So this is how lies become perceived as the truth: Through thousands of baseless and careless repetitions.
Mayor de Blasio recently announced another “affordable” housing project that blatantly runs counter to housing policy directions he has strongly supported.
The Mayor has consistently voiced his opposition to the “two door” policy in which publicly subsidized affordable housing developments provide two separate entrances: one for market rate apartments and another for the “affordable” housing units.
In a recently announced housing development in Brooklyn Heights won the right to build market rate apartments above a public library but the “affordable” housing units will be built ‘offsite’, that is, in a totally different neighborhood. Offsite housing runs counter to another strongly held de Blasio belief: that subsidized market rate developments should further the goals of income equality and economic integration by offering “affordable” housing in the same development.
Even though this project clearly runs counter to the basic housing policies the Mayor is pushing city-wide, housing advocates have stayed conspicuously silent on the Mayor’s hypocrisy on this particular housing development approval.
“At the start of the First World War, food purchases consumed half of the average paycheck; today the figure is six percent.”
So, today, housing, not food, is the largest component of consumer costs. That doesn’t mean that there is a housing crisis today, just as there was no food crisis a hundred years ago.
It is not news that Bill de Blasio, then New York City Public Advocate, began endorsing a rent freeze in the summer of 2013 while campaigning to become Mayor. If it were not for RSA’s maneuvers behind the scenes in 2014, the City Rent Guidelines Board (RGB) would have most likely approved the City’s first ever rent freeze in Mayor de Blasio’s first year of office. In 2015, however, with all nine members of the Board appointed by Mayor de Blasio, a rent freeze was inevitable.
Prior to the 2015 RGB process, Mayor de Blasio publicly endorsed a rent freeze on several occasions. Leading into the Final Vote on June 30th, Mayor de Blasio remained quiet, but applauded the RGB after the Board voted in favor of no rent increases. At the beginning of October, the de Blasio Administration launched a $1 million ad campaign promoting the rent freeze that went into effect on October 1st. With City taxpayer dollars funding the ad campaign, RSA blasted Mayor de Blasio for promoting the rent freeze that was supposedly approved by an “independent board.” Rather than dedicating the $1 million to aiding the homeless or contributing to rent subsidies for those in need of assistance, the Mayor opted to promote his own political platform.
After much criticism, Mayor de Blasio held his first “town hall” style meeting after nearly two years into his mayoralty. The meeting was held at a public school in Washington Heights and was dubbed by many reporters as “political propaganda” after the Mayor seemed to stack the meeting with handpicked tenant advocates to focus on rent security and tenant protection. Attendees of the meeting were invites only, with tickets distributed by allies of Mayor de Blasio.
The media has caught on to Mayor de Blasio’s early re-election campaign rally. He has stripped away any pretense that the RGB is an independent Board and in many ways, he is now taking the credit for the rent freeze enacted by the RGB. The RSA is trying to work with Mayor de Blasio and his administration to educate them on how his affordable housing plan could be a successful one. If Mayor de Blasio’s affordable housing agenda is being driven by sound policy rather than politics, he would be embracing the biggest providers of affordable housing in the five boroughs – the owners of 1 million rent-stabilized apartments.
Since the days of Jacob Riis, housing has been viewed as the source of all urban ills. Riis photographed the deplorable living conditions of impoverished immigrants in the late 1880’s and is often credited with helping to establish the first tenement building code which required minimal light, ventilation and sanitary conditions at a time when indoor plumbing was rare. As government mandates imposed on property owners to cure social ills have multiplied (most recently through clean air mandates), housing has become vastly more expensive. The high cost of housing itself becomes another urban ill, “the affordable housing crisis” which in turn is credited with creating more urban problems such as poor health!
So now we have New York City Comptroller Scott Stringer doing his impersonation of Jacob Riis by pointing to the negative health consequences of an increase in over-crowding in New York City. While noting that overcrowding is not confined to poor, Stringer’s report fails to point out that a overcrowding is often a housing choice — sometimes by young folks starting out in the City willing to sacrifice space for location and sometimes by immigrants scrimping on housing costs in order to send remittances back home. Remarkably, the entire discussion of problems in the housing market proceeds without any mention of the fact that government intervention in the housing market is a very large part of the problem.
This article highlights the fact that housing shortages and high housing prices affect every major world capital – the direct result of global urbanization and immigration. While all these urban centers realize the ultimate solution lies in building vastly more new housing, the constraints on quickly producing new housing in dense urban areas results in the knee jerk reaction of imposing rent controls. Berlin imposed new rent controls in this context which has apparently not relieved its housing stresses. But Berlin only limited rent increases to 10% above neighborhood market levels. In fact, every existing or proposed system of rent controls allows for regular rent increases, usually tied to some independent measure of increased cost such as the CPI. The real test of whether rent controls work will come in New York, where the progressive administration of Mayor Bill de Blasio seems intent on pursuing a zero or near zero rent increase policy for the duration of the its tenure. The likely result will be the housing devastation that New York experienced in the post-War rent control era when there was no rent increase for 15 years and the City ultimately foreclosed on more than 100,000 apartments.
Megan McArdle, a reporter from Bloomberg View, gives her take in two well-written articles on the pros and cons of gentrification in major cities and specifically touches on the effects it has on New York City. The first article focuses on traditional housing projects, voucher holders in rent subsidy programs, inclusionary zoning, and why rent control doesn’t actually work.
