DeBlasio’s Next Battle: The Fight for Affordable Housing

5 thoughts on “DeBlasio’s Next Battle: The Fight for Affordable Housing

  1. I BEG of the media to stop talking about NEW “affordable” housing and talk about terminating the MCI (“major capital improvement”) loophole which incentivizes landlords to predatory practices. If MCI exemptions were reversed, we would not need any NEW housing, and people could live WHERE THEY ARE. http://parkslope.patch.com/groups/the-soapbox—nyc-govt/p/open-letter-to-mayor-deblasio–please-stop-talking-about-building-new-affordable-housing–bring-back-rent-stabilization–you-wont-need-new-anything

    1. I agree there needs to be better safeguards against that loophole I described. It’s insane that tenants are priced out of the same home they’ve occupied for years, because it’s suddenly been “revitalized”-especially bc they should have been entitled to these improvements throughout the duration of their tenancy. But until we get that reform, we’ll still need those additional units at reasonable cost.

  2. We most certainly do need more housing in this city, but I strongly disagree with your argument in addition to the fact that one of your primary claims is factually inaccurate. In your article you make the claim that renovations of existing rent-stabilized apartments “forces an individual who lived in formerly affordable apartments to move because they cannot afford to pay the increase in what their apartment is now supposedly worth.” This is not true according to the rent-stabilization code. A renovation on an apartment, called an Individual Apartment Improvement Increase (IAI) (please see: http://www.nyshcr.org/Rent/factsheets/orafac26.htm) allows an owner of a building with greater than 35 apartments to raise rents by 1/60th the cost of improvements and 1/40th the cost of improvements for buildings with 35 units or less on vacant apartments, not on occupied ones. The only other way to increase rents on existing buildings is via a Major Capital Improvement which is a rare occurrence because it is only granted with buildings with no existing outstanding violations, which applies to but a tiny fraction of multi-family buildings in this city. Aside from that, rents can only be increased on an annual or 2 year basis based on the amount decided upon from the Rent Guidelines Board.

    However, this is not the main point that your argument missed. Housing prices, just as with the prices for every other good or service, is the equilibrium between supply and demand. Despite the myriad of regulations and price restrictions that apply, prices of housing in New York City is no different in nature than the prices of oil, wood, or anything else. The problem is that even with rising demand, given the growing population, there is not a commensurate increase in the housing supply and the only buildings being built are either subsidized and income restricted or ultra luxury housing. This was not always the case. Most of the housing stock built in this city, during the 1920’s and 30’s, was built without any subsidies yet rents were much lower and affordable to the middle class on an inflation-adjusted basis. The difference maker is construction costs. Construction costs are astronomically high in this city today as a result of the myriad of state and municipal policies that make any type of building extremely expensive. Such policies include unreasonable liability laws that make insurance rates the highest in the country, the corrupt and graft-seeking DOB (which is well documented) which adds enormous “cost of doing business” expenses to projects of all scales, and of course zoning laws, with off street parking mandates and density restrictions that either outlaw new development or make it simply unfeasible.

    The state and city’s “affordable housing” program is not affordable at all. It simply shifts the astronomical cost of construction on to the public instead of actually reforming the policies that result in an acute housing shortage for a huge swath of New Yorkers. Our tax dollars should be used ONLY for public goods, as in goods or services that can be enjoyed by ALL New Yorkers at no cost (because we’re paying the cost via taxes). Such examples include education, parks, law enforcement, and the fire department. It should never be used for private goods such as housing, because the same money that should be used to provide badly needed classroom capacity and more (and better) teachers is instead going to build brand new housing with lots of amenities that only a very lucky few individuals will be able to enjoy. There is NO justification for this!!

    Bill De blasio’s plan is about 150 pages long, but it only passingly mentions construction costs and zoning in a couple of sentences. Inclusionary zoning is another bad policy it advocates for and is the opposite of a solution to our housing shortage. The zoning code should not restrict building densities in most parts of the city, especially in Manhattan. Inclusionary zoning is popular among politicians because it obfuscates the high cost of building by having the developer pay for it instead of the public, but it results in fewer housing units being produced overall which only shifts the supply curve inward, raising prices.

    The truth of this very important matter is that the government’s current prescription for affordable housing does absolutely nothing to address it, and it should be obvious to anyone seriously studying the matter it is completely the result of horrific public policy that housing supply isn’t being added to meet our growing population. We need to change our policies, which will have the benefit of dramatically reducing taxpayer expenditures and dramatically increasing both the supply and quality of our housing stock. Until this is done, housing prices in New York will continue to increase significantly so long as our population still grows. Unfortunately, people, especially immigrants, may begin to reconsider making New York home if our incompetent government doesn’t realize how it is causing this problem.

    1. Thank you Jackson. Your comments were very insightful! The one place I must respectfully disagree with you is on the point of landlords raising rents after improvements; to which you stated my position was factually inaccurate. After working in housing court and with community residents who have been the victims of predatory landlords, I can tell you firsthand that many times tenants who are not aware of their rights are forced out of their apartments under the auspices of increased rents. While your position exists in theory, in reality/practice you would be unpleasantly surprised at how frequently this occurs.

    2. Jackson Strong: you missed my post’s meaning entirely. Everything you wrote about pertains to market forces and the very point of rent stabilization is to exempt having a safe place to live from those market forces. The very idea of rent regulation sets itself apart from the market. That is the point of it. The loophole of “capital improvement” is exactly that. A loophole. Units that had been deemed regulated – are taken out. This causes communities to fall apart. Many believe that housing is a human right, and should be treated the same as our right to clean water and (theoretically) air.

      DeBlasio is pouring huge $$ public money into building NEW “affordable” housing but not in helping people stay in their homes. He should focus on discontinuing the capital improvement exemption. If he did this, communities would be saved as well as billions of dollars. There would be no need to build new housing — except, perhaps, the pressure from developers and construction companies who compete for the contracts.

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