HOUSING FIRST! COMMENTS: NYC’s REVISED NEW HOUSING MARKETPLACE PLAN

 FOR IMMEDIATE RELEASE:

As a result of the New Housing Marketplace Plan, New York’s affordable housing industry has undergone a renaissance and its narrative has been re-energized. This narrative, which dates back to Lindsay and Koch, tells the story of New York’s private-public investment partnership in affordable housing as a non-partisan, credit-worthy, and revenue-generating asset that creates hundreds of thousands of jobs by addressing the never-ending demand for hundreds of thousands of quality homes and apartments that the private market, acting on its own, cannot or will not serve. This narrative is especially valuable now because of affordable housing’s costeffectiveness in generating jobs, wages, and business income while the City and State are battling the current recession and searching for new growth sectors to transform local economies.

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As a short-term response to today’s tough financial times and the problems of foreclosures and over-mortgaged apartment buildings, the Revised New Housing Marketplace Plan (NHMP) is a pragmatic and reasonable strategy. And, achieving its 165,000-unit goal is a necessity. So, it is essential that the City obtains the resources – like, $400 million from Battery Park City’s Joint Purpose Fund – needed to achieve this goal.

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In executing the Revised NHMP, it is essential that the City focus on three priorities.
Because of record homelessness in the city,

1. the City should target at least 10 percent of the plan’s units for homeless households
2. the City should identify specific actions it will take to speed up development and
construction of the 12,000 units of supportive housing that were scheduled in the original
New Housing Marketplace Plan.
3. Because of the 356,000-unit shortage of apartments with monthly rent below $600,
the City should target a much greater percentage of the plan’s units to families with
incomes below $25,000 a year

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*** FULL STATEMENT ***

Long-term, the Revised NHMP’s goal of building 24,000 more new units by 2014 will leave the city with a need for 440,000 units to be built between 2015--2030. The prospect of creating 664,000 jobs by producing 440,000 more homes and apartments from 2015 to 2030 should provide a clarion call to current and future City administrations that expansion of New York’s private-public investment partnership in affordable housing must be a constant fixture of City policies to generate jobs, stimulate economic growth, and sustain a livable and affordable city.

In 2001, Housing First! released its Platform calling for the next mayor of New York to invest in the production and preservation of 185,000 apartments and homes for low-, moderate- and middle- income New Yorkers. Since then, Housing First!’s primary goal has been – and continues to be – increasing both the public- and private-sectors’ capital investment in the production and preservation of affordable housing.

We have continuously monitored, prodded, and frequently applauded the evolution of the City’s New Housing Marketplace Plan from its original1961 goal of 65,000 units into a $16.5 billion program to finance preservation and production of 165,000 units by 2014. (The $16.5 billion includes $8 billion in bonds issued or to be issued by the City’s Housing Development Corporation.) In addition to financing nearly 94,000 units through June, 2009, that evolution has been marked by several noteworthy features, including:

# The 24,870 new rental units financed through 9/30/08 are equivalent to 43% of the city’s
58,449 increase in rental occupancy during the 2002--2008 building boom.1
# The 17,109 new and preserved owner units completed through 9/30/08 are equivalent to
46% of the city’s 37,531 increase in homeownership during that boom,2 among these
17,109, there had been only 5 foreclosures as of that date.
# Of the $8.5 billion in capital and expense funding for the plan, $1.2 billion will
essentially be self-financed with earnings from the City’s Housing Development
Corporation.

As a result, New York’s affordable housing industry has undergone a renaissance and its
narrative has been re-energized. This narrative, which dates back to Lindsay and Koch, tells the story of New York’s private-public investment partnership in affordable housing as a nonpartisan, credit-worthy, and revenue-generating asset that creates hundreds of thousands of jobs by addressing the never-ending demand for hundreds of thousands of quality homes and apartments that the private market, acting on its own, cannot or will not serve.

