable to homeless families will be accomplished by increasing the
capital subsidy to reduce the amount of debt the project carries, or by allowing
income averaging so that higher rent units can offset the lower rents for homeless
units.
Accelerate the housing placement process
Multiple bottlenecks in the shelter-to-housing placement system have caused
homeless families and individuals to remain in shelters too long, leaving affordable
units vacant while depriving landlords of a stream of rental income, and increasing
costs to taxpayers by forcing shelters to expand. The City will convene a standing
interagency “bottlenecks working group” specifically tasked with reducing the
time it takes to move families and individuals from shelter to permanent affordable
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housing. Strategies for this working group will include ongoing review of application forms, documentation requirements and procedures, and creating a coordinated assessment system to streamline and automate the placement process for
homeless families and individuals. This will include electronic document management and enhanced coordination across agencies to ensure that vacancies are filled
quickly by individuals and families moving on from shelters.
End veteran homelessness
The City is committed to the national goal to end homelessness among veterans by
the end of 2015. To help achieve this goal, the City will redouble its efforts through
programs such as Veterans Affairs Supportive Housing (VASH), Supportive Services
for Veterans and their Families (SSVF), and Grant per Diem (GPD). The City must
also identify and rehouse veterans living in shelters and on the street. This work will
require close collaborations among City agencies who work with veterans and with
our Federal partners at HUD and the Veteran’s Administration (VA) as well as with
community providers. Additional strategies will include data sharing and piloting
new tools to assess every veteran in shelter for appropriate housing options, eliminate placement bottlenecks and rapidly link veterans to housing.
Expand Supportive Housing
While increasing the affordable housing stock and rental subsidy resources will help
many formerly homeless New Yorkers, some chronically homeless households and
people with disabilities need an additional level of support. Supportive housing is a
cost-effective intervention that provides a permanent, affordable place to live combined with on-site services. Peer-reviewed research on New York City’s supportive
housing system has found that for every unit of supportive housing, taxpayers save
more than $10,000 per year in public resources such as shelters, emergency rooms,
jails, and psychiatric facilities. Research has also shown that Supportive Housing
improves the surrounding neighborhood and can help keep even those with the most
severe barriers to independent living stably housed in their own apartments.
3. Levanon Seligson A, Lim S, Singh T, Laganis
E, Stazesky E, Donahue S, Lanzara C, Harris
TG, Marsik T, Greene CM, Lipton FR, Myers R,
Karpati AM. New York/New York III
Supportive Housing Evaluation: Interim
Utilization and Cost Analysis. A report from
the New York City Department of Health and
Mental Hygiene in collaboration with the New
York City Human Resources Administration
and the New York State Office of Mental
Health, 2013.
nyc.gov/housing
Since the 1990s, New York City and New York State have signed groundbreaking
collaborative commitments—the “NY/NY” agreements—to develop and operate over
15,000 supportive housing units for vulnerable homeless New Yorkers. The latest
agreement, NY/NY III, is on track to create 9,000 units serving people with severe
mental illness, substance use disorders, HIV/AIDS or other disabling medical
conditions. The City will continue its commitment to finish out the NY/NY III
agreement.
Encourage production of new supportive housing opportunities
The demand for supportive housing today far outstrips the available supply.
Building upon the lessons learned and successes from prior partnerships and
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agreements, the City will seek to expand the production of supportive housing.
Supportive housing is a critical ingredient in helping households in need of
additional services succeed in stable environments.
Other recent innovations developing in supportive housing include policies
adopted by the State’s Medicaid Redesign Team (MRT). Through MRT, New York
State has engaged in an innovative process to reduce Medicaid costs by investing in
housing. The City is currently using this new funding and new models to create
opportunities for previously underserved high-need populations. The City will
continue to partner with the State to leverage MRT dollars.
The City will propose changes to the Zoning Resolution’s regulations for
Community Facilities and Nonprofit Institutions with Sleeping Accommodations
to clarify the definitions of these classifications, reduce the possibility of fraud and
abuse, and facilitate the development of supportive housing. These changes will
promote construction of supportive housing and make these publicly funded
projects more cost effective.
Improve efficiency: moving in, moving on
Housing New York calls for a major expansion of the supportive housing resources
in the City. However, building new housing will have a greater impact if we move
people into supportive housing more quickly and help tenants to move on when
they are ready. By improving flow through the existing system, the City will make
better use of the thousands of supportive housing units that currently exist.
Moving In: The supportive housing system in New York City is large and complex.
Multiple agencies and regulatory requirements can lead to process bottlenecks and
confusing, overlapping documentation requirements. The City must streamline
this process and eliminate unnecessary hurdles for supportive housing tenants and
providers alike, to make the allocation and use of this precious housing resource as
efficient as possible.
Moving On: Just as the process of moving into supportive housing should maximize efficiency, so should the process of moving out when a tenant no longer
requires a high level of service. Resources such as rental assistance, aftercare
services providing continuity of care, and a supply of affordable HPD or NYCHA
apartments must be available for supportive housing tenants who are ready to
move on. This will increase housing choice and independence among supportive
housing “graduates” while also making a much-needed and extremely scarce
supportive housing apartment available to a new chronically homeless household
who needs it. The recently approved 30 percent rent cap protection for clients of
the New York City HIV/AIDS Services Administration (HASA) is an early victory
in this effort, as it ensures that people diagnosed with HIV and AIDS no longer
have to fear being rent burdened if they choose to leave supportive housing.
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Improve Housing Options for Seniors
Seniors represent the fastest growing segment of New York City’s population.
DCP estimates that from 2010 to 2040, the number of New Yorkers who are age 65
and older will increase by 40 percent, to more than 1.4 million. Stable, affordable
housing for seniors is essential, whether they wish to age in their existing homes or
in a facility that offers specialized senior care. Current demand for subsidized
senior housing, however, far outstrips the supply. The City will take action to
promote a more secure housing future for its rapidly growing population of seniors
through increased production of senior housing in addition to enhanced housing
supports and services.
Increase supply of housing for seniors
Increasing the supply of housing for seniors will become ever more important over
the next decade as the Baby Boom generation enters retirement and as older
seniors continue to live longer. Part of this effort will leverage Project-Based
Section 8 vouchers to make housing affordable to those seniors whose income
remains stagnant or declines over time. To encourage development, the City will
propose amendments to the Zoning Resolution to reduce requirements for parking
(which often goes unused by senior housing residents), to update outdated regulations to recognize a wide range of senior housing facilities that now exist, relax
minimum unit sizes where they prevent the creation of appropriately sized senior
housing units, and address other zoning constraints that make senior housing
development easier and more cost effective.
We will also actively seek out ways to develop new senior housing in collaboration
with NYCHA, leveraging their resources and prioritizing their residents..
Enhance services for seniors
The Senior Citizen Rent Increase Exemption (SCRIE) program, which protects
eligible seniors from rent increases, is currently administered separately by both
HPD and the Department of Finance (DOF). By consolidating these programs into
DOF, the City will boost their efficiency and make them more user-friendly for
tenants and landlords alike. The City will also perform more robust outreach to
eligible seniors to increase the reach and breadth of this program.
The City also supports increasing income eligibility for SCRIE recipients, which is
currently at $29,000 a year. Increasing the eligibility will allow more seniors who
are on a fixed income to remain stably housed. NYS recently passed legislation that
allows the income eligibility for SCRIE recipients to increase from $29,000 to
$50,000 per year. The NYC Council has also introduced a bill, which would
authorize increasing the SCRIE income level to $50,000 in the City.
Finally, the City will encourage developers of senior housing to partner with LGBT
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Case Study:
Senior Housing
Staten Island
Markham Gardens Manor
This new five-story development—developed by the nonprofit Sisters of Charity
Housing Development Corporation in partnership with NYCHA—will provide 79
affordable housing units for elderly households with incomes under 50 percent of
AMI. The 61,000 square foot building will also include a landscaped rear yard, a
community room, an outdoor recreational area, a computer and library room, an arts and crafts area, an onsite laundry, and surface parking lots containing 28
parking spaces.
The $17.4 million development is located on vacant land provided within
a NYCHA community. Funding for the project is being provided by the
United States Department of Housing and Urban Development (HUD)
through its Section 202 Supportive Housing for the Elderly Program
($12.5 million) as well as HPD through its HOME funds ($4.1 million).
The Federal Home Loan Bank of New York Affordable Housing Program
also contributed $800,000 toward the Markham Gardens Manor
development.
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nonprofit service providers, to provide inclusive affordable housing opportunities
for lesbian, gay, bisexual and transgender seniors.
Support Naturally Occurring Retirement Communities
A number of communities across New York City—including several large affordable housing complexes—have such growing populations of seniors that they have
been coined Naturally Occurring Retirement Communities (NORCs). For example, more than 76,000 seniors, or nearly 20 percent of total NYCHA residents,
reside in public housing. Many of these seniors have raised families and now live
alone, without the daily support they may require.
The City will need to ensure that adequate services, accessibility and housing
quality are maintained for these seniors. Developing dedicated senior housing with
supportive services in NYCHA buildings for the use of existing residents will be a
key element in the City’s comprehensive approach to undertaking redevelopment of
underutilized land for affordable mixed-income housing where opportunities exist.
Ensure Accessible Housing for Individuals with
Disabilities
Providing equal access and treatment for persons with disabilities has been the law
for several decades. And yet, all too often people with disabilities are unable to
secure affordable and accessible housing. The City is committed to creating
accessible apartments for New Yorkers with disabilities and removing barriers to
their sharing in the City’s affordable housing resources. The City will increase
oversight of accessibility standards in the private market as well as in its regulated
affordable housing stock and work to improve access to housing subsidies for New
Yorkers with disabilities.
Housing affordability for people with disabilities
Various housing subsidies exist for people with disabilities, such as the Nursing
Home Diversion Waiver, MRT vouchers, and Individual Supports and Services
grants from the Office for People with Developmental Disabilities, but they are
misaligned with the timing and requirements of HPD’s policies and procedures.
The City will work to better coordinate across government agencies to maximize
their utility within the HPD housing stock.
The Disability Rent Increase Exemption (DRIE) and SCRIE programs protect
people with disabilities and seniors from rent increases, but the programs are not
currently aligned. The City will advocate with the State to match the income
eligibility threshold of the DRIE program with that of SCRIE, enabling more New
Yorkers with disabilities to benefit.
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The City will take aggressive steps to match people with disabilities to available
affordable housing. HPD sets aside 7 percent of the units in housing lotteries for
individuals with hearing, vision, or mobility impairments. Too often, people with
disabilities are unaware of this valuable resource, or their income levels make
them ineligible for such housing. The City will step up marketing efforts and
aggressively match available subsidies for people with disabilities to affordable
housing developed through HPD programs, in order to ensure maximum participation, beyond the 7 percent set aside, for people with disabilities.
Refine roles and prominence of Americans with Disabilities Act
(ADA) and section 504 coordinators
ADA and Section 504 Coordinators are Federally required positions intended to
ensure that City programs and facilities are accessible for persons with disabilities.
The City will enhance the roles of ADA and Section 504 coordinators who currently serve part-time so they can actively improve access to the City’s housing programs for persons with disabilities. A full-time staff member will act as ADA and
Section 504 coordinator for the City’s Housing Agencies, ensuring a proactive and
coordinated response to the housing needs of people with disabilities.
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Chapter 5
Refining City
Financing Tools
and Expanding
Funding
Sources for
Affordable
Housing
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Overview
The City will act now to refine City financing tools and increase sources for
affordable housing by using existing statutory and regulatory authority at its
disposal. However, many initiatives require legislative action and cannot be
accomplished without the assistance of State, Federal and industry partners. The
City will, therefore, establish a task force in the coming months to develop a
comprehensive City, State and Federal legislative agenda for needed reforms. This
task force will convene by August 2014 and deliver a set of preliminary recommendations by December 2014.
The City and the task force will explore how to target tax incentives to better
leverage private capital, more closely align them with affordable housing objectives and encourage affordable housing preservation and development.
Additionally, the City and the task force will explore whether legislation is appropriate to introduce new funding sources dedicated to affordable housing, and will
continue to streamline existing financing tools and develop innovative public/
private partnerships to fund affordable housing.
Key strategies:
• Target and Strengthen City Tax Incentives
• Identify New Funding Streams to Fund Affordable Housing
• Increase Private Leverage and Expand Existing Financing
Tools
• Strengthen Public/Private and Philanthropic Partnerships
• Re-Evaluate HPD and HDC Programs to Stretch City Housing
Subsidy Dollars Further
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Target and Strengthen City Tax Incentives
Real estate property taxes represent a significant expense for multifamily building
owners and developers. For this reason, exemptions and abatements that reduce
an owner’s property tax can be a powerful incentive tool to induce investment in
the construction, rehabilitation, or maintenance of the City’s multifamily housing
stock. The City has a set of tax exemptions and abatements to promote the development of market-rate housing as well as the development and maintenance of
affordable housing. Over time, some of these tax benefit programs have become
inconsistent and overly complex, and in some cases the tax benefits they provide
are higher than necessary to induce the construction and preservation of affordable housing. To address these issues, the task force will explore legislative and
administrative changes to simplify and rationalize tax programs while increasing
their effectiveness in generating affordable housing.
Modify the 421-a tax exemption
The State of New York implemented the 421-a tax exemption program in 1971
to stimulate the development of the tens of thousands of undeveloped lots that
existed at the time because of disinvestment in many New York City neighborhoods. The initial legislation authorized a single as-of-right exemption from
real property taxes for ten years for all new residential construction. In subsequent years, the program was amended to provide longer-term benefits for
governmentally assisted affordable projects, as well as for projects outside
Manhattan. Restrictions added in 1984 established a Geographic Exclusion
Area (GEA) that required projects in the strongest Manhattan markets to
provide affordable units either on-site or in an off-site location in exchange for
the 421-a tax benefit. Between 2006 and 2008, the GEA was expanded by local
and state legislation to include all of Manhattan and portions of the other four
boroughs. In addition, the “certificate program,” which allowed off-site affordable units to generate 421-a benefits for market-rate GEA units, was eliminated.
At present, only buildings receiving substantial governmental assistance
pursuant to an affordable housing program, those that set aside at least 20
percent of their units as affordable, and projects that purchase negotiable
certificates from agreements executed prior to December 28, 2007, are eligible
for 421-a benefits in the GEA.
Based on the recommendations of the task force, the City will consider a number of
reforms to 421-a legislation and program rules in order to increase its efficiency
and effectiveness as an incentive for developing affordable housing.
Increase Efficiency of 421-a
Today, developers frequently layer 421-a benefits on top of other public programs designed to subsidize affordable housing development, using the same
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affordable units to qualify for multiple forms of subsidy. Going forward, in
cases where multiple subsidies are used by developers building in strong
markets, the City will seek to increase the percentage of affordable units
required and/or require the developer to provide deeper affordability (depending on the exact combination of subsidy programs). The task force will study
the 421-a benefit schedule, income levels and affordability requirements more
broadly, and will work to make recommendations that are flexible and can
respond to current market conditions. An updated and rationalized benefit
schedule would reduce over-subsidization and more effectively encourage
affordable housing development in areas where incentives are most needed to
make affordable projects viable.
The 421-a program has a complex array of statutory affordability requirements,
exemption benefit schedules, and Assessed Value Cap (AV Cap) limits on benefits.
The task force will study the fairness of the 421-a program and provide legislative
recommendations for deeper affordability requirements, revised benefit schedules,
and updated AV Cap provisions, and will work to make recommendations that are
flexible and can respond to current market conditions.
Harmonize 421-a and Inclusionary Housing Programs
421-a is a significant driver of affordable housing development in areas mapped
for participation in the Inclusionary Housing program. These programs can and
should work together to promote the development of affordable housing in areas
where rezoning has substantially increased the capacity for new housing. In
order to better align these programs, the task force will consider pursuing
legislative authority to expand the 421-a Geographic Exclusion Areas to match
the areas designated for Inclusionary Housing. In strong markets, where developers meet the Inclusionary Housing requirements in order to obtain 421-a
benefits, the City will require more affordable units and/or deeper affordability.
To ensure that these programs work well together, the City also will seek to
harmonize the two programs’ requirements regarding unit size, unit distribution
and income targets.
Streamline program administration
The City will seek to streamline the 421-a program, improving its usefulness to
developers and its ability to promote affordability, by eliminating outdated and
unnecessary programmatic, eligibility, and oversight requirements. It will also
seek to address inefficiencies resulting from the program’s two-step application
structure by eliminating the Preliminary Certificate of Eligibility and making
construction period benefits retroactive. Additionally, the City will work to
ensure that 421-a recipients effectively contribute to the City’s market-rate
housing stock by combatting unit warehousing and hotel use in buildings receiving 421-a benefits.
