Most people who live in rent-stabilized apartments are above the poverty level, he says, and the poor could be protected more efficiently by giving them housing subsidies.
These arguments, which are common among critics of rent controls, are utterly clueless about New York City's housing realities.
First, rent controls are not a housing program only for the poor. They are an attempt to protect all tenants from gouging during a chronic housing shortage. The city's rent-regulation laws, first enacted as a continuation of World War II price controls, would expire automatically if the vacancy rate for rental apartments went above 5 percent. That has never happened. It's a simple issue of supply and demand: Without the regulations, renting an apartment here would be like buying batteries during Hurricane Sandy.
Second, the bifurcated market is largely the result of the weakening of rent stabilization in the 1990s, which primarily affected people looking for housing. In 1994, the city deregulated vacant apartments where the rent had reached $2,000 a month. The state enacted a similar law in 1997, which made it impossible for the city to repeal it.
Those laws were sold to the public as something that only affected a handful of Manhattanites who were too rich to deserve cheap rent. Anthony Weiner, who voted for deregulation as a City Councilmember, still defends it on those grounds. It hasn't worked that way.
If you want to see what would happen if rent control and rent stabilization were eliminated, look at what has happened in the city since 1997. The combination of inflation, the housing shortage, and fraud has led to the deregulation of almost every vacant apartment in the lower half of Manhattan, and pushed up rents all over the city. Apartments over the current deregulation threshold of $2,500 are advertised in Bay Ridge, Bedford-Stuyvesant, and East New York; in Astoria, Harlem, and Washington Heights; and in Kingsbridge and on the Grand Concourse.
In the New York City of today, the two best ways to make housing more affordable would be to strengthen rent controls and build much more genuinely affordable housing. Both of these remedies face major political obstacles.
A 1971 state law prevents the city from enacting rent regulations stronger than the state's, and the real estate lobby shovels lots of money into Albany. After the Republicans retook the state Senate in 2010, Rent Stabilization Association head Joseph Strasburg bragged about how landlords had "basically emptied our piggy banks" to protect their interests. One real-estate magnate, Leonard Litwin, exploited a loophole in campaign-finance laws to give almost $2 million in the 2012 election, primarily to Senate Republicans, and has already contributed $625,000 to Gov. Andrew Cuomo's 2014 campaign.
With federal funds for new public housing eliminated, almost all new "affordable" housing here in the last 20 years has been created by complicated schemes that give luxury developers tax credits for building token amounts—20 percent, often less in practice—of below-market apartments.
Mayor Michael Bloomberg's New Housing Marketplace program has built more apartments for people who make more than $100,000 than for people who make less than $32,000. This is due to the program's indirect financing, and because the median income in the affluent counties of Westchester, Rockland, and Putnam is included in the formula that determines what "affordability" means.
The most intellectually honest argument against regulating rents is the naked libertarian one—that government has no business interfering with the market, and people have no right to a product they can't afford. This reasoning is far too ruthless to fly politically, so rent-regulation foes have to find friendlier ways to package it.
One is to portray rent-stabilized tenants as affluent, aging "dowagers," who pay $225 for a seven-room apartment on West End Avenue. This is like the Reagan-era legends of "strapping young bucks" buying T-bone steaks with food stamps. Davidson seems to buy into this myth, as did former city Rent Guidelines Board chair Edward Hochman.
Here's the reality: In the pre-deregulation year of 1996, when there were still more than 200,000 rent-stabilized apartments that cost less than $400, 80 percent were occupied by people making less than $25,000 a year, and half by people making less than $10,000. About 200—less than 0.1 percent—were occupied by people making more than $100,000.
Yet the federal survey concluded that from 2008 to 2011, the city lost more than 150,000 apartments that rented for $700 or less. The remaining low-rent units make up less than one-sixth of the total supply, and most are in public or subsidized housing.
Rent-control foes offer a way to ease our consciences by offering subsidies to the poor and the elderly. At the Rent Guidelines Board's final vote in June, both chair Jonathan Kimmel and owner representative Steven Schleider argued that this would be fairer to landlords than restricting rents; Davidson endorses this too.
