Opinion: Cuomo should invest settlement funds in affordable housing
Since January 2015, more than $2.5 billion in new settlements have accumulated through enforcement actions responding to banking law violations, led by the state Department of Financial Services.
As of November, $2.08 billion in settlements are sitting in an unbudgeted reserve in the state’s Dedicated Infrastructure Investment Fund.
Last year, the New York Housing Conference found nearly $1 billion in housing-related bank settlement agreements was tied to mortgage misconduct by JPMorgan Chase, Bank of America, Ocwen Financial and Citigroup. In less than two weeks, more than 100 organizations joined the Fair Share for Housing Coalition calling on state lawmakers to fund housing programs. This call was not met, as infrastructure programs took priority last year and only JPMorgan Chase funds were invested in housing as per legally binding stipulations. However, 2016 represents a second chance for settlements to be invested in affordable housing.
The more than $2 billion in new settlement funds provides Gov. Andrew Cuomo and the state Legislature with an opportunity to move the dial on our affordable housing crisis in the budget for the next fiscal year.
The New York Housing Conference urges lawmakers to focus at least $1 billion of this substantial sum toward five priority areas to address our affordable housing crisis:
- Build more supportive housing for homeless people with disabilities.
- Launch a new senior housing program to prepare for our rapidly aging population’s housing needs.
- Preserve public housing to provide safe and decent homes for current residents and for future generations.
- Invest in the hardest-hit neighborhoods through foreclosure prevention and remediation programs.
- Support mixed-income development by increasing the state low-income housing credit.
We also strongly recommend using settlement funds in affordable housing projects to leverage federal low-income housing tax credits as well as tax-exempt bonds (“volume cap”), both of which generate additional private capital. Unlike non-housing uses, every settlement dollar invested in affordable housing development will leverage another $5 in public and private funding.
With the demand for affordable housing at its greatest level in decades, the state has an unprecedented opportunity to invest settlement funds in affordable housing and maximize leveraging potential by pairing these funds with other federal, state and city programs.
Rachel Fee is the executive director of the New York Housing Conference.