Mayor Defends Increased Fines and Penalties as Revenue Raisers

Property owners have long believed that many City fines and penalties (Sanitation summonses, in particular) were issued with the City’s budget needs in mind more than public safety concerns. Now, we have apparent confirmation of this belief from none other than the Mayor himself.

According to City and State First Read (2/25/13), Mayor Bloomberg was responding to a report by Public Advocate Bill DeBlasio which blasted City Hall for targeting outer borough small businesses with onerous fines.

“Bloomberg said the small business inspections are “designed to keep you safe,” and explained that the number of violations found outside of Manhattan is because there are disproportionately more small businesses in the outer boroughs. He added that fines are still preferable to raising taxes. [emphasis added]”

The last line indicates that City Hall has made a conscious decision to raise revenue through fines rather than a broad-based increase in taxes. City Hall is zeroing in on property owners as a revenue target not just through increased fines and penalties. Property taxes and water and sewer charges continue to escalate, of course. And costs which should be public burdens, such as the installation of backflow preventers to safeguard the water system, are also being foisted on property owners.

Needless to say, increased fines and penalties, municipal levies and mandated expenses all increase the cost of providing housing in New York City in direct contravention of City Hall’s stated goal of increasing the supply of affordable housing.

                                                  – Jack Freund, Executive Vice President, Rent Stabilization Association (RSA)

(Views and opinions expressed are those of the author and do not necessarily reflect the policy or position of the RSA.)


Why Your Rent’s Too High

Posted: February 11, 2013

If there were one lesson our mayoral aspirants would do well to learn, it’s this: The reason basics in New York are so much more expensive than they should be — e.g., rent, real estate, education — is because our politicians are limiting supply.

The less supply the city has, the less affordable this city becomes.

That’s especially worth remembering when politicians prattle on about “affordability.” A perfect example: the opposition to a promising move by Mayor Bloomberg to open more city land for housing.

The plan is simple: Lease city land to developers to build luxury apartments, set aside 20 percent for families making less than $50,000, then use the revenues to pay for badly needed repairs for public housing.

Makes sense, right? In the land of common sense it does — but not in New York politics. Already, three likely candidates for mayor — Chris Quinn, Bill Thompson and John Liu — are attacking it. Posing as champions of the people, they claim the city should be building more affordable units, and fixing the ones New York has.

What’s notable is what they don’t say: how to pay for it. The city doesn’t have the cash, and good luck getting it from Washington.

Bloomberg understands this. He understands too that this city desperately needs more housing. Even adding luxury housing helps, because the more units on the market, the more prices go down — and folks have more chances to move up.

In an ideal world, Bloomberg would be selling the city’s land entirely and getting the government out of the housing business. That would include ending subsidies exploited by the rich (e.g., rent control) as well as giving the poor more opportunities to afford private apartments, rather than packing them off to public housing.

Still, the mayor deserves kudos for a plan that represents a huge step forward over the status quo. As for the hapless mayoral wannabes attacking it, a big Bronx cheer — and a free copy of the collected works of Milton Friedman.


Source: New York Post

Tiny Apartment Winner Announced—In a Race to the Bottom?

New York City recently announced a winner in its competition to build “tiny” apartments. The winner will build 55 apartment as small as 250 square feet on City provided land with additional subsidies. Yet, rents for these apartments will be comparable to market rate studio apartments in this pilot program to provide more  “affordable” housing.

Any effort to provide more housing in New York City should be applauded, but this pilot program raises questions. Why stop at 250 square feet? San Francisco last year legalized apartment as small as 220 square feet while Paris permits apartments of less than 100 square feet. Of course, there are plenty of “tiny” apartments in existing rental and co-op buildings, many with less than 100 square feet, so it hardly seems necessary to demonstrate that even the tiniest spaces can be livable and are in demand. New York City could produce more housing faster if it simply picked a number, together with minimum habitability standards, and then let the private sector see if it can fill the niche.

But in New York City, it seems, anything called affordable housing requires a City imprimatur. Take for example the history of SRO housing (essentially rooms with common bathrooms) in New York. Decades ago, the City determined that SRO housing was sub-standard and banned any such new construction, except by a non-profit housing entity. But there is a market for such housing, as reflected by the remaining SRO stock, so why not re-legalize a form of housing that has served a distinct segment of the market. Maybe, after a few more competitions, we will get back to where we were.


                                                    – Jack Freund, Executive Vice President, Rent Stabilization Association (RSA)

(Views and opinions expressed are those of the author and do not necessarily reflect the policy or position of the RSA.)


Additional Sources:

In Winning Design, City Hopes to Address a Cramped Future- The New York Times, 1/22/13

Private Developer Asked to Provide Permanent Affordable Housing??

Hundreds of units of new rental housing are being delayed by tenant advocates who insist that affordable housing within the development be provided on a permanent basis. The over-reaching threatens not only this development, but the entire process by which thousands units of affordable housing have been developed over many years.

The basic model for the development of affordable housing by private developers has been that City government provides subsidies in the form of tax exemptions for a period of years enabling private developers to provide a portion of that housing at reduced rents for the same period covered by the exemptions. The basic problem with this model has always been that such subsidized housing is time limited,requiring government to ultimately extend benefits to maintain that subsidized housing or replace it with new subsidized housing. The tenant advocate response to this conundrum is, apparently, to simply demand that private developers maintain the subsidy forever, without the commitment of additional subsidies by government.

The case in point is the development of a 750 unit rental project on West 57th St by Durst Fetner under the City’s 80/20 program, under which the developer would set aside 150 units for low income housing for 35  years. Tenant advocates, led by Councilperson Gale Brewer, have held by approval of the project insisting that the low income units be permanently affordable. The denial of economic reality by housing advocates will certainly not produce the desired inflow of low income housing and is a negative portent for the future development of affordable housing by private investors.


                                             – Jack Freund, Executive Vice President, Rent Stabilization Association 

(Views and opinions expressed are those of the author and do not necessarily reflect the policy or position of the RSA.)


Additional sources: