Mamdani and Affordable Housing Development

CNN quoted me in Zohran Mamdani Has Big Housing Plans. Here’s What Stands in The Way. It reads, in part,

Mamdani’s rent freeze plan could undermine his goal of building 200,000 publicly subsidized, rent-stabilized, permanently affordable homes over the next decade for low-income households and seniors.

That’s because the private sector may be dissuaded from participating if these buildings don’t include market-rate housing. The private sector has a “very important role” to play in building housing, Mamdani has said.

“A rent freeze will change how a conversion might pay off for the developer,” said David Reiss, a law professor at Cornell University who served on the Rent Guidelines Board under Mayor Bill de Blasio.

And to be permanently affordable for extremely low-income renters, it will require deeper government subsidies than Mamdani has pledged, experts say. Previous New York City mayors have attempted to produce housing for a wide range of incomes to help offset higher subsidies for deeply-affordable units.

“It’s in the right direction to focus on people with the greatest affordability challenges,” said Alex Schwartz, an urban policy professor at The New School and a current member of the Rent Guidelines Board. “It’s important to recognize that the capital dollars won’t go as far in terms of total numbers of units if they only go toward people with extremely low incomes.”

Mamdani wants the city to borrow $70 billion to build affordable housing over the next decade, on top of the roughly $25 billion it already plans to invest.

That’s no easy task – he will need state approval since the plan would exceed the city’s debt limit by around $30 billion, as well as the New York City Council’s approval of zoning reforms that would make it easier to build.

“This would be a significant increase in city capital to produce deeply affordable housing,” said Rachel Fee, the executive director of the New York City Housing Conference, a non-profit affordable housing policy and advocacy organization. “It’s not something he can just implement on his own. It will take a political coalition to make this happen.”

 

Rent Freezes in NYC

Zohran Mamdani, Democratic Nominee for Mayor of NYC

The New York Times quoted me in Free Buses and Billions in New Taxes. Can Mamdani Achieve His Plans? It reads, in part,

A major pillar of Mr. Mamdani’s economic plan is housing: He wants to build 200,000 units of affordable housing and freeze rent on the city’s nearly one million rent-stabilized apartments.

But to build, he has said the city will have to borrow $70 billion, exceeding its debt limit by some $30 billion. Going over the limit would require state approval.

Freezing rent, on the other hand, is relatively straightforward and has precedent. But there are consequences.

Mayors cannot freeze rent on their own, but they do appoint the nine members on the Rent Guidelines Board, which sets rents on the city’s rent-stabilized units.

David Reiss, who served on the board under Mr. de Blasio, said that before it voted, members generally considered the overall state of housing in the city, including affordability, landlord expenses and economic conditions.

He said that members could decide that affordability was the most important factor and vote to freeze rents, as they did in 2015, 2016 and 2020.

“A rent freeze would meet the needs of a lot of people who are having a hard time keeping up with their rent,” Mr. Reiss said, “but it’s an unsustainable operation.”

Landlords, including those whose buildings have a large majority of rent-stabilized units, are increasingly saying that they are not collecting enough rent to maintain units.

“Are we going to be pushing a distinct portion of the housing market into great distress because their expenses are outstripping their income?” Mr. Reiss said.

Amazonian Rage in NYC

photo by Theeditor93

Vice quoted me in Amazon Is Bringing in Elite Lobbyists Amid Seething Rage Over HQ2. It opens,

Amazon might be too big to tax, but it’s not too big to freak out.

As the company tries to erect a massive headquarters in America’s largest city, it has come up against staunch opposition from residents, politicians and unions—all concerned the powerful monopoly will serve to inflate rent and strain local infrastructure, especially the housing supply and subway system. And while it might seem like a trillion-dollar company could easily quash protesting naysayers, turns out CEO Jeff Bezos might actually have good reason to try and win the haters over.

On Wednesday, the Wall Street Journal reported Amazon hired high-powered Democratic consulting firm SKD Knickerbocker, and a lobbying shop called Greenberg Traurig, to help smooth the way forward for its new HQ. While Amazon remained relatively tight-lipped, the company has sought to make inroads into affected communities—planning meetings with public-housing residents and reaching out to members of the city council. But some elected officials, including Senator Mike Gianaris and NYC Councilman Jimmy Van Bramer, whose districts include the HQ’s proposed turf in Long Island City, have refused to serve on its advisory board, indicating instead a desire to kill the project entirely. Meanwhile, a Quinnipiac poll that dropped this week showed the majority of NYC residents backed the HQ2 plan, but activists groups and community board members have continued to organize, spurred on by Congresswoman-elect Alexandria Ocasio-Cortez—or at least her Twitter account.

In fact, the new Amazon influence operation, which emerged a few weeks after HQ2 plan was made official, suggested there were still concrete ways locals could thwart or at least put a dent in the company’s expansion scheme. If nothing else, an extremely-powerful company that has experience in the DC lobbying game is finding out it won’t get a new home in NYC without a fight that cuts at the core of the Democratic Party’s identity.

According to Richard Brodsky, a lawyer and veteran Democratic politician who served in the state assembly, if city officials or other activists took Amazon or the politicians who supported the plan to court, they could employ legislative subpoenas to demand more documentation of the project, and investigate compliance issues. Brodsky argued Amazon’s bid might provide the jobs promised, but that the company still had a long way to go in informing the public about how it would impact communities.