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Harness homeownership development to produce affordable
rental housing
The strong current demand for condominium development presents an opportunity to harness market forces to boost the production of affordable housing. In order
to fully harness this demand, we need a more flexible way for developers of
condominium projects to participate in the 421-a program. The task force will
explore ways to induce more condominium (and cooperative) developers to fund
the development of off-site rental affordable housing as a condition of participating
in the 421-a program. The options considered will include requiring such developers to either (a) construct off-site affordable rental units within a prescribed
geographic radius of the market rate homeownership units, or (b) make payments
into a fund to be used for that purpose. The task force will also consider ways to
tailor the size of the affordable housing requirement and the value of the tax
benefits provided in order to maximize efficiency of such a program.
Modify J-51 and 420-c tax incentives
J-51
The J-51 program was originally implemented in 1955 to encourage landlords to
install heat and hot-water systems in cold-water flats. It was later expanded to
provide a combination of real property tax benefits for investments in critical
building systems. All rental units receiving J-51 benefits must be rent-stabilized.
Owners receive a tax exemption and/or abatement in exchange for the rehabilitation of existing buildings, or upon the conversion of certain nonresidential
buildings to residential buildings. The value of J-51 abatements is based on the
type of improvement provided, as well as other factors. Owners submit documentation itemizing the cost of each improvement; the value of the abatement is
determined in part by the Certified Reasonable Cost (CRC) schedule, which lists
the allowable costs for each item.
The program was overhauled in 2012-2013 through State and local legislation, as
well as changes to New York City Rules, resulting in marginal cost savings and
increased efficiencies. Going forward, the City and the task force will explore
additional reforms to encourage proper maintenance and upkeep of buildings by
providing incentives that lower operating costs. Broader participation in the
program would allow J-51 to meet two central policy goals: 1) increase the
quality of the housing stock and thereby reduce the need for enforcement actions
(e.g., Housing and Maintenance Code violations, Emergency Repair Program
expenses); and 2) retain the low-cost housing stock through investment in
rent-regulated units.
1. The value of the benefit can vary based on
many of the following factors: a) whether the
project is substantially governmentally assisted
(SGA); b) where the project is located; c)
whether it is in a landmarked district; and d)
the cost of the improvements.
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Specifically, the task force will consider:
• Deepening the incentive for improvements to building systems and major capital
improvement (MCI) such as plumbing, heating and windows in order to ensure
safe and habitable housing for occupants now and in the future. The most recent
changes to the Certified Reasonable Cost (CRC) schedule enriched the J-51
abatement; however, the allowable costs by and large are not an adequate
recoupment for current construction costs. Increasing the CRC for key items
would allow owners to recoup more of their investment and potentially encourage more owners to participate in the program
• Aligning the list of items eligible for J-51 benefits with HCR’s useful life schedule
for MCI, which enables landlords to increase the legal rent for rent-stabilized
units. Coordination with HCR would ensure that tax benefits to owners also
benefit tenants when owners secure both J-51 and MCIs for the same repairs
• Providing incentives for investments that advance key policy goals, such as
building system upgrades that are environmentally sustainable and in line with
the City’s other green building initiatives (e.g., Office of Long Term Planning and
Sustainability Clean Heat program)
420-c
The 420-c program provides a tax exemption for low-income housing developments financed through tax credits and controlled by charitable organizations.
Under this program, the property owner must adhere to a regulatory agreement
limiting rents in 70 percent of units to levels affordable to households up to 60
percent of AMI. In return, the City grants a full or partial tax exemption for the
land and building for the duration of the regulatory agreement (up to 60 years).
The City will pursue a series of administrative reforms to better focus the program
on the provision of affordable housing, remove unnecessary eligibility requirements, expedite application processing by HPD, and increase predictability for
owners regarding the value of the exemption and the timing of its implementation.
Expand New York City Industrial Development Agency
Authority
The New York City Industrial Development Agency (NYCIDA), in collaboration
with the task force will consider legislative reforms that would enable NYCIDA to
assist the development or renovation of residential and mixed-use projects. NYCIDA
provides discretionary tax incentives that are subject to approval from NYCIDA’s
Board of Directors. These incentives include real estate tax stabilization or reduction, sales and use tax waiver, and a Mortgage Recording Tax waiver. The savings
generated through these benefits could reduce construction and other upfront costs,
stabilize long-term property costs, and foster the construction and/or renovation of
more affordable housing throughout the City.
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Identify New Funding Streams to Fund
Affordable Housing
Financing affordable housing is a major challenge. The availability of subsidy is
limited and subject to cuts to the Federal budget and the continuing need for the
City to fund other important projects and programs. It is critical for the City to
receive additional dedicated funding streams specifically to fund affordable
housing. The task force will explore a number of potential sources that could be
dedicated to fund affordable housing.
Increase Private Leverage and Expand Existing
Financing Tools
The City will encourage more efficient and targeted use of public financing resources such as tax exempt bonds and expand existing programs that provide
capital for the construction and preservation of a broad range of affordable
housing.
Work to increase the pension fund’s commitment to affordable
housing
The New York City Pension Funds have a long history of investing in affordable
housing. To date, the New York City Employee’s Retirement System (NYCERS)
alone has provided more than $747 million to finance long term permanent debt on
affordable housing projects. By working with the trustees of the City’s five pension
funds and engaging with New York State, the City will seek to:
• Increase pension investment in affordable, moderate and middle income housing
to $1 billion
• Commit capital to fund construction loans for the rehabilitation of small buildings that will remain affordable, in coordination with the City’s preservation
efforts
• Target at least 50 percent of the pension’s Economically Targeted Investments
(ETI) Fund to fund workforce housing
• Reduce the City pension funds’ mortgage insurance requirements to increase the
participation of projects insured by HDC’s Real Estate Mortgage Insurance
Corporation (REMIC). By reducing the amount of required insurance from 100
percent to 50 percent, the amount of reserves set aside to cover these insured
loans would be halved, thereby doubling REMIC’s capacity to insure pension
fund loans. An opportunity for similar alignment exists between the pension
funds and the State of New York Mortgage Agency (SONYMA)
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• Provide long-term credit enhancement and liquidity on HDC bonds so that HDC
can offer low rates for affordable housing projects that utilize 501(c)(3) Bonds
• We will also engage with the New York State Common Retirement Fund to
explore opportunities for the state to provide funding to effectuate the objectives
of this plan
“Bifurcated” mixed-income financing
The City is committed to using our financing tools to expand beyond the traditional “80/20” model to more effectively leverage resources dedicated to such projects
and redirect resources conserved through those strategies to other projects that
serve a wider range of affordable housing needs.
A limited amount of tax-exempt financing capacity (also known as Private Activity
Bond Volume or “Volume Cap”) is allocated to HDC each year. The State has
consistently supported the City’s affordable housing efforts by allocating additional
Volume Cap to HDC above and beyond the City’s as-of-right allocation.
“Bifurcated” structures target volume cap to finance only the low-income units in a
mixed-income development, rather than financing the entire project. This structure allows for a smaller allocation of Volume Cap to be used for such mixed-income projects and the resulting Volume Cap savings can then be used for other
projects, increasing the amount of affordable housing that can be financed each
year. The City will work in coordination with the State to ensure that Volume Cap
freed up under such bifurcated structures can be used to increase the production
of affordable housing projects in the City.
Tax-exempt bond recycling
The City will continue to conserve Volume Cap by maximizing and facilitating the
use of “recycled bonds” in developments that aren’t dependent on LIHTC equity.
HDC’s Recycling Program re-uses Volume Cap where there are prepayments in
the first four years from bond-financed loans. These proceeds can be recirculated
back for eligible tax-exempt affordable housing projects (but not with concomitant
LIHTC). This program is particularly useful for financing mixed, moderate and
middle income projects that do not require tax credits. Continuing this program,
especially in coordination with the State Housing Finance Agency, will maximize
the initial financial investments and reduce the need for additional allocations of
Volume Cap that do not need or qualify for tax credits.
Pursue low cost financing to deliver maximum affordability
HDC will work with existing and prospective financial partners to provide the
lowest cost financing to affordable housing projects in order to deliver maximum
affordability for extended terms. Such financings may include traditional bond
sales through public underwriting, private placements, direct placements,
placement with one or more of the retiree pension funds, partnering with the
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GSEs, and any subsequent housing finance providers as well as the Federal
Housing Administration.
In furtherance of these goals, HDC is expanding its capacity by entering into an
agreement to sell affordable housing loans to the New York City pension funds, to
become a Multifamily Accelerated Processing lender with FHA to provide mortgage insurance and lower cost financing, and participate in a program to facilitate
the sale of Federally insured mortgages pursuant to the FHA-HFA Risk Sharing
Program to the Federal government. Collectively, these measures will enable HDC
to take advantage of the low interest rate environment and the desire for banks to
attain strong Community Reinvestment Act (“CRA”) ratings.
Battery Park City Authority Funds
Funds derived from land lease rents paid to Battery Park City Authority (BPCA)
have been used for affordable housing purposes pursuant to several agreements
with the City and the State since Battery Park City was created. Currently, HPD
and HDC have $200M remaining from the original $400M BPCA 421-a Fund. The
final contribution from BPCA pursuant to this agreement is scheduled to occur in
2016. The source of this fund are rents paid to BPCA. The City will work with the
State to enter into a further agreement with BPCA after the current agreement
expires to provide additional resources that will be dedicated exclusively to the
production and preservation of additional affordable housing.
Strengthen Public/Private and Philanthropic
Partnerships
Investment in housing by the private sector is critical to the City’s housing stock,
particularly in publicly sponsored projects that leverage private sector capital for
affordable housing and community development. Expanding the use of those
programs and strengthening private sector relationships will be imperative to
maximizing the City’s ability to support these crucial goals.
Expand use of New Markets Tax Credits
The New Markets Tax Credit (NMTC) Program is a Federal program administered
by the U.S. Department of Treasury Community Development Financial
Institutions (CDFI) Fund. The NMTC Program permits taxpaying investors to
receive a credit against Federal income tax liability in exchange for making
investments in designated Community Development Entities (CDEs), which in
turn invest in a variety of development projects and businesses in LMI areas.
NMTCs can catalyze the development of commercial, retail, and mixed-use
projects and enhance overall development efforts by supporting projects that
provide critical jobs and services in underserved communities. Since 2006, EDC
has facilitated the use of NMTCs for the financing of real estate projects that also
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create quality jobs for LMI workers. Building on its experience, EDC is exploring
developing a CDE to apply for allocation authority to enable the City to better
target resources to mixed-use and economic development projects that may
include affordable housing.
Explore partnerships through the CDFI Bond Guarantee
Program
EDC, in conjunction with Build NYC, the City’s conduit tax-exempt and taxable
bond issuer, will explore opportunities to partner with CDFIs to apply for the
CDFI Bond Guarantee Program (BGP). The BGP is a Federal program administered by the U.S. Department of Treasury Community Development Financial
Institutions Fund. Through this program, the Federal Financing Bank guarantees
the full amount of bonds issued by Build NYC to support CDFIs that make investments for eligible community or economic development purposes. The bonds or
notes support CDFI lending and investment by providing a source of long-term,
patient capital to CDFIs and can provide CDFIs with the least expensive funds to
generate loans. These loans can support a variety of financial activities, including
the financing of affordable housing, commercial facilities, community facilities,
among a variety of other uses.
Leverage Social Impact Bonds to finance supportive housing
Social Impact Bonds are an innovative tool to for government to leverage private
sector capital to finance the delivery of services that address a wide range of
chronic social problems. Also known as “Pay for Success” contracts, private
investors pay for, and assume the risk of a program being able to deliver measurable results. The government only pays back the private investor if independent
evaluators determine that the initiative or program has achieved specific outcomes
that both create benefits for society and generate savings for the public sector. The
City is committed to exploring the possibility of using Social Impact Bonds to
finance supportive housing, and social service programs for homeless, elderly,
vulnerable, and extremely low-income populations.
Partner with philanthropic organizations
The City will partner with foundations to serve vulnerable populations and
families who are most in need of affordable housing. Through the use of grants and
below market rate loans, philanthropy can provide flexible capital that can supplement current City programs and be source for innovative pilots that “test” new
strategies to combat homelessness, serve the elderly, and provide needed social
services and job training.
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Partner with financial institutions
The City will create new relationships and expand existing ones with financial
institutions and insurance companies. As the financial capital of the world, New
York City can creatively leverage these institutions’ resources to support housing
and neighborhood development, both in the neighborhoods in which their employees are based and in neighborhoods from which they draw deposits.
There is also an opportunity to work with, and educate, Federal regulators on how
supporting a wider array of the City’s affordable housing and community development efforts, could qualify for Community Reinvestment Act credit.
Create a development finance toolbox
True mixed-use projects can often be the most complex to finance. In addition,
Federal, State, and City programs intended to support these projects can be
difficult to navigate, highly complex to structure, and often underutilized. EDC
will develop a centralized information “toolbox” of all available development
finance programs that support dynamic development. This will provide the
development community with a customized resource to harness programs that
maximize potential funding sources that make projects a reality. We will also work
to educate Federal regulators on how the City’s housing and community development objectives can be further supported.
Re-Evaluate HPD and HDC Programs to
Stretch City Housing Subsidy Dollars Further
HPD and HDC will undertake a systematic review and revision of program terms
to implement the policy goals of the Housing Plan. Changes will be explored to
achieve three specific goals:
• Enhance the production of additional affordable housing across a broader range
of incomes
• Achieve greater leveraging of private financing sources
• E
nsure that we are spending no more public dollars than absolutely necessary to
achieve our goals
To that end, terms will be reviewed to enhance public benefit throughout the
lifecycle of the project, including leveraging development sources, strengthening
regulatory terms, and preserving affordability at project maturity. HPD and HDC
will consult with stakeholders in formulating these changes and provide adequate
notice to developers and operators before they take effect.
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Chapter 6
Implementing
the Plan
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Overview
Housing New York: A Five-Borough, Ten-Year Plan has laid out a blueprint for
preserving and constructing 200,000 units of affordable housing; fostering thriving
and inclusive neighborhoods; and creating stable and caring environments for
homeless individuals, seniors, and others who have special needs.
But this plan is just the beginning. Achieving these goals will require significant
commitments of City capital and much more effective use of these resources to
leverage private investment. This chapter lays out the City’s financing strategy as
well as a series of immediate steps we will take to begin implementing the plan.
Funding the Plan
New Construction vs Preservation
60%
Preservation
40%
New
Construction
Creating and preserving 200,000 units of affordable housing over ten
years is a significant undertaking. We estimate the total cost, including
all public and private sources, will be $41.4 billion. This plan lays out a
series of steps we are taking to ensure this effort is a success:
• The Mayor’s 2015 budget will propose to more than double HPD’s
annual capital budget in the five-year plan, a significant down
payment on this commitment
• The Mayor’s budget will also propose additional funding for
infrastructure investments needed to make land available for
significant new housing opportunities
• Through a series of new loan securitizations—immediately and
over the course of the Plan, the City will maximize the resources
available at HDC to contribute to the Plan
Households Served
Share of Housing Units Created or Preserved by Income Band
90%
11% Middle Income
11% Moderate Income
70%
50%
• We will make more efficient use of the City’s resources to maximize
their impact
58% Low Income
• Working with financial institutions, pension funds, financial
intermediaries and philanthropy, we will also seek to leverage
private capital on a greater than 3 to 1 basis
12% Very Low Income
• We will work in partnership with the State and the Federal
government to identify new resources to fund affordable housing
in the City and help us meet these critical objectives
30%
10%
• The Mayor’s 2015 operating budget will increase staffing at the
Department of City Planning and the Department of Housing
Preservation and Development to ensure that the Housing New
York plan can be efficiently and quickly implemented
8% Extremely Low Income
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Housing New York: A Five-Borough, Ten-Year Plan
Fiscal years 2015–2024
numbers in thousands - 10 year totals
Uses
Total TDC
New Construction
$30,643,240
Preservation
$10,489,956
Total
$41,133,196
Sources
Direct Housing Subsidy
City
City Capital
$6,687,619
HDC (Contributions and Securitization Proceeds)
$1,140,100
Reso-A
$180,000
421a / BPCA Fund
$195,997
Other
$40,671
Total City
$8,244,387
Federal and State
HOME
$673,664
Lower Manhattan Development Corporation
$12,800
State Funding
$300,000
Potential Dedicated Affordable Housing Funds
$1,900,000
Total State and Federal
$2,886,464
Private
Low Income Housing Tax Credit Equity (4% and 9% credits)
$4,950,000
State Low Income Housing Tax Credit Equity
$107,000
HFA Bonds
$1,700,000
HDC Bonds (Tax Exempt, Taxable, and Recycled Bonds)
$11,000,000
Pension Funds
$1,000,000
Private Financing
$11,245,345
Total Private
$30,002,345
Total
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$41,133,196
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Near-Term Milestones
The City is committed to taking the following ten steps within the next year to
begin the implementation of many of the initiatives laid out in this plan:
1. DCP, working with HPD, will initiate and expedite the completion of a study to
provide the foundation in land use policy for incorporating a mandatory
Inclusionary Housing Program into the Zoning Resolution
2. DCP, in conjunction with HPD, will initiate a comprehensive review of the
existing Inclusionary Housing Program to identify and recommend specific
improvements
3. The City and NYCHA will restore the priority for homeless families for public
housing and continue to prioritize homeless individuals for Section 8 resources
4. HPD, DHS and HRA will begin an interagency process to develop a model for
financing innovative permanent housing for homeless individuals and families
using dollars that would otherwise be spent on higher cost homeless shelters
5. EDC, DCP, and HPD will compile a census of all vacant and underdeveloped
publicly controlled properties, and begin the process of forming partnerships
with the State, public authorities, nonprofit institutions, faith-based organizations, and private owners who have land that could be deployed for
affordable housing
6. HPD will create a pilot outreach and financial assistance program to provide
grants or loans, as appropriate, to accelerate investments in energy and water
efficiency projects in small and mid-size buildings housing low- and moderate-income residents
7. HPD will issue requests for proposal for the first round of the NIHOP and NCP
programs, and HDC will pilot the new mixed-income program.