This narrative is especially valuable now because of affordable housing’s cost-effectiveness in generating jobs, wages, and business income while the City and State are battling the current recession and searching for new growth sectors to transform local economies.
Notwithstanding this remarkable renaissance, it has also become the “worst of times” for
affordable housing. Millions of New York owners, renters, and homeless households are beset by these harsh new realities:

# an all-time high number of homeless New Yorkers – more than 39,000 – sleeping in
municipal shelters each night; more than 120,000 different men, women, and children
slept in municipal shelters during FY2009, 45 percent more than in FY2002 4
# a 356,000-unit shortage of apartments with monthly rent below $600 and affordable
to families with incomes below $25,000 – more than double the 166,000 shortage in
20025
# an estimated shortage of 129,000 units to accommodate new household formation by
the 257,000 young adults (20-34 years-old) forced to live with their parents or other
older adults because of the recession, high rents, and low vacancy rates
# a repricing of the rental inventory from 2002 to 2008, displacing 528,000 units renting
for less than $900 with 586,000 units renting for more than $900 7
# a 40% shrinkage in the supply of apartments with rents below $900 from 1.4 million
in 2002 to only 901,000 in 2008 8
# the imminent threat to 100,000 more apartments in over-mortgaged buildings that are
at risk of deterioration, financial default, and foreclosure as a result of real estate
speculation by their owners in recent years.9
# 574,000 tenants in the city – three out of ten – using 50% or more of their incomes
for rent in 2008; and, another 447,000 using between 30% to 49% 10
# 211,000 homeowners in the city – two out of ten – under the extreme financial
duress of using more than 50 percent of their incomes to pay for housing; another
198,000 using between 30% to 49%

And, in today’s tough financial times, the path of affordable housing developers through debt and tax-credit equity markets has become a tightrope. The City’s production programs have also been constrained by these markets; and, its tax receipts and capital budgets have been placed under severe pressure from the nation’s economic meltdown.

The Revised New Housing Marketplace Plan responds to these changing circumstances. The
revised plan sticks to the program’s 165,000-unit goal by 2014. It even adds $996 million to the plan’s capital and expense budget, and it addresses the originally unplanned-for problems of single-family foreclosures and over-mortgaged apartment buildings in financial and physical distress. It scales back new construction from 91,600 to 60,000 units, with 24,000 left to be done by 2014; and, it ramps up preservation from 73,400 to 105,000 units, with 47,000 left to be done by 2014.

Short-term, the response of the Revised New Housing Marketplace Plan is a pragmatic and
reasonable strategy. And, achieving its 165,000-unit goal is a necessity. So, it is essential
that the city obtains the resources – like, $400 million from Battery Park City’s Joint
Purpose Fund – needed to achieve this goal. And, in executing the revised strategy the City
should focus on three priorities.

Because of record homelessness in the city,

1. the City should target at least 10 percent of the plan’s units for homeless
households
2. the City should identify specific actions it will take to speed up development and
construction of the 12,000 units of supportive housing that were scheduled in the
original New Housing Marketplace Plan.
Because of the 356,000-unit shortage of apartments with monthly rent below $600,
3. the City should target a much greater percentage of the plan’s units to families
with incomes below $25,000 a year
Long-term, we must not forget that even more is needed as the City’s PlaNYC 2030 and the
Mayor’s message accompanying the revised plan indicate.

Long-term, the revised plan will place the City further behind in meeting the primary
challenge posed by PlaNYC 2030, namely expanding the city’s supply by 500,000 new units
by 2030 to accommodate new household growth and decrease the existing gap between supply and demand that has made housing less affordable.15 The revised plan’s goal of building 24,000 more new units by 2014 will leave the city with a need for 440,000 units to be built between 2015--2030.

Fortunately, the prospect of creating 664,000 jobs16 by producing 440,000 more homes and apartments between 2015--2030 should provide a clarion call to current and future City
administrations that expansion of New York’s private-public investment partnership in
affordable housing must be a constant fixture of City policies to generate jobs, stimulate
economic growth, and sustain a livable and affordable city.

FEBRUARY 22, 2010
For information, contact:
David Muchnick, Coordinator
HOUSING FIRST!
dmmuch@aol.com 212-957-0848