The Fannie Mae Foundation, in partnership with the Kennedy
School, has chosen to provide an award in housing and community
development. These issues of affordable housing and homes
for working families are extraordinarily difficult. In particular,
the percentage of family income necessary to have a decent
home continues to go up, supply cannot meet demand, and
it is not likely that all those problems will be solved
with federal dollars. For these reasons, Fannie Mae Foundation
partners with us in making a $100,000 award annually to
the most creative and innovative solutions in housing and
community development.
INTRODUCTION
Lisa Mallory-Hodge, Managing Director for Policy
and Consulting, Fannie Mae Foundation
It is a pleasure to be here with the Manhattan Institute.
We have been collaborating with them for some time and support
their efforts to recognize innovations. I am also pleased
to be with the Ash Institute, as we have been working with
them for two years now, recognizing innovations in affordable
housing. I recently
had the pleasure of participating in the review of some of
the finalists for the Ash Award a couple weeks ago in Boston,
and it was just amazing. There were over 1,000 applications,
and we only select one winner out of each category. We support
one winner here, but there are wonderful things going on,
and it is striking to see the determination and perseverance
of folks who are toiling out there everyday to support affordable
housing and other causes.
Brad Lander is the Director of the Pratt Center, and he
previously served as the Executive Director for the Fifth
Avenue Committee. He was one of the Fannie Mae Foundation
James A. Johnson Community Fellows in 2003, and is also
an adjunct professor of City and Regional Planning in Pratt’s
Graduate Center for Planning and the Environment.
Mercedes Marquez has been the General Manager of the Los
Angeles Housing Department since 2004. She has a staff of
over 500 people, and is responsible for the direction, development,
and implementation of citywide housing production and preservation
programs. Mercedes was formerly Vice President of McCormack
Baron Salazar, a national firm specializing in the development
and consultation of urban communities. She was also last
year’s Ash Award winner.
BRAD LANDER: When Julia Vitullo-Martin asked me
to participate in this discussion, I was enthusiastic because
I have respected Los Angeles’s great Systematic Code
Enforcement Program (SCEP) for a long time.
As everybody knows, it is exciting to create new affordable
housing. We love to develop it, we love to build it, and
we have a great new plan in New York City to build something
like 94,000 units over ten years. In many ways, however,
it is even more important to preserve what we have, not
only because it is less expensive, and the history of trying
to do it is longer, but because the scale and the numbers
are simply much bigger. Millions of New Yorkers live in
affordable housing today, and it is important to make sure
it stays affordable for the long run.
I have a few thoughts about similarities and differences
between New York and Los Angeles, and then I will give a
quick update on New York City strategies in preserving affordable
housing. The similarities, I think, are obvious: Enormous
population growth, largely as a result of immigration; an
increasingly polarized service economy, with many new people
at the low end of the income and wage scale; rising prices,
both rental and ownership, making it ever harder for people
to find a place in the city; people paying more of their
income for rent, and more people needing affordable housing.
All of this creates challenges. For example, landlords who
withdraw services in an effort to get rid of the current
tenants and replace them with people who would pay a little
more. It means some challenges in terms of neighborhood
livability as well, as growth puts pressures and strains
on a whole range of neighborhoods. I was looking at the
numbers, and the housing cost burden is very similar in
New York City and Los Angeles. The rental vacancy rate is
extremely low, and there are also similarities between affordable
housing preservation strategies in these two cities, in
particular preserving the existing privately owned or publicly
subsidized stock, rent regulations, and code enforcement
and conditions.
There are also some differences, which largely revolve
around scale. New York City has approximately 2.2 million
rental units, while Los Angeles has only 800,000. The average
date of construction of these units in New York City is
1949, as opposed to 1960 in L.A, though interestingly, crowding
is almost twice as high in Los Angeles. From a preservation
point of view, New York City has a much longer history of
developing affordable housing with city, state, and federal
subsidies. Over its history, New York has built about 430,000
units of affordable housing, whereas Los Angeles has built
about a tenth of that. L.A. has a lot of catching up to
do, which is why I think that focusing on the private market
through code enforcement makes a lot of sense.