The truth is that rent subsidies for people below the poverty level—about $17,000 for a family of three—would do nothing to protect working and middle-class tenants.
Davidson admits that eliminating rent controls would likely drive everyone who makes less than $90,000 out of Manhattan, which he says would not be healthy for the city, but then he claims that it would be "great" for the middle class. This makes sense if he's defining "middle class" as an income in the low-mid six figures, visualizing all the fantastically located apartments in Manhattan and brownstone Brooklyn occupied by rent-regulated peasants, and imagining that a mass eviction would open up many more choices on the market and might even enable him to snag a place for $3,300 instead of $3,750.)
Curiously, the real-estate lobby has yet to advocate for the tax increases necessary to adequately fund the federal Section 8 rent-subsidy program, which has been closed to new applicants here since 2009 and generally won't help pay for a two-bedroom apartment that costs more than $1,474.
A lesser-known but important issue is that rent-controlled and rent-stabilized tenants can't be evicted without a legal reason, while unregulated tenants have no right to renew their leases. How stable would the city's neighborhoods be if rising rents forced residents to move every year or two? How would people raise children? How would they maintain the social relationships that sustain communities?
There is also a deeper social and moral issue. Opponents of rent regulation often argue that it forces property owners to "subsidize" tenants who pay below-market rents.
But who is really "subsidizing" whom? Real estate in New York City is valuable because of its proximity to the biggest public transportation system in the world, and because it sits at the center of a metropolitan area sustained by the labor of millions of people. Why should these millions be forced to subsidize a few thousand multimillionaires who have bought up this land?
Some members of the NYC Alliance for Public Housing are also members of R3.
The NYC Alliance for Public Housing members proposes:
NYCHA Must Retain All Its Operating Revenues
Halt the Current NYCHA Infill Land-Lease Plan
Moving-to-Work (MTW): Binding Agreement Needed
Section 8 Housing Choice Voucher Cuts
Keep NYCHA Centers Open; Retain NYCHA Jobs
Where is the NYCHA Disaster Preparation Plan?
Is a One-Evening, Three-Hour Public Hearing Enough?
ALLIANCE TO PRESERVE PUBLIC HOUSING
Participants and Support
The position paper below on the NYCHA
Draft FY2014 Annual Plan has the support of the following organizations and
concerned elected officials (list in formation):
for Children of New York
City Employees Union
Local 237, International Brotherhood of Teamsters
Families United for
Racial and Economic Equality (FUREE)
Good Old Lower East
Legal Aid Society
Environmental Law and Justice Project
Pratt Programs for
Sustainable Planning and Development’s RAMP Program
Action Committee (Tenants PAC)
Urban Justice Center
Alfred E. Smith
Resident Association, Manhattan
Resident Association, Manhattan
Davidson/Site 166 Resident
Resident Association, Manhattan
New York State Legislature
Richard N. Gottfried
Linda B. Rosenthal
NYS Senator Brad
NYS Senator Daniel
New York City Council
NYC Council Member
Gale A. Brewer
NYC Council Member
NYC Council Member
NYC Council Member
NYC Council Member
ALLIANCE TO PRESERVE PUBLIC HOUSING
NYCHA FY2014 DRAFT ANNUAL PLAN
The issues identified and the
recommendations forwarded in this position paper were developed in light of the
ongoing pressures NYCHA and its residents face:
·A $61 million public housing annual operating deficit and increasingly
inadequate government funding at all levels—federal, state and local.
·A $6-7 billion backlog in needed major capital improvements, leading to
further deterioration of building conditions and long resident waits for
·Long waiting lists for public housing and for Section 8 vouchers, fewer
opportunities through turnover of apartments and vouchers.
·Continuing, high unemployment rates among the NYCHA resident labor
force, continued need for workforce development, training and job
·The need to preserve our public housing and Section 8 housing choice
voucher resources in the face of declining government commitments.
RETAIN ALL ITS OPERATING REVENUES
As Washington grapples with deficit reduction and sequestration, public
housing is threatened by further decreases in inadequate federal support. Yet, Washington
is the only level of government that provides operating support to NYCHA public
housing, while New York City is the only level of government that draws HUD operating
funds away from NYCHA:
·$75 million dollars annually for the
Police Department (NYPD) for “special services”, under a 1995 Memorandum of
·$23 million annually for PILOT payments
(in lieu of property taxes),
·$1.8 million annually for special
pick-ups by the Department of Sanitation.
