Over the course of his first 100 days, New York City mayor Bill de Blasio has shown a tendency to aspire towards the historic. His plan to create or preserve 200,000 units of affordable housing is no exception.
De Blasio’s affordable housing goal exceeds those set by previous mayors. Mayor Koch reached about 190,000 units over approximately 15 years, while Mayor Bloomberg sought to complete 165,000 new units over 12 years (some of these units are just now coming on line).
How will he do it? The administration is developing its affordable housing plan now, and a report is expected in May that will detail its plans.
Meanwhile, de Blasio’s campaign literature provides some clues. The new mayor will make inclusionary housing mandatory, will look to convert illegal basement units into legal, affordable apartments, will increase taxes for vacant properties in an attempt to encourage development, and direct the city’s pension fund investments into affordable housing in the city.
The mayor will need to utilize all of these strategies and more to reach his goal. The challenges facing his administration are formidable.
De Blasio’s first challenge is that the number of affordable units he proposes to create exceeds the number of new units that were built—at any income level—over any ten-year period since at least 1981.
To reach his goal, de Blasio’s administration would need to complete 20,000 affordable units a year. But between 1981 and 2008 there were only three years in which housing production exceeded 20,000 units—and this figure includes market rate units as well as affordable units.
Source: HPD, Housing New York City 2011
The good news is that de Blasio will not need to actually “build” 200,000 units to reach his goal. It is a common misperception that when city leaders talk about “building” affordable units, they’re only referring to new construction. But often the bulk of new affordable units consist of “preserved” units, or preexisting units that receive financing or tax breaks in return for keeping rents at an affordable level. Under Bloomberg the city preserved twice as many affordable units than it built: 107,119 units preserved versus 50,111 newly constructed units.
But even if de Blasio keeps the same proportion of newly constructed units versus preserved units, it’s clear that the pace of construction will need to accelerate. Otherwise nearly 50% of all newly constructed units in the city will need to be affordable units if de Blasio is to reach his goal.
The next challenge is that de Blasio’s plan relies too much on inclusionary zoning to reach 200,000 affordable units. The mayor’s campaign literature suggests that new, tougher inclusionary zoning laws will create 50,000 new affordable units over the next decade.
Under Bloomberg, the city created 2,800 IZ units over seven years, or just 400 a year. Even with mandatory inclusionary zoning and higher requirements, such as a 30% affordability requirement as opposed to 20% affordable, the production of 50,000 new IZ units is highly unrealistic.
I’ll put it this way. Even if Bloomberg had required the inclusion of mandatory units in all new developments, as de Blasio plans to do, the city would have only seen 39,000 new inclusionary units over eleven years. This is certainly an improvement, but still not enough to get to 200,000.
(For this calculation, I am simply looking at the number of new units constructed under Bloomberg at all income levels and multiplying by 20%, the standard affordable requirement under the city’s inclusionary housing program.)
Another challenge is shrinking commitments from the federal government. Without getting into the specifics of federal housing policy, we can generally expect less federal money for the city’s affordable housing efforts, and we can expect that city dollars will not go as far as the federal government scales back its programs.
The Bloomberg administration put forward $5.3 billion in city capital funds for affordable housing, according to reporting from the New York Times. Koch used $5.1 billion in city funds. The city may have some room to increase its capital contributions for affordable housing, as this IBO report indicates, and de Blasio said he plans on directing the city’s pension funds to invest about $1 billion in affordable housing. The fact remains, the capital needs of de Blasio’s affordable housing plan will be significant.
De Blasio will also be facing pressure to target a larger share of new affordable units to low-income households. Affordable housing advocates have noted—correctly—that the majority of new affordable units built under Bloomberg were not actually affordable for the residents of the neighborhoods in which they were built, based on a neighborhoods’ median income.
The goal of deeper affordability is important, and de Blasio will come under intense scrutiny from progressives to target lower-income households. But the tradeoff may be fewer total units built.
Finally, de Blasio will need to overcome the fact that most of the city’s land has been built out already. Previous housing plans under Koch and Bloomberg relied heavily on city-owned properties and vacant land, but there is little vacant land still available. HPD-owned vacant land can support an additional 7,000 units, but nearly half of these would be on the Rockaways peninsula—far from jobs and the city center and prone to flooding and storms.
This is not an exhaustive list of the problems that the de Blasio administration will face, but it gives us a better idea of what some of the most pressing issues will be. I will talk about opportunities for affordable housing development in a future piece.