Tag Archives: NYC

Planning and Protesting at the Brooklyn Book Festival

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I will be moderating a panel at the 2014 Brooklyn Book Festival on Sunday, September 21st at 10am in the Brooklyn Law School Moot Courtroom.  The panel is

Planning and Protesting: Cities Evolve!
With the city constantly evolving, each major project has its supporters and protesters. Authors Gregory Smithsimon and Benjamin Shepard (The Beach Beneath The Streets – Contesting New York City’s Public Spaces) and Daniel Campo (The Accidental Playground: Brooklyn Waterfront Narratives of the Undesigned and Unplanned) and Peter Linebaugh (Stop, Thief! The Commons, Enclosures, and Resistance) discuss how public space is shaped through policy, perspective and protests, how to agree to disagree, and the dynamics of shaping a city’s growth and change. Moderator David Reiss, Professor, Brooklyn Law School.

Compact Units: Mountain or Molehill?

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NYU’s Furman Center has posted a short Research Brief, Compact Units:  Demand and Challenges. The brief notes that there is no formal definition of a compact or micro unit of housing, but

the term is typically used to refer to units that contain their own bathroom and a kitchen or kitchenette, but are significantly smaller than the standard studio apartment in a given city. Accessory dwelling units (ADUs) are self-contained units located on the property of a single-family home. Sometimes ADUs are separate structures, like a cottage on the same lot as a primary dwelling; sometimes they are attached to the primary structure, located in a basement, in an extension, or over a garage.

Proponents of compact units argue that they allow seniors to live independently, respond to changing household sizes and demographics, reduce sprawl through urban infill, mitigate the environmental effects of larger developments by reducing energy consumption, free up larger units for families, and help cities provide housing affordable to a wider range of households. (2)

The brief is a very useful overview of the debate concerning compact units but my own take is that they represent a mere molehill of possibility when it comes to affordable housing. No new construction in cities, unless heavily subsidized, is geared toward low-income households and probably only a small portion of such new construction is geared to moderate-income households. The economics of new construction just don’t allow it.

This is not to say that New York City shouldn’t change its larger-than-average minimum unit size regulations (400 square feet) so that they are in line with those of other cities (220 square feet). These small units could work well for all sorts of one-person households, which, by the way, make up more than half of all households in NYC. They just wouldn’t be low-income households. But, by expanding the total number of units available, they can put at least some downward pressure on rents.

My bottom line: compact units are good, but they will not provide the mountain of affordable housing that some claim they can.

Location Affordability in NYC

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Following up on two earlier posts (here and here) about Citizens Budget Commission policy briefs on housing affordability, I turn to a third one, Location Affordability in Large U.S. Cities. As a refresher, “Location affordability recognizes that the costs of housing and transportation, usually the two largest items in household budgets, are inextricably linked, and considering them together in relation to income gives a good sense of a city’s location affordability.” (1) the CBC’s key findings are that,

  • For moderate- and middle-income households, location costs in New York City are below the 45 percent affordability threshold due mostly to low commuting costs. New York City ranks well—ranging from second to sixth most affordable—among the 22 large cities.
  • For low-income households, location costs in New York City exceed the affordability threshold. A low-income family requires 47 percent of income for these costs and a single worker household requires 56 percent; for a single person earning a wage at the national poverty line, location costs in New York City are particularly burdensome at 101 percent of income. Almost all cities examined were unaffordable to low-income households. (1, citation omitted)

There are a lot of interesting implications that arise from these policy briefs.  Most important, they provide another (if it were even necessary) argument that scarce affordable housing dollars should be concentrated on low-income households. After all, NYC moderate- and middle-income households are doing better than in most other large American cities when transportation expenses are taken into account in an affordability index.

It would be most worthwhile for the de Blasio Administration to incorporate something like HUD’s Location Affordability Index into its housing plan.

Location Affordability

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Following up on an earlier post on NYC’s (Affordable) Housing Crisis, I turn to the Citizen Budget Commission’s report on Housing Affordability Versus Location Affordability. The report opens,

How much more would you pay for an apartment just a short walk from your job than for an equivalent apartment that required an hour-long commute by car to work?

This question highlights two important points about the links between housing costs and transportation costs. First, transportation costs typically are a major component of household budgets, usually second only to housing. Second, a tradeoff between housing costs and transportation costs often exists, and taking both into account can provide a better measure of residential affordability in an area than only considering housing costs.

In recognition of these important points, the U.S. Department of Housing and Urban Development (HUD) has developed a Location Affordability Index (LAI) that measures an area’s affordability based on housing and transportation costs relative to income. This policy brief uses the HUD data to compare costs for a typical household in New York City to those in 21 other cities . . .. (1, footnote omitted)

The report finds that “Low transportation costs and high incomes make New York City relatively affordable: New York City is in third place in location affordability. Housing and transportation costs for the typical household are 32 percent of income in New York City, with lower ratios only in Washington, D.C. (29 percent) and San Francisco (31 percent). This is well within HUD’s 45 percent affordability threshold for combined costs as a percent of income.” (1)

This report makes a very important point about the cost of living in different cities. It should also reframe some of the national discussion about affordable housing policy. It would be great if there were a way to account for length of commute in the Location Affordability Index to make a better apples to apples comparison among cities when it comes to the housing choices that are available to households.