NYCHA no longer has enough operating funds to afford to underwrite city
services. At a time when it cannot sustain basic management operations—such as
repairs and elevator maintenance—or continue community and senior center
services, these non-expiring agreements need to be seriously considered by the
Mayor and NYCHA for immediate termination.
City immediately terminate the $75 million annual NYCHA payment for police
services. Oddly, the NYPD provides comparable services free to private
landlords under the “Clean Halls” program,. NYCHA residents already pay
for police protection through their local taxes—they should not have to pay
City immediately terminate the $23 million annual PILOT payment to
NYC—payment in lieu of taxes. Nonprofit housing developers and many
institutions are exempt from property taxes.
City immediately terminate the $1.8 million in annual payments to the
Department of Sanitation.
Additional pick-ups are and should be provided by the Department as
needed, without special payments.
HALT THE CURRENT NYCHA INFILL
The draft Annual
Plan emphasizes the NYCHA Infill Land-Lease Plan as a key strategy to generate
needed revenue, an estimated $30 to $50 million annually. In early 2013, the
Infill plan targeted eight “prime market” Manhattan developments, where
fourteen available parcels—parking lots and open spaces—were designated for
99-year leases to private developers of residential housing, largely apartments
at high-end market rents. Attachment B
lists seven of the developments—Smith, Meltzer, Baruch, LaGuardia,
Douglass, Washington, and Carver Houses—for which NYCHA will prepare Section 18
Disposition proposals to be submitted to HUD in 2014.
The Infill Plan has
generated substantial controversy. It is opposed by seven of the Resident
Councils in the eight target developments. The three affected Manhattan
Community Boards —Boards 3, 7, and 11—have registered strong objections to
Infill, particularly to the rushed, secretive way NYCHA moved forward, without
meaningful community engagement. Concerned State legislators introduced
legislation requiring NYCHA dispositions to comply with New York City’s Uniform
Land Use Review Procedure (ULURP), which was supported in a May 23rd
City Council resolution and passed by the State Assembly.
The Infill plan has
serious shortcomings, in both substance and process. Briefly mentioned in the 2011 PLAN-NYCHA, the Infill plan was
further described in October, 2012, when NYCHA announced at an elite breakfast
meeting its plan to release Requests for Proposals (RFPs) to developers in
early 2013. However, the 8 Resident Councils did not learn they were targeted
until February and only through a leak in the Daily News. NYCHA had been at “the drawing boards” for
some time, without resident and community engagement in critical plans for
their communities. Since then, the Councils have not had ample time or
resources to obtain independent technical assistance to review and assess the
impacts of Infill proposals on open space, access to light and air, and other
issues concerning community costs and benefits.
The release of RFPs
is now expected in July. But the
Authority’s concern for speed has constrained Infill redevelopment plans to
within existing zoning constraints—nearly exclusively residential
towers—without considering broader community planning issues, such as needed
retail and commercial facilities, or whether “tower in the park” campuses
should be woven into the fabric of the surrounding community. Infill is an example not only of unilateral
planning decisions made without real community engagement, it is also an
example of “bad planning”, limited to narrow development objectives, primarily
leasing parcels to private developers for residential construction.
NYCHA’s rush is
inexplicable. Its long-term, structural financial issues might be better
addressed with more thoughtful, inclusive, long-term planning.The Authority must work communities to
determine whether and how private redevelopment capital can significantly
benefit public housing communities as well as generate revenues. The current
Infill plan is only the first wave of escalating dispositions across NYCHA
developments. Transforming public housing communities is too serious a matter
to be done quickly, without careful planning and extended dialogue with
community leaders.NYCHA must take the
time to develop a consensus on future plans, one that envisions robust,
mixed-use communities to which all can look forward.
