No one should be surprised that Mayor de Blasio's long-awaited plan to save-or-create 200,000 units of affordable housing proclaimed that the city is at a housing “crisis point,” even as it proposed to leave in place policies, such as rent stabilization, that have long distorted the city's housing market.
But when one looks past the rhetoric — and grants that this mayor is hardly likely to champion free-market reforms — there are some signs that he's backing away from extreme positions, and could pave the way for the increase in supply that a city growing in population needs.
A key test will be the way the administration chooses to interpret its proposed “mandatory inclusionary zoning.” It's the signature part of the plan and builds on a Bloomberg-era program in which developers were given a zoning bonus to build bigger, if they agreed to set aside units for lower-income households. That program led to some 5,000 units being set aside — not enough for the new mayor.
But mandating such a set-aside, as the new housing plan proposes, risks driving development away altogether — a problem that NYU's Furman Center noted last year, when its director was Vicki Been, whom de Blasio has since named to head the city's Department of Housing Preservation and Development.
A Furman paper observed that “mandatory inclusionary zoning” might “render potential projects less profitable or completely unprofitable,” such that “the development would not be built at all.” In other words, by requiring so much subsidized housing, it could lead developers to drop marginal projects altogether.
Furman also warned that developers might “try to pass the added costs on to market-rate tenants and buyers if the market allows it.” In this view, inclusionary zoning could lead to higher overall rents, fueling a need for yet more affordable housing, with the city effectively chasing its own tail.
The de Blasio plan appears to reflect tension in the administration between those who want to insist on mandating that rich and poor live side-by-side and those who realize housing capital could migrate to Florida, like so many New Yorkers.
Thus, the plan says “economic diversity must be a cornerstone of housing development” — a rhetorical sop, at least, to radicals. On the other hand, it also hints that developers may be permitted to get that zoning bonus without setting units aside for the poor in new buildings themselves. “The city,” it says, “will provide flexible options for meeting the requirements.”
The 120-page plan doesn't say exactly what this key phrase will mean — but it suggests that developers could qualify for the zoning bonus by paying into a fund for construction of low-income units in parts of the city where land is cheaper.
It's worth watching carefully as to what de Blasio really prefers — increasing housing supply, or the social engineering that requires the rich to share luxury high-rises with the poor.
Another surprise: De Blasio hints that he may not abandon a good Bloomberg idea to build new, market-rate housing on empty land owned by the New York City Housing Authority, while setting aside some “inclusionary” units. The mayor promises a “respectful” conversation with NYCHA tenants — who live in aging projects that desperately need the revenue such projects would bring. And he at least pays lip service to speeding up the land-use reviews that leave so many new housing plans stuck on the drawing boards.
Of course, if government-subsidized housing were the best way to ensure affordability for all, New York would be housing heaven. The city has more subsidized and price-regulated units per capita than any other US city, by far — 61 percent of all rentals are in some way protected from market forces.
And adding 80,000 new, permanently “affordable'” units, and freezing in place another 120,000, will just worsen the city's housing culture — which already sends the strong signal to “shelter in place,” once you're one of the lucky few with a good deal.
In short, the de Blasio plan is built on what has long been the city's dysfunctional dogma — that private forces will fail everyone but the super-rich. Indeed, it proposes that families of four earning up to $138,000 be eligible for new, subsidized units.
A real free market for the city's housing market isn't on the horizon at present, though. We may have to settle for not strangling private development altogether.
Original Source: http://nypost.com/2014/05/05/faint-housing-hope/