How're We Doing?: City Evaluates Housing Plan

Print More

Three out of every four dwellings created so far under Mayor Bloomberg's 10-year affordable housing plan have been occupied by low-income people – a number that exceeds the plan's target but is trending downward, while construction costs and estimates of the housing initiative's budget creep up.

The Department of Housing Preservation and Development last week released a report on who is living in housing units that were completed in fiscal year 2006 under the New Housing Marketplace Plan, which began in 2003 and aims to build or preserve 165,000 units of affordable housing by 2013. The survey follows a similar study of units that were completed in fiscal year 2004. Taken together, the two reports – commissioned, HPD says, to allow better tracking of the actual performance of the housing initiative – depict the complex and changing dynamics of the Bloomberg program.

Of the more than 13,000 units built or preserved in 2006, 75 percent went to low-income people – those making less than $56,700 a year for a family of four, which is 80 percent of Area Median Income. That's well above the 68 percent target for low-income people in the mayor's plan. But it's also down from 2004, when 80 percent of units went to low-income households. Who took up the slack? People of “moderate income” (ranging from $56,700 to about $85,000 for a four-member family) fared about the same over the two years, accounting for around 12 percent, but “middle income” households making more than $85,000 doubled their share to about 13 percent in 2006.

The downward trend in lower-income units “is a shift that we fully expected,” HPD Commissioner Shaun Donovan told reporters at the release of the report Aug. 8. Unlike Mayor Koch's Ten-Year Plan, which almost exclusively targeted low-income people, the Bloomberg housing initiative has aimed to address the growing need for housing help among people with somewhat higher incomes, while still devoting more than two-thirds of its units to low-income residents. The low-income share was expected to start high and then fall to the target. That, said Donovan, is just what's happening.

At least, it's what's happening among renters. The overall success of low-income households under the plan is largely due to their dominance of the rental units, occupying 93 percent of those units completed in 2006, down slightly from 95 percent in 2004. Homeownership numbers tell a different story: The portion of homeownership units that went to low-income people soared from 35 percent to 58 percent between 2004 and 2006, but that was still short of the 65 percent target.

HPD says the overall change in the income mix from 2004 to 2006 reflects a shift in the programs that housing developers have used—from those favoring low-income residents to others targeting higher earners. That trend will continue as the city exhausts its supply of tax-foreclosed properties, which moved from more than 100,000 in past years to below 1,000 parcels in June. As that property dries up, affordable housing developers will have to buy land, driving up costs and rents. And as the supply of city-owned buildings dwindles, there'll also be have to be more new construction, exposing HPD to rising construction costs—which the spring issue of City Limits Investigates identifies as a potential threat to the mayor's plan.

“It's a real issue,” Donovan said of construction costs at the press conference. “We've had to add money to our new construction programs and we've increased the maximum subsidy per apartment.” While a cooling national housing market could ease construction costs in coming months, the persistent local building boom will continue to put pressure on prices. However, HPD insists that encouraging the wave of private development in the city “is an affordable housing strategy in and of itself.”

Affordable housing advocates are more skeptical about what the numbers do and don't show. “We still commend the mayor for making such a tremendous investment in affordable housing,” says David Hanzel, policy director for the Association for Neighborhood and Housing Development. He praises HPD for increasing low-income participation in its homeownership programs. But he's less impressed that HPD is exceeding targets it set itself.

“We probably wouldn’t have agreed with the origination benchmarks of the plan. It probably should have been more like 80 percent,” he says. That HPD predicts less affordability in future years “is troubling,” he adds – as was the recent Furman Center report that found that between 2002 and 2005 the city lost more than 200,000 units affordable to low-income families. “The fact that the city still says we can build our way out of this crisis is both inadequate and troubling. If you look at what is being built, it's not housing that helps low-income people.”

From 2004 to 2006, the share of units going to very low income people – those with incomes lower than 30 percent of area median, or roughly $21,000 – increased by 40 percent. Donovan attributes that to an increase in the numbers of homeless people being served by HPD.

But Patrick Markee, senior policy analyst at the Coalition for the Homeless, says the 239 apartments that went to homeless people in fiscal year 2006 was just not enough, with more than 30,000 people in shelters. “At a time of record homelessness in New York City, it's just kind of unconscionable that the administration would develop a housing plan that targets so few units to homeless people,” Markee says.

HPD's plan is still evolving; at least, its cost is. Some of HPD's rising expenses have been met by shifting money out of underused programs, Donovan said, but he added that the original $7.5 billion price tag for the 10-year plan has edged up to $7.7 billion. That figure could change again: HPD is in the midst of a full reevaluation of its budget projections. The results of that review are expected around the end of the year.

– Jarrett Murphy

Leave a Reply

Your email address will not be published. Required fields are marked *