CityViews:
For East New York’s Housing Crunch, Supply is not the Solution

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Scenes from today's East New York.

Scenes from today’s East New York.

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The authors write on behalf of the Coalition for Community Advancement: Progress for East New York/Cypress Hills.
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East New York (ENY) has long been a haven for working-class families in the city. As other neighborhoods have become increasingly unaffordable, ENY’s importance as a community accessible to lower-income residents, immigrants, and people of color has only grown.

As tenants, homeowners, affordable housing developers, faith-based organizations, and other local stakeholders, the Coalition for Community Advancement shares the city’s interest in creating more affordable housing. But we have grave concerns about the city’s current plans, and claims that the city can address the affordable housing crisis and prevent displacement of ENY residents by dramatically increasing the community’s overall supply of housing. This ignores that significant new building may increase local market pressures, adding fuel to the fire of gentrification; that dramatically increasing development rights is especially dangerous in communities with lots of unregulated housing, such as ENY; and that building “affordable” housing at levels above the reach of current residents will not help them stay in the community.

Simply put, inviting significantly more building in low-income communities without guarantees that most or all of the new housing will be affordable to current residents may increase, not reduce, the risk of displacement. The only increase in housing supply that will help to alleviate New York’s affordable housing crisis is housing that is truly affordable to low-income and working-class people. Opening the floodgates to new market-rate development is not the way to way to build a more equitable city, and we urge the city to reject this strategy for East New York and citywide.

It’s no secret that New York’s real estate market has spun out of control, and housing is ever-more unaffordable. The de Blasio administration hopes to reverse this trend by significantly increasing New York’s overall housing supply, rezoning neighborhoods to allow for much more building; implementing a Mandatory Inclusionary Housing (MIH) requirement to guarantee that about a quarter of all new housing is permanently affordable; and using HPD subsidies to drive down rents.

It sounds like a good plan – but the devil is in the details. City officials insist that gentrification is happening with or without the re-zonings, and at lastTuesday’s MIH hearing, HPD Commissioner Vicki Been argued that “rents are rising because of lack of supply,” and “if we don’t build, displacement will be even worse.” But in ENY, land prices and rents – which had been stable for years – skyrocketed after the city completed a prior planning initiative, and again after the city announced the rezoning. Because planning may increase speculation, the city must take meaningful steps to curb it. Aggressive housing preservation efforts must happen before or as part of planning initiatives, and the city should identify affordable housing as its main goal – a move that would deter investors from overpaying for land and buildings and driving up prices in the expectation of high-cost rentals and sales.

In ENY, the proposed rezoning would create over 6,500 new apartments. MIH would require just 25 percent to be permanently “affordable,” to households making over $50,000 a year – well above the community’s median income of $34,520. The city has promised that HPD subsidies will make many more apartments affordable at levels that more closely match the community needs, and if all goes as planned, about half of new construction resulting from the rezoning will be below-market.

But that means at least half of the housing will not be affordable. For ENY families, “market-rate” housing is luxury housing, and it will not do anything to alleviate current rent pressures; it will worsen them. And what if everything doesn’t go as planned? First, subsidies are voluntary. As the market in ENY strengthens, developers will be less interested in taking them. Second, the mayoral administration could change, or the city might run out of money for subsidies. That could severely limit the affordable housing the city can or is willing to subsidize, leaving developers with significant building rights but minimal affordability requirements. Third, ENY residents will be given a community preference for, at most, half of all new affordable units – if community preference withstands the current legal challenge against it. Otherwise, ENYers will have to compete for affordable apartments with thousands of applicants from around the city. Fifth, by the time new units are ready, many of today’s ENY residents will be long gone. If current residents are not eligible for, cannot afford, or simply do not get the new apartments, the rezoning will not have served as a “preventative measure” for displacement – it will, instead, have hastened it.

These are complex problems that require careful solutions. The Coalition’s plan keeps the needs of current residents at its core and requires at least 5000 new apartments at rents affordable to current residents, including 30 percent of all units permanently affordable at 30 percent AMI. The Coalition’s plan also includes strong anti-displacement policies to protect current low-income tenants and homeowners. If the city doesn’t think it can guarantee 5000 deeply affordable units and curb displacement, we urge the city to stop the rezoning, or cut its size to match what HPD can realistically subsidize within the next few years. HPD has argued that it “need[s] the proposed plan approved so we can move forward” with plans to build subsidized affordable housing – but that is not true. HPD may need a rezoning plan to do these projects, but it needn’t be this rezoning plan. Instead of passing a rezoning that invites 5 times more housing than HPD can commit to subsidizing, the city should consider a more modest plan that permits only the construction of the deeply affordable housing that current ENY residents need.

ENYers do not fear change. They fear that they will not be around to benefit from the changes that are coming. We welcome new affordable housing, but the city’s theory that the lack of supply is the main problem ignores that housing that’s unaffordable to current residents may do more harm than good. Just ask the former residents of communities like Williamsburg – if you can track them down.