Testimony: New York City Council Committee on Housing and Buildings

Oversight Hearing on Building Homes, Preserving Communities: A First Look at the Mayor's Affordable Housing Plan

Thomas J. Waters

Thank you for this opportunity to comment on the city’s important efforts to increase the production of affordable housing. The Community Service Society of New York is a 170-year old nonprofit organization that addresses the root causes of economic disparity through research, advocacy, litigation, and innovative program models. One of our major focuses is the chronic shortage of housing affordable to the city’s 3 million people in households with incomes below 200 percent of the poverty line.

During the 12 years of the Bloomberg administration, CSS often reiterated that the city’s New Housing Marketplace Plan deserved praise, but that it fell far short of what was needed to mitigate the effects of the city’s housing shortage. In fact, the housing picture for low-income New Yorkers grew steadily worse even as new housing covered formerly vacant lots all over the city.

The Community Service Society’s recent report, “An Affordable Place to Live” draws on evidence from the U.S. Census Bureau to show that from 2002 to 2011, there was a 39 percent drop in the total number of apartments—including public, subsidized, and private-market housing—affordable to a family with an income at 200 percent of the federal poverty line. This loss of more than 385,000 units could not possibly have been remedied through new development alone.

To its great credit, the de Blasio administration has taken important steps beyond its predecessor’s policies. We applaud this administration for committing, in its Housing New York plan, to significantly increase city capital funding for housing above the level of the Bloomberg era. We also applaud the administration for its steps to end double-dipping by developers when they get both zoning and direct subsidies for producing the same housing. And we applaud the administration for its efforts to create new incentives for affordable housing production and to link affordable housing with economic development.

It would certainly be a great step forward if the State of New York were to begin taking the housing shortage as seriously as the city does.

Unfortunately, however, the progress represented by the de Blasio’s administrations first steps must be measured against not only the forces that led to the loss of affordable housing but also against a new problem – the end of the city’s supply of land seized for non-payment of taxes, which provided a major tool for housing development for many years. Virtually all of this land has been used up now, making it significantly more difficult to produce new affordable housing. Some of the new resources that the de Blasio administration has added may end up simply compensating for the loss of this land resource.

The city can fight this tendency by committing to make affordable housing a priority use for all of the land that it and other government entities still hold. We should certainly not be seeing the city’s scarce land resources used for projects that are entirely or primarily market-rate housing, nor should scarce land resources be sold just to produce revenue. The city cannot hope to combat economic segregation while selling off land in the most desirable locations and building affordable housing only in areas where land prices are low.

Another perennial problem for affordable housing production programs is that only a few of the apartments created are affordable to the people most affected by the city’s chronic housing shortage. Families with incomes below 200 percent of the poverty threshold – those that CSS refers to as “low-income” – are far more likely to pay unaffordable rents of 30 percent, 50 percent, or more their income. They are also far more likely to be living with serious maintenance deficiencies. But these families are largely left out of new affordable housing production efforts because most of the subsidy tools that the city can access from the federal government are not well-suited to serve them.

It is not that households with incomes of $45,000 to $100,000 are so well served by the private market that it doesn’t make sense to try to serve them through public policy. The problem is that low-income households with even greater needs are being left out. It is simply a myth that public housing, Section 8, and other older housing programs have already taken care of this group. We don’t have nearly enough public housing or Section 8 to do that.

The Housing New York plan does call for an increase in housing created for truly low-income families beyond what the previous administration did, but not nearly enough, and we are yet to see how this will work. The most innovative aspect of the new administration’s plan, the use of zoning to promote affordability, is unlikely to reach this group unless it is combined with other tools. The affordable apartments proposed to be built in Astoria Cove, for example, are targeted to families with incomes that are more like 300 to 500 percent of the poverty threshold.

Finally, we are concerned that in New York City today, new development tends to raise the value of surrounding properties, potentially resulting in less affordability there. This too must be balanced against the affordable units created as part of the new development.

To sum up, we applaud the Housing New York plan for its significant commitments of resources and for its original thinking. But when it comes to addressing the city’s serious long-term housing shortage, it can only be seen as a beginning. We believe it can be strengthened in several ways:

  1. Add a commitment to use the city’s, and other governmental bodies’ land resources for affordable housing purposes whenever possible.
  2. Create new programs, even if on a pilot scale, to produce new housing for people with incomes below 200 percent of poverty.
  3. When tying affordable housing production to major new developments, carefully study the interaction between the affordability requirements and the secondary effect of the new development on the surrounding market, in order to ensure that there is a net increase in affordable housing.

And just as important, we call on the mayor and the city to recognize the limitations of housing production as a strategy to deal with the housing shortage, and lead the fight to strengthen the rent stabilization laws, especially by ending vacancy deregulation. This is the most effective step that can be taken to preserve our existing housing stock for low-income New Yorkers.

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