8. HPD and HDC will release a revised set of program terms to implement the
policy goals of the Plan
9. The City will convene a task force to solicit input from industry-informed
stakeholders about how to consolidate and streamline the permitting and
review processes across agencies in order to reduce costs and avoid delays for
developers
10.Working with the City, NYCHA will fully engage with its residents to create a
tailored preservation and development plan that will provide a full-scale
evaluation of tenant needs and lay out a path forward to accomplish these
critically important objectives.
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Create a Housing Plan Implementation
Advisory Board
These ten steps are critical to the success of the plan, but there will be much
more comprehensive action required. This plan also calls for a number of task
forces and working groups that will be convened to accomplish various components of the plan.
To help prioritize and refine the work of these task forces and accomplish the
many recommendations in this plan, the City will also create a broader
Implementation Advisory Board (Advisory Board). This Advisory Board will
engage in a regular dialogue with the City leadership. The Board will be comprised
of stakeholders from New York’s diverse housing community and provide important guidance to the City.
Create a City-State Task Force on Affordable
Housing
Coordination with other City and State elected officials and agencies will be
especially critical to the success of this plan. To coordinate on the range of legislative issues identified as priorities in this plan, the City will create a City-State Task
Force on Affordable Housing that will bring together City and State elected
officials. This task force will focus on developing and implementing policy changes
that will enable both City and State housing agencies to conduct their work more
effectively and achieve the goals of this plan.
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“We have to remember that the best and the
brightest are born in every neighborhood, in every
zip code. And what marks a just society is
that it allows them all to reach their potential.”
—Mayor Bill de Blasio
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Notes
All dollar values in graphs are adjusted to
2013 dollars using the Consumer Price
Index for All Urban Consumers (Current
Series) for the New York-Northern New
Jersey-Long Island, NY-NJ-CT-PA
Metropolitan Statistical Area, except
where otherwise noted. Source: Bureau
of Labor Statistics
Executive Summary
Pg. 5
Changes in rent and income over the last
twenty years are based on 2011 Housing
and Vacancy Survey data; nine year
differences are based on 2005-2012
American Community Survey (1 Year
Estimates); twelve year rent burden
estimates are based on 2000 Decennial
Census and 2012 American Community
Survey data. Note that rent burden and
severe rent burden estimates may vary by
data source in addition to time period.
Pg. 6
Annual Incomes for Income Bands are
based on the U.S. Department of Housing
and Urban Development’s Estimate for
Area Median Income (AMI) in 2014
($83,900 for a four-person household).
Source: U.S. Department of Housing and
Urban Development
Pg. 8
Estimated number of jobs created from
the construction and preservation of
200,000 units of housing reflect gross
employment impacts associated with
construction and ongoing maintenance
and operations of affordable housing
projects, including operations associated
with commercial components of the
projects. They do not account for
short- or long-term displacement of
other economic activity and, therefore,
do not reflect “net new” jobs created in
New York City. Source: Economic
Development Corporation
nyc.gov/housing
Pg. 11
Evidence on the cost benefit of supportive housing includes, Levanon Seligson et
al, New York/New York III Supportive
Housing Evaluation: Interim Utilization
and Cost Analysis. A report from the New
York City Department of Health and
Mental Hygiene in collaboration with the
New York City Human Resources
Administration and the New York State
Office of Mental Health, 2013.
Introduction
Pg. 16
Changes in median gross rent and
median renter household income shown
relative to 2005 values where the index
equals 100.
Pg. 17
Utility costs are calculated by summing
monthly electricity and gas costs as
reported by householders of rental units
who pay utilities separately from rent.
American Community Survey and
Decennial Census estimates may
overstate rent burden because they do
not exclude households living in
means-tested housing.
Pg. 18
Annual income needed to afford typical
New York City apartment is calculated as
the median gross rent divided by 30
percent and multiplied times twelve
months.
Pg. 19
ELI and VLI definitions are specific to
household sizes of one through eight
persons, so households larger than eight
persons are excluded.
Units Affordable to Extremely Low
Income and Very Low Income
Households are defined as units with
gross monthly rent equivalent to 30% or
less of the monthly household income
limits for VLI households of sizes
appropriate to those units.
Housing New York: A Five-Borough, Ten-Year Plan
Max persons per unit defined using
standard occupancy practices for
affordable housing whereby a minimum of
one person and a maximum of two persons
per bedroom is considered appropriate;
does not account for household composition or gender of occupants.
Pg. 21
Households living in public housing or
receiving rental assistance (Section 8,
HUD-Regulated, Work Advantage,
Jiggets, Employee Incentive Housing
Program, or Other City, State or Federal
subsidy program as reported by respondent) are counted as Non-Rent Burdened
Households, because they are means
tested.
Graph shows total shelter population by
month, which includes families and single
adults. For data through September 2011,
figures for homeless families, children,
and adult family members reflect
end-of-month census data. All numbers
for families after September 2011 and for
homeless single adults (men and women)
for all months reflect average daily census
data. Where data on the total population
are missing, monthly values on the graph
are interpolated, assumed a constant
monthly rate of change between
non-missing values.
For details on methodology and data
sources, please see www.nyc.gov/html/
dcp/pdf/census/projections_report_2010_2040.pdf
Pg. 22
The graph shows number of units
permitted and completed, respectively.
Pg. 23
The Rent Guidelines Board estimates a
minimum number of units lost based on
DHCR registration data for stabilized
units. They also provide an actual
number of stabilized units added based
on data collected from various city and
state agencies. Calculations for the net
number of units lost are based on the
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total rent-stabilized stock as estimated by
the U.S. Census Bureau for the 1993
Housing and Vacancy Survey.
Net Loss of Rent Stabilized Units is
defined as Cumulative Additions to the
stock subtracted from Cumulative Loss
to the stock. Cumulative additions to the
stock include units that become subject
to rent stabilization due to receipt of
421-a, 421-g, 420-c, or J-51 benefits; or
Lofts. Cumulative Loss includes units
subtracted from the stock from High
Rent/High Income Deregulation, High
Rent/Vacancy Deregulation, Co-op/
Condo Conversion, 421-a and J-51
Expiration, Substantial Rehab,
Commercial/Professional Conversion,
and Other.
Pg. 24
Single Parent with Children includes
either male and female householders with
own child(ren) and no spouse present;
Two or more Adults with Children
include married couples with own
child(ren); Two or More Adults without
Children is the difference between total
family households minus families with
own children added to the total non-family households minus households where
the householder lives alone; Singles
defined as any individual who lives alone.
Distribution of households represents
the total number of persons in occupied
households (renter and owner); households that comprise more than 6 persons
are counted as having 6 persons or more.
Distribution of units shows all occupied
units (renter and owner); units that
comprise more than three bedrooms are
counted as having three bedrooms or more.
Pg. 25
HOME grant funding FY 2009 through
FY 2014 represents New York City
official grant award amount from HUD
for each year in thousands of dollars.
Data shown in nominal dollars.
nyc.gov/housing
Chapter 1
Chapter 3
Pg. 40
Estimates reflect gross employment
impacts associated with construction and
ongoing maintenance and operations of
affordable housing projects, including
operations associated with commercial
components of the projects. They do not
account for short- or long-term displacement of other economic activity and,
therefore, do not reflect “net new” jobs
created in New York City.
Pg. 61
The official New York City vacancy rate
is measured by the Housing and Vacancy
Survey (U.S. Census), 2011. For details,
see Glossary.
Source: Economic Development
Corporation
Chapter 2
Pg. 52
The Rent Guidelines Board estimates a
minimum number of units lost based on
DHCR registration data for stabilized
units. They also provide an actual
number of stabilized units added based
on data collected from various City and
State agencies. Their estimates may
understate the total number of units lost
and should be understood as a minimum.
Pg. 53
For details on Housing Court proceedings, see Housing Court Answers,
Summary of Evictions, Possessions, &
Ejectments Conducted for the period
January 1, 2013 through December 31,
2013 available at http://cwtfhc.org/
evictions-marshals-documents.
Pg. 56
Utility costs include electricity, natural
gas, and water and sewer charges. Source:
New York City Rent Guidelines Board,
2013 Price Index of Operating Costs, pg.
6-7 (http://www.nycrgb.org/downloads/
research/pdf_reports/pioc13.pdf )
According to the Census Bureau’s CPS/
HVS, the 2011 estimated vacancy rate for
rental units in the United States was
approximately 9.5 percent. (https://
www.census.gov/housing/hvs/data/
ann11ind.html)
Chapter 4
Pg. 80
Evidence on the cost benefit of supportive housing includes, Levanon Seligson et
al, New York/New York III Supportive
Housing Evaluation: Interim Utilization
and Cost Analysis. A report from the New
York City Department of Health and
Mental Hygiene in collaboration with the
New York City Human Resources
Administration and the New York State
Office of Mental Health, 2013. For
research on affordable housing spillover
effects see Furman Center for Real Estate
and Urban Policy Working Paper 05-01,
Nonprofit Housing and Neighborhood
Spillovers.
For details on New York / New York
Supportive Housing Agreements I, II,
and III, see http://shnny.org/budget-policy/nyc/ny-ny.
p. 82
Senior population projections provided
by New York City Department of City
Planning. For details on methodology
and data sources, please see http://www.
nyc.gov/html/dcp/pdf/census/projections_report_2010_2040.pdf.
Pg. 59
Information on changes to the Federal
Insurance Rate Map (FIRM), see SIRR
report available at http://www.nyc.gov/
html/sirr/html/report/report.shtml.
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Glossary
420-c
The 420-c program provides a tax
exemption for low income housing
developments financed through tax
credits and controlled by charitable
organizations. Under this program, the
property owner must adhere to a
regulatory agreement with or approved
by HPD limiting rents in 70 percent of
units to levels affordable by low-income
households (up to 60 percent of AMI). In
return, the City grants a full or partial tax
exemption for the land and building for
the duration of the regulatory agreement
(up to 60 years).
421-a
421-a tax incentive programs provide
partial tax exemption for new construction of multiple dwellings on lots that
were vacant, predominantly vacant or
improved with a non-conforming use
three years prior to the start of construction. The benefit may extend for 10, 15,
20, or 25 years, depending on the location
of the development and any affordability
provisions.
421-a Certificates
Historically, developers of affordable
housing projects were allocated 421-a
certificates, which they could sell to
market rate developers. This provided
equity for the affordable housing
projects, and the market rate housing got
10 year 421-a exemptions. The certificate
program was ended when 421-a was
reformed in 2006, although sales of final
certificates continued well after that
point.
421-a Fund
When the 421-a Certificate program
ended, the City created a $400M fund in
lieu of the equity that would have been
generated through sale of certificates.
The Fund is managed by HPD and HDC.
501(c)(3) Bonds
Local government entities may issue
low-interest, tax-exempt 501(c)(3)
bonds, the proceeds of which are made
nyc.gov/housing
available to federally eligible 501(c)(3)
non-profit organizations to finance
affordable housing creation. These bonds
provide more flexibility than private
activity bonds.
80/20
The 80/20 Program uses tax-exempt
bonds to construct multifamily rental
buildings. In exchange for the low-cost
financing, 20 percent of the apartment
units are reserved for low-income
tenants earning no more than 50 percent
of area median income; whereas 80
percent of the apartment units are open
to mixed income families. The 80/20
Program is often coupled with 421-a.
Affordable Housing Preservation
This refers to the preservation of the
affordability of the existing housing
stock. Current affordable housing may
be unregulated privately owned
property, regulated privately owned
property, or publicly-owned property.
The City, in coordination with Federal,
State, private, and non-profit partners,
preserves affordability by offering
building owners low cost loans for
capital needs or refinancing and/or tax
incentives for operations in exchange
for regulatory agreements limiting rents
to affordable levels.
Affordable Neighborhood
Cooperative Program (ANCP)
ANCP provides funding and links
nonprofit and/or for-profit sponsors to
TIL buildings to perform rehab and
convert them to tenant-owned cooperatives. ANCP will assist in the rehabilitation of the remaining properties in the
TIL Program.
Alternate Enforcement Program
(AEP)
HPD and the City Council developed the
Alternative Enforcement Program (AEP)
in 2007 to force owners of the most
physically distressed buildings in the City
to address their code violations. Through
AEP, HPD annually identifies the 200
Housing New York: A Five-Borough, Ten-Year Plan
multifamily buildings with the most
outstanding B and C code violations and
emergency repair (ERP) charges. If
owners do not correct violations and pay
for previous ERP work within a four
month window, the building is subject to
building-wide inspections, fees, and
extensive repair work to correct
violations and underlying conditions.
Area Median Income (AMI)
Area Median Income is a HUDdetermined metric used to determine
income level qualifications for affordable
housing programs. For instance, low-,
moderate-, and middle-income households are categorized by a calculation of
AMI.
Article 7A
The Article 7A program serves tenants
renting apartments in privately owned
buildings. These buildings have been
abandoned by their owners, resulting in
conditions that are dangerous to the
tenants’ health. Experienced housing
organizations are appointed pursuant to
New York State Law to manage the
properties.
Article XI
Article XI limits the taxes paid by
affordable housing projects owned by
HDFCs. The exemption is authorized by
the City Council and can be a full or
partial exemption for up to 40 years.
Assessed Value
This is the amount used to calculate
property taxes. The formula for calculating Assessed Value is: Market Value X
Level of Assessment = Assessed Value.
For Classes 1, 2a, 2b and 2c, the Assessed
Value is modified by caps on assessment
increases.
Asset Management of HPD
Financed Buildings
HPD Asset Managers monitor HPDfinanced buildings from selected
programs; they assess capital needs,
financial stability, and regulatory
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compliance. Asset Managers intervene
where necessary to return buildings to
physical and financial soundness through
payment plans, loan programs, refinancing, and other tools.
Battery Park City Authority (BPCA)
BPCA revenues were used to establish the
New York City Housing Trust Fund. The
funds are used to create or preserve
affordable housing units in New York City.
BluePRint Review Process
The Department of City Planning’s
Business Process Reform effort is a major
business change initiative to reform and
accelerate the portion of the land use and
environmental application review
processes that occurs before the formal
public review of an application, known as
the Uniform Land Use Review Procedure
or ULURP.
Brownfield
An industrial or commercial property
that is underutilized, in part, because of
potential water and/or soil
contamination.
Build It Back Program
The New York City Build it Back program
was designed to assist homeowners,
landlords, renters and tenants affected by
Hurricane Sandy within the five boroughs.
The program offers multiple pathways to
housing assistance, including property
rehabilitation or reconstruction, reimbursement for repair work already carried
out, and acquisition of homes. Rental
assistance is also provided for eligible
New Yorkers affected by the storm.
Business Improvement District (BID)
A Business Improvement District is a
partnership between a local authority
and the local business community to
develop projects and services that will
benefit the trading environment within
the boundary of a clearly defined
commercial area, where businesses have
voted to invest collectively in local
improvements which will benefit the
nyc.gov/housing
local economy. The New York City
Department of Small Business Services
oversees the City’s BID program.
Certified Reasonable Cost (CRC)
By law, J-51 tax abatement benefits are
capped at a maximum annual and
maximum aggregate represented as a
percentage of the CRC, which are the
costs of the alterations or improvements
schedule identified in a schedule
promulgated by agency rules attributing a
maximum value to each renovation item.
City Capital
Capital funds are used to primarily
support the new construction and
rehabilitation of affordable housing
projects across the City. Capital is also
used to fund key housing support
functions such as office reconstruction
and computer upgrades. Capital
investment is generated through the
issuance of General Obligation (GO)
bonds. All uses of capital funding must
meet eligibility requirements established
by the City and State.
CDFI Bond Guarantee Program
The CDFI Bond Guarantee Program
guarantees the full amount of notes or
bonds issued to support Community
Development Financial Institutions
(CDFIs) that make investments for
eligible community or economic
development purposes. The bonds or
notes will support CDFI lending and
investment by providing a source of
long-term, patient capital to CDFIs.
City Environmental Quality Review
(CEQR)
CEQR is the City’s process for reviewing
discretionary land use actions for any
potential adverse environmental effects,
assessing their significance, and proposing measures to eliminate or mitigate
significant impacts. Only certain minor
actions identified by the state, known as
Type II actions, are exempt from
environmental review. Code Inspection
Housing Code Inspectors enforce the
New York City Housing Maintenance
Code and New York State Multiple
Dwelling Law by responding to complaints from 311 calls and conducting
proactive building inspections in a
number of specialized programs.