Preserving the existing stock is an enormous challenge
in Los Angeles, and they are doing a number of things there
to meet the significant challenge of trying to preserve
between 200,000 and 250,000 units of privately owned but
publicly subsidized development. Community Service Society
just came out with a report that says about a quarter of
that stock has been lost as affordable since 1990, and around
15-20% of it is at risk in the next few years as a result
of the expiration of the subsidies and the regulations that
go along with them.
New York and Los Angeles are grappling with this, trying
to think about it as a portfolio problem rather than putting
out fires one at a time, and thinking about new regulatory
tools. For example, Mayor Bloomberg has proposed legislation
in Albany to extend rent regulations to cover the post-1974
developments, adding some regulatory incentives for owners
to keep them in the programs, and then come up with new
financing strategies to enable nonprofits and for-profits
to acquire them and keep them affordable for the long term.
I think both New York City and Los Angeles are facing challenges
in dealing with the U.S. Department of Housing and Urban
Development (HUD) and getting what they need from the federal
government, especially on the federally subsidized stock
to try to keep it affordable for the long term.
The same is true in public housing. New York City recently
announced a significant new plan to preserve the 180,000
units of public housing that it has, relying on a $100 million
commitment from the city, rent increases on the top quarter
of NYCHA tenants, and project-basing about 8,500 Section
8 housing cost vouchers. The vouchers have become the most
controversial part of the plan, since they are obviously
a scarce resource.
Rent regulation is the second subject I would like to address.
New York City and Los Angeles are two of the only cities
in the country that have significant programs of rent regulations,
and I think, in the kind of economy we have at this moment,
we do need to regulate to make sure folks can stay in their
homes. If we thought it was something we needed for returning
veterans in WWII, it seems to me, we ought to think it is
necessary for the immigrants we are asking to come here
and do the service work, healthcare jobs and the retail
jobs that our economy is creating.
Both cities regulate housing that was built before the
1970s. New units are not necessarily covered if they do
not opt in for one reason or another. One significant difference
is that Los Angeles has essentially full vacancy decontrol,
which means that the city regulates an existing tenant.
You can only have an annually-set increase. When a tenant
moves out, the unit is able to go to market, and advocates
have felt that this creeping vacancy decontrol has resulted
in more than 100,000 units leaving the rent regulation system
and being lost as a regulated affordable resource.
The third issue is code enforcement and housing quality,
in which L.A. has been a leader. Overall, conditions in
New York housing and neighborhoods have been improving over
the last decade as the city has gotten stronger and its
economy has rebounded. At the same time, there are a significant
number of places and buildings where housing conditions
are bad, and in fact getting a little bit worse. Between
2002 and 2005 there was a slight up tick from 4 to 4.9%
in the housing stock that had five or more severe maintenance
deficiencies per unit, and of course these are concentrated
in low-income neighborhoods in Harlem, the Bronx and Central
Brooklyn. As a result of innovation from HPD and pressure
from community groups and advocates, the city is trying
several new things in partnership with others. One program
is modeled after Los Angeles’s SCEP program; the New
York City program is the Targeted Cyclical Enforcement Program
(TCEP). While L.A. inspects every unit, New York focuses
on the buildings that are in the worst shape, and every
two months in three city council districts, HPD, a city
council member, and the community group sit down and target
the worst buildings for enforcement. They will inspect 7,500
units or so a year, and at that rate it would take 293 years
to get to the entire city. However, the new program has
certainly made significant progress since its adoption just
a few months ago.
In partnership with an advocacy group, Housing Here and
Now, HPD has also been working to get banks more involved.
New York Community Bank, which was one of the worst offenders,
has, along with Citibank, agreed to this wonderful new compact,
and they are putting pressure on other lenders to join.
When buildings that they have lent to have housing conditions
problems, the banks will now do more: they will inspect
those buildings, put money in escrow before they complete
the loan on a building, and look at owners’ track records
before lending to them in the future. This is a new effort,
so I do not think we can measure its results yet.
