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Housing New York:

Pairing Neighborhood
Investment with Protections
Against Displacement
Vicki Been
Commissioner
Housing Preservation and Development
City Law Breakfast
November 13, 2015

A Confluence of Factors Has Put


Pressure on New York City Renters
Urbanization
Stagnant wage and job growth

Inadequate production of new housing


As competition for housing increases but wages do not,
housing costs impose an extraordinary burden upon
New York City renters, especially low and moderate
income households

Gap Between Rents and Incomes


Index of New York City Median Gross Rent and
Renter Household Income 2005 - 2014

Data Source: American Community Survey

NYCs Housing Production Is too Low

Source: U.S. Census Bureau

Limited Supply of Affordable Units


Supply and Demand Among Extremely Low Income and
Very Low Income Renter Households

Supply
Data Source: Housing and Vacancy Survey (U.S.
Census), 2014.

Demand
There are more than two Extremely Low Income
and Very Low Income households for every one
housing unit that is affordable to them.

200,000 New or Preserved Units


To address the shortfall in housing supply, especially for
low and moderate income households, we have a dual
strategy for investing in neighborhoods, and will leverage
all federal, state, and local tools to:
Secure the new construction of undersupplied low income and
mixed income housing
Preserve existing low and mixed income housing developments
both already subsidized and not yet under an affordability
program

We Are Right on Target!


21 months in, the City has closed on 30,155 homes -- 15% of the
plans goals
New Construction:
Preservation

11,693
18,462

39%
61%

86% of the homes are for extremely-low, very-low and lowincome residents those making less than $62,150 for a family
of three

Obstacles or Opportunities?
Limited supply of City-owned land that is readily developable,
enough for perhaps 16,000 homes over the remaining 8 years of
Housing New York
To open up other development possibilities will require both
considerable infrastructure and resiliency investments

Land costs are increasing rapidly so private land requires more


subsidy
Between 2009-2014, land prices rose dramatically around the
city: Manhattan +34%, Brooklyn +96%, Queens +51%

Creating Opportunities for the


Development of New Affordable Housing
Currently studying seven areas for rezonings; up to eight more
to come
Introduced the most ambitious Mandatory Inclusionary
Housing program in the nation to increase the amount of
housing built as affordable
Reformed 421-a to tie tax incentives to production of higher
percentages of affordable housing, at a broader range of
incomes, in every area of the City
Made our voluntary inclusionary policies easier to use to create
more affordability in neighborhoods with the best job and
educational opportunities
Introduced Zoning for Quality and Affordability to reduce
regulatory barriers to affordable homes, especially homes for
our seniors

Investing in Neighborhoods

No Neighborhood Should Be Left Behind

East New York

East New York: Pitkin Avenue Existing


Conditions

East New York: Pitkin Avenue Vision

East New York: Atlantic Avenue Existing


Conditions

East New York: Atlantic Avenue Vision

Who Benefits?
People worry that the existing residents of neighborhoods
seeing substantial investment, especially the poorest
residents, will not share in the benefits
More specifically, they fear that they will be displaced as the
neighborhood becomes more desirable
They are concerned that the improvements and investments
will not be targeted to their vision of the community that their
concerns and hopes for the neighborhood will not be solicited,
or will be ignored
They worry that the new affordable housing built will not be
accessible to them because they will make too little or too
much for the incomes served, or because so many people will
apply for the housing

The Problem of Displacement


Displacement, defined broadly, includes:
Current residents moving away because of rising costs or a loss of
community
Low and moderate income families unable to find affordable housing

Harms caused by displacement:


Residents have to leave their homes and the neighborhoods in which
they have invested energy, and which are critical to identity and culture
Individuals and businesses have to move to less desirable locations
Homeowners cant carry increased expenses and have to leave before
realizing increase in property values
Current residents unable to enjoy the benefits of revitalization the new
stores are too expensive, the jobs available dont match their skill sets

These harms fall more heavily on poor and minority residents who
have fewer alternatives when moving