Violations are issued as Class A, Class B
(hazardous), or Class C (immediately
hazardous) and are enforceable in
Housing Court.
Community Development Block
Grant (CDBG)
CDBG is a Federal grant funded under
Title 1 of the Housing and Community
Development Act of 1974 as amended by
Congress. The Act requires that the
funds be used for:
“the development of viable urban
communities, by providing decent
housing and a suitable living environment and expanding economics opportunities , principally for persons of
Low-and Moderate Income”.
The goal of the program as mandated by
HUD’s regulations is to support program/activities that will principally
benefit low-and moderate income
persons and prevent slums and blight.
The Mayor’s Office of Management and
Budget (OMB) administers the
Community Development Block Grant
(CDBG). Although HPD receives the
largest share of CDBG funds throughout
the City, OMB makes the determination
on how CDBG funds are allocated based
on Citywide needs and the availability of
funding. CDBG funds are used solely for
HPD programs, such as Code
Enforcement, ERP, DNP DPM, and TIL,
which meet the above eligible criteria.
Community Facilities
Under New York City Zoning Code,
community facility space in a building is
used to provide educational, health,
recreational, religious or other essential
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services for the community it serves.
Buildings that contain both residential
and community facility uses are subject
to special density regulations.
Community Reinvestment Act (CRA)
A 1977 act of Congress intended to
counteract discriminatory lending
practices by encouraging banks to lend to
their surrounding communities, thus
increasing the availability of credit in
low- and moderate-income
neighborhoods.
Compact Unit
An innovative apartment model, which
includes a kitchen and bathroom, that is
smaller than what is allowed under
current regulations.
Department of City Planning (DCP)
The New York City Department of City
Planning oversees the City’s zoning and
land use processes. It works to promote
strategic growth and development in the
City, in part, by initiating planning and
zoning changes for individual neighborhoods and business districts.
Department of Environmental
Conservation (DEC)
The New York State Department of
Environmental Conservation oversees
the conservation, improvement and
protection of New York’s natural
resources and environment.
Department of Finance (DOF)
The Department of Finance collects over
$30 billion in revenue for the City and
values more than 1 million properties
worth a total of over $800 billion. DOF
also records property-related documents,
administers exemption and abatement
programs, adjudicates and collects
parking tickets, maintains the City’s
treasury, chairs the City’s Banking
Commission, and acts as the City’s chief
civil law enforcement officer.
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Department of Homeless Services
(DHS)
The New York City Department of
Homeless Services works to prevent
homelessness by providing short-term
emergency shelter and re-housing
support in partnership with its clients,
public agencies, and the business and
nonprofit communities.
Department of Housing Preservation
and Development (HPD)
Using a variety of preservation, development and enforcement strategies, the
Department of Housing Preservation and
Development strives to improve the
availability, affordability, and quality of
housing in New York City, and to create
and sustain viable neighborhoods for
New Yorkers.
Department of Small Business
Services (SBS)
The Department of Small Business
Services makes it easier for businesses in
New York City to start, operate and
expand by providing direct assistance to
business owners, fostering neighborhood
development in commercial districts, and
linking employers to a skilled and
qualified workforce.
Department of Youth and
Community Development (DYCD)
The Department of Youth and
Community Development was created in
1996 to provide the City of New York
with high-quality youth and family
programming. Its central task is administering available City, State, and Federal
funds to effective community-based
organizations.
Disability Rent Increase Exemption
(DRIE)
The Disability Rent Increase Exemption
(DRIE) program provides protection
from rent increases for low- to moderate
-income tenants with disabilities living in
rent-regulated apartments.
Housing New York: A Five-Borough, Ten-Year Plan
Division of Neighborhood
Preservation (DNP)
HPD’s Division of Neighborhood
Preservation assesses thousands of
buildings each year to determine
whether they are at risk, and to develop
and implement individual treatment
plans. DNP encourages owners to pay
their taxes, refers owners to education
and support programs including
anti-abandonment training, provides
assistance with rehabilitation loan
financing, refers buildings for targeted
code enforcement, and reviews distressed properties for exclusion from
Department of Finance tax lien sales.
Emergency Housing Shelters
HPD operates shelters for families
displaced by emergencies, including fires
or vacate orders from the Department of
Buildings or HPD.
Emergency Repair Program (ERP)
HPD’s Emergency Repair Program
repairs emergency conditions cited by
HPD Inspectors or other agencies (in
limited circumstances) where an owner
fails to do so. If HPD’s ERP repairs the
emergency condition, HPD, through the
Department of Finance, will bill the
owner for the cost of repairs. If the
owner fails to pay the bill, a lien is placed
on the property. Unpaid liens may make
a property eligible for the City’s tax lien
sale.
Federal Emergency Management
Agency (FEMA)
The Federal Emergency Management
Agency (FEMA) supports communities
and first responders in efforts to build,
sustain and improve our capability to
prepare for, protect against, respond to,
recover from, and mitigate all hazards.
FHA-HFA Risk Sharing Program
In 1992, Congress created the FHA-HFA
Risk-Sharing program to increase and
accelerate Federal Housing
Administration (FHA) production of
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multifamily mortgages. The program
enables qualified state Housing Finance
Agencies (HFAs) to underwrite FHA
mortgages in exchange taking on a
portion of the risk associated with them.
Fire Code
A City law (Title 29 of the New York City
Administrative Code) governing fire
safety in NYC buildings.
Flood Insurance Rate Maps (FIRMs)
FEMA produces Flood Insurance Rate
Maps (FIRMs) which identify areas that
are at risk of flooding. Areas are assigned
different zones depending on the level of
flood risk.
Floor Area Ratio (FAR)
The principal bulk regulation controlling
the size of buildings, FAR is the ratio of
the total building floor area to the area of
its zoning lot. For instance, a
100,000-square foot building on a
25,000-square foot lot would have an
FAR of 4.0.
Food Retail Expansion to Support
Health (FRESH)
FRESH is a City program that provides
zoning and financial incentives to
promote the establishment and retention
of neighborhood grocery stores in
underserved communities throughout
the five boroughs.
Government-Sponsored Enterprise
(GSE)
Privately held corporations created by
the U.S. Congress to reduce the cost of
capital for certain borrowing sectors of
the economy (e.g. students, farmers and
homeowners).
Grant Per Diem (GPD)
The U.S. Department of Veterans Affairs;’
(VA) Homeless Providers Grant and Per
Diem Program is offered annually (as
funding permits) by the VA’s Health Care
for Homeless Veterans (HCHV)
Programs to fund community agencies
providing services to homeless veterans.
nyc.gov/housing
The purpose is to promote the development and provision of supportive
housing and/or supportive services with
the goal of helping homeless veterans
achieve residential stability, increase
their skill levels and/or income, and
obtain greater self-determination.
HDC Bonds
HDC issues different types of bonds to
develop and preserve a variety of
affordable housing, from large and
small-scale multifamily buildings to
cooperative homeownership. In doing so,
HDC has become the nation’s leading
local housing finance agency, issuing a
higher volume and dollar amount of
bonds than many of the largest banks in
the country.
HDC Mixed Income (50/30/20)
In 50/30/20, 20 percent of the apartments in a multifamily rental building are
restricted for low-income tenants, 30
percent are reserved for middle-income
tenants and the remainder is rented at
market rates. This structure provides a
deeper level of affordability across many
different economic levels. HDC uses the
proceeds from the sale of tax-exempt
bonds to make first position mortgages
and also uses its corporate reserves to
make 1 percent second mortgage loans.
HOME Investment Partnership
Program (HOME)
HOME provides formula grants to States
and localities that communities use to
fund a wide range of activities including
building, buying, and/or rehabilitating
affordable housing for rent or homeownership or providing direct rental
assistance to low-income people. HOME
administrative funds are used for overall
program management, coordination,
monitoring, evaluation and certain other
services.
Homebase
Homebase is the City’s homelessness
prevention program. With locations
throughout the five boroughs, the
program connects people to an array of
services to keep them in their homes and
help prevent them from entering the
shelter system. These services include
family or tenant/landlord mediation,
household budgeting, emergency rental
assistance, job training and placement,
and benefits advocacy.
Housing Development Fund
Corporations (HDFC)
Housing Development Fund
Corporations are nonprofit entities that
oversee limited equity housing cooperatives or rentals to provide low-income
housing for New Yorkers.
Housing Maintenance Code
A City law (Chapter 2 of Title 27 of the
New York City Administrative Code)
governing minimum housing standards
in NYC residential buildings.
Housing Trust Fund (HTF)
The New York City Housing Trust Fund
(HTF), funded by $130 million in Battery
Park City Authority revenue, provides
subsidies for innovative acquisition
programs, rehabilitation of portfolios of
housing, and to facilitate rehabilitation
and new construction targeted to
households earning below 30 percent of
AMI and between 60-80 percent of AMI.
HPD Homeless Set-Aside Units
A homeless set-aside is a unit in an
HPD-funded project that is reserved for
referrals from the homeless shelter
system. Occupants of these units are
often paired with Section 8 vouchers,
when available and if the occupant is
eligible.
HUD Income Limits (HUDIL)
HUD sets annual regional income limits
for eligibility to live in subsidized
affordable housing. HUD calculates the
limits beginning with a measure of
median family income, then makes
adjustments based on household size,
local housing costs, and other geographically-specific factors. The result is a set of
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limits for households of different sizes
and different income levels. Public
agencies like HPD use HUDIL to qualify
applicants of different income levels to
live in affordable housing developments
and to regulate maximum rents for
subsidized units.
HUD Multifamily
The HUD Multifamily Loan Program
leverages public and private sector
financing to rehabilitate and preserve
privately owned HUD-assisted rental
housing throughout New York City. The
Program’s mission is to ensure long-term
affordability, stabilize low-income
properties and revitalize neighborhoods.
The Program targets buildings that are
most distressed due to physical neglect
and financial mismanagement, as well as
those properties that face expiring HUD
use restrictions or are considered
“at-risk” of opting out of subsidy
programs and converting to market rate
housing.
Human Resources Administration
(HRA)
The New York City Human Resources
Administration/Department of Social
Services (HRA/DSS) provides temporary
help to individuals and families with
social service and economic needs to
assist them in reaching self-sufficiency.
HRA serves more than 3 million New
Yorkers through essential and diverse
programs and services that include:
temporary cash assistance, public health
insurance, food stamps, home care for
seniors and the disabled, child care, adult
protective services, domestic violence,
HIV/AIDS support services, and child
support enforcement.
Inclusionary Housing Program
The current Inclusionary Housing
Program provides a zoning bonus for
multiple dwelling developments in
return for new construction, substantial
rehabilitation, or preservation of
permanent affordable housing.
nyc.gov/housing
Individual Apartment Improvement
(IAI)
A building owner may increase the rent
in an individual apartment based on
increased services, new equipment, or
improvements. This increase is in
addition to statutory vacancy increases or
the regular annual Rent Guidelines Board
adjustments for rent stabilized apartments, and biennial adjustments to
Maximum Base Rents for rent controlled
apartments. In buildings that contain
more than 35 apartments, the owner can
collect a permanent rent increase equal
to 1/60th of the cost of the Individual
Apartment Improvement (IAI). In
buildings that contain 35 apartments or
less, the owner can collect a permanent
rent increase equal to 1/40th of the cost
of the IAI. IAIs performed in an occupied
unit require written consent of the
tenant. IAIs performed in vacant units do
not require written consent of any tenant,
nor does it require approval by DHCR.
See DHCR Fact Sheet #12 for more
details.
International Existing Building Code
A model building code developed by the
International Code Council, which
establishes minimum regulations for
existing buildings intended to encourage
the use and reuse of existing buildings
while requiring reasonable upgrades and
improvements.
In Rem
Latin for “against the thing,” in rem is a
legal term used to refer to the City’s
possession of a building as collateral
against a tax-delinquent owner. At the
peak of urban blight in the 1970s and
1980s, the City held over 100,000 units
in-rem. Renovating and transferring
these buildings into private ownership
formed the basis of much of the City’s
housing policy through the 1990s.
Housing New York: A Five-Borough, Ten-Year Plan
J-51 Tax Exemption and Abatement
program
J-51 is an as-of-right tax exemption and
abatement for residential rehabilitation
or conversion to multiple dwellings.
Eligible projects include HPD-financed
or privately financed moderate and gut
rehabilitation of multiple dwellings,
privately financed and government–assisted major capital improvements to
multiple dwellings, or conversions of
lofts and other non-residential buildings
into multiple dwellings.
Lien
A lien is a legal claim one party has
against another party’s property for
unpaid debt. Examples of such debt are
unpaid property taxes or failure to pay
for services provided.
Low Income Housing Tax Credit
(LIHTC)
LIHTC refers to federal tax credits
awarded by HPD to qualified low-income
housing projects in New York City. To be
eligible, projects must be substantial
rehabilitation or new construction with
at least 20 percent of apartments
reserved for low-income households.
The credits are sold to investors to
generate equity for the rehabilitation or
new construction work.
Major Capital Improvement (MCI)
When owners make improvements or
installations to a building subject to the
rent stabilization or rent control laws,
they can apply to the State’s Division of
Housing and Community Renewal
(DHCR) for approval to raise the rents of
the tenants based on the actual, verified
cost of improvement or installation. The
total value of the approved cost for the
Major Capital Improvement (MCI) is
amortized over 84 months and divided by
the total number of rooms in the
building, then added to the legal rent of
each stabilized unit based on the number
of rooms in the apartment. MCI increases for stabilized units are capped at 6
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percent per annum and are permanent
increases to the legal rent. An owner
must apply to DHCR for MCI increases,
and the State is responsible for calculating the legal rent increases. When
owners also receive a J-51 abatement for
the same work, the MCI increase is
reduced by half the value of the abatement. See DHCR Fact Sheet #24 for
more details.
Medicaid Redesign Team (MRT)
Governor Andrew M. Cuomo created the
Medicaid Redesign Team to address
underlying health care cost and quality
issues in New York’s Medicaid program.
Medicaid Redesign is premised on the
idea that the only way to really control
costs is to improve the health of program
participants. Among the many initiatives
under MRT, supportive housing was
recognized a cost-saving measure to keep
chronically homeless and people with
disabilities stably housed and out of
emergency rooms.
Minority/Women-Owned Business
Enterprise (M/WBE)
Although definitions can vary slightly
between jurisdictions according to
factors unrelated to gender and ethnicity,
a minority/women-owned business
enterprise is a business that is at least 51
percent owned, operated, and controlled
by a woman or a member of a racial or
ethnic minority group.
Mitchell-Lama Program
Created in 1955 under the Private
Housing Finance Law, the MitchellLama program provides affordable rental
and cooperative housing to moderateand middle-income families. There are
currently 97 City-sponsored, moderateand middle-income rental and limited-equity cooperative developments in
the city, which contain over 45,000 units.
HPD supervises waiting lists, management issues, and other oversight
responsibilities for New York City’s
Mitchell-Lama developments. In some
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cases, responsibility is shared with HUD.
New York State also oversees a MitchellLama portfolio within New York City.
There are eligibility requirements related
to income limits, family size, and
apartment size for both City and State
assisted Mitchell-Lama developments.
Mixed Income Program
HPD’s Mixed Income Program funds the
new construction of multifamily rental
projects affordable to households earning
up to 130 percent of Area Median
Income. HPD may provide a subsidy of
up to $75,000 per unit in addition to
construction and permanent financing
sources provided by, but not limited to,
private institutional lenders and
programs at HDC, HCR, and HFA.
Projects may qualify for 421-a, 420-c, or
Article XI tax exemptions.
Mortgage Recording Tax
New York State imposes a tax on the
privilege of recording a mortgage on real
property located within the state. In
addition, New York City, Yonkers, and
various counties impose local taxes on
mortgages that are recorded in those
jurisdictions.
Naturally Occurring Retirement
Communities (NORCs)
Naturally Occurring Retirement
Communities refers to housing developments, including NYCHA properties,
with growing percentages of seniors.
New Housing Marketplace Plan
(NHMP)
The NHMP was a multi-billion dollar
initiative to finance the creation or
preservation of 165,000 units of affordable housing for half a million New
Yorkers. Created under the administration of Mayor Michael R Bloomberg in
2002, at its time the NHMP represented
the largest municipal housing effort in
the nation’s history. The NHMP was
implemented by the HPD along with
many partners in the public, private, and
non-profit sectors.
New Markets Tax Credit (NMTC)
The New Markets Tax Credit Program
was established by Congress in 2000 to
spur new or increased investments into
operating businesses and real estate
projects located in low-income
communities. The NMTC Program
attracts investment capital to low-income communities by permitting
individual and corporate investors to
receive a tax credit against their
Federal income tax return in exchange
for making equity investments in
specialized financial institutions called
Community Development Entities
(CDEs).