NYCHA call a halt to its
current Infill plans. It should go back to the “drawing
boards” and set up a meaningful community planning process from the start,
one that includes both Resident Councils and the Community Boards. Since the Annual Plan (Attachment B)
indicates NYCHA will submit Infill applications/proposals to HUD in
October, 2014, there is time to reconsider, rather than waste resources by
moving forward with faulty or unpopular proposals. (The timeline now calls for approval of
“conditional designation letters” to developers by December 2013.) In 2014, it will be up to the next Mayor
and a newly appointed NYCHA Board to approve the Section 18 Infill
applications/proposals to HUD. Many
mayoral candidates, and virtually every elected official representing the
proposed sites, have registered objections to the current Infill
plan. There is still time to work
with resident and community leaders to seek consensus on whether and how
private redevelopment can benefit NYCHA communities.
NYCHA must agree to comply with ULURP. In the absence of State legislation
to require compliance, NYCHA should comply voluntarily. Given the density of city neighborhoods,
plans to redevelop NYCHA communities also have spill-over impacts on the
surrounding community that should be addressed through ULURP.
NYCHA must comply with HUD
Section 18 disposition regulations if it moves forward with current Infill plans. NYCHA does not plan to submit Section 18
applications or proposals to HUD until October 2014 (Attachment B.) Since
this Annual Plan does contain such applications or proposals, HUD
regulations require that NYCHA either include them in next year’s Annual
Plan (2015) or offer them as “significant amendments” to the 2014 plan. In
either case NYCHA is required to release the written
applications/proposals, allow 45 days for public review, and conduct a
NYCHA must expedite the
allocation of HUD TPA (Tenant Participation Activity) funds to targeted Resident Councils, so that
they can assemble the independent technical assistance they need to review
development proposals and strengthen their voice in plans for the future
of their communities.
NYCHA Infill plans must
retain existing community services. The Infill plan for Washington Houses calls for demolition of the
standing Union Settlement Community Center. Any redevelopment plan must
include construction of new community center facilities as well as provision
of temporary facilities during construction.
NYCHA must hold special
public hearings on all Section 18 disposition proposals, preferably at the affected
developments. Each initiative
deserves close attention, including its own special review and hearing
process. Each is too important simply to be mentioned in a voluminous 200+
page NYCHA Draft Annual Plan and crammed into a 3-hour citywide public
hearing one night a year.
BINDING AGREEMENT NEEDED
This year the Annual
Plan again registers NYCHA’s intention to apply to HUD to become an MTW
authority when and if that is made possible by legislation that has been moving
slowly through Congress. MTW started in
1996, allowing a limited number of housing authorities to demonstrate how
deregulation—waiving federal laws and regulations—could promote more effective
public housing programs.
One of its
provisions was “funding flexibility”, allowing authorities flexible use of all
HUD funds received, for public housing—operating and capital funds—and for Section
But MTW also conveys
special powers to housing authorities:
The number of assisted units—public
housing and voucher units combined—can be reduced. If
NYCHA allocated voucher funds to public housing operations, the number of vouchers
available to current holders and waiting-list families would be reduced.
MTW authorities can seek waivers to
existing federal laws and regulations, such as the Brooke Amendment (capping rents at 30% of income), and
the HUD 964 resident participation regulations. Most current MTW authorities
have received such waivers.
MTW authorities have the power to impose
new restrictions on residents. Some MTW authorities have
instituted work requirements; others have imposed time limits on tenancy.
intention is to obtain MTW funding flexibility, not to waive basic resident
rights and protections, or impose new restrictions on residents. However, there
is no assurance that once it becomes an MTW authority, NYCHA will not use those
special powers. Intentions and needs can
change over time, depending on the NYCHA Board and the Mayor who appoints them,
as well as the HUD administration. At last reading, authorities can revise
their MTW agreements as long as HUD agrees. There is a risk. The central
question is: What binds NYCHA to its original intentions under MTW over the
Any NYCHA proposal to become an MTW authority
on the reduction in the total number of assisted public housing and
Section 8 voucher units.
A list of
the federal laws and regulations that NYCHA will retain under MTW.
A list of
restrictions—such as time limits and work requirements—that NYCHA is
prohibited from imposing on residents.
NYCHA must hold a special public hearing on
any MTW proposal prior to submission to HUD, with 45 days for advance review of the written proposal.