Relationship Between Investment and


Displacement

Most of the more recent and rigorous studies of gentrification find that
poor households and renters do not move out of gentrifying
neighborhoods at unusually high rates
While low income families face a great deal of housing instability in
general, most of the research shows that renters move away no more
often, or even less often, in gentrifying than in non-gentrifying poor
neighborhoods
Some research shows that homeowners in gentrifying neighborhoods
are more likely to move than if they lived in poor, non-gentrifying
neighborhoods (likely as they realize gains in value)
The research also shows some gains for those who remain in
gentrifying neighborhoods (increasing incomes and greater
neighborhood satisfaction)

But the Fear Is Real and Raw


Research shows what happens on average; people worry that this
time, this neighborhood, this confluence of factors will be different
Research is limited by methodological and data challenges
Low income tenants and homeowners face considerable housing
insecurity regardless of gentrification or other changes to
neighborhoods
In-movers may be different than they would have been absent the
neighborhood improvement, so the demographics, and the look and
feel, of the neighborhood may change
Fear is part of broader national, and local, concern that the
American dream of improving ones situation is fading

So How Will We Protect Against


Displacement?
Preserving the affordability of existing subsidized housing, and
bringing more of the existing stock under affordability restrictions
through rehab and other subsidy programs
Requiring all new housing that receives tax exemptions, or is built
through land use changes, to include affordable housing
Securing even more affordable housing, and even deeper affordability,
through City subsidies
Strengthening rent regulations
Preventing harassment of existing tenants
Helping local residents take advantage of new affordable housing
Providing places for neighborhood institutions to remain
Tying improvements to economic development and local hiring

Preservation Efforts
Taking a more data-driven approach to preserving affordability
Working with landlords to keep Mitchell-Lama, HUD-assisted, and
Low Income Housing Tax Credit (LIHTC) apartments from going
market rate when existing affordability requirements expire
Targeting preservation and outreach strategies to neighborhood
needs and focusing on transitioning neighborhoods
Reaching out to small building owners to help preserve affordability
through Neighborhood Preservation Helpdesks to offer physical,
financial, and technical assistance
Using our Green Housing Preservation Program to finance energy
and water efficiency improvements that will lower utility costs and
promote long-term affordability

Unprecedented Commitment to Build Affordable


Housing in Areas Undergoing Change
Mandatory Inclusionary Housing will require that 25% to 30% of the
housing be permanently affordable
HPDs subsidy programs and financing tools will achieve additional
affordable units, and deeper affordability where appropriate
For example, in East New York, we have committed to:
Use our subsidies to achieve 100% affordability in at least half of the
development that occurs over the next decade
Ensure that all HPD-financed development will provide at least 40%,
and in some cases, 45%, of the housing for families making between
$23,350 to $38,850
Breaking ground on construction of over 1,200 units of affordable
housing within two years of ULURP

Strengthening Rent Regulation, Which Ensures


Affordability in Many Changing Neighborhoods

Source: U.S. Census Bureau. See 2014 Housing and Vacancy Survey

Rent Stabilized Stock Is Critical for the


Lowest Income Families
Rent Regulation Status of Households in
Unsubsidized Rental Units
Rent Stabilized

Private, non-regulated

400,000
350,000
300,000
250,000
200,000
150,000
100,000
50,000
0

<30%: Extremely
Low Income

31-80%: Very
Low or Low
Income

81-120%:
120-200%:
Moderate Income Middle Income

>200%

Source: 2014 Housing and Vacancy Survey (U.S. Census); source of housing assistance is self-report and classified
based on calculation of HUD Income Limits (FY2011)

We Achieved Significant Reforms but


More Needs To Be Done

High-rent vacancy decontrol: Raised to $2,700 per month and


indexed to RGB increases, but we need to raise the threshold
higher

Vacancy allowance: Rent increases upon vacancy were


modified for units receiving preferential rents, but we need to
further limit vacancy allowances and protect tenants with
preferential rents

Major Capital Improvement (MCI): The time over which the MCI
is spread out was extended, but we also need to prevent the
increases from raising the rent permanently

Rent Guidelines Board Increases: This past summer, RGB


voted the lowest rent increases ever, with 0% increases for one
year leases, and 2% for two year leases

