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.)

 

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Preaching to the Choir on Housing. At last week’s debate, New York’s mayoral candidates sang the same old chorus.

NICOLE GELINAS
28 January 2013

At last Thursday night’s mayoral debate on housing policy at an East New York church, Joseph Lhota, the Republican newcomer to the race,distinguished himself by being quiet. The housing forum showed how hard it is to run for mayor by talking to everyone, and how politically brave one has to be to try. The hosts and the questioners accepted as fact that New York faces an affordable-housing crisis and that it’s the city’s job to fix it. Everyone who spoke wanted the city to build or “preserve” city-controlled housing—whether private, rent-regulated buildings or public units. The first questioner, Erica Townsend of Brooklyn, asked: “Mayor Bloomberg is on the right track to build and renovate 165,000 units of housing, 15,000 per year. . . . Do you agree, and commit to preserving and building a total of 60,000 of housing [units] over four years?”

Not one of the candidates on stage—four Democrats, Lhota, and fellow Republican Tom Allon, a publisher—dared say no. City comptroller John Liu; his predecessor, Bill Thompson; and public advocate Bill de Blasio all agreed that 60,000 new city-supported housing units should be the minimum. Liu said that he had used $440 million in city-guaranteed pension-fund money to invest in 38,000 units of government-controlled housing; De Blasio said Liu hadn’t done enough.

Christine Quinn, the Democratic city council speaker, jumped in, too. Touting her “first job” as a tenant activist, Quinn said, “we’ve lost 300,000 . . . affordable housing [units] in this city” in recent years “because of the way Albany has eroded rent protection.” Quinn cautioned that building new city-controlled housing would not be “cost-free.” Her solution? “You need to decide it’s a priority in your capital budget.”

For a small-l libertarian—as Lhota describes himself—or just someone concerned about groupthink, there was plenty to respond to here. Lhota could have pointed out that when the city devotes taxpayers’ money to building brand-new housing for a few, it does so at the expense of investments in subways or keeping cops on the street—spending that benefits everyone. When Lhota did speak up, he quibbled only with housing programs’ inefficiency. Depending on what your particular subsidy is, he said, “you gotta talk to HPD, sometimes you gotta talk to HDC, sometimes you have to talk to City Planning, you always have to talk to the Buildings Department, you’ve got DEP on water bills, you’ve got . . . the rent-control board, there’s NYCHA, there’s Section 8 from NYCHA or from HPD. . . . The entire housing apparatus of the city needs to be completely reorganized . . . and focused on the problem at hand.”

Lhota showed that he is not politically naive. Politicians must pick their battles. Falling on his sword over public housing inside a church surrounded by public housing would have disqualified him on grounds of political incompetence.

Yet Lhota missed opportunities to turn a debate over one issue into a debate about who can best manage all of the city’s issues. He could have said that, as MTA chief until last month, he learned that public-housing residents needed better bus service to get to their jobs. That’s why he restored service that his predecessors had cut. He could have pointed out that, as deputy mayor in the 1990s, he learned that all New Yorkers—whether they live in public housing or in rent-regulated apartments in poor neighborhoods—deserve a safe, quiet environment. That means fixing the city budget so that we don’t lose another 6,000 cops, as we have under Mayor Bloomberg. The audience might have been receptive to a candidate willing to depart from issue-advocacy talking points.

When Townsend, the first questioner, asked about affordable housing, she also said that “at one time,” East New York “resembled a war zone, burned-out buildings, abandoned buildings,” with “drug dealers” operating under cover of burned-out street lamps. Townsend added that she had fought for “more police patrols in my neighborhood.” Someone on stage could have responded: Your affordable housing isn’t good enough if you can’t send your kids outside without getting shot, or if you can’t get to work without a long delay.

Lhota will have other chances. Nobody will remember that he treated the first debate as an opportunity to watch and learn, whereas everyone would have remembered a gaffe. But Lhota should remember that voters already have access to elected officials who use their current jobs to fight for their favorite special interests. New Yorkers want the next mayor to see the big picture.

Source: City Journal

Why Downtown’s Cool to Rent Control

Here’s an interesting piece by the Post’s Steve Cuozzo commenting on an issue raised in a recent Wall Street Journal article regarding rent stabilization coverage in the Financial District.

It seems that old-line tenant advocates, steadily losing their traditional constituency, are looking for new constituencies to support rent stabilization. The advocates are failing to find support in FiDi for the same reason they are losing support in the outer boroughs– in most of the City there is little difference between market rents and regulated rents.

                                            – 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.)

 

Why downtown’s cool to rent control

By Steve Cuozzo, October 12, 2012

It’s great news to most New Yorkers that the Wall Street area has become one of the city’s best places to live — evidenced by a Financial District population that’s nearly doubled to 57,000 since 1999 and will soon hit 60,000.

