A Housing Bond-Doggle

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While Mayor Bloomberg has talked up the need for housing downtown, the mechanisms his administration has put in place for making some of the new apartments affordable closely resemble a decades-old plan that by many accounts never quite worked–at Ground Zero’s neighbor, Battery Park City.

Governor Pataki and Mayor Bloomberg announced on August 7 that the state and city will evenly split $8 billion from the feds to rebuild downtown under the New York Liberty Bond Program. These funds, which officials hope investors will help supplement, are slated to go toward commercial ($2 billion), retail ($800 million) and residential ($1.6 billion) development.

Since that announcement, the state’s Housing Finance Agency has come under fire for planning to put most of its $800 million in housing funds toward market-rate apartments. Albany’s program requires developers to dedicate only 5 percent of their new units for low- and moderate-income tenants, despite the fact that most tax-exempt bonds mandate 20 percent.

So far, the city’s plan is no more generous. Tracy Paurowski, a spokesperson for the Housing Development Corporation (HDC), the city’s bond issuer, says the administration plans to give preferential treatment to developers who agree to construct some affordable housing near the Trade Center site, but it is not mandating such a commitment. Instead, HDC will charge each developer a 3 percent fee on the bonds, which will then be put into a housing fund. The city expects to pool up to $25 million for 2,500 units of affordable housing to be built throughout the boroughs.

How and when that money will be spent, however, has not been decided, says Paurowski.

Without these details outlined up front, housing and budget watchdogs fear the promise of affordable apartments will be lost, much as it was at Battery Park City. In 1989, then-Mayor Ed Koch signed an agreement to funnel up to $1 billion of Battery Park City’s revenue for the development of affordable housing. According to a study by the watchdog group City Project, the city had invested only $143 million of those funds into affordable housing as of 2000. The rest went to plug the city’s budget gaps.

“We’ve had 20 years of broken promises. We shouldn’t have another 20,” says Bonnie Brower of City Project.

The City Council has proposed guidelines requiring that 35 percent of the units built with Liberty Bond money be reserved for middle income families, and an additional 20 percent for low-income families. The council does not get an official vote on this matter, however.

Some housing advocates are not ready to give up on Bloomberg. “The Mayor is strongly considering the plan,” says Ronald Shiffman, director of the Pratt Institute Center for Community and Environmental Development and an author of the council’s proposal. After all, he adds, “how are we going to talk about rebuilding Lower Manhattan when the heroes in the days after