New York City Construction Code
A city law (Title 28 of the New York City
Administrative Code) governing the
construction of buildings. This set of
codes includes several codes, including
the building code.
New York City Economic
Development Corporation (EDC)
New York City Economic Development
Corporation is the City’s primary vehicle
for promoting economic growth in each
of the five boroughs. NYCEDC’s mission
is to stimulate growth through expansion
and redevelopment programs that
encourage investment, generate prosperity and strengthen the City’s competitive
position. NYCEDC also helps create
affordable housing, new parks, shopping
areas, community centers, and cultural
centers.
New York City HIV/AIDS Services
Administration (HASA)
The HIV/AIDS Services Administration
helps New Yorkers living with AIDS or
HIV gain access to benefits and support.
HASA clients may receive help with
medical care, housing assistance, direct
links to other HRA services such as food
stamps, employment services, and
counseling.
Housing New York: A Five-Borough, Ten-Year Plan
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New York City Housing and Vacancy
Survey (HVS)
The New York City Housing and
Vacancy Survey is a triennial survey
conducted by the U.S. Census Bureau on
behalf of HPD, as required by state and
local legislation. The survey measures
the vacancy rate for rental units in New
York City, which is required for the
continuation of rent regulation.
New York City Housing Authority
(NYCHA)
NYCHA’s 334 public housing developments house more than 400,000 New
Yorkers across the five boroughs, and
another 235,000 receive subsidized
rental assistance in private homes
through the NYCHA-administered
Section 8 Program. HPD, in collaboration
with NYCHA, rehabilitates NYCHA
housing stock and constructs low- and
moderate-income units on vacant
NYCHA property.
New York City Housing
Development Corporation (HDC)
The New York City Housing
Development Corporation provides a
variety of financing programs for the
creation and preservation of multifamily
affordable housing throughout the five
boroughs of New York City. HDC
programs are designed to meet the wide
range of affordable housing needs of the
city’s economically diverse population.
New York City Industrial
Development Agency (NYCIDA)
The New York City Industrial
Development Agency encourages
economic development throughout the
five boroughs, and assists in the retention
of existing jobs as well as the creation and
attraction of new ones. NYCIDA programs
are discretionary and provide companies
with access to triple tax-exempt bond
financing and/or tax benefits to acquire or
create capital assets, such as purchasing
real estate, constructing or renovating
facilities, and acquiring new equipment.
nyc.gov/housing
New York City Pension Fund
The City’s primary employee Pension
Funds are the New York City Employees’
Retirement System (NYCERS); the
Teachers’ Retirement System of the City
of New York (TRS), the New York City
Police Pension Fund Subchapter 2
(POLICE); New York City Fire
Department Pension Fund Subchapter
Two (FIRE); and the New York City
Board of Education Retirement System
(BERS). Each Pension Fund is financially
independent and has its own board of
trustees.
New York State Division of Housing
and Community Renewal (DHCR)
The New York State Division of Housing
and Community Renewal (DHCR) is
responsible for the supervision, maintenance and development of affordable
low- and moderate-income housing in
New York State. DHCR oversees and
regulates the State’s public and publicly-assisted rental buildings; administers
housing development and community
preservation programs; and maintains
and enforces the State’s rent regulations.
New York State Energy Research
and Development Authority
(NYSERDA)
The New York State Energy Research
and Development Authority is a public
benefit corporation created in 1975
tasked with helping New York meet its
energy goals: reducing energy consumption, promoting the use of renewable
energy sources, and protecting the
environment.
New York State Housing Finance
Agency (HFA)
The New York State Housing Finance
Agency offers financing to build affordable housing and preserve existing
affordable housing in communities across
the State of New York.
Housing New York: A Five-Borough, Ten-Year Plan
NY/NY Agreements
The “New York/New York” agreements
are a series of three City-State agreements signed by three separate mayors
since 1990 to fund the creation and
ongoing operations of some 15,000 units
of supportive housing for homeless New
Yorkers with special needs.
Office of Environmental
Remediation (OER)
The New York City Mayor’s Office of
Environmental Remediation was
established in 2009 to design, build and
operate a set of world class municipal
programs to advance cleanup and
redevelopment of brownfield sites. OER
works in some of the most blighted
properties in some of the City’s most
disadvantaged neighborhoods to perform
clean up, improve safety, and facilitate
new development. OER also provides
environmental counsel to the Mayor’s
Office.
Office of Long Term Planning and
Sustainability (OLTPS)
New York City’s Office of Long-Term
Planning and Sustainability coordinates
with all other City agencies to develop,
implement, and track the progress of
PlaNYC and other issues of infrastructure and the environment which cut
across multiple City departments. In
addition to producing PlaNYC, the Office
of Long-Term Planning and
Sustainability promotes the integration
of sustainability goals and practices into
the work of City agencies and the lives of
New Yorkers.
Office of Management and Budget
(OMB)
New York City’s Office of Management
and Budget oversees an annual expense
budget of $69.9 billion and a capital
budget of more than $9.2 billion per year.
With a staff of approximately 300
employees, OMB prepares and monitors
the budgets and programs of over 80 City
agencies and covered organizations such
as the Transit Authority, Health and
Hospitals Corporation and the Housing
Authority.
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Office for People with
Developmental Disabilities (OPWDD)
The New York State Office for People
with Developmental Disabilities is
responsible for coordinating services for
more than 126,000 New Yorkers with
developmental disabilities, including
intellectual disabilities, cerebral palsy,
Down syndrome, autism spectrum
disorders, and other neurological
impairments. It provides services directly
and through a network of approximately
700 nonprofit service providing agencies,
with about 80 percent of services
provided by the private nonprofits and 20
percent provided by state-run services.
One-Shot Program
A one-shot deal is a one-time payment by
the Human Resources Administration
(HRA) to help pay back rent to avoid an
eviction. “One-Shot Deals” are for people
who have income from sources other
than HRA such as employment or SSI.
Pension’s Economically Targeted
Investments (ETI)
In an effort to generate risk-adjusted
market rates-of-returns and to promote
economic development within the five
Boroughs of New York City, the New
York City Retirement Systems (NYCRS)
share an investment policy allocation of 2
percent of pension assets towards
Economically Targeted Investments
(ETI). The ETI program seeks investment opportunities that are not only
expected to deliver risk-adjusted market
rates-of-returns for NYCRS, but also to
generate collateral benefits to the City.
ETIs are designed to address market
inefficiencies by providing capital or
liquidity to under-served communities
and populations City-wide.
Permanently Affordable Housing
In the Inclusionary Housing
Program, housing that generates the
zoning bonus must remain affordable for
as long as the market rate housing that
receives the bonus continues to use that
bonus.
nyc.gov/housing
Pre-Certification Review
Prior to the start of the ULURP process,
the Department of City Planning reviews
an application for completeness. The
time period between an applicant’s first
contact with DCP to the start of ULURP
is called the Pre-Certification period.
This process involves two parallel
reviews: a land use review of the
application to ensure that the application
is complete and technically accurate, and
an environmental review, the purpose of
which is to disclose and analyze potential
impacts that may result from the
proposed action.
Proactive Preservation Initiative
Officially launched in January 2011, the
Proactive Preservation Initiative (PPI) is
the City’s strategic approach to identifying and addressing deteriorating physical
conditions in multifamily buildings
before they endanger the health and
safety of residents or threaten the quality
of the surrounding neighborhood. Each
month, HPD uses data and community
referrals to identify and survey buildings
showing signs of distress. Based on the
survey, PPI combines tough enforcement
tools with low-interest loans and other
incentives to ensure that owners are
accountable and equipped to maintain
their buildings in safe condition.
Project-Based Section 8 Vouchers
Project Based Vouchers are HUD rental
vouchers designated to specific units that
require tenants residing in that unit to
pay 30 percent of their income towards
rent, with the subsidy covering the
remainder.
Real Estate Mortgage Insurance
Corporation (REMIC)
The New York City Residential Mortgage
Insurance Corporation (REMIC) is a
public benefit corporation created to
promote the production and rehabilitation of affordable housing in New York
City through the issuance of mortgage
insurance. It has been a subsidiary of
HDC since 1993.
Real Property Transfer Tax (RPTT)
The RPTT applies on transfers of any
interest in real property in New York
City (except by a mortgage or by a will or
through inheritance, or transfers to or
from charitable organizations), including
the transfer of a controlling interest in
the owner. The tax rate and amount of
tax due depends on the amount of
consideration, the type of property, and
the type of transfer.
Rental Vacancy Rate
The rental vacancy rate is the proportion
of units that are vacant and available for
rent at a specified point in time. The
rental vacancy rate is calculated for the
triennial Housing and Vacancy Survey
(HVS) by the US Census Bureau using
the following formula:
Rent Guidelines Board
The Rent Guidelines Board (RGB) is a
local body with a mandate in both state
and local law to investigate conditions
within the residential real estate industry
and to establish fair rent adjustments for
rent stabilized units. Under the Rent
Stabilization Law (section 26-510) the
Board is charged with establishing
annual guidelines following a review of
(1) the economic condition of the
residential real estate industry in New
York City including such factors as the
prevailing and projected (i) real estate
taxes and sewer and water rates, (ii)
gross operating maintenance costs
(including insurance rates, governmental
fees, and cost of fuel and labor costs), (iii)
costs and availability of financing
(including effective rates of interest), (iv)
over-all supply of housing accommodations and overall vacancy rates, (2)
relevant data from the current and
projected cost of living indices for the
affected area, and (3) such other data as
may be made available to it. The Board
comprises nine members, all of whom are
appointed by the Mayor. Two members
are appointed to represent tenant
interests, two members are appointed to
represent owner interests, and five
Housing New York: A Five-Borough, Ten-Year Plan
113
119
members (including the chairperson) are
appointed to represent the general
public. The chairperson serves at the
pleasure of the Mayor.
Section 236
The Section 236 program, established by
the Housing and Urban Development Act
of 1968, combined Federal mortgage
insurance with interest reduction
payments to the mortgagee for the
production of low-cost rental housing. Under this program, HUD provided
interest subsidies to lower a project’s
mortgage interest rate to as low as 1
percent. This program no longer
provides insurance or subsidies for new
mortgage loans, but existing Section 236
properties continue to operate under the
program. The interest reduction
payment results in lower operating costs
and subsequently a reduced rent
structure. Section 8
HUD’s Housing Choice Voucher
program, commonly referred to as
Section 8, is the nation’s largest affordable housing program for renters. HPD’s
Section 8 program serves nearly 37,000
households and is the nation’s fifth
largest. Participants receive a voucher
that covers the difference between 30
percent of their gross annual household
income and the cost of their rent plus
utilities. Payments are made by HPD
directly to the participating landlord.
Senior Citizens Rent Increase
Exemption (SCRIE)
The Senior Citizens Rent Increase
Exemption (SCRIE) program provides
protection from rent increases for low- to
moderate-income seniors living in
rent-regulated apartments.
State Low Income Housing Tax
Credit (SLIHC):
The New York State Low-Income
Housing Tax Credit Program (SLIHC) is
modeled after the federal LIHTC
Program, providing a dollar-for-dollar
nyc.gov/housing
reduction in state income taxes to
investors in qualified low-income housing.
However, it has one major difference:
SLIHC assisted units must serve households with incomes at or below 90 percent
of AMI, as opposed to the 60 percent
standard of the federal LIHTC.
State of New York Mortgage Agency
(SONYMA)
The State of New York Mortgage Agency
is a public authority created in 1970 by
the state government of New York to
provide affordable homeownership to
low- and moderate-income New Yorkers
by offering affordably priced fixed-rate
mortgages through several mortgage
programs.
Supportive Housing
Supportive housing is affordable housing
with onsite comprehensive social
services to help chronically homeless
individuals with special needs to remain
stably housed.
Supportive Services for Veteran
Families (SSVF)
SSVF is a program of the U.S.
Department of Veterans Affairs that
awards grants to private non-profit
organizations and consumer cooperatives
who can provide supportive services to
very low-income Veteran families living
in or transitioning to permanent housing.
Grantees provide eligible Veteran
families with outreach, case management, and assistance in obtaining VA and
other benefits such as health care, legal
services, child care, housing counseling,
transportation, and financial planning.
Tax Levy
In New York City, revenues are generated from a variety of local taxes and user
charges. Other revenues are raised by
imposing a property tax to cover the cost
of providing public services, such as
housing and other budget purposes. Tax
Levy funds are used throughout HPD to
support any function that is not purely
grant funded.
Housing New York: A Five-Borough, Ten-Year Plan
Tax-Exempt Bond Recycling
The use of “recycled” tax-exempt
multifamily housing revenue bonds was
authorized by Congress as part of the
Housing and Economic Recovery Act of
2008 (HERA). Under the legislation, loan
prepayments received from bond-financed projects (paydowns that occur
with LIHTC equity) can be re-issued as
tax-exempt bonds to fund affordable
housing development with no additional
allocation of new volume cap. Unlike the
original bonds, recycled bonds do not
come with as-of-right tax credits; for that
reason, they are often used for middle-income projects for which tax credits are
less instrumental.
Tenant Interim Lease Program (TIL)
The Tenant Interim Lease Program
provides assistance and training to
organized tenant associations in
occupied City-owned buildings of three
or more dwelling units to develop
economically self-sufficient, low-income
tenant-owned cooperatives. During City
ownership, HPD provides major
rehabilitation and management training.
Rental income covers operating expenses, minor repairs, and management fees.
Rents are restructured before buildings
are sold to the tenant association in order
for the buildings to remain financially
viable after sale.
Third Party Transfer (TPT)
TPT provides a mechanism to transfer
ownership of distressed and tax delinquent properties to HPD qualified
developers. Developers receive a
combination of City and private market
rate financing for rehabilitation. TPT
projects either become rentals or limited
equity cooperatives.
Tower-in-the-Park Zoning
Zoning regulations established in 1961
and still applicable in certain parts of the
city that encourage towers set back from
the street within open space that is often
occupied by lawns or parking.
114
120
Transferable Development Rights
In certain locations, such as for properties near the High Line in the Special
West Chelsea District and for designated
landmarks, a property that is built to less
than the full floor area allowed by zoning
may transfer unused development rights
- sometimes called Transferable
Development Rights - to another,
non-adjacent property where this floor
area can be built in compliance with
regulations set forth in the Zoning
Resolution.
Uniform Land Use Review
Procedure (ULURP)
A standardized procedure set forth in the
City Charter for the public review of
discretionary land use applications. Examples of actions requiring
ULURP include changes to the zoning
map or text of the Zoning Resolution,
Special Permits within the Zoning
Resolution requiring approval of the City
Planning Commission (CPC), or the sale
or lease of City-owned property. The
process includes review and public
hearings held by the affected Community
Board, Borough President, the City
Planning Commission, and the City
Council.
Urban Development Action Area
Project (UDAAP)
Housing and urban renewal plans and
projects, pursuant to City, State and
Federal laws are required to be reviewed
by the City Planning Commission.
UDAAP designation authorizes rehabilitation or new construction on formerly
City-owned land. This action is subject
to the Uniform Land Use Review
Procedure.
U.S. Department of Housing and
Urban Development (HUD)
The U.S. Department of Housing and
Urban Development is the nation’s
federal housing agency. HUD provides
funding and programmatic support to
sustain homeownership, create
nyc.gov/housing
affordable housing opportunities for
low-income Americans, and support the
homeless, elderly, people with disabilities
and people living with AIDS. HUD also
promotes economic and community
development and enforces the nation’s
fair housing laws.
U.S. Department of Treasury
Community Development Financial
Institutions (CDFI) Fund
The Community Development Financial
Institutions Fund (CDFI Fund) promotes
economic revitalization in distressed
communities throughout the United
States by providing financial assistance
and information to community development financial institutions (CDFI).
Zoning Resolution
The New York City Zoning Resolution
regulates the permitted use, density,
height and setback of buildings. The
Zoning Resolution consists of text as well
as maps dividing the city into zoning
districts, each of which is subject to
regulations set forth in the text.
Veterans Affairs Supportive Housing
(VASH)
The HUD-Veterans Affairs Supportive
Housing (HUD-VASH) program
combines Housing Choice Voucher
(HCV) rental assistance for homeless
Veterans with case management and
clinical services provided by the
Department of Veterans Affairs (VA).
Workforce Housing
Housing affordable to households that
perform essential services for the local
economy, such as firefighters, teachers,
nurses, or police officers, who may
otherwise be priced out of the housing
market in proximity to their place of
employment.
Year 15 Program
HPD’s Year 15 Program seeks to preserve
LIHTC units beyond “Year 15”, the point
at which tax credit investors may exit the
program. Participating projects receive
mortgage modifications and rehabilitation loans in exchange for extending
regulatory agreements another 15 to 30
years.
