Bloomberg Pulls Back on Commitment to Affordable Housing

New Housing Finance Plan Reduces Long-Term Affordability.

New York City has took a big step backward in affordable Housing Policy with the release yesterday of part of the City’s housing finance plan for the year. The past ten years of the Bloomberg housing program have seen an impressive commitment to affordable housing – building or preserving over 100,000 units, innovations such as inclusionary zoning, and extending the term of affordability to make sure that the housing built is there for future generations and the taxpayer investment not given away. Just recently, at a local groundbreaking, Mayor Bloomberg reiterated this commitment to long-term affordability, saying “Long-term affordability gives families spending power to put back into local economies, which in turn builds confidence in communities that attracts further investment and new jobs.” Yesterday, however, the Mayor took a major step backward that damages his legacy as an affordable housing innovator. The Mayor cut in half the planned length of affordability for tax-credit financed affordable housing projects from 60 years to 30 years. Tax-Credit financing is the largest source of affordable housing equity the city has at its disposal, and the majority of affordable housing developments are financed with some form of Tax Credits. “In 2011 every single tax-credit project financed by HPD pledged affordability for 60 years. Under this new plan, the requirement is only for 30, with a small incentive for 40. I don’t see how the Mayor can invest so much in affordable housing, and then cut affordability in half with a stroke of a pen,” said Benjamin Dulchin, Executive Director of ANHD. Tax-credit financing is governed by a point system known as the “Qualified Allocation Plan” or “QAP,” with project proposals with the most points gaining funding. All projects are required to be affordable for 30 years. For the last 6 years, the QAP has had 10-15 points for long-term affordability, with most projects pledging 50 or 60 years of affordability – all at no additional cost to the city. When the first draft of the 2012 QAP came out, the city had proposed that all affordable housing developments pledge 60 years of affordability. However, when the final draft came out, that had been cut in half to 30, with only 3 points for an additional 10 years (unless the development is done via a supportive housing program, in which case the incentive is for 30 additional years). This puts the Mayor’s plan not only behind New York State, but several other cities such as Boston, San Francisco, and Los Angeles as well. We only have to look at the Mitchell-Lama developments of a few years back to see what the Mayor’s New Housing Marketplace holds for the future under the current regulations. “Mitchell-Lama was a great housing plan, but there was a crucial loophole – the affordability was only for the short-term.” Dulchin continued. “When the restrictions on a development expired, the city was stuck with a lose-lose: either vital, affordable housing would disappear, potentially displacing the long-term residents, or the City would have to pay through the nose to preserve the affordability of these units under the current market conditions where owners could cash in on luxury rents. With this return to short-term affordability under Bloomberg, we’re concerned that this going to be the legacy of the New Housing Marketplace as well.” (The Draft and Final 2012 Qualified Allocation Plans, and the 2007 - 2011 Qualified Allocation Plans can be found here).