Less Regulation to Produce More Housing

What’s the best way to increase the amount of affordable housing in New York City. The New York Times digital edition recently featured a collection of proposals that address this issue.

Most of the proposals were more of the same old: strengthen rent regulations, preserve public housing, tax increment financing, nonprofit ownership and other mechanisms that have been used in NYC to a greater extent than anywhere else, but have all failed to solve the “affordable housing crisis”.

Only one proposed solution has not been tried in New York and it comes from Ed Glaeser, an economics professor at Harvard University, who understands the laws of supply and demand. Professor Glaeser proposes a simple solution of easing housing demand by increasing the supply of housing. And the way to increase supply is to remove the barriers to building created by land use regulations such as zoning, historic preservation and air rights (and we should add rent regulations and labor practices).

But New York City, under Mayor Michael Bloomberg, has moved in the exact opposite direction. Major rezoning, affecting 40% of the city, has downzoned neighborhoods where developers were building higher-density market-rate housing without taxpayer subsidies. Development has instead been funneled into smaller development zones where even greater density will be required, together with subsidies to produce affordable housing.

Report: New Mayor Should Stop Re-Housing the Homeless

Report: New Mayor Should Stop Re-Housing the Homeless

Some mayoral candidates want to restore programs that place homeless families in regular housing. But one think-tank believes those programs drive shelter demand.

By Diane Jeantet

ICPH's Ralph de Costa Nuñez speaking at an event in October. He argues that a succession of approaches to rapidly rehousing shelter clients has led to shelter recidivism and increased demand for shelter beds.

Homeless numbers have reached historic levels, shelters are mushrooming throughout the city, homeless-related expenditures have gone through the roof and for the first time in three decades, there is no rental assistance or other housing program available to help shelter residents move into more permanent housing.

With more than 48,000 people sleeping in the city’s homeless shelters every night, and no end to the crisis in sight, homelessness certainly has been a topic of discussion among the candidates for mayor.

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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

Over Objections by the City Administration, NYC City Council Set to Make Affordable Housing More Expensive

NYC Council Passes Contentious Law

By Donna Kimura

Affordable housing developers in New York City face a controversial new law that calls for the extensive reporting of wages and other data for projects receiving city funding.

After being passed by the City Council in July, the legislation (Intro 730) was headed to Mayor Michael Bloomberg.  Even if he vetoes the law, the council could still override his vote.

Under the rule, the Department of Housing Preservation and Development (HPD) would have to report detailed information on the subsidies awarded to projects and provide data on the wages of every individual performing project work by the developer or a contractor.

The move is aimed at increasing transparency at the department and the many affordable housing developments financed by HPD each year, but critics say the requirements will create more red tape and place a huge burden on the industry, especially smaller developers. Affordable housing representatives point out that there could be 50 subcontractors on a project and thousands of wage reports annually.

The New York State Association for Affordable Housing (NYSAFAH) called for the elimination of the wage-reporting requirements.

“These mandates impose untenable administrative burdens on local and small businesses, putting them at a significant competitive disadvantage, with only the largest businesses able to compete,” said NYSAFAH, which estimated it would cost $40 million to implement Intro 730.

HPD Commissioner Mathew Wambua has also been critical. “HPD already vigorously enforces all applicable wage laws,” he said in a statement. “Collecting and stockpiling massive amounts of personal and sensitive wage information offers no clear benefits to the public.”

 

Source: Affordable Housing Finance

New Housing Initiative: Tiny Apartments

If tiny apartments are so desirable, why doesn’t New York City revive single room occupancy (SRO) uses?

— 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.)


 

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Mike pushes for smaller apts. for young singles

ERIN DURKIN
Monday, July 09, 2012
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Mayor Bloomberg with Commissioner of City Planning Amanda Burden, announce…

And you thought your apartment was small.

Mayor Bloomberg launched a contest Monday to stir development of teeny-tiny apartments — called micro units — for young singles willing to cram themselves into shoebox-sized digs.

The new closetlike flats will be just 275 to 300 square feet — larger than a jail cell but smaller than a mobile home — and will have special permission to ignore city rules requiring newly built apartments to exceed 400 square feet.

“The city’s demographics have changed,” Bloomberg said. “It used to be the average household was a family, a couple of adults and some children.”

That meant that the city was filled with larger dwellings, leaving just 1 million studios and one bedrooms — not nearly enough for the 1.8 million one-and two-person households.

At a news conference Monday, the mayor announced a contest seeking a developer for about 80 micro units at a city-owned parking lot on E. 27th St. in Kips Bay.

The ministudios will be just big enough for a bathroom, kitchen and sleeping and dining areas — but Bloomberg said tenants shouldn’t plan on doing much entertaining. Continue reading