Tag Archives: mayor de blasio

How are Seniors Served by the Mayor’s Housing Plan?

Communities are paying close attention these days to exactly what kind of affordable housing is being promised to their neighborhood because they want to ensure that the housing is really meeting the greatest local and city need.  Over the last several weeks, ANHD has published analyses of the affordability levels of units created under Mayor Bill de Blasio’s Housing New York plan and how they compare to the need of New York City residents.

Our newest analysis looks at Housing New York’s production of senior housing to see how affordability stacks up. We compare income levels of the senior population to those of New York City as a whole, and to the affordability of the units created by Housing New York so far. Here, we find that the de Blasio plan is doing an excellent job of building to the New York City senior population and income need.

While we find it important to understand need by comparing rent burden at different income levels to the affordability of new units, rent burden data specifically for New York City’s senior population is limited. Available data shows that New York City’s seniors are much lower-income than residents overall. 54% of seniors fall below the 30% AMI level*, versus 27% of all New Yorkers.

We found that the combination of Extremely Low Income and Very Low Income units exceeds the proportion of the senior population at those incomes. Overall, the affordability levels of senior units are a better match for the specific population versus Housing New York units overall, especially at the lowest income levels. At the same time, the total 4,627 senior units make up just 6% of all Housing New York units created so far.

As New York City’s population ages, the City must create housing that meets the need. A March 2017 report by the NYC Comptroller found that “the number of New Yorkers over 65 grew by 19.2 percent, which was more than double the rate of the total population (7.47 percent), and more than triple the rate of the population under 65.” Living on a fixed income makes truly affordable housing critically important.

*Note: to make this analysis possible, we treated seniors as one-person households
Sources: NYC OpenData, Housing New York Units by Building; Census PUMS 2015

Lucy Block, ANHD’s Research and Policy Associate
Graphic by: Melanie Breault, ANHD’s Communications Associate

A New Model and a Step Forward for Mission-Driven Developers:

JOE NYC Moves into High Gear

Earlier this month, the ambitious new collaboration called the Joint Ownership Entity (JOE NYC) announced the acquisition of a 43-building, 248-unit portfolio of at-risk affordable housing in Brooklyn. This signifies another important step forward for neighborhood-based housing groups. The purchase was done by the well-respected local not-for-profit developer St. Nicks Alliance and was backed by the shared scale and financial resources that is the hallmark of the JOE model.

This acquisition represents a rare example of a not-for-profit organization acquiring an at-risk portfolio owned by a for-profit organization. This type of model ensures that the buildings remain affordable and benefit the community over the long term.

ANHD congratulates St. Nicks Alliance and JOE NYC on this notable step forward.

Mission-driven developers – including Community Development Corporations (CDCs) – have been key assets for the New York City affordable housing development infrastructure for decades. But under Mayor Bloomberg, the City shifted towards policies that favored for-profit developers, a shift that Mayor de Blasio did not correct. This fact, combined with a more expensive and competitive development environment, has created challenges for mission-driven developers.

JOE NYC is an ambitious answer to this challenge. Mission-driven developers bring essential benefits to their local neighborhoods, including permanently affordable housing, deeper affordability, essential social services funded by the “profits” of the buildings, and stronger neighborhood civic infrastructures. These are community benefits that only mission-driven developers bring.

Launched in spring 2016, JOE NYC was founded by a group of CDCs to expand their capacity to build and preserve affordable housing in their communities. JOE NYC expects to take ownership of over 3,000 affordable housing units across New York City in the next year. CDCs that participate in the collective JOE NYC model have a seat on the organization’s board and share in the financial benefit and increased economies of scale that have a direct, positive impact on their local communities.

JOE NYC strengthens the capacity of asset and property management across its portfolio by giving participating CDCs the opportunity to benefit from shared efficiencies and JOE’s balance sheet. And, JOE NYC will serve as a guarantor for CDCs, which will allow its members to secure financing in future development projects.

The recent St. Nicks Alliance acquisition is a key step forward. 43-building cluster was at-risk because it was reaching the end of the 15-year low-income-housing tax credit compliance period, putting all 248 units at risk for losing their affordability. With a $5.3 million loan from the Local Initiatives Support Corporation (LISC), $1.24 million dollars in equity coming from JOE NYC, and over $900,000 from St. Nicks, these units are now guaranteed to remain a safe, stable, decent, affordable resource for the local community.

