NYC’S TOUGHEST CHALLENGE IS AFFORDABLE HOUSING

By KATHRYN WYLDE | February 10, 2020


The toughest challenge facing New York City today is how to meet the escalating demand for affordable housing, with needs ranging from the desperation of the homeless to the frustration of the middle class.

City government is spending more than ever on housing and shelters, but the crisis continues to grow. Politicians and advocates regularly toss up proposed solutions — like spaghetti against the wall — but not much is sticking.

A major obstacle is the public’s mistrust of both government and the real estate industry. Confidence in the people who plan, develop, own and regulate our residential infrastructure is a prerequisite to achieving real solutions at a meaningful pace and scale.

For example, last year’s rent reforms provided some immediate relief to the tenants of the city’s 1.2 million rent regulated apartments, but tenants may be worse off in the long run because legislation did not include incentives needed to encourage continued investment in aging buildings. Judging by this omission, punishing landlords was more important than improving housing.

In another case, the de Blasio administration is smartly seeking to generate revenues for the New York City Housing Authority (NYCHA) through development of new housing on underutilized NYCHA properties. Parochial opposition and litigation have slowed this important initiative to a crawl.

Similarly, the city administration’s plan to attract more federal funding for NYCHA under a program that would install private management in a number of projects is meeting political resistance, despite clear evidence that the NYCHA bureaucracy cannot effectively manage its crumbling domain.

During the 1980’s, the Koch and Cuomo administrations worked with industry and nonprofit organizations to develop a highly successful set of housing preservation and production programs. Communities and politicians rallied to support the largest, most comprehensive urban housing movement that the nation had ever seen.

This was at a time when most New Yorkers had personally witnessed the rapid decline of the city in the ‘70s, a decade in which we narrowly avoided bankruptcy and neighborhoods were devastated by fire and abandonment. We all understood the city’s fragility and the imperative of working together to turn it around.

Behind the creation and implementation of the Koch-Cuomo Housing New York program was a strong network of community development organizations and nonprofit housing intermediaries— many of which still exist but are no longer playing the same central role in the design and delivery of mainstream housing programs.

There was also a cadre of diverse developers, owners and contractors who hired community residents, knew how to control costs, and were not in the game to become billionaires. Most of them are still around and prepared to partner with nonprofit groups on housing solutions.

Conditions in the city have obviously changed dramatically in the past 25 years. Today the city has strong tax revenues and its economy is doing well. Construction and land costs have skyrocketed; real estate assessments have spiraled, amounting to 30% of the expenses in most rent-regulated buildings.

City government no longer owns an inventory of tax-foreclosed land and buildings to contribute for development. Site assemblage through condemnation is unaffordable. The federal government has substantially reduced its funding for housing, community-based development organizations, and NYCHA, which is our largest affordable housing asset.

Reflecting these changes, current housing programs rely on leveraging private financing and cross-subsidies from market-rate rents and sales. Inevitably, this has reduced the role of trusted, community- and church-based organizations and intermediaries that once served as an important buffer against anti-development tensions and fears of displacement.

Absent a substantive role in housing ownership, management and development, the “people power” emanating from New York’s neighborhoods has turned defensive. With the advent of social media, advocacy is less informed and more easily distorted into negative activism.

It is not too late to turn this around. The nonprofit intermediaries that built and helped to fund community development infrastructure are still active, most notably Enterprise, LISC, the Community Preservation Corporation (CPC), the Corporation for Supportive Housing, and the Mutual Housing Association (MHANY). They have the expertise required to recreate local capacity that has withered as funding streams from housing programs dried up.

The foundations that piloted the community development movement in the city, including Ford, Rockefeller, and New York Community Trust, along with newer institutions like Robin Hood and Open Society, might be induced to re-engage. Ford, under the presidency of former community development executive Darren Walker, is already contributing to a fresh look at the NYCHA challenge by a broad cross section of community interests. Robin Hood and Trinity Church are supporting a coalition effort organized by the New York Housing Conference to inform the housing agenda of the next mayor.

New York has enjoyed unparalleled growth in population and jobs over the past decade. Continued growth depends on re-engaging communities and their trusted representatives in framing and implementing a comprehensive plan for solving the housing crisis, a process that needs to move forward immediately.

 

Kathryn Wylde is President and CEO of the Partnership for New York City.