In housing vote’s aftermath, what did New York City gain?

The zoning text amendments that passed the New York City Council overwhelmingly on Tuesday are the linchpins of Mayor Bill de Blasio’s plan to create or preserve 200,000 units of affordable housing over the next decade. But after all of the back-and-forth with housing advocates and vote whipping the administration was doing with council members over the last several weeks, did anything appreciably change in the final versions of Mandatory Inclusionary Housing and Zoning for Quality and Affordability?

I posed these questions to Benjamin Dulchin, the executive director of the Association for Neighborhood and Housing Development – which endorsed the zoning text changes in the days leading up to Tuesday’s vote.

Here’s what Dulchin had to say:

Nick Powell: Earlier this month, ANHD and other housing advocates released a joint statement calling for an amendment to the mayor’s housing plan that would include a “deeper affordability option.” Does the final version of this plan that the City Council approved satisfy that request?

Benjamin Dulchin: The de Blasio administration’s original proposal had set affordability options that only went down to 60 percent of Area Median Income – that’s a rent of $1,300 a month, and would be affordable to a family earning $51,000 a year. That would have excluded 49 percent of all New Yorkers, and the majority of people in the neighborhoods that are being rezoned in the near future. For ANHD’s 99 member-groups, that would have failed to meet the actual affordability needs of far too many of our neighborhoods. So, ANHD called for a “deep affordable option” within Mandatory Inclusionary Housing, both as a stand-alone option, and required deep-affordability bands within the other affordability options.

The proposal passed on Tuesday included provisions for affordability down to 40 percent of area median income – that’s a rent of $860 month, which is affordable to a family earning $34,500 a year. That’s a significant improvement over the original proposal, adding 15 percent of New Yorkers, about 500,000 families, who could potentially be served by Mandatory Inclusionary Housing. ANHD had wanted the affordability to go even deeper, down to 30 percent of AMI, and we had wanted it to be applied more broadly so it would result in more units. But what passed is still better, significantly more affordable and the strongest inclusionary housing program in the country. 

But, in answer to your question, this version of Mandatory Inclusionary Housing still leaves out a lot of New Yorkers who earn below that amount, over 30 percent of New Yorkers, and the reality is that there are neighborhoods that won’t see their interests represented anywhere in this version. For ANHD, part of the answer is that we believe the final plan could have gotten to even deeper affordability. Another part of the answer is that MIH is just one tool in an overall set of city strategies that are needed to support affordability. The core logic of MIH is that the increased number of market-rate units allowed by the rezoning is supposed to cross-subsidize the required affordable units. So, there is a realistic limit to how many affordable units you can ask for, and how deeply affordable they can be, before you cut too deeply into the developer’s incentive to build and you end up with no new housing.

NP: The real estate development community evidently believes that the 421-a abatement is crucial to building affordable housing. Does the efficacy of Mandatory Inclusionary Housing in New York City largely depend on the Legislature reviving 421-a in some form?

BD: The unexpected suspension of the 421-a tax abatement will have an impact on Mandatory Inclusionary Housing, but it is unclear exactly what that impact will be. Each of the options in the new Mandatory Inclusionary policy are based on an underwriting model that assumed the existence of an as-of-right tax abatement such as 421-a. So, the development picture is a bit less clear now. In the short term, however, we don’t expect that there will be a big impact for two reasons: One, anticipating that there might be some uncertainty with 421-a, many developers got their stakes in the ground and their abatements already lined up, so there is about a year of development pipeline already qualified. And two, much of the new Mandatory Inclusionary Housing will be built in the neighborhoods that are slated to be rezoned, and development in those early neighborhoods will likely require a city subsidy program that can include another form of tax abatement.

So, in the short term, Mandatory Inclusionary Housing works without 421-a. In the long term, the impact is murky, and depends on how strong or weak each local neighborhood development market is. Some very strong neighborhood development markets may not want or need the 421-a abatement, and some very weak neighborhood development markets would be more likely to make use of city subsidy and other city tax abatement programs, anyway. The question will be about those neighborhood development markets that are in between, where the 421-a abatement is a big factor in an owner’s decision to build, or not, and where it would be inappropriately expensive for the city to rely on subsidy and other tax abatement program to fill in the gap.

NP: Historically, communities have received pledges from developers and/or city government to get amenities like parks, more buses or school seats with a rezoning. But these commitments have not always been kept, particularly when administrations change. Is there anything in these zoning amendments that spells out how the administration plans to approach these community benefit agreements?

BD: You raise a legitimate issue. There is a history of community pledges not being met by individual developers because pledges are hard to enforce on any individual developer, and the pledge usually doesn’t carry over to the next owner if the site is sold. There are some recent examples of this happening in Williamsburg. That specific issue doesn’t apply to Mandatory Inclusionary Housing because the affordable housing requirements are tied to the land by the zoning, so the current owner has to comply, and future owners will also have to comply. And, the city’s housing department recently announced that they are setting up an improved and better-resourced oversight system to make sure that the rules are fully enforced.

A bigger concern – from the point of view of many community groups – is that because of the way the program is structured, much of the deep affordability in Mandatory Inclusionary is tied to a commitment by Mayor de Blasio to make subsidy available. This will come down to a neighborhood-by-neighborhood process around each of the upcoming local rezonings that the mayor is planning, and I am sure that communities will push hard to make sure that their affordability needs are met. The deep affordability is also tied to this mayor’s commitment to special new financing programs that he rolled out to support more deeply affordable development, which was an important step forward. The concern is that, even if this mayor remains committed to supporting deep affordability for his full time in office, the rezonings will be in place for many years to come, and future mayors may not be as committed to providing the resources for deep affordability. This concern could be addressed by requiring some deep affordability in the strong neighborhood development markets where city subsidy isn’t required, but this may be an issue that communities ask future mayors to address.

NP: Mandatory Inclusionary Housing seemed to get all of the attention in the pitched debate over the mayor’s housing plan, but there were also some significant changes to the Zoning for Quality and Affordability amendment. Are you satisfied with the final ZQA amendment, specifically regarding the cutting of height bonuses in low-density neighborhoods?

BD: The final changes in Zoning for Quality and Affordability, overall, made the program stronger. The council kept the core of the administration’s proposal, but made sure that the benefits in density and ability to build on parking lots were more directly tied to the creation of new affordable and senior housing. ANHD thinks that zoning benefits should always and everywhere be tied to affordability requirements. The original ZQA proposal was a sensible, modest fix to some zoning and design problems, and the changes strengthened the amendment further.