2 Steps for Mixed-Income Communities

Two Steps For Mixed-Income Neighborhoods:  New Furman Center Report Makes the Problem Clear

On Tuesday, the Furman Center released its report Housing, Neighborhoods, and Opportunity: the Location of New York City’s Subsidized Affordable Housing.  The report is an incredibly rich documentation of exactly where, and in what types of neighborhoods, affordable housing exists. The details are fascinating, but the overall conclusion is unsurprising – affordable housing mostly gets built in poorer neighborhoods with worse schools, crime, and access to transit & amenities, while once-affordable housing is most likely to cash out and go market in wealthier areas.

You might think there’s not much we can do about this – after all, New York is expensive, and it’s always more lucrative to do high-end luxury in desirable neighborhoods. But there are actually two concrete things the city can do to help better create the mixed-income neighborhoods that New Yorkers want to live in, and that we know are the right social policy.

First, we can make sure that two tools we do have for building affordable in high-income areas are strengthened: Inclusionary Zoning and the 421a program. Both of these allow the city to leverage some affordable housing out of the high-end luxury construction in exchange for tax breaks and zoning bonuses. Unfortunately, the real estate industry is always looking for workarounds – getting the tax benefits and zoning incentives, but shifting their responsibilities for building affordable elsewhere, or finding ways to do it on the cheap. That’s why we’re saying No Loopholes in the 421a renewal: it’s simple: if you get a tax break for the building, the building has to have real affordable housing. No poor doors, no housing that’s called affordable actually isn’t, no shuffling off the affordable housing down the block or to a different neighborhood. Developers look to maximize every dollar they can through these loopholes – it’s up to the city to make sure they close them up.

The second is to utilize Non-Profit, Community-Based Developers who can be expected to keep the housing  Permanently Affordable. With nonprofit developers, you don’t have to worry that affordable housing will cash out and go to market. It an easy fix to a large future problem.

With the changes in New York over the last few decades, the city should realize by now that all neighborhoods were you build affordable need to have an owner committed to staying affordable – not looking at the dollar signs down the road with one eye. After all, as the Furman report shows, many of the neighborhoods where large amounts of affordable housing was built during the 1970s, 1980s, and even into the 1990s weren’t thought of as the kind of neighborhoods that might someday be desirable for people all over the world. But now they are, and private developers who were given vacant land and buildings during this time now have a city-sponsored windfall. Most of the housing that does stay affordable in these neighborhoods today was built by nonprofit Community Development Corporations.

Unfortunately, the City doesn’t seem to have learned this lesson – instead continuing to rely on short-term affordability by profit-driven businesses. Just recently, the city gave away a 5.7 million dollar piece of vacant land to a private developer for short-term affordable housing that can eventually be cashed out – even though a local nonprofit was better qualified, offered more affordability, and could be relied upon to keep the buildings affordable even if East New York eventually turns into the next Williamsburg.

Our housing crisis in New York is a tough, and seemingly unending. But there are things we can do, and if the city wants to put the brakes on slow squeeze of affordable housing out of high-opportunity neighborhoods, it can. Without these two changes, we’ll be looking at another report in a few decades just like this one – only worse.