Just about every apartment that comes to market is swiftly snatched up. People love the new FiDi — anchored by the country’s healthiest office market, now also throbbing with families, shops and amenities.

It’s so popular that the rental apartment vacancy rate is below 1 percent.

But to “tenant advocate” reactionaries, the picture is bleak.

Now a family-friendly ’hood: Crossing the street near Battery Park.

Why? Well, tenants there won’t fight to have their market-priced apartments rent-stabilized.

Paul Newell, a Democratic district leader who is trying to inflict rent-stabilization on thousands more apartments downtown, whined to The Wall Street Journal last week that a mere 10 residents responded to his campaign.

Stabilization, the ruinous residue of World War II-era “emergency” rent-control law, to this day warps the city’s housing scene by keeping 1 million apartments effectively off the market — sometimes for decades.

A 2010 court ruling left some 5,000 more downtown units potentially subject to stabilization (on technical grounds involving landlord receipt of a tax benefit). But to win stabilized status, tenants must prove an “overcharge” to the state Department of Homes and Community Renewal or sue their landlord.

Newell, a leftist activist who sued the NYPD over “illegal” arrests (including his own) involving Occupy Wall Street’s Zuccotti Park takeover, is dismayed that FiDi residents haven’t taken up the rent cause in droves.

To explain it away, he absurdly claims the area is full of short-term residents who just have no interest in trying to reduce rents long term. Community Board 1 member Tom Goodkind echoed him, “Our area has always been quite transient,” and lamented, “We don’t want 15 college kids crashing in an apartment. We want people to hunker down and stay.”

Newell and Goodkind claim that people don’t stay long because it’s a lousy place to live lacking “basic trappings” like grocery stores.

Huh? What neighborhood are these guys talking about?

A 2009 poll by the Downtown Alliance found two-thirds of respondents had lived in the district for five years, and most intended to stay. More recent data from the Alliance show a median FiDi household income of $143,000 and average household income of $188,000. Some bunch of student drifters.

If FiDi were a transients’ camping ground, would Rose Associates spend a half-billion dollars to convert 70 Pine St. into a luxury address with 750 apartments at the highest rents in the area’s history?

Food shortage? The area’s proliferating choices range from huge new 55 Fulton Market to supermarkets to scores of gourmet shops.

Well, then — if it’s laughably false that residents want to bolt as soon as they can, why are they failing to fight for rent stabilization?

For one thing, the gap between market-rate and stabilized rents in the area is so small as to make the time and legal fees to seek stabilization not worth the struggle.

But there might well be a deeper explanation — anathema to activists who’d turn the clock back:

Maybe young, affluent residents dwelling amidst capitalism’s nerve center don’t buy into the culture of housing dependency and subsidy that animates “make our landlord beg” activists.

Very possibly, unlike 1960s rent-strike leaders, they recognize greater value in a building priced by the law of supply and demand.

Just as possibly, they understand that lower rents compromise a landlord’s inclination to provide the best service and maintain properties in the best condition.

And they love Downtown the way it is — striving and growing with no need for help from “advocates” whose day is long over.

Source: New York Post

RSA President Joe Strasburg responds to the City Comptroller’s recent report on rising rents in Crain’s New York

Letters to the Editor: The truth about rents

City comptroller’s report misleads on housing-cost burden

 

The city comptroller’s recent report on rising rents (“High rents hitting middle-class New Yorkers,” CrainsNewYork.com) slices and dices the statistics to erroneously make it appear that rent burdens in New York City are higher than elsewhere and, unbelievably, to suggest that middle-class renters have greater housing affordability problems than poor renters.

First, New York’s rents have been rising along with rents in the rest of the country to the point where a majority of renters in New York and nationally pay more than 30% of income for rent, making the 30% limit an outdated standard. (Some of your readers may recall that the federal government used to define paying more than 25% as unaffordable.)

Second, a large part of the rise in rents is the direct result of the increase in government levies for real estate taxes and water and sewer charges, yet the comptroller does not suggest restraining those increases as a way to rein in rising rents—perhaps because Comptroller John Liu, as a city councilman, voted for two midyear real estate tax increases. Nor does he suggest that zoning and other restrictive regulations raise the cost of housing.

Third, when gauging affordability, the comptroller’s report fails to consider that many renters willingly pay more than 50% of their income in rent for the privilege of living in core Manhattan or highly desirable outer-borough neighborhoods (or to consider the 1 million college students who are paying rent with little or no income).

There is a clear need to expand the supply and contain the costs of housing in New York City, but exaggerating the scope of the problem while ignoring root causes does not foster the rational discussion we need.

 

— Joseph StrasburgPresident 
    Rent Stabilization Association

 

Source: Crain’s New York