One challenge is around the issue of enforcement, and I
am very interested to know how Los Angeles has dealt with
it. Unfortunately, in New York City, there is a real challenge
going from a notice of violation to the actual improvement
of that violation, and HPD estimates that only 25% of violations
are removed within the given time frame. There are about
2.7 million outstanding violations, including nearly 500,000
that are class C violations. Unlike a parking ticket, for
example, it takes extra court action for a notice of violation
to turn into a fine if you do not fix it, and so one thing
advocates are pushing for is a way to convert more easily
from a violation to a fine, so that we would see units really
fixed and fines levied if they do not get fixed.
I think we are lucky to have the partner that we have in
HPD. One thing that they have done to send a signal over
the last few years is to put a couple of our worse offenders
in jail, and they have taken several landlords to court
and sent them to prison for a few days to send the message
that they are breaking the law and jeopardizing people’s
lives, and we take that seriously. I think that is the kind
of tone that we want. At the same time, it is a big challenge
and we are lucky to have colleagues around the country,
and in this case Mercedes Marquez from Los Angeles, to shed
some light on things that we might do here to make those
conditions even better.
MERCEDES MARQUEZ: I am thrilled to be able to come
and share a bit about the work we have been doing. I can
tell you that the inspectors that do this work—SCEP
as a whole is about 215 people—are what I call the
meat and potato guys who are out on the street everyday.
They do not get a lot of recognition, so I am happy to represent
them here today.
I will not go into so much of what our condition is in
Los Angeles. Unlike New York, we are not the perfect storm
of an affordability crisis. All of the things that Brad
mentioned are true: Soaring prices, land costs, construction
costs, and housing prices that have risen over the last
15 years at several times the rate of inflation while wages
remain flat. Los Angeles also has very low area median incomes,
much lower, for instance, than our sister city in San Francisco.
In Los Angeles, the area median income is $69,000 for a
family of four, while in San Francisco it is $113,000. That
is the reality in Los Angeles that really makes it difficult
for people to get into home ownership, as well as the gap
in the costs of rent. An average rent these days for a normal
two-bedroom apartment in L.A. is about $1,500. The gap is
about $800 between what someone with median income can afford
and what it costs, and it is rising, not unlike New York,
but because we are tied to area median incomes in all kinds
of formulas when you look at funding, it is very difficult
for us. The one thing I can tell you about Los Angeles is
that we accepted that we could not simply build our way
out of the housing crisis, so we were forced to turn away
from only having a Production Department to really focusing
in on preservation.
With that comes an understanding that we would prefer the
Housing Department to act as a public sector entrepreneur
to push in the right direction and then get out of the way
so that we are really working with the market. That is very
difficult for government. We will always be behind, but
to the degree that we hold it as a value and pay attention
to it, it seems that our success rate is better. We are
doing that, and dually focusing on preservation and production.
I would like to tell you a bit about how SCEP came to be
and how it works. SCEP is the Systematic Code Enforcement
Program, and it is true that at this point we are the only
city in the country that actually inspects each and every
unit. How did it come to be? I think it is most important
that we developed SCEP through a very open public process.
When I was a practicing lawyer, we filed a RICO action
against saving and loans that were churning these buildings;
for example, one of the bank officer’s black Labrador
retriever was a signatory on documents—things were
that bad. As we were chasing after these bad guys, they
would move, and we would have to start the due process all
over again, which was enormously frustrating. The private
firm I was working for at the time brought that RICO case
to the city attorney’s office, and we won in the state
supreme court, but it did very little to change the conditions
of the buildings or tenants or anybody else.
We have moved from that, though, and we ended up forming
a citizens’ committee. It was led by a man who has
become Cardinal, was chaired by the President of Loyola
Marymount, a Jesuit, and included tenants, landlords, elected
officials, neighborhood folks, housing officials –
you name it, and they were involved in an urban subcommittee.
Eventually they came back with a true understanding and
study of how the city did code enforcement across the city,
and, of course, they found that there was no coordination.