Focus on Economic Issues Is Necessary To Citywide Equity

ANHD applauds Mayor de Blasio’s call for more good jobs in the City in this year’s State of the City address.

Having long recognized that “no housing is affordable without a good paying job,” ANHD supports the Administration’s focus on creating good paying jobs, which it defined as jobs paying over $50,000 a year. We also believe it is critical that these new jobs be directly connected to current unemployed, underemployed, and low- to moderate-income New Yorkers who are looking for opportunities to help move into the middle class.

In order for this commitment of more good jobs in the City to be realized, it is important to consider how key questions in the weeks and months ahead will be answered.

What kinds of jobs are being created, and for whom?

Too often, the promise of job creation has been limited to the production of either low-wage work or high-wage jobs with high-barriers to entry. While these positions do satisfy the goals and quotas of increased employment, they have either not paid well enough to provide sustainable wages or have barriers to entry which make them inaccessible to many low- and moderate-income New Yorkers who struggle to remain in this City. We look forward to working with the Administration in creating 140,000 well-paying new employment opportunities over the next decade. We also hope that the Administration will go further in connecting these opportunities to the neighborhoods and communities that need them most through partnerships with community organizations and robust job training and placement programs, especially as the promise of new development unfolds citywide.

How do we preserve the cultural identity of our neighborhoods?

Many New Yorkers take economic opportunity into their own hands and start their own businesses. Many of these local businesses, run by immigrants and sustained over decades, contribute to the cultural identity of a neighborhood. As gentrification and displacement continue to threaten community based small businesses, ANHD applauds the City’s new Love Your Local program as a way to preserve and ensure the long-term existence of these community pillars. Considered alongside the recent City Council push to advance Nuisance Abatement reform – which protects immigrant and people of color owned small business tenants from criminalization and displacement through NYPD court orders – the City is taking necessary steps to back Mayor de Blasio’s reassurance to our small businesses that “this is your city”.

Will the commitment to good jobs extend beyond city-owned sites?

The City’s commitment to invest in City-owned Sunset Industrial Park was first outlined in its 2015 Industrial Action Plan, also under the banner of creating more good paying jobs. While the City investing in its own industrial assets is crucial to nurturing economic opportunity, it misses the opportunity to create good jobs on industrial land more broadly. The City’s 21 Industrial Business Zones provide a wider network for creating more of the exact kinds of jobs the Mayor described in his speech. Many of the ways the City can tap into this resource were highlighted in the 2015 plan; the Administration need only advance those commitments in 2017.

ANHD commends the Mayor for using his State of the City speech to address equity. Questions remain on the specifics of how to achieve the goals presented in his speech, and we look forward to working with the Administration to advancing the right answers.

City Announces First Step to Expand Manufacturing Jobs With Innovative Not-For-Profit Industrial Development Fund

Mayor de Blasio took an important step towards more equitable economic development policy last year with the creation of the innovative Not-for-Profit Industrial Developer Fund.

Today, the New York City Economic Development Corporation (NYCEDC) announced the selection of the first awardee under this model program, and the project demonstrates how the Mayor’s initiative can have an important impact on expanding quality manufacturing jobs. With the project, the not-for-profit Greenpoint Manufacturing and Design Center (GMDC) will develop 90,000 sq. ft. of industrial space in Ozone Park, Queens, which will provide new space for 24 businesses that can support 80 living-wage jobs.

ANHD commends Mayor de Blasio and NYCEDC President Springer-Torres for this important step towards equitable economic development policy. GMDC is an exemplary recipient of the Industrial Development Fund because, as a non-profit developer, GMDC is mission-driven to create the maximum public benefit for its community by ensuring the generation of living-wage jobs and fulfilling the full impact of the Fund.

GMDC has a strong record of developing and managing industrial sites that allow light manufacturing firms to find a home in New York City, with jobs on GMDC’s sites paying an average salary of $51,000 a year. The new EDC Fund will allow more mission-driven developers to have the same impact, thereby benefiting more New Yorkers.

The light-manufacturing sector provides essential job opportunities for many communities to share in the City’s economic growth by allowing economic sectors other than the professional and service sectors – with their stark demographic divide – to thrive. 