Housing New York: A Five-Borough, Ten-Year Plan
115
121
Acknowledgements
Housing New York is the result of dozens of meetings with
hundreds of people who have an investment in the quality and
availability of affordable housing in the City. Their deep
analysis into what strategies have worked well in the past
decades, and what efforts can be improved upon in the future
have been invaluable. We believe this plan is ambitious and
innovative, and will begin to make New York City affordable for
our working families. So many individuals from for-profit and
non-profit sectors, government officials at federal, state and city
level, labor leaders, the real estate industry, academics, and
other housing stakeholders in the City gave us valuable input
over the past few months. We would especially like to thank the
following people for their countless hours and dedication to
this report:
The incredibly hardworking staffs at the following
City agencies:
Lilliam Barrios-Paoli, Deputy Mayor for Health and
Human Services
Department of Housing Preservation and Development,
Housing Development Corporation, New York City Housing
Authority, Department of City Planning, Office of Management
and Budget, Department of Buildings, Department of Finance,
Economic Development Corporation, Department of Small
Business Services, Human Resources Administration,
Department for the Aging, Department of Homeless Services,
NYC & Company, Office of Immigrant Affairs, Office of
Contract Services, and a special thanks to: James Patchett,
Steven Caputo, Elaine Braithwaite, Hayley Prim, Howard
Slatkin, John Kimble, David Quart, Kristin Misner, Jim
Quinlivan, Rich Froelich, Eric Enderlin, Jessica Katz, Elyzabeth
Gaumer, Eva Trimble, Andrew Eickmann, Connie Chan, Greg
Kelly, Alnisha Maniaci, Emily Osgood, Alexandra Warren, Eric
Stern, Noelle Marcus, Ana Arino, Katherine Gray, Carolee Fink,
Chandan Sharma, Susan Weinstock, Enid Harlow, Jessica
Singleton, Alex Costas, Emily Lessard, Ed Hogikyan, Ingrid
Emma Wolfe, Director of Intergovernmental Affairs
Ellen Gould, Mark Willis and Jessica Yager.
Agency Leaders
Image Credits
Office of the Mayor
Anthony Shorris, First Deputy Mayor
Vicki Been, Commissioner, Department of Housing
Preservation and Development
Carl Weisbrod, Chair, City Planning Commission
Gary Rodney, President, Housing Development Corporation
Dean Fuleihan, Director, Office of Management and Budget
Shola Olatoye, Chair, New York City Housing Authority
Cecil House, General Manager, New York City Housing
Authority
Kyle Kimball, President, Economic Development Corporation
Maria Torres-Springer, Commissioner, Department of
Small Business Services
Thomas Fariello, Acting Commissioner, Department
of Buildings
Gilbert Taylor, Commissioner, Department of Homeless
Services
Pages 32-33
(East New York and Cypress Hills):
DCP
Page 57
(Franklin Plaza):
Bing
Page 35
(Hunters Point South Mixed-Use
Development):
Before: Google Maps
After: ODA Architecture P.C.
Page 58
(Arverne View):
L+M Development Partners / Global
Design Strategies
Page 37
(Artspace El Barrio @ P.S. 109):
Photo: HHL Architects
Rendering: HHL Architects
Page 39
(St. George Mixed-Use Development):
Photo: Cooper Carry
Garrison Architects / Cooper Carry
Page 41
(Harlem River Waterfront
Redevelopment):
Before: Pictometry International
Corp
After: DCP
Page 48
(College Avenue Multifamily
Rehabilitation):
The Wavecrest Management
Team Ltd
Page 66
(Spring Creek):
HPD photos by Larry Racioppo
Page 68
(Melrose Commons Redevelopment):
Photo: HPD
Rendering: Magnusson Architecture
and Planning
Page 70
(Sugar Hill Development):
Adjaye Associates for Broadway
Housing Communities
Page 83
(Markham Gardens Manor):
James Shanks
Cover: John Lee
30%
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Affordable Housing & the State of the City
February 3, 2015 No Comments
Mayor de Blasio’s State of the City address today presented a bold vision. His commitment to reducing inequality and ensuring that
New York City remain a place where people from all walks of life can afford to live and work is clear and admirable, and he is right to
focus on the cost of housing as the root of the issue.
The best of de Blasio’s vision is reflected in his introduction by Sheryl Morse, a long­time Ft. Greene resident whose building partnered
with the city to renovate and maintain long­term affordability. This is a story of long­term residents working with the city to ensure that
they will be able to stay in their neighborhood even as it changes, and making a commitment to preserving affordability for low and
moderate income people. We need to make sure this stays the story – that thousands of Sheryl Morses can tell a similar story next year.
Because the alternate is a story of displacement; of low­income New Yorkers being pushed out of their homes and of more and more
neighborhoods becoming out of reach for average New Yorkers as a consequence of the very housing development that is intended to
prevent our city from becoming “a place defined by exclusivity, rather than opportunity.” We agree with Mayor de Blasio – we cannot
let that happen.
There’s no question de Blasio has been the kind of mayor who delivers on his promises. NYC ID was pledged, and it happened.
Universal Pre­K was pledged, and it happened.
Now de Blasio is pledging affordability and stability for our neighborhoods. He’s pledging a reversal in the decades­long trend of
skyrocketing housing costs. Rent burdening, as de Blasio pointed out, has risen 10% in a few short years. No matter how much
affordable housing is built, if people find their rents continuing to rise, their neighborhood become increasingly unaffordable, the
affordable housing being built not meeting their needs, that pledge for affordability will be broken. New Yorkers are still feeling the
squeeze, and are still desperate for relief. The crucial question is who will be living in rezoned neighborhoods years later, and will
their communities be made stronger for them by the rezoning?
Previous administrations have promised much for communities – but delivered primarily for developers. The de Blasio administration’s
actions on rezonings must not repeat the mistakes of the past, when rezonings were something that happened to­not with­ communities.
De Blasio needs to take three critical steps to not repeat these mistakes.
First, community organizations need to be involved in all steps of the process – not just initial planning and visioning, but building and
managing for the long­term. The recent decision of the administration to give one of the last remaining large parcels of vacant city­
owned land in the neighborhood to a big developer instead of a trusted local community group is disturbing, and sends the message that
these neighborhood partnerships are going to be transient – over once the rezoning is done.
Second, the city’s affordable housing strategy cannot be contingent on zoning away critical and needed manufacturing jobs. Our good­
paying industrial jobs must be protected against incursions by hotels, big box stores, nightclubs, and other misaligned uses on M­Zoned
land. De Blasio’s commitment to raise the minimum wage is a huge step. But supporting and retaining the good, middle­class jobs we
have currently is a critical step toward halting our growing income inequality.
Third, to ensure that de Blasio’s ambitious plans result in the kind of city we all want to see, strong protections against displacement
must be put in place before any neighborhoods are rezoned. A rezoning is a concrete and detailed change of what is legal in a
neighborhood. Displacement protections, and other neighborhood needs, must be approached in the same manner.
Development is a piece of the puzzle, and a needed one. But it’s not the most important piece. We’ve seen the results of what happens
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when development is the priority, and stabilization is the afterthought. Residents are displaced. Promised parks are still fenced off a
decade later. Good paying manufacturing jobs disappear. And the promise of new local jobs that never appear.
And lately, we’ve seen what happens when a neighborhood appears targeted for more development – witness the skyrocketing land
prices in East New York and Western Queens. This severely threatens the ability of the city to leverage truly affordable housing and
other community amenities and increasing rent pressures for both residents and local businesses. De Blasio needs to make clear that this
will not be repeated in the South Bronx, Sunnyside, Stapleton, East Harlem, and our other neighborhoods that will be rezoned to
come. We’ve learned our lesson – jobs, preservation, stabilization, and other community priorities need to be put in place up
front. The city needs to deliver for communities before they come through for developers.
De Blasio committed to doing everything in the city’s power to keep those who already have affordable housing in their homes. That
commitment must be turned into a robust set of new anti­displacement mechanisms, because too many communities have learned
that hard way that the existing tools are insufficient protection for keeping residents in their homes. While de Blasio’s
commitment to providing free legal representation to tenants who face harassment in rezoned neighborhoods is a great start, it can’t be
the only policy. All tenants in New York City need and deserve a right to council in housing court. But legal representation is a response
to harassment that has already occurred. Particularly in neighborhoods they plan to rezone, the de Blasio administration has an
obligation to put proactive measures in place so that tenants don’t wind up in court in the first place.
De Blasio proposed converting areas zoned for manufacturing into residential buildings. But no housing – even affordable housing –
is affordable without a job.The manufacturing and industrial sector pays, on average, twice the wages of the service sector. Rather than
repurpose those places where these well­paying, career ladder jobs can exist, the administration should be looking for ways to protect,
preserve and expand the manufacturing and industrial sector. Encouraging maker space is one piece of that puzzle. But creating a
special district to protect M­zoned land against incursions by hotels, big box stores, nightclubs, and other misaligned uses would do far
more to break down income inequality.
It’s a huge step that de Blasio’s is the first administration that has seriously talked about gentrification, recognized its negative impacts,
and pledged to do something about them. And the focus on cracking down on predatory landlords and supporting legal service for
tenants is desperately needed, and will make a real dent. But even while the administration recognizes that “multimillion dollar
apartments drive up costs in the neighborhood,” they are still promising 160,000 units of market rate housing – which, in the New York
City of recent past, has been almost synonymous with “multimillion dollar apartments.” Almost all of which would, currently, get a
421a Developer’s Tax Break costing the city more than $1 billion annually. The question needs to be asked ­ will these 160,000 market
rate housing displace people, or help people? Will they be for working families and the middle­class, or will they be more of the
same luxury development for international investors and the very wealthy?
And will our mandatory affordability in these developments be enough to offset the effects of luxury housing on neighborhood
affordability? Currently, the Inclusionary Housing Program only creates affordable housing for the wealthier half of New Yorkers –
those making 80% AMI and above. As it stands now, anyone making less than about $50,000 a year would be cut out of the Inclusionary
Housing progam. Families of four will need to make almost $70,000. To meet the Mayor’s vision, programs like the Mandatory
Inclusionary Zoning and 421a need to create truly affordable housing for all our residents. And large developments like Sunnyside
Yards need to focus on provide housing across the income spectrum, including for low­income seniors and families. While our
affordable housing production remains strong, and (as de Blasio pointed out) is 1300 units ahead of schedule, the 40,000 units of
affordable housing promised for families making less than $45,000 are lagging behind by approximately 50%.
Make no mistake, this is a real departure from past failed housing policies – an impressive vision for our city. Mayor de Blasio rejected
the old false choice between a livable city and an affordable one, and that’s exactly what we need if we’re going to keep this city great.
Because what makes New York – and what has always made New York – is that this is a city of inclusion. Inclusion strengthens us, not
weakens us.
But inclusion doesn’t come easy. We have to work for it. We have to fight for it. Let’s make it happen together.
Bloggers: Moses Gates, and Emily Goldstein
Blog team: Benjamin Dulchin, Jonathan Furlong, Moses Gates, Emily Goldstein, Ericka Stallings, Jaime Weisberg, Barika X. Williams.
Editor, Anne Troy.
new blog posts
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January/February 2014
Volume 23: Number 1
Autonomy, Mobility, and Affirmatively Furthering
Fair Housing in Gentrifying Neighborhoods
Rachel D. Godsil
Gentrification polarizes. The term
usually connotes a process where “outsiders” move into an area whose onceattractive properties have now deteriorated due to disinvestment. The outsiders moving in are often, though not
always, white. This migration can lead
to arguably positive outcomes. Increased demand results in an increase
in property values—which, from a
pure market perspective, seems like a
net positive. Indeed, those who currently own property acquire greater
equity, and the tax base of the city containing the gentrified neighborhoods
expands. Moreover, gentrification of
affluent outsiders would seem also to
further society’s collective interest in
residential integration. Residential integration has enormous potential to
address inequalities of other sorts, such
Rachel D. Godsil (rachel.godsil@
gmail.com) is Eleanor Bontecou Professor of Law, Seton Hall Univ. School
of Law. The original version of this
article appeared in Brooklyn Law Review, Vol. 78, No. 2 (2013). I would
like to thank the participants in the
2012 Brooklyn Law School Trager
Symposium for their thoughtful comments on earlier drafts of this essay,
as well as john powell and Michelle
Adams for their intellectual inspiration. Seton Hall University School of
Law assisted this project with a summer research grant.
Recycled Paper
as education, access to job networks,
and an increase in amenities resulting
from the political capital of the outsiders. This too seems like a significant net positive.
Opposition to
Gentrification
Why then is there significant opposition to gentrification by in-place residents? One concern is the possibility
that the property price increase will
result in displacement—building owners will drastically increase rents or the
increase in taxes may become too great
for current property owners to bear.
There is some dispute as to the degree
of direct displacement of individuals
due to gentrification (i.e., evictions,
failure to pay property taxes), but it is
clearly the case that the economic and
racial demographics of gentrifying
neighborhoods often change dramatically.
In-place residents fear that the newcomers will change the culture and
practices of the neighborhood. And
they have reason for this fear—anyone who has spent time in Crown
Heights, Brooklyn recently will be
familiar with the phenomenon. According to one caricature, “Housing
prices balloon; boutiques and bistros
blossom; and before you know it, some
bearded dudes in vests have bought the
local bodega and opened a saloon fes-
tooned with taxidermied animals.”1
While the image is ridiculous, the perceived loss to the in-place residents is
not. Indeed, the pain of loss of community and the harm of lost autonomy
have been well-recognized in the eminent domain literature.
My concern is the gentrification of
city neighborhoods that were abandoned during the government-sponsored suburban migration of the 1950s
through the 1980s. While the neighborhoods that gentrify tend to be in
certain otherwise prosperous cities—
New York, San Francisco, Chicago—
many of these cities have large numbers of people who have not benefited
from the “new economy” and remain
working-class or poor with too few
options for jobs that pay a living wage.
These neighborhoods that are now
so popular with affluent young professionals and families were the same
neighborhoods abandoned by both
(Please turn to page 2)
CONTENTS:
Gentrification ............. 1
Human Rights: 2013 .... 3
Development .............. 5
Stop & Frisk: NYPD ..... 9
PRRAC Update .......... 12
Resources ................. 13
Poverty & Race Research Action Council • 1200 18th Street NW • Suite 200 • Washington, DC 20036
202/906-8023 • FAX: 202/842-2885 • E-mail: [email protected] • www.prrac.org
129
(GENTRIFICATION: Cont. from page 1)
groups beginning in the post-World
War II period. The neighborhoods generally became racially isolated and economically depressed during this same
period. The residents who remained
did not choose to have the middle class
abandon their neighborhoods, nor did
they have the option for themselves to
leave. Now, after decades where those
who remained invested labor, time and
emotion in their neighborhoods, outsiders are moving in, and the residents
who remained (or their descendants)
are denied both the autonomy to prevent these changes and the means to
exit to more desired environs.
How convenient to now claim that
community members who were unable
to purchase their property lack any
recognizable “interest” in the communities in which they have worked and
lived. The idea of recognizing the interests of renters and in-place small
business owners might seem to be familiarly anti-gentrification. But kneejerk anti-gentrification assumes that
the goal of realizing community preferences requires compositional stasis.
Compositional stasis, needless to say,
is neither possible nor normatively appealing. Residential change in neighborhoods is inevitable whether a neighborhood gentrifies or not. The problem is that gentrification currently
causes non-consensual exit—and, as
such, threatens the autonomy of the
displaced in a way that is unlike a
Poverty and Race (ISSN 1075-3591)
is published six times a year by the Poverty & Race Research Action Council,
1200 18th Street NW, Suite 200, Washington, DC 20036, 202/906-8023, fax:
202/842-2885, E-mail: [email protected].
Chester Hartman, Editor. Subscriptions
are $25/year, $45/two years. Foreign
postage extra. Articles, article suggestions, letters and general comments are
welcome, as are notices of publications,
conferences, job openings, etc. for our
Resources Section. Articles generally
may be reprinted, providing PRRAC
gives advance permission.
© Copyright 2014 by the Poverty &
Race Research Action Council. All
rights reserved.
choice to move. But, by recognizing
a broad scope of community preferences, the autonomy of in-place residents can be revived.
In-Place Residents
Many in-place residents—particularly renters—currently lack the ability to choose to remain when
gentrification occurs. The forced exit
of sizable numbers of community
members is harmful both to them and
to those who remain. The ideal response is a vehicle that allows in-place
residents to remain but also allows
Gentrification polarizes.
them to choose whether to leave,
rather than being involuntarily displaced. Such a vehicle would seem to
blunt the criticism that gentrification
is an illegitimate invasion by outsiders, and it would transform gentrification into a mechanism by which
truly fair housing can be furthered.
Cities—with the help of the federal
government—have the option of creating such a vehicle—and indeed they
have when using eminent domain powers against owners. I argue that cities
like New York, borrowing from eminent domain remedies and federal government mobility programs operated
by the Department of Housing and
Urban Development (HUD), should be
using rental vouchers or low-interest
loans to restore the autonomy of inplace residents, providing them with
viable, self-determining options to remain or exit the neighborhood. Indeed, the Fair Housing Act (Sec.
3608) legally obligates HUD and its
grantees to “affirmatively further fair
housing,” and HUD has funds available to fulfill this mandate. The current absence of true autonomy and
choice for in-place residents of
gentrifying neighborhoods threatens
the legitimacy of any integration that
may occur as a result of the influx of
new residents.
