Questions on affordable housing

Any description other then “crisis” understates the situation with regard to housing in New York today. Sixty thousand souls are homeless, nearly half of them children. Thirty percent of our brothers and sisters in the Bronx are spending 50 percent or more of their income on shelter, often forcing them to choose between adequate food, medications or a roof over their heads. This, in the richest city in the world, where oligarchs from around the world are buying $50 million condos, which they leave vacant for half the year to avoid paying city income taxes.

Mayor Bill de Blasio came into office pledging to create and preserve 200,000 units of “affordable” housing. He has gotten off to a slow start, having probably underestimated the intractability of the problem. His Department of City Planning has now come forward with proposed zoning changes to promote affordability.  While the final proposal has not yet been made public, its basic contours have been clear for some months. The underpinning is a reliance on the private sector to provide affordable housing by providing benefits in return for doing so.

Benefits to private developers can come in two forms: tax reductions or increased allowable floor area (rentable space). The planning proposal takes both approaches. By permitting increased allowable height and site coverage, as well as lowering off-street parking requirements, more rentable residential space can be built. By making so-called “inclusionary housing” mandatory, a tax trade-off as well as increased allowable floor area is utilized. Inclusionary housing provides a tax reduction for a developer in exchange for creating “affordable” housing. The current projection is that the number of affordable units will need to be around 25 percent of the total units. The state has taken a similar approach with the 421-a program, which is intended to produce affordable units through tax advantages.  It has so far proved mostly ineffective.