The second article gives an in-depth look on the lack of power that government has in creating more affordable housing in the face of the ever-increasing demand for more units. Ms. McArdle says that the dream of adding new, affordable units while gentrifying the way some cities (such as New York City) are, is simply just a nice, but unfeasible dream.
Mayor Bill de Blasio’s first year in office has been an eventful one, to say the least. Despite other citywide issues, Mayor de Blasio has made it clear that his agenda throughout his term is to target the rental housing industry. Besides his appointment of five new members of the Rent Guidelines Board and a call for a rent freeze, the Mayor launched an historic affordable housing plan last May that will build and preserve 200,000 affordable housing units.
On February 3rd, the Mayor delivered his second State of the City speech and made his affordable housing plan the centerpiece of his 90-minute speech. As we already know, the plan calls to build 80,000 new units and preserve 120,000 existing affordable units. Mayor de Blasio stated that prior to the end of 2014, approximately 16,000 new units have been constructed, which is nearly a quarter of the proposed plan. As a result, we are left to believe that the task of constructing 80,000 new units may not be such a farfetched idea after all.
However, many people, including some elected officials, left the State of the City speech with doubts about this affordable housing plan after Mayor de Blasio delivered some big-time promises. The Mayor noted that the targeted area to construct a large portion (approximately 11,250) of these new affordable units is Sunnyside Yard, Queens, which is lacking in housing for a reason. For one thing, the land is owned by Amtrak, which is Federally operated, and the Metropolitan Transit Authority (MTA), which is State operated.
The MTA is currently using the land to store trains and is transporting materials needed to construct the new Long Island Railroad Station through Sunnyside Yard. Even if MTA wanted to sell the property, it would cost the City a hefty price tag, not to mention the additional funding needed to construct these thousands of units. The idea for this astronomical plan is perhaps nothing but a fantasy. Hypothetically speaking, if this long-term project was to be successful, it would take at least twenty years for it to be completed. Obviously, this is well beyond Mayor de Blasio’s possible second term, which would end in 2021.
The Mayor’s speech was primarily focused on his plans to construct another 60,000-70,000 affordable units throughout the City. The biggest question remains: How do you preserve 120,000 existing units? This is by far the biggest problem in his entire affordable housing plan. How will Mayor de Blasio reach his goal of preserving all of these units when his goals are to freeze rents and convince the State Senate to develop tenant-friendly rent regulations when the current rent laws expire in June? If there was ever any doubt that Mayor de Blasio is fully engaged in the Rent Guidelines process, his gloating over the “lowest rent increases in the history of the City” last year was a legitimate indication that he will continue to advocate for even lower if not zero increases. The math is simple Mayor de Blasio: small owners cannot maintain and preserve the existing affordable housing stock if you do not provide them with adequate rent increases while operating costs continue to skyrocket. Last year we raised concerns about this affordable housing plan and the question still remains: Is Mayor de Blasio’s affordable housing plan doomed?
There are only a few weeks to sit and ponder on Mayor de Blasio’s State of the City speech. We soon shall see how much the Mayor plans on having a say in this year’s process, with the Rent Guidelines Board expected to convene for the first time this year on Thursday, March 12th. RSA and the entire housing industry want to help the Mayor achieve this monumental goal, but we cannot do so if the blueprint is not realistic.
In many Liberal cities throughout the country, building and preserving affordable housing is a major priority. Take New York City for example where Progressive Mayor Bill de Blasio has promised to build and preserve 200,000 units of affordable housing over the next ten years.
Is it possible, however, that these political leaders and the view of the voters in their particular areas are adding to the affordable housing crisis in their own cities, rather than curing it? Housing experts seem to think so, with surveys showing that the more Liberal cities throughout the country, such as Los Angeles, San Francisco and even New York City, are having more trouble keeping their cities affordable than Conservative cities. The survey, which compares 32 Republican cities to 28 liberal cities (based off of results in the last Presidential Election in 2012), shows consistent matches in decline and recovery during the recession, but shows that affordability remains a bigger issue in the Liberal cities.
As we have said before, the important thing to note is that affordable housing is an issue throughout the entire country and in major cities internationally, not just in New York City. Progressives such as Mayor de Blasio lead residents to believe that housing affordability is only an issue in New York City and for a variety of reasons. In fact, however, affordability is at its lowest in San Francisco, according to these recent studies.
This does not necessarily mean that Liberal Democrats are the reason behind expensive housing. However, these studies have shown that because these liberal cities are less affordable, have lower homeownership, and have greater income inequality, greater regulation, political leaders in Democratic-leaning and Republican-leaning cities are evidently pushing for different policies.
Mayor de Blasio wants to build and preserve 200,000 units of affordable housing in New York City over the next ten years, a feat that has not been accomplished by any of his predecessors. However, this monumental plan is off to a rough start with the proposed Astoria Cove project in Queens.
In what the Wall Street Journal is calling “the first major project he has shaped from its early stages,” the developers of the 1,700-unit waterfront complex are proposing to set aside only 17-20% of the total units to below-market rents, which is causing much uproar with the de Blasio Administration and affordable housing advocates who are calling on 50% of the units to be below-market.
A de Blasio aide was quoted saying the administration is still identifying all of its tools to properly execute the housing plan. It is evident that Mayor de Blasio still has no general plan for his affordable housing proposal and that each project, such as the Astoria Cove, will have to be negotiated individually in order to achieve a certain amount of affordable units in each development. Going forward, it will be interesting to see how these large developmental projects will be handled in order to achieve the Mayor’s goal.