Preventing and Addressing Harassment


Rent regulation reforms increased civil penalties for
harassment
Mayor de Blasio has devoted significant funding in legal
services for renters who fear they are being harassed to
leave their apartments, or who are being evicted
A total of $76 million for legal assistance for low-income New Yorkers by
2017

Together with the states Tenant Protection Unit, Attorney General


Schneiderman, and DOB, we formed first ever tenant harassment
prevention task force
HPD and DOB are working together to proactively increase
inspections of buildings with owners we have reason to worry about
City Council passed legislation to prevent harassment through
repeated buy out offers

Providing Housing for Lower Income New


Yorkers
Housing New York committed that 20% of the 200,000 units will
target very low and extremely low income, up from 12%
More and deeper affordability required now than ever before:
421-a requires units going as low as 40% AMI ($31,080 for a family of
three)
Proposed MIH requires averaging to 60% AMI ($46,620 for a family of
three) or 80% AMI ($62,150 for a family of three), which can be tailored
in each rezoning to include very low income bands

HPD introduced new subsidy programs to provide housing for


incomes as low as 30% of AMI (as low as $15,232 for single adult
households)

Providing Housing for a Broader Range of


Incomes
Too much of our housing was targeted at the income
bands required by LIHTC ($46,620 for a family of three
in 2015)
Goal is to provide economically diverse neighborhoods,
not to concentrate poverty
Part of displacement fear is that young adults moving
back after college, parents and grandparents cant live in
the same neighborhood because a range of housing isnt
available; having a mix is crucial

Why Not Even Deeper Affordability?


Issue is simply a tradeoff going deeper would require
hundreds of millions more in City subsidies, or mean
producing fewer new units
The cost of operating a new rental apartment barely
breaks even with rents at 30% AMIweve covered the
costs in the past through federal Section 8 vouchers, but
the federal government has cut funding for vouchers
dramatically
Our obligations to fair housing are to promote diversity,
not to have all the new housing match the existing
incomes of the neighborhood

New Housing Is Only Part of the Strategy


We are focusing on those with extremely low incomes
through:

preservation policies
homelessness prevention efforts
supportive housing commitments
NextGen NYCHA to ensure better fiscal and physical health in
that critical housing
our broader economic development strategies

Housing alone cannot solve poverty; we must continue


to call on our partners at the State and Federal levels to
increase their investments in the lowest income
residents, and in housing through vouchers, senior
housing programs, and improvements to LIHTC

Marketing and Leasing of our Housing

Community preference
Increased marketing and counseling
Housing applications now available in seven languages
Housing Ambassadors Program
Financial counseling services

New Approach to Neighborhood Planning


and Community Engagement
New NYC Neighborhood Planning Playbook
Capital budgeting process now aligns investments of different
agencies
Neighborhood infrastructure fund ensures growth is accompanied by
needed amenities and services

Making Our Investments Serve the


Community
Building opportunity for MWBE and non-profit developers
to promote local hiring
Using our buildings to house critical community facilities,
job training centers
Hire NYC
Economic development for job growth
Support for small business services

In Sum, Multi-Pronged Strategy to Ensure


Inclusive Development
Use our investments to meet the needs of those
neighborhoods that have traditionally been underserved
Encourage all residents, especially the most vulnerable
residents of those neighborhoods, to participate in the
visioning and planning for investment
Ensure growth is always accompanied by affordable housing
to ensure economically diverse neighborhoods
Mitigate unintended consequences for those people who may
be vulnerable to displacement

Bottom Line: We Must Shape Development


Rather than React to It
Market forces will change neighborhoods whether our
rezonings, Mandatory Inclusionary Housing or Zoning for
Quality and Affordability proposals are adopted or not

Those proposals give neighborhoods the best tools any


city in the country has provided to shape the
development to their needs
Wishing/demanding that things stay the same wont
work!

my mission is to make sure the people who made our


neighborhoods great can still stay in the neighborhoods they
love. The difference today is that we, we the people, will
decide what kind of development we want. The city government,
together with the community, will set the terms for the future.
Mayor Bill de Blasio