The responsibility for code enforcement lay primarily with
the Building and Safety Department, which also had responsibility
for all of the commercial buildings and focused largely
on permitting. Practically, if you are an inspector, and
someone is waiting for you at a 50-story tower, and you
have a lot of power in that sort of situation, and they
need you to work with them, what is more sexy? Working on
the new tower, or handling a dispute between a single landlord
and a single tenant, which seems more like a domestic violence
situation because by the time a tenant gets the nerve to
complain, the situation is ugly.
The commission recommended that the city create a new program
and move the responsibility for housing inspections out
of the Building and Safety Department. This caused pandemonium
in the city; the inspectors in Building and Safety were
very upset because they felt that they had been denigrated,
so it took political action to get it moved from one department
to the other. Now there is no confusion about mission: The
Building and Safety Department continues to be responsible
for all of the inspections of commercial properties, and
the Housing Department created its own program with a group
of people who have a clear mission and pride about what
they do. Inspecting systematically also eliminated the issue
of conflict between landlords and tenants because an inspector
just goes in and objectively takes a look at the law. We
protect them as much as we possibly can to ensure that they
work only in that sphere, so that when we go to enforcement,
the inspector does not work on the enforcement case.
I think it is also important that we looked at it as a
business would. We consider the idea of enforcement and
compliance, I would say, a conveyer belt of work –
you just keep moving and moving, and time does run out.
The ordinance has specifically removed the discretion of
the inspector, so if you have not completed 60 percent of
the required work within the first time period, you cannot
get any kind of an extension. Anything beyond that, your
boss has to write a memo and say why it should be granted.
In government, if you want something to move in a direction,
you make sure that people have to take time and get extensions
approved, because it is amazing how they choose to comply
rather than delay getting the job done because it costs
time to not get it done right the first time. You incentivize
them; the path of least resistance is to get it done.
We have found that we have several tools for enforcement.
One, which is very important, is that we have now finished
our first round. It took five years to inspect the approximately
800,000 units, but now that we are done we have been able
to study the data. We found that 80% of landlords comply
within the first period, which means that we are able to
focus on the more difficult cases. An additional 13% comply
within the next round, so we are really only left with 7%
of the buildings that cause us difficulty in gaining real
compliance. In the end, the department was able to administratively
gain 99% compliance, which means we only send one percent
– or 250 buildings – a year to referral to the
city attorney for criminal prosecution. We were able to
get it done all by ourselves, and we have found that the
80% of the landlords who comply are now very appreciative
of our efforts to go after those who are more difficult.
Whereas before a great landlord could be on the block across
the street from one that was not so great, but because of
this compliance, everyone is improving, the neighborhoods
are rising, and so are their property values.
We have come a very long way from the state Supreme Court
– where our case finally went after the Apartment Owner’s
Association sued us – to doing joint property management
courses together now. This ultimately works because we keep
talking to each other all of the time. Tenant groups are
doing outreach, and everyone can come in with a complaint
that we will listen to, so it continues to be a very open
process. That is unusual in government, but we have found
that the only way we are going to get a neighborhood program
done is if the neighborhood is involved.
We are now looking at something called “Rise,”
which we invented. It is a way of giving a score to the
buildings as we went through the first process. Being at
the bottom of the score distribution means a building was
not complying. They are the first ones we re-inspect, and
we map it. We now have maps for every city council district,
and it tells us which census tracks have improved, which
have not. Not only do we target them for enforcement first,
but we are also targeting our rehabilitation programs there,
both multifamily and single family, and doing everything
we can to make that work.
MALE VOICE: Let me ask you to respond to what I
believe was the French system, although I am not sure whether
it is still in operation today. The French government got
out of the housing inspection business entirely and made
it into an insurance matter, so it becomes parallel to having
a car. I do not have to worry about the car inspector of
New York City coming to visit my car; I have to worry about
the insurance company upping my insurance. The insurance
company has a much greater stake in making sure it is a
good building than a building inspector, because the insurance
company has to make money off of the building. Many insurance
companies today have whole branches that go around in the
construction of the buildings saying, “don’t do
that, that’s going to be a fire or safety hazard.”