The manufacturing and industrial sector has long been a ladder leading to equitable economic opportunity for immigrant populations, people of color, and low-income communities. A comprehensive industrial policy is a crucial piece of the puzzle in the City’s effort to reduce income inequality and develop safe, vibrant, and affordable neighborhoods. The City’s industrial policy proposal, with its inclusion of zoning changes and city investments to support this sector, is laying the groundwork for real equitable economic development.

The Industrial Development Fund is a crucial investment into the future of industrial manufacturing in the city, and today’s announcement is an important first step.

Industrial Action Plan One Year Later: What Has Moved and What Hasn’t

On the one-year anniversary of Mayor de Blasio’s unveiling of the Industrial Action Plan, various critical components of the 10-Point Vision remain unfulfilled. While aspects of the plan have moved forward, others have either seen little progress or gone a different direction than the original intent. Ultimately, the purpose of the plan is to ensure that New Yorkers can continue to tap into economic opportunity and mobility.

• Industrial advocates today sent a letter to the Administration highlighting major concerns and the urgency for advancing the full breadth of the Industrial Action Plan.
• Evergreen Exchange, North Brooklyn’s Industrial Business Service Provider, has a new video that demonstrates just why #ManufacturingMatters, not only for its strong wages, but for its crucial role in supporting local economies.
• The economic opportunity presented by the industrial and manufacturing sector was covered in the New York Times last week. In addition to reinforcing many points previously raised in the City Council’s Engines of Opportunity report, The Times reminds us that most manufacturers are small businesses, employing less than 20 workers.

As the Industrial Action Plan enters its second year, we are optimistic of opportunities to work alongside fellow advocates and with the City and the Council to develop an equity agenda that provides economic opportunities for all New Yorkers.

New data suggests 421a is less necessary than anyone thought.

The 421a Developers’ Tax Exemption is the most important and most expensive New York City tax incentive that most people have never heard of, and has been an underlying fact of real estate development for the past 40 years. Something surprising happened this past January when the tax exemption was temporarily suspended, an unexpected causality of the struggle between big real estate and construction trades unions.

(This tax abatement is now being referred to as “The Donald Trump Real Estate Tax Exemption” because Trump used the program early and often, and “reaped at least $885 million in tax breaks, grants and other subsidies for luxury apartments, hotels, and office buildings in New York.“)

The suspension of the 421a Exemption was expected to have a major and immediate impact on the real estate market, with the big real estate lobby predicting dire consequences. In the past few months, we have been learning some new facts about what is happening in some new-construction markets, and the impact may not be what we were told it was going to be.

Policy makers have argued over the exact role the exemption plays in generating new housing across all types of neighborhood housing markets. But there is one thing the real estate lobby has asserted unequivocally: “It was not feasible to build rental housing in New York City without the 421a subsidies.” Some local newspaper editorial boards have accepted this as a principal reason to support the revival of 421a.

However, new trends suggest this may not be correct. In the past few months, there has been increasing evidence of new market-rate rental private construction in exactly the types of low-cost housing markets where the real estate lobby insisted would never happen. A few recent examples include Brownsville, Ocean Hill, Kingsbridge, Fordham, Flatbush, and Bedford Stuyvesant.

To be clear, these examples show a specific type of small-scale walk-up rental housing development where land and potential property taxes are relatively low, where the developer has kept construction costs low, and where market rents are starting to increase. These are important examples of new construction, but it is hard to know what the overall market impact is. But, the fact is new private rental construction is happening without 421a in neighborhoods where the real estate lobby asserted it would not happen. This assertion has been the centerpiece for the argument that 421a should be revived, a logic which should now be called into question.

The 421a exemption is well-understood to be an extraordinarily expensive and inefficient program, costing City taxpayers over $1 billion a year in lost tax revenue, and puts the “b” in “boondoggle” by padding the bottom line of big private real estate developers, while at the same time generating very little public benefit in return.

The 421a exemption is hard to defend on policy grounds, but it has been renewed year after year. Why?

• Decision makers assumed it was a political inevitability because of the power and influence of the real estate lobby. The circumstances this past year are unusual, but it turns out it is not inevitable.
• The real estate lobby told us the entire New York City new-construction private housing market would grind to a halt without the program. This has clearly turned out not to be the case, as new construction in neighborhoods with strong real estate markets has barely been affected.
• Finally, the real estate lobby told us new private rental constructions in the weaker markets of the outer boroughs would never happen without 421a. This is also not true.

