Jeanne Noonan for New York Daily News
A gentrifying block of Franklin Ave. in Brooklyn
How should Mayor de Blasio take on the affordable housing crisis?
In 1986, New York made a huge commitment to an intractable problem of the 80s – our falling-apart neighborhoods. Then-Mayor Koch made an unprecedented investment of city capital and also managed to get investors to the table to restore our dilapidated and burned-out buildings. This approach successfully rebuilt dozens of our neighborhoods.
But in 2014 most neighborhoods are struggling against a different challenge — gentrification, and the speculative development that comes with it. Investors are flocking to the city, not running away from it. It’s a lack of affordability, not lack of investment, that is our seemingly intractable problem.
During the campaign, de Blasio focused on a new tool — guaranteeing that affordable housing is included in new growth generated by rezonings. This new policy will go against the way things have usually been done. Under Bloomberg, the city simply gave away the enormous value that comes from being granted the right to build taller and denser in one of the most lucrative real estate markets on earth.
The Bloomberg administration thought that allowing market-rate housing to be built where and when developers wanted would help alleviate the affordability crisis by increasing the supply of housing overall. But after 12 years of this policy, affordability for most New Yorkers is even farther away. We need to do more than just build housing — we need to build the right kind of housing.
The fact is that our city’s private real estate market simply will not create any affordable housing on its own. In a market like New York’s, it is always more profitable to build luxury for the few that can pay top cost, than build affordable for the many that need it.
So city government should use the tools at its disposal to get affordable housing built by offering incentives and benefits (most backed by taxpayers). But under Bloomberg developers too often got the exact deal they wanted while communities got little in return.
The real estate industry will counter — as they always do at every attempt at getting a better deal for the public — with “if you do that we won’t build.” But New York is now one of the most desirable cities in the world. The idea that developers will simply take their ball and go home stretches the imagination.
Take a recent rezoning in Crown Heights. The city granted developers the right to build bigger along Franklin Ave. — a hot street in a heavily gentrifying stretch of Brooklyn. One developer who bought a building just 5 years earlier sold it for a quick $ 10 million dollar profit immediately after the rezoning.
That’s a great deal for speculators, but a terrible deal for the community, where affordable housing is a huge concern. When government creates so much wealth at the stroke of pen, local neighborhoods want to make sure that they got some benefit also.
De Blasio wants to fix this with a new Guaranteed Inclusionary Zoning approach so that if the developer takes advantage of new rules by building bigger and more profitable housing, that developer also benefits the community by making some of the units affordable.
A dozen cities around that country have the program in place and have seen Guaranteed Inclusionary Zoning repeatedly declared legal. And it’s created a lot of affordable housing. New York City can put in place a policy that — if done right — should be able to create 25,000 to 50,000 units of affordable housing over the next 10 years.
But Mayor de Blasio should go further. We need to take a tougher look at all city incentives for development, not just zoning. We desperately need to change our approach to reflect the New York of today, where getting private developers to build isn’t a problem — but getting them to build affordable is.
When we give massive tax abatements for new buildings, we should demand the right amount of affordable housing, or not give the tax abatement at all. The same for using publicly-backed tax-exempt financing. We shouldn’t give away city-owned land to be used mainly for luxury housing. We shouldn’t allow developers to use our tax dollars to build housing that is only affordable for the short-term, and then gain a long-term private windfall by taking the housing market-rate afterward. And the city should use non-profit community-based developers who plow every cent of the public subsidy back into the community.
Zoning for affordable housing is just the start. It is time for the city to revisit how it approaches development in general — and put in place the policies needed to address the current housing crisis, not the one of the past.
Benjamin Dulchin is the executive director of the Association for Neighborhood and Housing Development, an association of neighborhood-based not-for-profit affordable housing developers, managers and community activists