Testimony of CPC President & CEO Rafael E. Cestero before the New York City Planning Commission

Testimony of Rafael E. Cestero

President & Chief Executive Officer

The Community Preservation Corporation

Hearing before the New York City Planning Commission

Regarding the Mandatory Inclusionary Housing and Zoning for Quality and Affordability Text Amendments

December 16, 2015

Good morning.  Thank you Chairman Weisbrod and other distinguished members of the New York City Planning Commission.  My name is Rafael Cestero and I am the President and CEO of the Community Preservation Corporation (CPC), a nonprofit mortgage lender that was formed in the early 1970s to help New York City restore and rebuild communities that had been devastated by deterioration and abandonment. Today we help neighborhoods across the state meet their housing and revitalization challenges. In the last fiscal year alone, we have invested more than $372 million in communities around the state to support more affordable and sustainable neighborhoods.

I appreciate the opportunity to be here today to testify in support of the proposed Mandatory Inclusionary Housing (MIH) and Zoning for Quality and Affordability (ZQA) text amendment changes, which seek to make this city more affordable to a wide range of New Yorkers, fostering diverse, livable communities with buildings that contribute to the character and quality of neighborhoods. Many people have, I believe, misunderstood these initiatives because they are viewing them in isolation and not in the context of both the city’s history and also its present affordable housing efforts, including the Housing New York plan.

Since the 1990’s, New York City has been on a steady and impressive trajectory of growth.  Over the past 25 years, we have seen the population expand, the city has added new jobs, and incomes have increased – though not as fast as rents – and by all accounts public safety is light years beyond that of decades past. All of this points to an economy that is strong and robust and poised to continue its growth.  But we must remember that this has not always been the case.

Throughout the 1970s and 80s swaths of our city fell victim to blight and abandonment that devastated our housing stock and the communities it served. From the South Bronx, to Harlem and East New York – buildings were abandoned, crime was rampant, and hundreds of thousands of people fled the city for the surrounding suburbs. It was so bad that it took a courageous decision from Mayor Ed Koch to change the city. Instead of fencing off the South Bronx and other neighborhoods as part of a strategy called “planned shrinkage,” he launched a massive housing investment plan that rebuilt much of our city.

Today, New York City is booming in a way that has not happened in generations, and we have become an economic engine for the state, as well as the region and points beyond. This unprecedented growth can largely be attributed to this city’s legacy of investing in our neighborhoods, and in particular those neighborhoods that were scarred and stigmatized the most by disinvestment and flight.

This historical context is important. Over the past few decades the city has rebounded and we have seen an enormous pressure on the cost and demand for housing that is driving change in neighborhoods across the city. Our housing policies have been varied and expansive.  Inclusionary Zoning has been a piece of that overall housing strategy, but was never intended to work alone.

In 1987, New York City issued the first Inclusionary Zoning Plan to incentivize the creation of affordable housing and foster economic opportunity in communities. The Bloomberg Administration took a critical next step in recognizing that the city was experiencing large-scale change, and revamped the Inclusionary Housing program to better harness the private market to create new permanently affordable apartments in exchange for greater density.  Both policies were set forth in the larger context of the Koch and Bloomberg housing plans.

Today, the de Blasio Administration is proposing sweeping changes to our zoning policies. These changes are both innovative in their scope and within the context of our city’s proud history of investing in underserved neighborhoods in a way that seeks to address the upward pressures of rapid growth and gentrification. And the changes are proposed in the context of the Mayor’s remarkable Housing New York plan.

The market pressures our communities face today are not due to the policies or politics of the Bloomberg or de Blasio Administrations. We have done such a great job of making this one of the world’s premier cities – a place where everybody wants to live and invest – that we have become victims of our own success. The downside is that the city doesn’t have unlimited land or unlimited resources, and the scarcity of both has driven up demand as well as costs.

In putting forth this plan the Administration recognizes these issues, but also that the dynamics of the New York City market are strong and can be harnessed to create affordable housing and help lock in affordability in growing communities.

Without seeing the totality of this plan, it is easy to pick apart a zoning strategy as something that would lead to further pressure on low-income communities. But when you look at the various policies and plans that work in concert with one another under the umbrella of the Housing New York plan, you recognize that this is very far from the truth.

Mandatory Inclusionary Housing (MIH) and Zoning for Quality and Affordability (ZQA) are two critical programs that will help to create affordable housing and mitigate gentrification, but they should not and were never meant to be viewed in a vacuum.  They must instead be analyzed in the context of the Housing New York Plan and other complementary work of the de Blasio Administration.

Through the Housing New York Plan, the City’s Department of Housing Preservation and Development and Department of City Planning—along with other city agencies—have put forth a series of new programs that encourage the creation of new affordable housing, aggressively pursue the preservation of existing affordable housing, seek to protect the quality of our housing stock, mitigate uncontrolled growth, reign in unscrupulous owners, ensure tenant protections are enforced, and direct resources to NYCHA public housing so that all of our residents have more opportunities to live in safe and affordable housing.

I am here as the head of CPC and as a former HPD Commissioner to express my full support for the objectives of MIH and ZQA as vital new components of the Housing New York plan.

Voting down these new proposals because they are complicated, viewed out of context or because there are details that need working out, is myopic and potentially damaging to our city. The details can and will be addressed. The Administration is not blind to the need for dialogue. But if we simply say no, then the results are obvious. Re-zonings will not happen, additional affordable housing will not be required in private construction projects, and the main forces for change will continue to be those unaddressed market pressures of gentrification that are pushing our neighborhoods out of reach for working-class New Yorkers.

MIH and ZQA are integral components of this comprehensive strategy. Without them I have no doubt that the pressures facing our neighborhoods will get worse. There are some who are saying no because they don’t want their neighborhoods to change. That is understandable, but the truth is that these neighborhoods are already changing, that change is moving quickly, and it is pushing affordable housing further and further to the fringes of our city and beyond.

MIH and ZQA will give neighborhoods an opportunity to maximize the resources of their existing housing stock and will require permanently affordable housing to be created when new buildings go up. With these strategies in place New York will be equipped to harness the forces that are shaping our city while continuing a legacy of investing in the affordability and revitalization of our neighborhoods.

Thank you.


 

Contact: Eric Bederman, VP/Communications
212-869-5300, ext. 482 ebederman@communityp.com