2 • Poverty & Race • Vol. 23, No. 1 • January/February 2014
Why Should
GentrificationTrigger
Government Action?
If gentrification occurs when an
area experiences increased property
values as a result of outsiders who identify undervalued property, it is important, as a preliminary matter, to note
what caused the initial undervaluation.
If the causes of decline and renewal
are simply a result of individual preferences and consensual market exchanges, the argument in favor of a
laissez-faire approach seems strong. It
is exceedingly clear, however, that in
the context of urban neighborhoods,
declining property values are a direct
consequence of decisions made by the
federal government, bankers and real
estate brokers. Historian Thomas
Sugrue has shown that the boundaries
between these three groups were
blurred as bankers, real estate executives and developers moved back and
forth from government service to private practice. The private hand of the
market was consciously manipulated
to cause a decline in property values
and the quality of life in urban neighborhoods.
From the post-World War II period
through the 1970s, the federal government engaged in programs enhancing
the autonomy of white families to purchase homes and move to the suburbs,
while simultaneously disinvesting in
urban centers and contributing to the
exclusion of Black and Latino families from those same suburbs. In particular, three federal programs combined to provide unprecedented opportunities and autonomy even for
middle-class white families: the federal subsidization of highways, the
Federal Housing Administration
(FHA) and the Veterans Administration (VA) homeownership loan programs. Moreover, some of these same
programs resulted in massive displacement of poor people and the destruction of established neighborhoods.
In every major city, highway construction destroyed working-class
(Please turn to page 8)
130
(GENTRIFICATION: Cont. from page 2)
neighborhoods as homes were leveled
to make way for expressways, on and
off ramps, and overpasses. These
neighborhoods were comprised of
many ethnic groups; however, the
white ethnics were able to benefit from
the highway construction because it enabled easy commutes to and from the
suburbs.
The federal government did not act
alone. Decisions about where to place
highways and other unwanted land
uses—such as the concentration of large
public housing projects—all were
made at the local level.2 The central
role of government in creating the deteriorating conditions that now lend
themselves to gentrification and reduced autonomy for in-place residents
suggests that it is appropriate for the
government to now play a role in addressing gentrification and enhancing
such autonomy.
Legal Mechanisms to
Address Gentrification
If the in-place residents of a small
town or suburb feel strongly about the
scale and design of homes, the tacky
signage of a chain store, or even the
intensive development of open space,
there are a range of legal and regulatory options available. The primary
mechanism, of course, is zoning. Standard zoning tools of maximum height
requirements, setback rules and floor
area ratios—supplemented by modifications such as “cubic content ratio”—
are readily available to protect against
certain changes, so long as the residents can garner sufficient political
support. Some communities have also
imposed aesthetic zoning requirements
and design review as part of the permitting process. Other powerful existing tools are requirements for permits for subdivision with associated
design conditions, historical districts,
and emerging open-space requirements.
The “up-scaling” of reasonably
stable urban neighborhoods shares
many of the same characteristics of
standard new developments: It alters
the current aesthetic and uses norms
of a particular area. The existing land
use legal toolkit, however, is rarely at
play to protect community interests.
The reasons are myriad. A simple, but
important, difference is scale and political power. Most of the cities where
gentrification has already occurred or
where it is currently underway are
fairly large, and even during the nadir
of American cities, most retained a financial base of middle class residents,
wealthy residents and job sources.
New York, San Francisco, Philadelphia, Boston and Chicago all saw significant decline in the post-World War
II period through the 1970s, but they
never were abandoned to the degree
of cities like Detroit, Newark, Hartford or Camden. Accordingly, when
“gentrification” begins—when outsid-
Current residents should
have a choice of
whether to stay or
move.
ers with more capital move into abandoned neighborhoods—the current
residents have to counter the political
might of the extant middle class of the
city.
In addition, gentrification often
does not result in changed use in the
traditional sense. The brownstones or
old Victorian mansions that were used
for housing in the pre-gentrification
period are being used for housing now.
The difference is only who is living in
the house. The bodegas, small hardware stores and social clubs are replaced by other retail uses—boutiques,
upscale restaurants, and cafes. None
of these require zoning changes. This
means that in-place residents of
gentrifying neighborhoods lack many
of the current land use controls that
others utilize to protect their autonomy, and new devices are needed
to afford that protection.
In-place residents appear to have two
separate but related bases to oppose
gentrification: displacement and cultural change that reflects the interests
of the incoming gentrifiers. Displace-
8 • Poverty & Race • Vol. 23, No. 1 • January/February 2014
ment of both residents and businesses
is a result of increased demand for
housing and commercial space, which
results in higher rental and purchase
prices. Cultural change is caused in
part by the newly arriving upscale retail stores, the loss of long-known retail proprietors, and the different habits and norms of the gentrifiers. Without access to existing land use tools,
in-place residents must look elsewhere
to address these concerns. But in order for these new devices to take shape,
two threshold matters must be resolved.
First, governments will need to decide
what level of gentrification warrants
intervention; and second, they will
need metrics to determine which residents qualify for protection. To the
extent that any intervention requires
expenditures, governments, in these
budgetary times, will also need to identify sources of funds.
The Gentrification Trigger
The first issue in structuring protection for in-place residents is how to
determine when gentrification is occurring. The two phenomena most
often mentioned are increased housing and retail prices, and a higher percentage of high-income whites becoming homeowners (although some omit
the racial designation). Needless to say,
for constitutional and other reasons,
linking the trigger for gentrification
to the percentage of people of a particular race is a nonstarter. The same
concerns, however, do not apply if the
trigger is a particular increase in
prices. For ease of example, I presume
that gentrification occurs when rental
and home purchase prices have increased by 25% over a two-year period.
What might a city do to preserve
the autonomy of renters? An option
that relies upon existing tools and a
“market” model would be to issue a
voucher to cover the increased rental
costs to all renters able to establish that
they had lived or operated a business
in the neighborhood for a set number
of years. Arguably, those entitled to
the voucher would include the grown
(Please turn to page 10)
131
(GENTRIFICATION: Cont. from page 8)
children of people who had lived in
the neighborhood for the set number
of years, since they would have inherited the home, had their parents been
homeowners rather than renters. The
voucher would be available for a set
number of years; five years is the number that often is given when eminent
domain is at issue. An additional option would be to offer these same residents a very low-cost guaranteed loan
with a minimal down-payment to allow for purchase of a home.
The rental voucher or low-cost loan
would directly address the displacement concerns. Any long-term resident
(or their children) would have the option of remaining in the neighborhood.
And while perhaps paradoxical, I argue that such a voucher or loan option
should also be transferable out of the
neighborhood, which would offer true
choice and autonomy for in-place residents. When long-term residents or
business owners and their children have
choice and autonomy, the anger over
any change to the culture of the neighborhood would seem to be quelled.
Once current residents have a
choice of whether to stay or move,
there is the potential for residents to
organize and to persuade other residents and business owners to stay. If
many current residents and business
owners were to remain, the retail offerings and street life would likely not
change in any meaningful way. Or if
they did, the change would occur on
the residents’ own terms. If too few
people stayed, those who remained
might feel a sense of loss but not, presumably, a sense that outsiders pushed
out their neighbors.
If most voucher holders remain, one
presumes the gentrification cycle
would either slow down considerably
or halt altogether. Gentrifiers tend to
come in waves—artists and others seeking low rent and an “authentic” community, families seeking diverse
neighborhoods, and then, as amenities
follow, wealthier families whose capital drives the housing costs and retail
demands even higher. If most in-place
residents remain, however, a lack of
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supply would prevent the subsequent
waves. Although this harms the economic interests of landlords, in
gentrifying neighborhoods, rental
properties were among those that were
devalued by the disinvestment and
abandonment and so landlords would
have been able to buy very cheaply
initially, which mitigates any equity
concerns.
Affirmatively Furthering Fair
Gentrification
Why should the federal government
play a role in facilitating these vouchers? To respond to its legal obligations under the Fair Housing Act of
1968. Congress required HUD and its
grantees to do more than combat private housing discrimination. In recognition of HUD’s own legacy of segregation, the Agency has a mandate to
actively promote integration. The obligation to “affirmatively further fair
housing” has been integrated by HUD
in its 2010-2015 strategic plan, which
includes the pledge that HUD will operate its programs “with an eye toward
ensuring choice and opportunity for all
10 • Poverty & Race • Vol. 23, No. 1 • January/February 2014
people pursuing the promise of a better life.” HUD has included these goals
in the criteria by which it will judge
applications for grants from cities and
regional development offices.
Government played a significant
role in creating the conditions that led
to the harms to in-place residents;
therefore, government at the city and
federal levels ought to lead the effort
to eliminate the aspects of gentrification that generate the most intense
opposition. And, given HUD’s mandate, cities experiencing gentrification
have the option of seeking HUD funds
to counter the current dynamic, which
continues the cycle of denying autonomy to residents of urban neighborhoods.
Neighborhoods undergoing gentrification generally experience significant influxes of private wealth and
political clout. This combination tends
to generate increased commercial activity and governmental services and
amenities. If in-place residents have
the financial means to remain, they will
ideally be able to benefit from the employment opportunities, educational
opportunities, and other quality-of-life
132
improvements that are precisely the
qualities HUD seeks to incentivize in
its pursuit of “Mixed-Income Communities of Opportunity.” Accordingly, the federal government should
be encouraged to expend funds to
transform gentrification into a strategy for affirmative furthering fair
housing, rather than allowing it to continue as yet another racialized dynamic
that denies autonomy to the black and
Latino families that remained in the
neighborhoods that were hard hit by
the policies of the last century.❏
1
Adam Sternbergh, “What’s Wrong with
Gentrification,” N.Y. MAG. (Dec. 11, 2011),
http://nymag.com/news/intelligencer/62675.
(HUMAN RIGHTS: Cont. from page 4)
“[t]oday, many black children still attend schools in racially and economically isolated neighborhoods, while
their families still reside in lonely islands of poverty: 39 percent of black
children are from families with incomes below the poverty line, compared with 12 percent of white children.”
In addition to this, the recent mass
closing of schools (particularly in
places like Chicago), has disproportionally impacted students (and
teachers) of color and could be construed to interfere with Article 26, giving parents the “right to choose the
kind of education that shall be given
to their children.” Some human rights
organizations have even brought their
concerns to the United Nations, asking them to monitor the nearly 50
school closings in Chicago. Although
the right to an education has not always been viewed as a solution to social problems, one could, according
to Armaline, Glasberg & Purkayastha,
“easily argue that the manifest goals
of public education are closely intertwined with the concept of [human
rights].” The USHRN report recommends, among other things, that the
United States fulfill its obligations
under the International Covenant on
Civil and Political Rights (ICCPR),
which would include an aggressive
federal role in ensuring equitable in-
vestment of resources in public
schools. It also recommends that the
United States ratify the Convention on
the Rights of the Child (CRC) and the
Committee on Economic, Social and
Cultural Rights (CESCR) both of
which articulate higher standards of
accountability in ensuring the human
right to education.
Criminal Justice
One population especially affected
by the United States’ non-compliance
with the United Nations Human Rights
Council is prisoners. In particular,
over the last two decades, prisons in
the United States have increasingly
relied on solitary confinement, even
building entire facilities that primarily
serve to hold individuals for years and
sometimes even decades in extreme
isolation. According to the ACLU,
there are currently over 80,000 people
held in solitary confinement in
America, oftentimes suffering from
long-term depression and a slow and
irreparable decline of a prisoner’s
mind as a result. 2013 has seen unprecedented resistance to this form of
punishment. On July 8, 2013, representatives of the inmates at Pelican Bay
State Prison—an institution that, according to the UN High Commissioner for Human Rights, has held
more than 400 prisoners in solitary
confinement for over a decade, with
an average time of 7.5 years spent in
solitary confinement—demanded in a
petition, upon other things, an end to
long-term solitary confinement. Consequently, up to 30,000 California
inmates participated in a 60-day hunger strike to protest the conditions of
their imprisonment.
Outside of the prison system, resistance against solitary confinement
has been simultaneously mounted from
both civil liberties and human rights
organization. In Asker v. Brown
(Please turn to page 12)
Works Cited
American Civil Liberties Union. “ACLU Calls on International Human Rights
Body to Investigate Solitary Confinement in U.S.” March 12, 2013.
Anderson, Carol. Eyes Off the Prize: The United Nations and the African
American Struggle for Human Rights, 1944–1955. Cambridge: Cambridge
Univ. Press, 2003.
Armaline, William T., Davita Silfen Glasberg & Bandana Purkayastha, eds.
Human Rights in Our Own Backyard: Injustice and Resistance in the United
States. Philadelphia: Univ. of Pennsylvania Press, 2011.
Center for Constitutional Rights. “Court Must Intervene to End Torture of
Solitary Confinement, Attorneys Argue.” March 14, 2013.
Hankins, Salimah. “Advancing Human Rights: A Status Report on Human
Rights in the United States.” USHRN. December 10, 2013.
Leadership Conference on Civil and Human Rights et al. “Still Segregated:
How Race and Poverty Stymie the Right to Education.” September 13, 2013.
www.prrac.org/pdf/Still_Segregated2013.pdf
National Law Center on Homelessness & Poverty. “Criminalizing Crisis:
The Criminalization of Homelessness in U.S. Cities.” November 2011.
Rothstein, Richard. “For Public Schools, Segregation Then, Segregation
Since: Education and the Unfinished March.” Economic Policy Institute.
August 27, 2013.
United Nations Office of the High Commissioner for Human Rights. “California jails: ‘Solitary confinement can amount to cruel punishment, even
torture’.” August 23, 2013.
U.S. Interagency Council on Homelessness. “Searching Out Solutions: Constructive Alternatives to the Criminalization of Homelessness.” 2012.
Poverty & Race • Vol. 23, No. 1 • January/February 2014 • 11
133
SPECIAL FEATURE: ENVISIONING A CIVIL RIGHT TO COUNSEL
Occupy the Justice System:
The Civil Right to Counsel and the
Equitable Distribution of Justice
By Andrew Scherer!
Equal justice under law is not merely a caption on
the facade of the Supreme Court building… it is fundamental that justice should be the same, in substance and
availability, without regard to economic status.
—U.S. Supreme Court Justice Lewis Powell, Jr.
Occupy Wall Street’s message, so loud and clear
this past fall (and resurging again this spring), is that
there is something fundamentally wrong — unfair,
anti-democratic, wildly imbalanced
and wholly unacceptable — about
the large and growing disparity in the
distribution of wealth and power in
the United States. The statistics are
familiar but shocking all the same.
For example:
■ Between 1979 and 2007, households with incomes
in the top 1% saw their income increase 275%,
over 15 times more than income increased for
households with incomes in the bottom 20%;!
■ As of 2011, the median net worth of white households in the United States was 20 times that of
black households and 18 times that of Hispanic
households. "
We in the legal services world know all too well
that the distribution of justice in the U.S. suffers from
the same inequity. Under our “pay to play” system of
justice, the haves, who can afford legal help, get access
to the rights and protections of the legal system and
the have-nots get evicted. Or they lose custody of
their kids. Or employers rip off their already pitifully
low wages. Our system of justice fails because it is
fundamentally out of balance; it dispenses justice to
people with money and denies it to those without. And
because of the close nexus between poverty and race in
the U.S., that disparity falls almost as much along racial
lines as it does along economic lines.
In our rhetoric, we as a community generally
describe the issue of access to justice in absolute terms
— the quantity of unmet “legal need.” We talk about
the “justice gap” between what low income people
need and what they have.# This “legal need” framing
makes for a compelling argument for an expansion of
civil legal services. It evokes sympathy and resonates
with policy makers and funders. But we also should
be thinking and talking (at least among ourselves to
begin with) about access to justice in relative terms —
the gap between the resources that the justice system
devotes to the haves and the resources it devotes to
the have-nots. And we should be talking about how
public policy fosters, subsidizes and perpetuates that
imbalance. The imbalance is factual, not theoretical,
and can be demonstrated by empirical data. The most
glaring reflection of this imbalance is how the federal
tax system subsidizes legal expenses for the wealthiest 1% at approximately (and very conservatively)
$23.6 billion annually,$ while the federal government
funds legal services for the poorest 25% at under $400
million annually.% That’s a per capita benefit of $11 for
each poor person& and a subsidy for legal assistance (in
the form of a loss to the treasury and tax savings) for
each one percenter of $754,' or almost seventy times as
much federal benefit per one percenter as for each person
living in poverty.
Other data also reflects the gross imbalance in
the distribution of justice.( The astounding contrast
between the public resources devoted to the federal
court system and the resources devoted to the New
York City Housing Court, provides an striking illustration. All the federal district courts throughout the
United States combined have a total docket of 361,323
civil and criminal cases,)* a total of 1,205 judges and
magistrates,)) and an annual budget of $2.618 billion)!
