New York City real estate is too expensive to afford for most people who are not foreign billionaires. Mayor Bill De Blasio has vowed to build or preserve 200,000 new units of affordable housing in the next decade. Is that even possible? The experts say: Uhhh.....
How to create affordable housing for lots of people is one of the most difficult public policy issues in the world. To get it right, the solution must pass muster economically, politically, and in terms of design, and urban planning, and must satisfy the poor people who will actually live in the housing as well as the rest of the people who will not live in the housing but who will, indirectly, pay for it. It's even more difficult in a city like New York, where huge sums of money and huge demand for space meet huge financial inequality and a higher-than-average level of political maneuvering and daily tabloid media shouting. This morning, at the bright and airy New York Times Center near Times Square, the Municipal Art Society brought together various planning, governance, architectural, and political experts to suss out the realities of affordable housing. (Among other things—I skipped the rest of the conference.)
If you are a New York resident, you may be vaguely aware that the new administration has an aggressive ten-year plan to increase affordable housing. I live here, and I write about this shit, but even I was hazy on the details. But if you have had the misfortune of having to rent an apartment in this city in the past decade, chances are that a good affordable housing plan would benefit you, at least indirectly. So what's it all about?
First, Carl Weisbrod, the chairman of the NYC Planning Commission, gave a speech on this very topic. From his speech I learned: nothing. Weisbrod is a political functionary, and he speaks like a political functionary. The closest he got to granular detail on affordable housing was emphasizing that the city will be "working with all stakeholders to provide a framework for growth" in neighborhoods. He spent a great deal of time thanking influential political figures in the city, in the manner of, "I'd like to thank [INFLUENTIAL PERSON WHO MIGHT HEAR THIS SPEECH], and I'd also like to acknowledge the hard work of [OTHER INFLUENTIAL PERSON]."
None of this would get you an affordable apartment.
Fortunately, there was a panel of actual experts up next—including Vicki Been, the head of the NYC Department of Housing Preservation and Devleopment, a key person to actually making affordable housing a reality. Can the new, bold affordable housing plan in NYC become a reality? How? And will it make a real impact if it does? I now present the Cliff's Notes version of this issue for you, the generally discerning but lazy reader.
- How the hell do they expect to create hundreds of thousands of new affordable housing units in this city in the next decade, without bankrupting us or starting a revolt of the rich? A few ways: 1) Rezoning currently built-up areas to increase their density; 2) Trying to use various economic and political incentives to convince landlords to keep existing affordable apartments affordable, instead of boosting up the rent as much as possible as soon as they get the chance; and 3) By encouraging/ forcing developers to include a certain percentage of affordable housing units in their new developments. About 80,000 new units of housing are included in the goal of 200,000 total affordable housing units.
- The part about getting these affordable units in new market-rate developments is key. Its benefits: it creates economically diverse neighborhoods, instead of segregating all the poor people in far-flung ghettos, and it puts the onus for building the new units on private developers, not the city itself. But one panelist put this goal in perspective: a typical percentage of affordable units in a new building is 20%. To get 80,000 new affordable units in ten years would imply developers building 400,000 total units in that time. That's 40,000 new units per year. How many new units are being built annually now? About 22,000. Barely more than half of what would be necessary. And that is in a very, very good economy.
- Building anywhere near that many new units, even if it were possible, would "potentially disrupt neighborhoods," one panelist noted. No shit!
- How are the affordable units in nice building paid for? Essentially, the wealthier people paying full price for their units subsidize the poorer people paying below market price. Each building becomes its own little socialist commune, in that way. It's nice. But if the economy flags, it can quickly become problematic. Up to this point in the city's history, the vast majority of these types of buildings have been built in the "nice" neighborhoods of Manhattan, where there is an abundance of wealthy buyers to subsidize the less wealthy. But, as the finance guy on the panel pointed out, it's a lot trickier to take this plan to less wealthy neighborhoods—which the city will need to do, if it wants to get all these affordable units built. It's easy to find lots of wealthy buyers on the Upper East Side. Not so easy in the South Bronx. Hmm.
- Compared to these underlying issues, issues like the "poor door" controversy are just sideshows. (Still, everyone agrees that poor doors are a horrible fucking travesty.)
- Other, related housing issues that could slow down or cripple this city's big affordable housing plan include, but are not limited to: our city's extremely low vacancy rate; our city's extremely low turnover rate of housing; and the never-ending debate over whether or not our city's rent control and rent regulation laws are ultimately helpful or not for the population as a whole. (On the one hand, they're an artificial distortion of the market that incentivizes private developers to stay away from affordable housing in the first place; on the other hand, as Vicki Been said, fiscal conservatives applaud our nation's tax laws designed to incentivize buying homes because it promotes "stable" neighborhoods, but complain about stable neighborhoods when they're composed of renters. "When renters stay a long time, it's 'distorting,'" she said, in a mocking tone. "Why's that?")
- And let's not forget the more than 180,000 units of public housing that already exist in New York City! Why doesn't the city just try to add to this stock, rather than creating this convoluted plan to get private developers to do the building? Well, for one thing, it's expensive to build public housing, and it's expensive to buy the land for public housing, and by the way, the city Housing Authority has "unfunded capital needs totaling $18 billion" for the run-down decrepit units that already exist. That's an entirely separate shit show.
So, let's review: we have a massive, audacious, ten-year affordable housing plan that is dependent upon a rate of development almost double what our city has ever done, and dependent upon continued strength in our overall economy in order to provide the surplus of wealthy people who will subsidize the poors over the next decade, and dependent upon building lots of new buildings in neighborhoods where thus far it has not been shown that any relatively wealthy people want to live anyhow, and all of this has to be politically viable, as well, even as the populist pro-Obama surge that has propelled this nation since the recession swings back every so predictably towards conservatism. Even if all of this falls into place, this insanely bold plan will still not be big enough to meet the housing needs of our city, which contains more than 50,000 homeless people and countless millions of poor people.
I hope it works.