So let me put it to you sharply: We close down everything,
building inspectors, rent boards, all that kind of stuff,
and simply require that just as you have to have insurance
for your car, you have to have insurance for your house.
You have to have insurance for your building, so that if
a tenant has a problem—garbage in the hallway, for
example—they go to the insurance company, and get a
judgment against the landlord. Landlords who are chronic
offenders cannot get insurance, and so they cannot buy a
building because the law says they have to insure the building.
The only thing you enforce is you must have a certificate
of insurance, and since they can never get insurance, they
exit the real estate market leaving only the good landlords.
That would in effect privatize the entire process through
the insurance process.
MS. MARQUEZ: Thank you for the sharp question, and
let me make a sharp response: It does not work, and let
me tell you why. You assume in your fact pattern something
about enforcement rather than preservation. Your outline
requires us to catch somebody when they are doing the bad
thing. Here, we are talking about a mandatory minimum maintenance
program that is different from getting caught for being
the worst offender. I will also tell you that I spent many
years litigating against landlords who failed to meet their
responsibilities, and that means, of course, that you deal
with insurance companies in these cases. Insurance companies
are involved in inspecting for new construction, but they
are not in any way involved in inspecting for liability
once a building is built, particularly for the older buildings.
A case against a bad landlord would take three years, and
that is going at it one at a time. The difference here is
that we are trying to maintain a minimum so that ultimately
nobody is a bad landlord. Eventually, we may get to the
point of a minimum that can be maintained in Los Angeles,
but I can tell you that one of the reasons you have the
problems Brad laid out in New York is because no one believes
that the government will enforce the rules. Landlords do
not believe they will be caught, and they do not believe
that the government will have the person power to go look,
so people are willing to play the game of risk.
MR. LANDER: Two thoughts on this: first, every year
I have to take my car and get it inspected, so I am insured
against accidents at this one time, but I am inspected against
things that harm others, like air pollution. So, it is not
garbage in the hallway we are talking about, it is peeling
paint, no heat, no hot water, no locks, and it is in the
worst buildings. I agree, we are talking about a pretty
small percentage of folks, but they are folks with a business
plan, and if the law is not enforced, they are going to
do everything they can to figure out how to get around it.
That said, I love the new effort of trying to get lenders
involved, which is not so dissimilar, because the part of
the compact that several lenders have agreed to is looking
at a landlord’s portfolio, and if they have too many
maintenance violations in their other buildings, they will
not lend to them to acquire a new one. I do think that there
are ways to involve the market better in getting bad apples
out of the market, but it has to begin with the legal standard,
and we have to enforce the law.
MR. MICHAEL MEYERS: New York Civil Rights Coalition
What is the definition of this affordability notion? Is
there a standard definition of affordability? I think I
heard you say $1,500 in Los Angeles for a two bedroom. That
is not only affordable in Manhattan, it is a steal. So,
is there a universal standard definition of affordability?
My second question pertains to demolishing urban projects
and subsidized housing—at least in New York— and
moving to the free market. With respect to the new buildings,
which are supposed to be affordable but are more often luxury
housing, you have a reduced number of apartment houses and
more people who cannot live in those apartments without
some sort of subsidy. With the subsidies, however, it is
not just an inspection of the premises in the building;
it also comes with an inspection of the occupants. Occupants
must be examined not only in terms of their income, but
also in terms of their family households, criminal records,
and criminal possibilities of family members who may come
and visit the family, so this becomes a question of privacy.
MS. MARQUEZ: In the inspection program, we also
cite tenants. If they are packrats, if they are running
a business out of their unit, if they are leaving oil all
over the street because of cars, we cite them. We started
a special enforcement unit that works in the afternoons,
evenings, and weekends to focus in on those very specific
problems so that we often work with city council offices
to identify a tenant that is causing a problem for the entire
community in that building.
