Mayor de Blasio’s proposed cuts to affordable housing are shortsighted. The serious health and economic impacts of coronavirus on our city are profound. There are 198,000 sick, 20,298 deadi and 900,000 unemployed. Of course none of this harm is distributed equally, the burden has disproportionately fallen on minority working class neighborhoods where data shows have twice the death rate as wealthy neighborhoods. The federal lifeline of unemployment insurance will expire in July. Some small businesses will prevail with the aid of federal loans but many will not. For hundreds of businesses that normally thrive on tourism and a commuting workforce, a viable future is not in clear view. A tragedy of massive unemployment and housing insecurity is facing our city.
Now is the time to double down on affordable housing, and build on the progress already made under the mayor’s ambitious housing plan. It is not the time to retreat by cutting the housing budget by 40 percent as proposed by Mayor de Blasio. During this health crisis, the importance of housing is evident in the safety of isolation it provides, slowing the spread of the virus. Mayor de Blasio’s housing plan is the cornerstone of his fight against inequality because affordable housing is also central to creating opportunity for families. Housing is the launching pad for success and is needed now more than ever.
For affordable housing, there is always a double bottom line- social and economic arguments for investing. Each dollar of city capital leverages four additional dollars. Annually about 20,000 jobs are created. Spending on each development is keeping plumbers, electricians, masons and laborers employed. It is also keeping affordable housing suppliers and subcontractors in business. After the foreclosure crisis in 2008, the construction cranes dotting the NYC skyline were mostly on affordable housing development sites. When private capital retreats from housing construction as experts are predicting, public spending must fill the gap to keep people working while providing affordable housing. With tax exempt rates so low, the cost of government borrowing is too. The housing budget must be protected as affordable housing investment is the counter-cyclical tool that can jumpstart jobs, spending and the local economy.
It is also the way to house the homeless – an important part of the public health response to this deadly pandemic. Every one of us needs a home right now- that home cannot be a carboard box on a formerly crowded midtown sidewalk, it cannot be the A train needed to transport essential workers and it cannot be an 851-bed shelter. Instead of housing the homeless in hotels to social distance, NYC should think bigger about solving homelessness during this pandemic and convert those hotels, which are most likely to be in financial distress, to permanent affordable housing. Currently DHS is housing 8,000 homeless adults in hotels, but this is only a temporary solution. The city will need to provide stable affordable housing to keep them safe.
With the economy on pause, real estate prices are sure to drop and overleveraged rent stabilized multifamily buildings will come on the market. NYC’s housing plan will need adequate funding to adapt quickly to take advantage of these opportunities to preserve this important housing stock. Good stewards of these buildings are needed to preserve them for another generation of New Yorkers and there is no shortage of experienced and reputable housing operators among NYC’s affordable housing community. The city should bring back the Neighborhood Pillars program, which was established for the acquisition and rehabilitation of rent stabilized housing prior to major reforms in the rent laws last year. This is the time to act before another wave of unsavory investors extracts value through repositioning of these assets.
Coronavirus is loosening its grip on New York City, but it has squeezed a lot of life out of us. The vibrancy of the neighborhoods we love, the hustle and bustle of our daily commutes, the noise of our busy lives. As we restart our city, investing in affordable housing must be part of our recovery- to bring back jobs, to stimulate the economy and most importantly to keep us safe and healthy.
Rachel Fee is the executive director of the New York Housing Conference.