A Bold Proposal to Reshape How NY Addresses the Lack of Affordable Housing
David R. Jones, The Urban Agenda
It’s not every day that a major opportunity comes along to reshape the way we deal with one of our most severe and persistent crises.
But this coming Tuesday, just such a pathway will be blazed when Harlem State Senator Cordell Cleare and Brooklyn Assemblymember Emily Gallagher introduce legislation to create a Social Housing Development Authority (SHDA), representing a bold new way of taking on this city’s and state’s affordable housing deficit.
For about 50 years, New York State offered a total tax exemption to luxury developers in exchange for a tiny share of “affordable” rentals, often priced much higher than our community can afford. This program, known as 421-a, cost New York taxpayers $1.8 billion a year, more than any other single housing program in the state, including public housing, vouchers, and non-profit subsidies. 421-a died an unceremonious death a couple years ago, and now developers are begging for its return, claiming it is the only way we can jumpstart housing production in our city. That kind of viewpoint is what you would expect from the real estate industry, which shells out generous contributions to keep the status quo.
But handing over billions of dollars to private, for profit developers is not the only way to increase the city’s affordable housing stock.
While in the past we could have turned to the federal government for help, the primary support for affordable housing production it has to offer today is the “Low Income Housing Tax Credit.” This is a Reagan-era mechanism whereby the Federal government gives tax credits to states, which pass them on to affordable housing developers, which sell them to private investors, who save big on taxes. If that sounds like an awfully inefficient way to raise money for what should be a basic human right, it is.
And, the federal government has other programs, like the Housing Trust Fund (HTF), which are both much less complicated and much more efficient. But because tax credits make a lot of money for big corporate interests, they persevere as the primary mechanism for building temporarily affordable housing around the country.
Senator Cleare and Assemblymember Gallagher’s new bill will provide a pathway out of the housing crisis for New York State and a model for the rest of the country. Instead of giving huge tax breaks to the richest in order to build a few apartments for the poorest, New York State’s Social Housing Development Authority would be tasked with producing high quality, permanently affordable housing around the state – in cities, suburbs and rural areas alike.
Those new buildings would be built by the SHDA but could be owned by the tenants themselves or run by a trusted Community Development Corporation or management company. The SHDA could also help tenants in private rental buildings buy their buildings from their landlords and either turn them into not-for-profit rentals or limited-equity cooperatives – a process the Community Service Society of New York outlined in our interactive 2022 report, Pathways to Social Housing in New York: 20 Policies to Shift from Private Profit to Public Good. And on top of that, they would be built and staffed by union workers.
New York has dreamed big on housing before – we’ve just fallen out of practice. In the 1920s, our unions built affordable cooperatives around the city. In the 1930s, we built public housing, even before the federal government. In the 1950s, we started building Mitchell Lama coops and rentals, which remain extremely popular decades later. In the 1960s and ‘70s, we even had a Social Housing Development Authority – it was called the Urban Development Corporation, and it built high quality social housing around the city and state, including Harlem’s Lionel Hampton Houses, Schomberg Plaza, and more. In the 1980s, tenants fought for the city to turn over tenements to them to own and manage as affordable cooperatives. We’ve done it all before, but we need to do it again – now more than ever, as homelessness and rising rent burdens are becoming existential crises for our communities.
Housing is not a simple problem, and there’s no single solution to this crisis. We also need stronger tenant protections and programs to rehouse the homeless in already-existing vacant apartments.
But we’ll never solve the housing crisis just by tinkering around the margins of the tax code. New York State needs to lead the way by building the housing our communities need. Senator Cleare and Assemblymember Gallagher’s bill to create a SHDA will offer a transformative vision for a New York State with homes for all – poor and middle class alike.
We don’t just have to cut taxes and hope profit-seeking developers do the right thing; we can build the city and state New Yorkers deserve.