Diving into Affordable Housing, Part I

A panel of affordable housing experts last night agreed that fundamentals are at play with the start next month of a new mayoral administration. 

Everyone on the New York City Bar Association panel, moderated by New York Times reporter Charles V. Bagli, looked on the city’s efforts as laudable, and all suggested improvements that are needed in the face of escalating home costs that have squeezed middle class households and send them to the outer boroughs.

Affordable housing is the “intersection of real estate and politics,” said Bagli at the outset.

The session featured warnings about threats to the basic premises of affordable New York City housing efforts, such as zoning and subsidies, as well as the fear of the "Europization"  of Manhattan—that is, an area only for the wealthy and tourists, which a panelist said is the fate that has befallen Paris.

The key figures discussed throughout the 75-minute event was Mayor Mike Bloomberg’s efforts in creating or preserving 156,000 units of affordable city housing during his three terms, and Mayor-elect Bill de Blasio’s pledge that he will add 200,000 more units over the next four years.

The affordable housing focus has been heightened, Bagli told the audience of about 80, because the election turned on the perception that the mayor is too attentive to the needs of wealthier people, and the result in part is that housing is out of reach in much of the city, for much of the population.  He said the average apartment costs $1.4 million, and the average apartment rent is $3,000.

Bagli, the author of “Other People’s Money,” a book on the demise of Stuyvesant Town and Peter Cooper Village as affordable housing options for middle-class wage earners, offered some statistics:  He said that the $5.4 billion cost was the biggest-ever residential deal, for the East Side property that had been “a jewel in the city’s crown for 60 years.” But the deal, closed in 2006, collapsed in 2010. 

To generate revenue to service the debt, the transaction led to the deregulation of  rent-stabilized apartments.  Bagli said that in 2006, 28% of the units—about 11,200—were market rent. 

Now, about half of them are at market rates, with a two-bedroom renting for $4,600 in Peter Cooper and $3,800 Stuyvesant—well beyond the average minimum income levels for affordable housing.

“These are astounding numbers,” said Bagli, adding, “but it reflects what’s going on in the city:  The middle class can’t live here.”

He continued: “It’s a European model,” where immigrants and the middle class are pushed out.  New York, Boston and Washington, D.C. “are all headed that way,” Bagli said, “Cities for the rich and the tourists.”

This raises policy questions, said Bagli, “like can a city even survive when it is mono class”? Employers, for example, would need to move to be closer to the people they need to fill jobs.

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Later today: Bloomberg “gave away a lot of public value without creating public value.  . . . We should drive a better bargain."


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