Diving into Affordable Housing, Part III

Following up on our previous post about the comments castigating Mayor Mike Bloomberg for his handling of affordable housing negotiations by panelist Benjamin Dulchin, executive director of the Association for Neighborhood and Housing Development Inc., at last night’s NYC Bar Association panel, a fellow panelist said his experience with the Bloomberg administration was much different. 

Panelist Donald Capoccia, president of the New York State Association for Affordable Housing and principal of BFC Construction Corp., said his firm built 2,000 housing units in the past six years in which the city had provided land, special zoning entitlements, or capital. 

All of the projects were in rezoned areas, he said, explaining that 40% went to affordable housing-eligible families. All of the work was done in Brooklyn or Staten Island.

Moderator Charles V. Bagli, a New York Times writer who covers commercial real estate (see Part I of the Quidnunc report on last night's panel, HERE) asked Capoccia about other areas where 40% of a development might be a doable affordable housing target.

Capoccia returned to Staten Island, which he said “is the last frontier for delivering sizable projects.”  He said the best bets in the city to hit that level now are the Staten Island’s north shore, and Crown Heights in Brooklyn, which is “overlooked.”

Panelist Leora Jontef, director of the Third Party Transfer Program at the New York City Department of Housing Preservation and Development, described her office's efforts to move tax-distressed properties to private developers with resources to repair and maintain buildings which often have been neglected—and which usually are filled with poor and low-income tenants.

The laws that enable the program—they allow the city to foreclose and transfer properties without taking title--are explained at the program's link.

Panelist Matthew G. Lasner, Assistant Professor of Urban Affairs and Planning at Hunter College, and author of “High Life: Condo Living in the Suburban Century,” added historical perspective that produced the efforts that the other panelists spoke about. 

He noted the city has been in a crisis mode for housing since World War I, and arguably well before. He clarified that Mayor Bloomberg’s goal actual has been to establish 165,000 affordable housing units, not the 156,000 his administration has produced.  He said most of Bloomberg's effort has come from preserving old buildings—only 36% is new construction, Lasner reported.

And, he said, tax abatements or financing often terminates, making all units market rate, at least eventually.

Lasner said the new mayor’s most important affordable housing effort will be lobbying in Washington for federal housing subsidies, which have long been a component of New York City affordable housing. “There is no other city in America that has the problems we have, and no one other than the [NewYork City] mayor can do this,” said Lasner.

Panelist Ben Dulchin returned the discussion to the bases of affordable housing, noting that “private parties won’t build affordable housing purely on their own.”  He said affordable housing “must be publically incentivized.”

The problem, he said, is that the most used methods don’t work well.“[The] 421(a) [law] is a public boondoggle,” said Dulchin, “giving away value.” He was referring to the city’s tax exemption for construction, which varies based on location and work done.

Bonds, said Dulchin, “also are giveaways, with very little affordable housing” produced. Same thing, he said, with exclusionary zoning developments.

But he stopped short of abandoning the incentives.

“We need to get the details right on these,” said Dulchin.  “We need to get to the 200,000 [affordable housing units] aspirational goal.”

He concluded: “You need to stop giving away the store.  Bloomberg had the balance wrong.  Hopefully, de Blasio will be able to strike a better balance.”

In Part IV, to be posted later today, the panelists project about the state of affordable housing and real estate development in general 10 years from now.

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