Time for a Housing Plan Reset

Blog by Harold DeRienzo

In the Spring of 2014 Mayor de Blasio announced his ambitious 10-year housing plan to “build and preserve” 200,000 units of “affordable housing.”  At the time, the city was in good fiscal shape.  The economy overall was doing well, and there was every indication that no radical economic or political development would threaten that stability in the near term.  So the Mayor launched his Housing Plan, which he followed with announcements about rezoning initiatives throughout the city, mostly in low income communities of color.  Like a ship going out to sea, all of these announcements were launched with much fanfare.

How has the housing plan fared?  Based upon the administration’s numbers, they are ahead of schedule, producing or preserving 23,284 “affordable housing units” in 2016 alone. Impressive numbers!  Of course, there is substantial debate regarding what exactly “affordable housing” means.  For this Administration, “affordable housing” is housing that is affordable to households earning up to $138,435 annually.  That is 165% of the metropolitan Area Median Income (AMI).  Of more relevance, this level of “affordability” represents 338% of New York City’s median renter income (2014) and about 577% of the median income of areas like the South Bronx.

Citywide, since de Blasio took office in 2014, the city has built or preserved 62,506 “affordable” housing units.  The majority of benefit has gone to households earning between about $42,000 and $67,000 annually.  And even though the Mayor has exceeded the absurdly low goal of 8% of units going to those earning less than $25,000 a year (14% claimed through 2016), it is estimated that only 10% will go to this income group over the course of his 10-year housing plan.  The big problem is that in many of the areas targeted for rezoning, well over 50% of residents earn below this number, are severely rent burdened, and struggle with threats of displacement and homelessness on a monthly basis – even prior to the speculation, harassment and predatory investment that surely comes from announced and implemented rezoning initiatives.

At a more local level, using the Southern Boulevard “study area” of 125 blocks in Community Districts 2 and 3 as an example, 1,630 “affordable” units have been preserved and produced since 2014.  Of those units, 206, or 13%, benefitted those households earning up to $24,500.  The majority of units, consistent with the Mayor’s housing plan, went to households with annual incomes in the $41,000 to $65,000 range.  A full 75%, or 1,217 units, were dedicated to this income group, while 56% of the households in the study area earn less than $24,000.

These statistics, and the apprehension generated by them, show that Bronx residents are already at risk of displacement caused by market forces and city financed programs.  Local residents are resisting this planning study as they fear it will lead to an upzoning, creating the market forces that will in turn lead to their accelerated displacement.

At a recent local forum, a similar analysis of the first three years’ progress of the Mayor’s housing plan was presented by the Bronx Department of City Planning to local residents.  Those attending were incensed.  They scoffed at the notion that “low income” was defined as annual incomes that were 2 to 3 times the annual incomes they and their neighbors earn.  Many asked in different ways what was it about this plan would benefit them.  The only answer given by planning representatives was that the city was committed to providing housing for a mix of incomes, not just very low income households.

Thus far, the Mayor has responded to the kinds of concerns cited at the recent forum by stating outright that rezoning does not cause displacement.  He remarked recently that the Bushwick neighborhood in Brooklyn recently gentrified and since Bushwick was not rezoned, rezoning does not cause displacement.  Of course, what he is saying is that the market causes displacement, while never explicitly acknowledging that zoning creates the markets that then cause displacement.   Implicit in all of this is the belief that market forces are inevitable and cannot be controlled, only somewhat compensated for.

The Mayor has been equally disingenuous when it comes to the growth of the homeless population.  He appears largely unmoved by claims that the mere announcement of a rezoning plan prompts speculative investment and landlord harassment leading to displacement and homelessness.  After much prodding, he did finally agree to support the New York City Council’s plan for a Right to Counsel in Housing Court.  Unfortunately, he seems unwilling to reconsider his housing plan.  This is a mistake.  It is time for a reset.  Like a ship launched out to sea receiving news of an impending tsunami, it is time to change course or return to shore and chart a new course.  By every indication, the political tsunami is fast approaching.  And by every indication our Mayor is not inclined to reconsider his plan, doubling down on Economics 101 bromides about how increasing supply will benefit all, and reacting to continuing increases in the homeless population by promising to create more homeless shelters.

The impending tsunami.

Preliminary federal budget cuts to housing were recently leaked to the Washington Post – cuts amounting to $6 billion or more.  The projected cuts will eliminate Community Development Block Grants (CDBG) and the HOME program and reduce already inadequate funding for public housing, senior housing, and housing subsidies for people with disabilities.  Federally-funded rental subsidies are also targeted for major reductions.  Not only will these cuts severely limit our ability to assist the most vulnerable among us, but these budget cuts will also force lay-offs of the professional staff employed at our local housing agencies to operate critical housing programs.  If any lessons can be learned from the Trump Administration to date, it is a safe bet that his administration will de-emphasize urban policy even more than past administrations and target remaining federal funds and benefits to areas that bolster his already announced reelection plans for 2020.

If the city insists on proceeding full steam ahead with their housing plan, elimination and reduction of these programs will force the city to rely even more on unsubsidized private sector developed and financed projects.  This will undoubtedly lead to even more displacement and homelessness.  Low income areas throughout the city, and particularly the Bronx, will suffer.

Just this month, the Regional Plan Association (hardly a transmission belt for leftist policies) published a report entitled, Pushed Out – Housing Displacement in and Unaffordable Region.  The report shows how, in the city overall, most of the population growth in so-called “accessible” areas has been for new residents making over $100,000 annually.  But the report states that, given its infrastructure and transportation networks, the Bronx is now viewed as an “accessible” area.  To quote from one section, “the Bronx saw growth almost exclusively from people making less than $50,000, although its large amount of walkable, job-accessible neighborhoods means this could easily shift in the near future.  The Bronx has, by far, the highest proportion of these vulnerable tracts of any county in the region, with 71% of the borough being composed of tracts which show up on our index, and 44% of these tracts currently shifting toward a higher housing market.”  In other words, over 70% of Bronx residents are in danger of displacement and homelessness if the market does to the Bronx what it did to Bushwick.

It time for this Administration to step back, stop its programs that favor developers and radically transform neighborhoods in the name of “affordable housing.”  It is time for the city to refocus its energies and not inconsiderable talents on protecting at-risk tenancies, using public resources to develop and preserve housing resources for those most at risk of displacement and homelessness, and prioritizing not-for-profit housing development over for-profit housing development.  At best, this will curb the growth in homelessness, encourage truly low and moderate income neighborhood residents to support the Mayor’s actions, and cease speculation where landlords see opportunities to “upgrade” their tenancies due to city rezoning announcements.  At worst, it may deprive our Mayor of bragging rights over claims of producing and preserving more units than his predecessors.  Blindly pursuing our present course, however, is a definite path to disaster.