MR. LANDER: I think one thing that low income people
unfortunately get used to is a range of ways in which they
give up a meaningful amount of their privacy and dignity
if they want the subsidies and programs that are available,
and that is not good. On the one hand, the waiting list
for New York City Housing Authority is several hundred thousand
families long. For every affordable housing development
that we built in my previous job, there were 20 or 30 times
the applicants, even though folks knew every year they were
going to have to come tell us this range of things, and
we were going to come inspect the unit.
The technical definition of affordability is that the people
who live there will spend no more than 30 percent of their
income on rent. It does not tell you what their income is,
or therefore what the rent will be, because there are affordable
housing programs for very low income families, for low income,
for moderate income, and for middle income families. Now,
in New York, it is something like 60 percent of people earning
less than $25,000 that pays more than half their income
for rent. They are not living in subsidized units, and that
is true for moderate and middle-income people as well. It
is almost always a passionate fight over scarce resources
because there are many people who cannot get the housing
that they want, and they think someone else is getting it.
The biggest New York State affordable housing program ever
was the Mitchell-Lama program, which served moderate and
middle-income families, and then government policy got away
from that to focus on the lowest income families. While
people know we still need to focus on the lowest incomes,
we also need an affordable housing policy that is meaningful
to moderate and middle income folks facing pressures. That
means balancing scarce resources, but it is something that
is very important to do.
MALE VOICE: Is there any difference between the
various mayors – Mayor Koch, Mayor Dinkins, Mayor Giuliani,
and Mayor Bloomberg – in their attitude toward housing
programs and in their performance?
MR. LANDER: Well, one thing I would say is that
the times are so different; what you have to do with housing
policy now is remarkably different than it was 20 or 30
years ago, in times of abandonment. The crisis that Mayor
Koch was facing in trying to bring the city back with housing
policy is quite different than trying to make room for people
who cannot afford housing as the city is resurging. Partly
as a result of that, he was able to spend a lot more money
on affordable housing because it was not just about affordable
housing – it was about saving the city from real risk
– so Mayor Koch spent twice what we are spending now
in an average year, but it was really to do a different
thing. It was to reclaim abandoned neighborhoods, as opposed
to trying to carve out affordability. I do think that of
the four that you mentioned, the housing records of Mayor
Koch and Mayor Bloomberg are certainly easier to tell a
positive story about than Mayors Dinkins or Giuliani.
MALE VOICE: In L.A., the ramp–up of the staff
for the project and the aggressive code enforcement certainly
came with a price, but paid off unquestionably with the
social return on investment. Was there a marked or at least
quantifiable return on investment in real dollars, whether
as a result of fines or improved conditions that led to
more investment in the city?
MS. MARQUEZ: I would say one important thing is
that the city does not pay for the code enforcement program;
tenants completely fund it. Right now, the fee is $36 a
year, and so landlords pay it up front and then charge $3
a month through the rent, and the tenants were happy to
do it. We have calculated about $1.4 billion of reinvestment
in that same housing stock, all private dollars by landlords,
which is how we pay for it. What we do see is that, as neighborhoods
improve, our biggest challenge is going to be how we deal
with gentrification. That is how much better the neighborhoods
have become. In fact, one thing that I now hear people complaining
about is that while we are inspecting the units, the small
commercial establishments who have leaning garages or things
that are falling apart are not following along. Ultimately,
there is no doubt that everyone has benefited – tenants
and property owners.
MALE VOICE: We are not talking about affordable
housing; we are talking about subsidy programs. It does
not do housing any service to discuss the two in the same
breath. We should be talking about the cost of providing
housing and subsidy programs.
MR. LANDER: If developers will agree to provide
housing at the cost plus maybe a ten percent markup, then
I would entertain the idea of looking at a different way
of producing the housing.
MALE VOICE: That is what the Mitchell-Lama Program
proved, because until you put the provisions in the Mitchell-Lama
Program to allow people to buy out and pay off their mortgages
at the end of the process, nobody built anything under it.
