Election 2009:
Mayoral candidates differ in approach to affordable housing crisis
William C. Thompson, the city comptroller who is running on the Democratic ticket, wants to change state law to make sure rent-stabilized apartments remain affordable. Mayor Michael Bloomberg, an independent who is hoping to secure a third term, prefers providing financial incentives to developers to build and maintain apartments for working and middle-income New Yorkers.
Affordable housing has long been a hot-button topic in the Big Apple, where parking spaces can cost more to rent than apartments in many cities. More than 150,000 middle-class residents left the five boroughs in 2006, mainly because of high housing costs, according to the Center for an Urban Future, a public policy center for working-class and middle-income New Yorkers.
Though rents have decreased amid the economic turmoil, they remain beyond many people’s reach, experts said. The average Manhattan studio costs $1,760 a month while a three-bedroom apartment averages $4,591 a month, according to market reports by New York City’s largest brokerage firm, Citi Habitats. Only 1.7 percent of rental apartments were vacant in the third quarter of 2009.
Thompson believes the best way to keep housing affordable is to change laws. Repealing a policy called vacancy decontrol is key to his housing plan.
Vacancy decontrol allows landlords to deregulate vacated rent-stabilized apartments when the rent exceeds $2,000. The city’s one million rent-stabilized apartments are protected from sharp rent hikes, but those that are decontrolled are no longer immune.
As of 2008, nearly 84,000 such apartments have been deregulated and more than 100,000 units are on the verge of decontrol, according to a report by the Citizens Budget Commission, a nonprofit civic organization that focuses on the finances of New York City and the state.
"Repeal would be much more certain with a mayoral administration actively working with lawmakers to make it happen," wrote Thompson in his 2009 campaign report, “The New Direction for New York City: Real Solutions for the Housing Crisis”.
Thompson has been critical of Bloomberg’s $7.5 billion New Housing Marketplace Plan, a 10-year plan launched in 2002 that aims to preserve and expand 165,000 affordable housing units.
"Housing construction boomed, but most of it has been luxury condos unaffordable to the vast majority of New Yorkers," wrote Thompson in his 2009 campaign report.
However, Bloomberg administration officials say that the affordable housing market is healthy and that rezoning policies have created greater availability. The administration’s zoning policies provide incentives for owners to devote 20 percent of development to affordable housing.
Financial backing and incentives is Bloomberg’s preferred method to keep housing affordable. He has not taken a clear stance on legislation regarding vacancy decontrol.
If elected for a third term on Nov. 3, Bloomberg plans to focus on new housing and tax incentives for owners who continue to operate affordable units.
“You have to have developers willing to put money in, they have to have space to do it,” said Bloomberg in a NY1 mayoral debate earlier this month.
The 421-a program, created in 1971 but reformed last year, provides tax breaks on multi-family residential construction. It is predicted to generate hundreds of millions of dollars for affordable housing, according to the Department of Housing Preservation and Development’s 2009 report on the plan.
”The most time honored way to ensure affordable housing is to produce more housing,” said Howard Husock of the Manhattan Institute, an economic and social policy think-tank.
Yet much of the existing affordable housing stock is currently under threat of extinction. For instance, many of the city’s subsidized Mitchell-Lama developments are exiting the program and therefore losing rent-stabilization protection.
Concerned over the loss of the affordable housing pool, Thompson stated in his campaign report that he would fight to place all Mitchell-Lama housing developments, including those that have left the program, under rent stabilization.
The Bloomberg administration is also concerned about the deteriorating program but plans to use a different strategy. It hopes to convince the remaining developments to stay in the program for another 15 years in exchange for financial incentives and mortgage restructuring. Eventually, the administration would develop an initiative to convert the developments into cooperatives.
“The mayor wants to subsidize as much as the next person, even more than to my taste,” said Husock. “But he does emphasize pretty great policies for development. That’s been a breath of fresh air for this city.”
Still, some housing experts are not convinced that Bloomberg's tax incentives will provide long-term affordable housing.
"Developers are getting significant tax breaks and then 15 years down the line when those expire, tenants could face rent increases," said Rachel Rachlin, communications director for the Metropolitan Council on Housing, which is dedicated to preserving and expanding the city’s affordable housing stock. "There’s no renewal and they could face triple to quadruple rent increases.
Rachlin is concerned that tax and financial incentives will do more for landlords than for tenants who are struggling to pay for housing.
“The policies [of Bloomberg] have not been about affordability and sustainability, it’s been about giving developers tax breaks," said Rachlin. "We need to switch from profit-based to what the people need."