The de Blasio Administration – with all good policy intentions – has supported a reformed 421a as a necessary, underlying element of the Mayor’s laudable affordable housing production goals. It may be time to reconsider how true that is, and whether the trade-offs are worth it.

We know that the 421a Developers’ Tax Exemption is inexcusably expensive and inefficient, and now we know that it may not be necessary for even the most minimal level of public benefit. Decision makers should take their time and fully consider this program’s true impact on real estate markets before being rushed into renewing the program by the real estate lobby.

The background of the 421a Exemption shows why it is so expensive and inefficient.  

The Exemption gives developers a 100% real estate tax break on the value of any new residential building. The 421a Exemption was created in 1971, at a time when the City was in an economic crisis and the private housing development market was frozen. It was designed not as an affordable housing program, but as an incentive to build anything at all.

Over time, as the City’s real estate market changed, the incentive was no longer needed to spur development in many parts of the city; instead, attempts were made to use it to leverage affordable housing out of market-rate development. Affordability requirements were put in place in the highest-rent areas of the city, eventually including all of Manhattan below 96^th Street, and more recently parts of Brooklyn and Queens. But affordable housing requirements always lagged far behind when neighborhood rents were high enough to give real estate development a guaranteed high profit margin. Even where some affordability was required, the abatement was very inefficient, since the value transferred from unpaid taxes to the developer’s profit margin far outweighed the value transferred to the community in the form of affordable housing.

An ANHD 2015 Analysis of the 421a Program shows that in fiscal year 2013-14 the program covered a total of 152,402 residential units, and granted $1.1 billion in tax abatements. But, only 12,748 of those units had affordability restrictions. That translates very roughly to about $86,000 a year that taxpayers are transferring to private developers to subsidize each affordable unit, making 421a by far the most inefficient affordable housing program on the books.

The 421a abatement is so valuable to developers that when it has been mentioned in the news, it has usually been because of a corruption allegation when a developer was paying for the favor of being granted an exceptional 421a benefit. This includes the most recent high-profile convictions of State Assembly Speaker Silver and Senate Majority Leader Skelos.

The latest version of 421a was passed in Albany in June 2015. The revised law included affordability requirements throughout the City, but it also substantially increased the length of the tax abatement, and thus the benefit to developers and cost to taxpayers. ANHD’s analysis of the revised 421a exemption passed in June 2015 and a Furman Center analysis of the reform’s impact on developers and taxpayers shows why even the revised program is highly flawed.

The legislation passed in 2015 also included a highly unusual, last minute provision regarding possible labor requirements for 421a developments. The provision stated that the new 421a model would only become effective if and when the Construction Trades Council and the Real Estate Board of New York came to an agreement on attaching new labor requirements to the law. To the surprise of most observers, no agreement was reached, and 421a was suspended.

How 421a actually impacts the construction of new market-rate housing should be understood neighborhood-by-neighborhood because local market-rent determines how 421a is utilized. Housing markets are complex and difficult to predict, but here is ANHD’s understanding of how many housing policy experts expected the suspension of 421a to affect new construction:

• In Very Strong Markets (e.g.,below 96^th Street in Manhattan), the suspension of 421a has little impact on new housing development. Most developers in these markets forgo taking 421a in order to build condominiums, which are ineligible for the tax abatement.
• In Strong Markets (e.g., Williamsburg waterfront, downtown Brooklyn, Long Island City, parts of Manhattan from 96^th – 110^th Streets) where rents are high, developers can generally profit on new residential development with no tax benefit, but access to 421a may affect whether a developer chooses to build condominiums or rental apartments.
• In Middle Markets (e.g., Astoria, Flushing, Clinton Hill), rent levels have been seen as high enough to support new development with no tax breaks, but it was assumed that the loss of 421a would soften the market and slow the pace of new development. Given all the evidence, this may or may not be the case.
• In Moderate and Weak Markets (e.g., Flatbush, Crown Heights, Bushwick, Jamaica, East New York, Brownsville, Kingsbridge Heights), it had been understood that market rents generally cannot support unsubsidized development, even with 421a. Given recent evidence, how much this is actually the case may need to be reevaluated.