A local Memorandum of Understanding (MOU) should
be signed, which binds NYCHA
to its original proposal. No change in the MTW agreement with HUD can be made
without a special local approval process to be specified in the MOU.
NYCHA presentations of the MTW option to
residents must be fair and balanced. At recent Roundtables, NYCHA staff presented
MTW, focusing only on the advantages of flexible funding, without describing
the potential risks of waivers and new restrictions on residents.
SECTION 8 HOUSING CHOICE VOUCHER CUTS
As a result of funding
reductions due to the federal sequester, NYCHA is proposing draconian cuts to
its Section 8 Housing Choice Voucher program:
There will be no new rentals for the 124,000 households on the
Section 8 voucher waiting list. Turned-over vouchers will not be reallocated
in order to reduce the number of assisted households and units. As of
December 2013, NYCHA estimates 1,200 Section 8 vouchers will be
NYCHA vouchers will not cover rent increases for households
already in the Section 8 program. Although most voucher holders are
protected by rent regulation, they face rent increases set by the Rent
Guidelines Board. As a result, many
families will have to pay increased out-of-pocket costs for rent, above
the 30-percent of income considered “affordable.”
NYCHA plans to reduce the “payment standard” from 110 to 90
percent of the allowable HUD Fair Market Rent (FMR). This will result in
rent increases for about 9,600 voucher holders, which NYCHA estimates at
an average increase of $57 a month.
This is a steep increase that imposes a significant additional
burden on families, which can result in growing rent arrears, evictions,
and risks of displacement and homelessness.
NYCHA has announced plans to apply to HUD for a waiver that would
allow it to impose these rent increases immediately, rather than wait for
the next recertification.
NYCHA and the City press
the State to immediately increase the shelter allowance received by
Section 8 tenants on public assistance to the levels now received by private landlords. This modest increase could significantly
mitigate the consequences of the cuts due to sequestration.
NYCHA must press HUD for
its fair share of the $100 million the agency has set aside to deal with
the impact of the sequester on Section 8 residents. NYCHA presently holds about 5 percent of
the 2 million Section 8 vouchers nationwide.
NYCHA should conduct a
“rent reasonableness review” for the 9,600 voucher households likely to be impacted, to
determine whether there is a need for a reduction in the payment standard.
NYCHA should refrain from
seeking a HUD waiver to expedite voucher rent increases. The Authority should continue to impose rent changes only upon
recertification—that is its ongoing contract with Section 8 residents.
KEEP NYCHA CENTERS OPEN, RETAIN NYCHA
NYCHA estimates a
$205 million reduction in federal funding this year, a major gap that would
prevent it from maintaining current operations. Sequestration has been looming
since early 2013, but NYCHA waited until mid-June—at the eleventh hour in the
NYC budget process—to announce the cuts would require closing the 69 community
centers and 37 senior centers it operates, which would be disastrous for young
and senior residents. A loss of 500
NYCHA jobs would also result. City
Council agreed to restore $58 million; with additional effort from the NYC
Department for the Aging (DFTA) and the NYC Division of Youth and Community
Development (DYCD), it is hoped the closings can be prevented. Job losses are now estimated at 70 to
100. It is unclear whether retrenched
NYCHA workers can be absorbed by nonprofit organizations that will be operating
some of the centers.
NYCHA adopt the
recommendations made in the recent report of the Teamsters Local 237 NYCHA
Task Force to improve efficiencies, retain jobs, and strengthen front-line
NYCHA should open itself
to a systemic audit—conducted by the State Comptroller —to identify where
and how its operations can be made more efficient. Resulting savings could be used to retain Center operations and
expedite lagging repairs. Management operation improvements enabled NYCHA
to accelerate repairs this year. A
more thorough audit is needed.
NYCHA should not renew or
initiate new private management contracts.
If NYCHA jobs
are to be retained, the Authority should discontinue current contracts for
private management. It should back off its plan to outsource management of
an increasing number of developments to private management companies. Every operating dollar should be used to
retain in-house jobs and minimize job losses.
NYCHA should strengthen
its strategic planning capacity. There is no excuse for the
last-minute announcement of dire cuts in community and senior center
programs. Contingency plans to absorb sequestration losses should have
been in place earlier.
