Op-Ed: On Day One, the New Mayor Should Invest in Affordable Housing

Crain's New York Business
November 3, 2013

Four Steps the Next Chief Executive Can Take
By Rafael E. Cestero And Deborah Vanamerongen

New Yorkers have consistently raised affordable housing as a top priority for the next mayor. The rental vacancy rate hovers around 3% but is even less for lower-priced units. Half of renters are paying more than 30% of their income in rent—a barometer for affordability—while low-income New Yorkers can expect to pay 50% toward rent. And New York's population continues to grow, which makes the issue of affordable housing as important today as it was 40 years ago.

So what can the next mayor do about it? He will need to devote significant resources to housing and launch a large-scale affordable-housing initiative, following the success of the Koch administration's groundbreaking plan and the Bloomberg administration's New Housing Marketplace Plan.

—First, the next mayor should target resources to New Yorkers with the direst housing situation—the nearly 57,000 homeless—by streamlining the city's Section 8 voucher program and better targeting the subsidy. Instead of two separate voucher programs, having one citywide program run by the Department of Housing Preservation and Development would improve service and efficiency and save administrative costs. Because HPD is tasked with building new housing, the vouchers can be tied to newly created units. With its resources focused on capital improvements, the New York City Housing Authority can bring more units online and make them available to families in and out of homelessness. Currently, shelter residents don't get priority for public housing.

—Second, the next mayor must allocate sufficient public resources in the form of tax incentives and capital subsidies to attract private investment to affordable housing. The broad-based coalition Housing First calls for an $8 billion initiative to build or preserve at least 150,000 affordable units over eight years.

Such an investment would attract another $15 billion from the private sector, resulting in the creation of 32,800 jobs annually, $21.2 billion in economic spinoff, neighborhood revitalization and sorely needed housing—not to mention improved education outcomes and reduced health care costs for the residents of new affordable housing.

—Third, to maximize the effectiveness of public resources, the next mayor needs to improve coordination among the city's four housing agencies. The various programs and agencies could have a greater impact if they worked together to solve problems and create neighborhood-specific housing plans.

For example, the private financing tools available to the Housing Development Corp. could be utilized to ease NYCHA's budget problems; HPD, which is responsible for code enforcement, could help the Department of Homeless Services find decent housing for people leaving shelters; and coordinating the city's funding for shelters and affordable-housing production could create more permanent housing for vulnerable New Yorkers.

To ensure this type of coordination, the HPD commissioner should serve as NYCHA chair, just as the commissioner chairs HDC's board.

—Fourth, the next mayor needs to pay attention to our aging housing stock, especially the nearly 1 million rent-regulated apartments that provide low-cost housing to 2.2 million New Yorkers. Landlords' expenses to keep these apartments going—heat, hot water, electricity and more—are rising to levels higher than the rents many of their tenants can afford.

To keep this housing in good condition and create incentives for owners to keep it affordable for the long term, the next mayor should continue to use his housing agencies to offer low-cost loans and tax incentives to owners for capital repairs and energy-efficiency upgrades that will tamp down operating expenses and rent increases.

To the benefit of all New Yorkers, the leading mayoral candidates have each committed to large-scale affordable-housing plans. Any plan should aim to make significant progress toward addressing the housing and affordability shortage, boosting the local economy and untangling the web of social problems facing working families and vulnerable individuals. Investing in housing is investing in our future, and that should start on Jan. 1.

Rafael E. Cestero is president and CEO of the Community Preservation Corp. and a former commissioner of the New York City Department of Housing Preservation and Development. Deborah VanAmerongen is strategic policy adviser at Nixon Peabody and a former commissioner of the New York State Division of Housing and Community Renewal.