It was only the incentive of getting out that spurred the
program. I have loved this information about Los Angeles;
I love that the tenants pay, and that they are subject to
citations for violations. I would like to explore some of
the other differences that might make this program work
in Los Angeles. For example, I know in New York, there are
over 500 violation codes, with very fine distinctions between
them. You talked about a minimum standard. What are you
really enforcing, and what has been your experience in developing
that?
MS. MARQUEZ: We enacted no new laws in terms of
habitability standards to begin the program, so we enforce
the minimum state habitability code that applies to all
cities in California. This is a minimum mandatory program;
all we are doing is enforcing the law on a regular basis
– you have to have screens on the windows, you cannot
have peeling paint in the sinks, you have to have hot water
at a certain temperature. I am talking minimum habitability
standards that anyone would agree is what it is, and I think
what is important about it is that by sticking to the code
that everyone knows and understands, nothing new happened
except consistent enforcement and education on what those
minimum standards are.
We are finding that some landlords who had to put in $1,000
to $2,000 per unit because they had not done any maintenance
for years, are willing now to put in the $2,000 more to
upgrade the unit completely. The units turn over so often
that landlords know that eventually they will reap the benefit,
and if they do it all now, when that tenant moves out, they
will get a better rent as a result.
MR. EAMON MOYNIHAN: If you read a basic microeconomic
textbook, there will be a description of the difference
between a public good and a private good. A public good
is considered non-rivalous and non-excludable, so a lamplight
is a public good because you cannot exclude a person’s
ability to see the light, and if they see it, which does
not mean that you cannot see it. A hamburger is a private
good: if I eat it, it is gone. Housing would seem to be
a pure private good. I lock the door; it is my apartment,
not yours. Therefore, it is very unclear why government
is involved in the housing industry at all, except in what
the L.A. program is doing, because information happens to
be a public good. I just thought that was a useful comment
to understand in the context that New York, which has the
biggest housing program probably of any city in the history
of America and has remarkably unaffordable housing –
300 or 400 percent above the national average. If you correct
income data in New York City for the cost of living, New
York City is one of the poorest places in the United States,
and a large part of it is due to the massively-failed housing
policies.
MS. MARQUEZ: I would say that if housing does not
function, children do worse in schools, the infrastructure
needs grow worse, and you have all kinds of things that
someone else in the government will have to pick up. Certainly
to the degree that people have to come and save us from
electrical fires and put everybody else out, it starts to
be in the area of a public good as opposed to a private
good. It is the interconnectedness we cannot escape, that
we all live together. Unless we really want to live way
out and have no neighbors and be completely self-sufficient,
we are touching each other all of the time. In the area
of housing, all of the things that happen in government
that we all rely on without thinking about have to work
together.
PAUL KERZNER: Con Edison’s Renaissance Housing
Program
Do you have continued re-inspection until compliance in
L.A.? How do you deal with the access issue? In New York
only about one-third of apartments are inspected because
of a lack of access. How do you deal with owners who do
not pay the fines?
MS. MARQUEZ: Access involves an enormous amount
of outreach. We have even color-coded the letters. We have
them posted in the buildings, and we send them, of course,
to the landlord. We give them an opportunity to reschedule.
We also send the letter to every tenant in the building
so that they know that we are coming. I would say that as
the program has moved on, we have greater and greater access
to those buildings. We only receive about 15,000 complaints
a year even though we are inspecting 200,000 units a year.
We are able to have enormous access. I think that ultimately,
the openness of this program –landlords know all about
it and work on it, as do tenants – has made it less
foreign. In fact, we now have reports from the police department
that for the first time robberies are happening based on
people coming in purporting to be housing inspectors. We
are now so well received that despite badges and identifications,
we are now designing a uniform. Now people let us in. We
have been able to really get into the culture of the city.
Yes, we continually inspect until you comply. If you get
to the point where we refer you to the city attorney, then
you have to pay for two extra inspections. Right now, that
fee of $36 a year covers all of the inspections unless you
distinguish yourself for criminal enforcement, in which
case the landlord bears the cost of the continued inspections
for failing to comply.
Support for this event, and publication of its proceedings,
was provided by the Fannie Mae Foundation.
