New York City’s Mayor Mike Bloomberg is in his last year of his third term in office. One of the signature achievements of the Bloomberg era is his affordable housing production initiative – called the New Housing Marketplace Program (NHMP) – that committed to meet the affordable housing needs of our city by creating or preserving 165,000 units of city-subsidized affordable housing. This commitment, which the administration is on track to meet, is one of the largest and most ambitious municipal affordable housing efforts in the nation’s history, and the Mayor’s perseverance, even through a severe economic downturn, makes the commitment even more remarkable.
But for too many New York City families and communities, the city’s sizeable investment has not had as much effect on their community as it could have. Especially, local housing advocates have frequently noted a mismatch between the units produced by the city and the incomes of the residents in the communities where those units are built.
Analyzing What Happened
Housing has long been one of the key focuses of fights for social justice in New York City, and housing advocates pushed hard to establish the consensus – embraced by Mayor Bloomberg – that effective New York City mayors build affordable housing. Our movement of affordable housing developers and activists worked closely with the mayor and the talented and committed staff he asked to implement his plan. And we applauded the program as it was enacted, building-by-building.
But now that a new mayor will take over at the start of the new year, we have the first opportunity in twelve years to re-set affordable housing policy. In preparation, my organization, the Association for Neighborhood and Housing Development (ANHD, an umbrella organization of not-for-profit affordable housing developers, managers, and community organizers across the five boroughs of New York City), conducted the first comprehensive study of the Bloomberg housing plan in order to better understand the strengths and weaknesses of the current policy and help inform the next era of city housing policy.
The report, Real Affordability: An Evaluation of the Bloomberg Housing Program and Recommendations to Strengthen Affordable Housing Policy, asks not just how many units were built, but also where the housing was built, how long it is affordable for, what size apartments, and how deeply affordable the units are. In raising these issues, ANHD hopes to spark a dialogue among affordable housing advocates, experts, and policy makers on how best to analyze our affordable housing production in a more comprehensive and nuanced way, and how to best shape our affordable housing policy to maximize the impact for local residents and communities.
We found a disconnect between the city’s momentous goal and the on-the-ground reality. While the New Housing Marketplace Program met an unprecedented benchmark, it misaimed by not taking into account the various aspects of affordable housing development that make a unit truly effective for a family and the community.
We know that not all affordable housing units are created equal. A subsidized studio apartment renting for $1,492 that is only affordable for 30 years is different from a permanently affordable, three-bedroom apartment renting for $531. The second unit:
Houses more people – a household of 4 to 6 persons versus a single individual.
Is affordable for a longer time period – permanent affordability versus expiring in 2041.
Serves a household with a substantially lower income and very limited options in the city’s expensive rental market – one with a total annual income of no more than $36,760, as compared to subsidizing an individual earning as much as $97,125.
Yet, both of these units were identically counted and celebrated by the city as “one affordable unit” successfully developed, which is the single, linear measure it used gauge the impact and effectiveness of its housing production program.
While producing a significant number of units is a very important part of addressing the city’s affordable housing shortage, the actual impact of each unit on the local community and the value created for the taxpayer also needs to be understood. This means including the depth of affordability, the length of affordability, the number of people served per household, and the additional services and benefits the housing brings.
In Real Affordability we examine:
Depth of Affordability: NHMP’s units often do not meet the actual affordability needs of the neighborhoods in which they were built. Approximately one-third of NHMP units have an upper income limit above the actual New York City median income. And in half the city’s community districts, the majority of units built in the community are too expensive for a household earning the local median income for that neighborhood.
Length of Affordability: City housing policy, including NHMP, has not preserved the long-term affordability of the units that are built, placing thousands of affordable units in jeopardy for our children and generations to come. Starting in 2017, the city will be at risk of losing an annual average of 11,000 units per year that were built with city subsidy. By 2037, the city could lose the affordability of as many units as were built by NHMP, greatly undermining the value of the city’s efforts. When the affordability restrictions on a unit expire, the city is stuck in a lose-lose scenario. Either the city loses vital affordable housing, potentially displacing families and putting them at risk of homelessness, or it has to overpay to keep owners from evicting tenants and cashing in on luxury rents.
Location: NHMP units were concentrated in a few community districts, although generally for valid development reasons. Five of the City’s 59 community districts account for 30 percent of all NHMP units built or preserved.
Household Size: NHMP unit sizes do largely match the distribution of household sizes for NYC. Two-, three-, and four-person households make up 56 percent of New York City households, and 58 percent of the NHMP units appropriate to house these size households.
One factor contributing to the strength or weakness of the units built is whether they were built by a for-profit developer or not-for-profit community-based developer. While this issue is not addressed directly in the report, the factors that go into the most effective housing development are more likely to be included if a not-for-profit developer built the project. A skilled community-based not-for-profit is more likely to build deeply affordable housing, provide de-facto permanent affordability because they generally find a way to maintain the low rents even past the expiration of the regulatory agreement, and strengthen neighborhood civic infrastructure through the planning and development process. New York City has among the strongest not-for-profit community development sectors in the country, with many groups that have fully modern development and management skills. Yet, the strengths that this sector brings for both the taxpayer and the community were too often ignored under the Bloomberg housing program.
The report outlines a new way of measuring the proposed impact of affordable housing development, called the Real Affordability Index. Instead of simply counting units, the index measures a development’s impact along different metrics – length and depth of affordability, as well as unit size and other community impacts a development might bring. By calculating the public impact gained, per subsidy dollar spent, advocates and the city can then tell which potential developments would be the best use of city subsidy. And that sounds like a good baseline for a municipal housing policy.
(See also the New York Times 2/14/13 coverage of this report.)