“Because the governor and the mayor have given this project to a set of soviet-style bureaucracies, there’s no one to ask the questions and no one to answer,” he told me, referring to the special fast-track process Mayor Bill de Blasio and Governor Andrew Cuomo, both Democrats, have tapped to push through the Amazon deal. “Who the hell do you ask?”

Litigation is a fairly common way of handling disputes over projects like this in the city, according to David Reiss, a law professor and expert on community development at Brooklyn Law School. “Not being a shy bunch, New Yorkers often file lawsuits that try to set up procedural roadblocks to the project,” he told me via email. “These suits can slow down or even stop projects—and can give community members leverage with the City, State and project developers.” Even if it isn’t stopped altogether, legal action could help modify the project and fund parks, schools or transit.

Under the current approach from on high, however, the Amazon HQ also had to be approved by the Public Authorities Control Board (PACB), comprised of gubernatorial appointees mostly made in consultation with the state legislature. This may prove to be among the only serious points of leverage Amazon opponents have to stall, or, in an extreme case, block the whole project. Even then, Brodsky said, the PACB was only technically supposed to oversee financial concerns, and not necessarily gauge a project’s social impact.

The city, for its part, appeared to largely be standing behind its original plan as it geared up for public hearings beginning next week. A spokesperson from the NYC Economic Development Corporation, the nonprofit development agency contracted by the city that helped broker the deal, told me Amazon was working to broker partnerships with affordable-housing developments and other community organizations, as well as provide concrete details about the 25,000 jobs promised in the company’s initial memo about the project.

The spokesperson also dismissed the idea that the new HQ would strain the city’s mess of a public transportation system. They argued the current flow of traffic on the subway routes amounted to Queens residents commuting to Manhattan for work, and that the “reverse commute” of Amazon employees coming to Long Island City would balance things in the other direction, not jam up trains in some new way. (It’s worth noting that Amazon employees were already reportedly looking for rental properties in Long Island City proper.)

Those resisting the headquarters, however, were unlikely to be swayed by more details, logistical help, or civic engagement on part of a brand many despised for what it represented in the annals of modern capitalism. Ocasio-Cortez, who has become a national spokesperson for anti-Bezos sentiment and a leading light of a left-wing insurgency in the Democratic Party, took to Twitter again on Tuesday: “Now what I DON’T want is for our public funds to be funding freebie helipads for Amazon + robber baron billionaires, all while NYCHA and public schools go underfunded & mom+pops get nowhere near that kind of a break,” she said, capturing criticism of some of the most comical parts of the Amazon deal as brokered by de Blasio and Cuomo.

Ocasio-Cortez’s Democratic Socialist bent may still be a nascent one, and her job in DC means local activist groups will have to lead the fight on the ground. (Some unions actually supported the deal, further exposing the internal Democratic Party divide at issue here.) At the same time, it’s important to look back to previous massive corporate deals for context on what’s going on. While Amazon, as a company, doesn’t have many contemporaries in the city trying to launch a new home at this scale, the way stadiums, universities and other hubs have been constructed in NYC in the past will help inform what does—and doesn’t—happen in Long Island City.

The EDC spokesperson, for example, pointed out that other big projects—such as Columbia University’s expansion and Atlantic Yards—were also achieved via a General Project Plan pushed through by the state instead of undergoing to the more public land review process at the city level. Using that fast-track in Amazon’s case has been a key flashpoint in the dispute over its origin, garnering frustration from Van Bramer and his colleagues. (Announcing a project before knowing the specific details, the EDC spokesperson insisted, was par for the course in cases like this one.)

This fast-tracking does happen often with larger projects, Reiss agreed, noting that land procedures can be bypassed when the state government is involved, leaving some feeling like their voices were ignored. “This can cut deeply because they are often the ones who are most affected by the negatives of the construction process and the changes that the project bring about in their communities,” he told me.

Reiss on Urban Planning Legacy of the Bloomberg Administration

The BLS Real Estate Society is sponsoring The Zoning and Urban Planning Legacy of the Bloomberg Administration on Monday, November 25th from 6:30 p.m. – 9:00 p.m. in the Student Lounge on the first floor of Brooklyn Law School, 250 Joralemon Street. The press release reads:

Come hear two real estate experts discuss and debate zoning and urban planning issues and the legacy of the outgoing Bloomberg Administration.

Panelists

Mitchell Korbey ’03, Chair of Zoning and Land Use Group, Herrick Feinstein

David Reiss, BLS Real Estate Professor (previously Paul Weiss, and Morrison & Foerster)

No RSVP is required for this event. Contact Rafe Serouya at rafe.serouya@brooklaw.edu for more information.

Mitch’s bio reads in part,

Prior to joining Herrick, Mitch served for six years as commissioner of the New York City Board of Standards and Appeals under Mayor Rudolph Giuliani, and as director of the New York City Department of City Planning’s Brooklyn office, where he guided Brooklyn’s first mixed use zoning districts through the public review process and spearheaded plans for the rezoning and revitalization of a number of neighborhoods, including Williamsburg and Greenpoint.  Prior to running the Brooklyn office, Mitch was deputy director of the Staten Island office and served in the City Planning Department’s Housing and Economic Development Division.

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Mitch is an Adjunct Professor in Hunter College Graduate School’s Urban Affairs and Planning Department where he teaches Land Use Law and leads a seminar entitled “Lawyers and Planners in the Development Process.”  His insights on real estate development and the intricacies of local zoning laws have appeared in major real estate and business publications, including Crain’s, The New York Times and The Real Deal.

He is also a co-author of Herrick’s land use and zoning blog, ZONE, which keeps readers up-to-date on the latest issues in land use and environmental law.