WHERE IS THE NYCHA DISASTER PREPARATION PLAN?
Superstorm Sandy had
a devastating impact on NYCHA residents and communities in Lower Manhattan, Red
Hook, Coney Island, and the Rockaways. It is startling to find the Annual Plan
makes no reference to an Authority plan for how NYCHA will organize its
response to future disasters. (Page 23 mentions
a $7 million Department of Labor grant to create 441 temporary work positions
for repair, restoration, and outreach at Sandy-impacted developments. Page 118 describes a pilot program to “advise
residents of all ages to prepare for emergencies.”) The omission is surprising
in light of Representative Nydia Velazquez’ proposed bill—the Public Housing
Disaster Planning Act (H.R.1669)—requiring housing authorities to develop
The question is how
NYCHA plans to prepare itself, as a responsible agency, to respond to
catastrophes like Sandy and prevent a repeat of the Authority’s apparent
disorganization and the stranding of older and infirm residents in their
apartments. An “evacuation order” is not
enough. With autumn, and the next hurricane season only months away, it is
critical that NYCHA be better prepared.
NYCHA must develop a
Disaster Preparation Plan
as part of the Draft Annual Plan, describing how the Authority will
organize itself to respond to emergencies like Sandy.
The Plan should include resident training/certification and
NYCHA collaboration with agencies and community organizations that can
offer disaster relief.
The Plan should include infrastructural improvements to
vulnerable NYCHA buildings to assure resiliency to future flooding
disasters, as recommended in PlanNYC:
A Stronger, More Resilient New York, June 2013.
The Plan should be subject
to public review and a special public hearing.
IS A ONE EVENING, THREE-HOUR PUBLIC HEARING ENOUGH?
The 1998 Housing Act
gave greater autonomy to public housing authorities to set their own
plans. To promote accountability, the
law required authorities to release a draft Annual Plan each year, allow 45
days for public review, and then conduct a public hearing on the Plan.
The law applies to
housing authorities across the country, regardless of their size. But NYCHA is
the largest public housing authority in the country. With 180,000 households
living in 344 public housing developments and 93,000 voucher holders,
NYCHA-assisted residents constitute a sub-city of 800,000
people, larger than some of the country’s largest cities. This year’s Draft Annual Plan is 173 pages
thick, excluding supporting documents. Attachment B lists 28 mixed-finance and
Section 18 disposition plans at various stages of development. Three hours, for
one evening a year, is simply not enough time to for the nation’s largest
housing authority to obtain public input on a wide range of issues.
At every such
hearing, those who want to be sure to testify must arrive early because there
are always many waiting to testify who are turned away when the hearing
ends. A mix of “first-come-first served”
residents, elected officials, and concerned organizations do testify, but the
time is not used well. There are no guidelines: for how many individuals from
the same organization can speak to similar issues. Residents use their three
minutes as a rare opportunity to describe substandard living conditions and
demand repairs—although they are ushered aside to be assisted by NYCHA staff,
there are no guidelines for allocating the time needed to address concerns
about the Annual Plan. It is conceivable
that significant, controversial issues—like the Infill plan and mixed-finance
developments—will get short shrift at the hearings, though they represent
significant transformations of the targeted public housing communities. If these proposals are to be included in the
Annual Plan, they merit the time and attention they deserve.
NYCHA must plan and hold
hearings that allow all interested individuals to testify. Time-limited hearings that turn away
potential testimony when the time runs out defeat the purpose of the
hearings. Guidelines on the number
of testifiers from any one organization may be in order.
NYCHA should conduct
separate hearings on mixed-finance and Section 18 disposition proposals, so that they get the time and
attention they deserve. Preferably
these hearings should be held at the affected developments. At each stage of proposal revision and
development, the amended proposal should go through a similar review
process—written release, 45-day review, and public hearing.
While the NY Times and the NY Post assert that rent regulation is the problem, tenants are letting them know that rent regulation is the solution. Without vacancy deregulation to drain the City's stock of affordable housing, rent regulation would keep more apartments affordable. And by ensuring lease renewals, regulation gives tenants more bargaining power with landlords.