The Right Path to Affordable Housing

The New York Daily News
by Rafael Cestero
Wednesday, May 17, 2017

The critics’ knives are out for the mayor’s affordable housing plan. A group called Real Affordability for All claims that the mayor’s plan doesn’t produce nearly enough low-income housing and contributes to the gentrification of underserved communities.

To make its point, Real Affordability for All recently launched a scorched-earth campaign consisting of personal attacks and innuendo intended to use anti-Wall Street sentiment to criticize the city’s housing plan.

This includes a report in which it claims that mixed-income housing, which has both market-rate and affordable units, promotes gentrification and mirrors the “Goldman Sachs development model” implemented by de Blasio’s deputy mayor, Alicia Glen, during her previous work at the investment bank.

Everyone can agree that New York City is facing an affordable housing crisis. But to effectively address it, we can’t perpetuate an increasingly hostile and irrational environment where people of goodwill who want the same thing are torn apart.

There needs to be an open dialogue between the city and all its external partners, but it must be a sober and civil conversation. Let’s start by getting the facts straight.

Census data show that the renter populations with the highest percentage of rent-burdened households are low income (46% of households), moderate income (23% of households) and middle income (17% of households).

The mayor’s plan to build and preserve 200,000 units of affordable housing has a goal of providing 80% of its units to the lowest-income residents.

Three years in, the plan is right where it should be. Nearly 63,400 units have been financed in total, with 50,330 going to low-income households.

Of that housing, 17,800 units are targeted to households at the lowest end of the spectrum: approximately 8,600 units for families earning between $24,000 and $40,000, and 9,200 units for families earning less than $24,000 a year.

While low-income renters receive the vast majority of the units, the remainder are for moderate- and middle-income households, which, according to the census data, are significantly rent-burdened and also in need of affordable housing.

And, contrary to de Blasio’s opponents, Goldman Sachs did not invent mixed-income housing. The highly successful financing model the mayor is attempting to leverage has been used for decades and has helped create thousands of low-income units that have locked in affordability and stabilized neighborhoods — helping to combat gentrification, not drive it.

The laws of economics can’t be repealed. Affordable housing requires taxpayer subsidies to make it work: the deeper the affordability, the more subsidy is needed. A family with an income of $25,000 per year can’t afford to pay enough in rent to support the basic operating costs of a building, so subsidies like Section 8 fill the gap.

But not only are those subsidies very limited, Congress has been slashing them for more than a decade, and they’re being targeted for further cuts by the Trump administration.

In mixed-income buildings like those the city wants to build, the rents from the higher-income units pay for the low-income units — requiring less subsidy and allowing the city to stretch its subsidies into additional affordable housing.

This is not to say that the advocates’ concerns should be dismissed. They’re right that the need is so great among the lowest-income people that the city could put all of its resources toward low-income housing and never meet the demand.

But New York is one of the few places in the country where the private market doesn’t meet the demand for moderate- and middle-income housing. In order to keep our city diverse and our neighborhoods economically viable, we need to have all incomes included. Shouldn’t a teacher, police officer or nurse be able to find an apartment they can afford in the city where they work?

Advocacy organizations have been important partners in the city’s affordable housing efforts for decades. They are the boots on the ground and the voices of their neighborhoods. If these groups feel as if they don’t have the administration’s ear on important community development issues, that’s a problem.

But creating villains and starting a campaign of personal attacks doesn’t solve problems, and it won’t make the affordability crisis go away. For more than 40 years, advocates, government, nonprofits and private developers have worked together to rebuild our neighborhoods and create more affordable housing in New York City than anywhere else in the country. Let’s not tear this effort down now.

Cestero is the president and CEO of the Community Preservation Corp., a nonprofit affordable housing finance company, and former commissioner of the New York City Department of Housing Preservation and Development.