NYC’s (Affordable) Housing Crisis

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The Citizen’s Budget Commission is releasing a series of Policy Briefs on affordable housing in New York City. They raise interesting questions. The first policy brief, The Affordable Housing Crisis: How Bad Is It in New York City, compares the affordable housing situation in 22 large American cities and finds that NYC is not the worst, notwithstanding how many New Yorker’s feel about it. Some of the particular findings included,

  • New York City relies more heavily on rental, as opposed to owned, housing than all other large cities; more than two of every three occupied housing units are rental.
  • The increase in housing supply since 2000 was slower in New York City than in every other large city with population growth.
  • New York City does not have the highest average rents. New York City median rent ranks sixth most expensive among the 22 cities, slightly worse than 2000, when it ranked seventh.
  • New York City is not the most unaffordable: New York City ranks ninth worst in rental affordability, defined as the percent of households spending more than 30 percent of income on gross rent. This is slightly better than its eighth worst ranking in 2000, although the share of renters with burdensome rent increased from 41 percent to 51 percent.(1)

For me, the real story is the second bullet point.  New York City had the fourth slowest growth in the number of housing units out of the 22 cities, notwithstanding the fact that it has always had a limited supply and compounded by the fact that its population has been growing significantly for quite some time. It is depressing to learn that “the number of housing units in New York City increased” only 5.8 percent between 2000 and 2012. (2) This leaves New York City with a vacancy rate of 3.6 percent in 2012, which means that we are a long way off from making a serious dent in the affordability problem. The de Blasio administration has made affordable housing a centerpiece of its agenda. This report reminds us that part of the solution to the affordable housing puzzle is just building more housing overall. We have lots of pent up demand, we just don’t have the supply. That is one reason the rent is too damn high!

Reiss on the Poor Door

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Law360 quoted me in ‘Poor Door’ A Symptom Of Tough Balancing Act In Housing (behind a paywall). It opens,

Extell Development Co.’s so-called “poor door” — a separate entrance for affordable housing tenants at a development on Riverside Drive — made headlines last week after receiving official approval, but experts say the controversy clouds the reality of balancing private and public housing interests in a city like New York.

The building and its “poor door” first caught the world’s attention last year, when the developer released renderings for the project that showed separate doors for condominium buyers and affordable rental tenants.

It wasn’t the first setup of its kind, particularly not in New York City, but with news of growing inequality around the country and especially in large urban areas, many criticized the separate door as classist and suggested that affordable housing tenants were being treated as “second-class citizens.”

The controversy erupted again last week when the Department of Housing Preservation and Development confirmed that it had approved Extell’s application for the department’s inclusionary housing program, which gives the developer access to certain incentives in exchange for adding to the city’s affordable housing inventory.

Many have argued that the trade-off may not be worth it: If developers that qualify for such programs end up relegating lower-income tenants to a separate entrance, are those tenants benefiting fully from the city’s efforts to house them?

“One reason that the ‘poor door’ issue touches a nerve is that real estate and class are so closely linked in New York City,” said David Reiss, a professor at Brooklyn Law School who focuses on real estate finance and community development. “Affordable housing units are seen as a great equalizer. The notion that someone living in an affordable housing unit must be constantly reminded of their status is repugnant to many.”

This has led to headlines around the world proclaiming Extell’s design and the city’s approval a “disgrace.” But experts say the question of what to do about such practices is not that simple.

Inclusionary housing has been a major tenet of Mayor Bill de Blasio’s plan to add or maintain 200,000 affordable housing units over the next decade. In a city with such high land prices and rents, it has become clear that developers need some kind of incentive to include affordable housing in their projects, and the mayor and city council have made a series of adjustments and concessions to get such housing into projects like the new Domino Sugar Factory development and under-construction buildings at Hudson Yards.

But just how affordable and market-rate housing should be built together in these developments has not been as closely considered, and experts say the “poor door” controversy may just be the first of many unanticipated issues in need of creative solutions.

To get around the issue of affordable units having different entrances or looking different and having different amenities from market-rate units, some have suggested making the units indistinguishable, but Reiss warns that this might cause additional problems.

“For instance, given a particular amount of funding for affordable housing, is it better to build fewer units of affordable housing that are indistinguishable from market-rate units in a Manhattan building, or is it better to build more units of affordable housing in an outer-borough — and therefore cheaper — building?” he said. “There is no right answer to that question. Each reflects a policy preference. But it is most important to realize that a trade-off between cost and number of units exists.”

NYC’s Abandoned Public Housing

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The Community Service Society issued an important report, Strengthening New York City’s Public Housing. Public housing has a terrible reputation in much of the country, but the New York City Housing Authority traditionally had the reputation, notwithstanding its real flaws, as the best large public housing system in the nation. This report makes a strong case that many of its current flaws are the result of systemic disinvestment at the federal, state and local levels in recent years. The report concludes,

the analysis confirms the reality of the appalling living conditions in NYCHA apartments reported by residents and the media for several years. But the Authority’s reputation or its competence should not be at issue; it performed relatively well until its resource base fell apart in the period following 2001. Government defunding was and is the root cause of the accelerating deterioration over the last decade. The state and city were major contributors to that decline, often at levels equivalent to the federal disinvestment. They should be open to a major role in restoring NYCHA.

Moreover, existing institutional arrangements that make NYCHA opaque to public scrutiny need to be changed—those that mask the Authority’s financial condition and its failures to comply with local housing and building codes—because they cloak the real consequences of government defunding and, as a result, deprive residents, advocates, concerned elected officials, and the interested public of the information they could use as ammunition to press for needed resources. The NYCHA Board also needs to be freer to act as a leading advocate for the Authority. Its governance structure should be reconsidered to assure the Board the independent voice it needs to better make the case for itself and its residents. (27)

The de Blasio Administration has made affordable housing a centerpiece of its agenda, so there is reason to think that this report will get its attention. Let us hope so — there is a lot of solid infrastructure which just needs its deferred maintenance issues addressed. But the report also highlights various operational changes that can lead to real improvements in the lives of NYCHA residents.  These reforms could provide many low-income households with decent homes.