— that’s approximately $7,252 spent per case and a
caseload of 300 cases per judge or magistrate. The
New York City Housing Court, just one of the innumerable forums throughout the United States that
adjudicate legal matters primarily affecting the lives
134
Management Information Exchange Journal

Occupy the Justice System
Continued from page 33
of poor people, handles a similar caseload — about
350,000 cases per year.)" It has a total of 50 judges)# and
an annual budget of about $32 million.)$ That’s $91.43
spent per case and a caseload of 7,000 cases per judge.
The federal trial level courts, which are far more likely
to adjudicate matters affecting the wealthy than New
York City’s Housing Court, thus spend almost eighty
times as much per case and the Housing Court asks its
judges to manage 140 times as many cases as do federal
district court judges and magistrates. Granted, federal
litigation is procedurally more complex and substantively more varied, and the dollar value of each case is
no doubt far greater on average, but what is at stake in
New York City’s Housing Court — the ability to have
a home — is far more significant in human terms than
what is at stake in much federal court litigation. And
the astounding disparity in resources devoted to the
administration of justice in these forums is emblematic
of the gross imbalance in resources devoted to administration of justice between rich and poor overall.
Because one has to pay to get meaningful access
to the justice system, there is a proportional relationship between access to legal help and wealth: the
wealthier you are, the greater your access. Since justice
is a commodity for sale, lawyers generally earn their
living selling access to justice to the highest bidder and
the legal profession naturally uses a wildly disproportionate amount of its members to serve people with
money. It should come as no surprise, then, that only a
small fraction of all lawyers provide legal assistance —
both civil legal services and indigent criminal defense
services — for low-income people. According to the
ABA, of the 1.2 million lawyers in the U.S. in 2010, only
1% provided civil legal services or indigent criminal
defense (and that fraction is diminishing: in 1980 the
figure was 2%).)%
Why does the relative distribution of justice matter?
Why is not it enough to simply focus on the absolute
need? And what does this all have to do with the movement for a civil right to counsel? Navigating our system
of justice requires familiarity with a complex set of
substantive and procedural rules and in many matters
counsel is necessary in order to vindicate legal rights.
When justice is treated as a commodity and meaningful access is based on wealth (and, by extension, race)&),
the justice system is severely misaligned. This misalignment strikes at the heart of who we are and what we
stand for as a nation. It implicates our core democratic
values of fairness and equality. The call for a civil right
to counsel directly addresses this most fundamental
of flaws of the civil justice system, not just because it
satisfies a “need” of the poor for legal help with matters
of fundamental importance, but because it also moves
us toward a more neutral posture for the judicial
branch and a more equitable allocation of its resources.
In our system of separation of powers, the only branch
of government that (openly and blatantly, at least)')
does its business and provides its services in proportion to wealth is the judicial branch. A civil right to
counsel will not be a panacea, but it certainly will be an
important step toward addressing this most fundamental flaw of the legal system.
We need a concise, simple and practical way to
articulate a long-term vision for what a civil right to
counsel would mean so that we can make clear how
the civil right to counsel would move us closer to an
equitable system of justice, a system where justice is
not (or at least not solely) for sale. A clear vision also
provides a goalpost for us to focus our work. For tactical and strategic reasons, the ABA resolution calling
for a right to counsel)( and local initiatives promoting a
right to counsel, have mostly focused on specific issues
of law, specific litigant characteristics or consequences
of the proceeding.!* These make sense as short term
goals. But a long-term vision for a right to counsel in
civil matters cannot easily be reduced to the kind of
single neat bright-line rule related to the consequence
of the proceeding, like facing loss of liberty does in
criminal matters. Moreover, the range of civil matters
is extremely broad as are the consequences of civil
proceedings and the characteristics of civil litigants.
And people need counsel in civil litigation when they
are plaintiffs, not just when they are defendants.
If we think of the right to counsel as a tool to
establish a basic balance of justice in a system that we
justifiably critique as unfair and inequitable, we need
to articulate an organizing principle for the civil right
to counsel that people would generally understand as
addressing that critique and making the system in fact
fair and equitable. A reasonable person standard for
implementation of the civil right to counsel accomplishes that goal. An articulation of that standard could
be that:
A person is entitled to counsel at government
expense in legal matters for which a reasonable
person with sufficient means to afford counsel
would engage counsel to advance or protect his or
her interests.
135
Summer 
This approach fundamentally realigns the playing
field to render it more even and fair, and accomplishes a
few other important things. It is easily understandable.
It avoids the overinclusiveness of presenting the standard as a presumptive right in every single civil case,
which would be justifiably perceived as too daunting,
costly and impractical. It avoids the underinclusiveness
of simply applying the right to particular categories of
cases — which does not give us an overarching standard or long-range vision for the right in civil litigation.
And it focuses on the individual in need of counsel and
not on the court, the process or the outcome.!) Most
importantly, it provides a vision for a system in which
the distribution of justice is no longer solely determined by wealth.
For the most part, low-income people, like the
wealthy and their corporations, need counsel in civil
legal matters to achieve a comparable goal: to advance
and protect their material well-being. Like their wealthy
counterparts, low-income people need legal help in
the formulation as well as the application of the laws
and policies that affect their lives. While the stakes for
the wealthy and the corporations are generally greater
monetarily, the stakes for low-income folks — home,
family integrity, income, community, health, education
and the like — are, on a human scale, far higher. And
on the scale of what really matters to our clients and
their communities — getting the help they need when
they need it, help solving legal problems that affect their
fundamental human needs — we are (through no fault
of our own) doing miserably.
The “state based delivery systems” that we have
developed are, while laudable, merely artifices that
we have been forced to construct to do our best with
unforgivably stingy resources. We create and take
responsibility for “delivery systems” for access to justice
for the poor because the true delivery system — the
justice system itself — fails them. That is a government
function. There is no separate “delivery system” for
access to justice for the wealthy. We have been forced
to take responsibility for a separate “delivery system,”
for access to justice for the poor, and to engage in
endless debates over intake and priorities, because the
demand for legal assistance is so high and the resources
to provide it so small that we must expend a large
portion of our time and energy in an ongoing exercise
of battlefield triage. The notion that we are responsible
for the delivery system is a mistake. We are in the business of providing access to justice, but we are not, nor
should we be held, responsible for providing access to
justice. The government, or at least its judicial branch,

is the only legitimate “delivery system” for access to
justice for all under the constitution. We need to thrust
that responsibility back on the judicial branch. We are,
however, responsible in our role as advocates for pushing the system to address its fundamental flaws.
As the movement for a civil right to counsel has
grown in recent years, anxiety has been expressed
about the movement from at least some within the legal
services community.!!
However, it is hard to believe that there is any real
underlying philosophical objection from members of
the legal services community to the notion that there
should be a recognized civil right to counsel. We should
demand and accept no less than a justice system built
on equity. Without equity there can be no real justice.
No doubt, a reordering of the justice system caused by
a meaningful civil right to counsel will raise complicated and even uncomfortable issues. The very idea is
certainly threatening to the powers that be. It may make
some people at the heart of the “delivery system” feel
threatened as well, but they need to be brought along,
and we need to get beyond the anxieties and focus our
collective energy on how we get from where we are now
to a more equitable justice system.
The call to establish a right to counsel in matters of
fundamental human need is bold. The call to establish
a right to counsel as a matter of fundamental equity is
even bolder because it challenges the legitimacy of the
entire judicial system, not just how the system fails the
poor. But most of us have chosen to do legal services
work because we are problem solvers and are motivated
to rectify wrongs. We should not shy away from advocating bold solutions and working towards a long-term
vision that would fundamentally alter the distribution
of, as well as access to, justice. And maybe, just maybe, if
we speak with a united voice and keep saying it loudly,
clearly and frequently enough, and if we continue to
push and experiment with tactics and strategies, we will
see real progress.
So let us be bold. Let us take a page from Occupy
Wall Street and develop a frank and thorough critique
of the inequities and gross imbalance of the justice
system and let us gather the empirical data to support
that critique. Let us stand firm in support of the principle that justice should not solely be a commodity for
sale and the judicial system should not deny economic
and racial equity in the distribution of justice. Let us
continue to forge a consensus in our community and
work together to develop strategies to secure a civil
right to counsel that brings true equal justice.
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Occupy the Justice System
Continued from page 35
1
Andrew Scherer is a consultant and expert witness
with respect to access to justice, housing, property
and economic rights. He is also a Senior Fellow at the
Furman Center for Real Estate and Urban Policy at
NYU Law School, an Adjunct Professor at the Columbia
University Graduate School of Architecture, Planning
and Preservation, where he teaches Planning Law, and
the author of Residential Landlord-Tenant Law in New
York (originally published in 1994 and updated annually) and many other published works.
In 2010, Andrew stepped down after nine years as
Executive Director of Legal Services NYC, the largest
nonprofit civil legal services organization in the United
States. He had been with the organization in a variety of
capacities since 1978. As Executive Director, Andrew led
the organization through a period of significant growth
and development. Accomplishments of his tenure
included: markedly increasing services, funding (both
private and public), staffing and pro bono participation;
greatly expanding the organization’s docket of major
litigation; and successfully completing a major organizational restructuring.
Among his many affiliations, Andrew is an active
member of the NYC Bar Association and a former
chair of its Executive Committee, an active member of
the NYS Bar Association and the current chair of the
Civil Gideon subcommittee of the President’s Committee on Access to Justice and a founding member of the
National Coalition for a Civil Right to Counsel. In addition to Columbia, Andrew has taught at CUNY Law
School, NYU Law School and Bennington College. He
has lectured widely in the U.S. and in Latin America
and Asia. Andrew may be reached at [email protected].
!" Congress of the United States, Congressional Budget
Office, Trends in the Distribution of Household Income
Between 1979 and 2007, October, 2011, p. iv.
3 Pew Research Center, Twenty-to-One: Wealth Gaps Rise
to Record Highs Between Whites, Blacks and Hispanics,
July, 2011, p. 1.
4 See, in particular, Legal Services Corporation, Documenting the Justice Gap In America: A Report of the Legal
Services Corporation (Sept. 2005), available at http://
www.lsc.gov/press/pr_detail_T7_R6.php, and http://www.
lsc.gov/press/pressrelease_detail_2009_T248_R27.php.
5 Under the Internal Revenue Code, legal expenses of
corporations and other businesses are tax deductible.
26 USC § 162. According to American Lawyer, gross
6
7
8
9
10
11
12
13
14
15
revenue for the 100 highest grossing law firms in the
U.S. in 2010 was 67.42 billion (and seventeen law firms
grossed over $1 billion). Available (for charge) at http://
almlegalintelligence.com/. Using that $67.42 billion as a
very rough (but very conservative) proxy for the legal
expenses of the top 1% and applying the 35% income
tax rate for earners in the highest income bracket
(http://www.irs.gov/pub/irs-pdf/i1040tt.pdf), the U.S.
treasure foregoes $23.6 billion in tax revenue, in effect
subsidizing legal assistance for the 1% to the tune of
$23.6 billion.
See, LSC Fact Book 2010, http://lsc.gov/sites/default/files/
LSC/pdfs/LSC_2010_Fact_Book.pdf.
Ibid. The 2010 federal Legal Services Corporation
budget of $394,582,437 divided by the 36,0013,627
people in poverty equals about $11 per poor person.
One percent of the U.S. population in 2012 is about
3.13 million people (http://www.census.gov/main/www/
popclock.html). The $23.6 billion in tax revenues forgone
by the government divided by number of one percenters
is $754.
There is a growing body of data on the justice gap, as
measured by need (see, fn. 3 supra.), the difference in
outcome made by counsel (see, e.g., Carroll Seron, et
al. The Impact of Legal Counsel on Outcomes for Poor
Tenants in New York City’s Housing Court: Results of a
Randomized Experiment, 35 LAW & SOC’Y REV. 419
(2001), and the costs and benefits of provision of counsel to low-income people (see, e.g., Maryland Access
to Justice Commission, Implementing a Civil Right to
Counsel in Maryland (2011), available at http://mdjustice.org/node/1539). There is relatively little accumulated
data, however, on the inequitable distribution of access
to justice. This area merits further in-depth research.
Judicial Business of the United States Courts, 2010
Annual Report of the Director, p. 12, available at http://
www.uscourts.gov/uscourts/Statistics/JudicialBusiness/2010/JudicialBusinespdfversion.pdf.
Id. pp. 40 (678 judges) and 41 (527 magistrates).
See 2010 Judiciary budget, available at http://www.gpo.
gov/fdsys/pkg/BUDGET-2011-APP/pdf/BUDGET-2011APP-1-4.pdf.
See website of the NYS Unified Court System, at http://
nycourts.gov/courts/nyc/housing/civilhistory.shtml.
See website of the NYS Unified Court System, at http://
www.nycourts.gov/courts/nyc/housing/judges.shtml.
NYS Unified Court System Budget, 2012-2013, p. 39,
available at http://www.courts.state.ny.us/admin/financialops/BGT12-13/Final2012-13Budget.pdf.
Continued on page 54
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Continued from page 36
16 See, ABA Lawyer Demographics, 2010, available at http://
www.americanbar.org/content/dam/aba/migrated/marketresearch/PublicDocuments/lawyer_demographics_2011.
authcheckdam.pdf.
17 Where disparities in access to justice create a disparate
impact on access to housing based on race, as they do in
eviction and foreclosure litigation, a housing discrimination argument under Title VIII may well be available. See, e.g., Huntington Branch, N.A.A.C.P. v. Town of
Huntington, 844 F.2d 926 (2d Cir. 1988), aff ’d in !"#$%&'((&
)*+*&,-&.,/((0&.$12345&#6785"9&$1&#6:136&2"5&;<5=#<><?
3"$1#@&83;6#&A<$96&BCCC&17&$D6&E<F<9&G<HD$5&I=$&17&,/J(%&
K6="856&17&$D6&;<5!"#"$6&<>!"=$&13&><31#<$@&!1!89"$<130*
18 Disregarding, of course, the unofficial distortions of
power and influence related to money that are attributable to lobbying and campaign contributions.
19 ABA Resolution 104 (Model Access Act) (Aug. 2010),
available at http://www.americanbar.org/content/dam/
aba/administrative/legal_aid_indigent_defendants/ls_
sclaid _104_revised_final_aug_2010.authcheckdam.pdf.
20 See, e.g., John Pollock’s article in this Journal; Paul
Marvy & Laura Klein Abel, Current Developments in
Advocacy to Expand the Civil Right to Counsel, 25 Touro
L. Rev. 132 (2009).
21 Some version of this “reasonable person” standard is
applied in European countries. See, Johnson, Earl, Equality Before the Law and the Social Contract, 37 Ford. U.
L. Rev. 157, 182-83, (“England combines the merits and
significance tests in a formula that asks whether a person
of modest but sufficient means would employ counsel to
prosecute or defend the case.”) See also, California Equal
Justice Act, which would provide counsel to plaintiffs
“only if a reasonable person. . . with the financial means
to employ counsel, would be likely to pursue the matter
in light of the costs and potential benefits” available
at http:www.brennancenter.org/content/resource/state_
equal_justice act.
22 The Coalition for a Civil Right to Counsel has
responded to many of these concerns in an “Informational Memo drafted by Laura Abel and David Udell.
See, http://www.civilrighttocounsel.org/pdfs/NCCRC%20
Informational%20Memo.pdf. Cathy Carr also addresses
many of these concerns eloquently in her discussion of
the evolution of her own thinking on the civil right to
counsel in her article in this Journal.
Grasshopper and the Ant
Continued from page 46
any state, a full range of stakeholders, including legislators, will need to be at the table. Until then, it is important to keep the conversation going.
1
2
3
4
5
6
Pamela Cardullo Ortiz is the Executive Director of the
Maryland Access to Justice Commission. The Commission was appointed by Maryland Chief Judge Robert M.
Bell in 2008 to enhance access to the civil justice system
for all Marylanders. Pamela Ortiz staffs the Commission and its committees, and works with the State’s many
justice system partners to improve access to the courts
and to justice for the indigent and those facing critical
barriers. She served as the Executive Director for Family
Administration with the Maryland Administrative
Office of the Courts from 1999 to 2008. She served as the
Family Law Administrator at the Circuit Court for Anne
Arundel County from 1996 to 1999. She had a public
interest law practice in domestic and juvenile cases prior
to 1996, serving first with the Legal Aid Bureau, and
later as the managing attorney for the Anne Arundel Bar
Foundation Pro Bono Program. She holds a law degree
from Georgetown University, a master’s degree from the
University of Chicago, and a bachelor’s degree from St.
Mary’s College of Maryland. Pamela may be reached at
[email protected].
See, for example, Frase v. Barnhart, 379 Md. 100 (2003).
Maryland Access to Justice Commission, Interim Report,
2009. Available at: http://mdcourts.gov/mdatjc/pdfs/
interimreport111009.pdf.
Available at http://mdcourts.gov/mdatjc/pdfs/implementingacivilrighttocounselinmd2011.pdf.
Id., p. 2.
Id.
The Maryland Access to Justice Commission
was created by Chief Judge Robert M. Bell
in 2008, to enhance the resources available
to support civil legal services, and improve
access to the courts and to legal help for the
most vulnerable Marylanders.
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