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New York Housing Plan Is Delayed
MANNY FERNANDEZ
Mayor
Michael
R. Bloomberg’s plan to create or preserve 165,000 units of housing
for low- and moderate-income families by 2013 has been pushed back one year
because the economic recession has stifled the financing of low-cost housing.
The
one-year extension is the first major setback for one of the mayor’s oldest and
most ambitious initiatives: his 10-year, $7.5 billion effort to build or
preserve housing affordable to 500,000 low- and moderate-income New Yorkers. It
officially began in 2003 and had progressed five years later to the point that
in September, Mr. Bloomberg and city housing officials celebrated reaching the
halfway mark on schedule, with 82,500 units financed.
But
Mr. Bloomberg announced the extension in December during a speech and in one of
his weekly radio addresses, neither of which received much attention beyond
housing advocates.
Seth
Donlin, a spokesman for the city’s housing agency, the Department of Housing
Preservation and Development, said in a statement last Wednesday
that the mayor’s goal of creating or preserving 165,000 units remained
unchanged and that “only the timeline is altered.” He said that the delay
affected less than 10 percent of the overall plan and that “we continue to
close on new developments at a time when many others are having to abandon
their plans.”
Advocates
and developers of low-income housing described the one-year extension as a
reasonable concession in uncertain and difficult economic times, though some
believed the plan could stretch not just to 2014 but perhaps 2015.
“It’s
not a surprise to me that the mayor’s housing plan has had to adjust to the
times,” said Josh Lockwood, executive director of Habitat
for Humanity — New York City, a nonprofit developer of low-income
housing. “There’s only so much that’s under the mayor’s control.”
Many
of the projects in the plan rely not only on government subsidies but also on
private financing from lenders, a stream of money that has tightened in recent
months. Another factor that has slowed development of so-called affordable
housing is the drop in price of low-income housing tax credits. The sale of the
federal tax credits to investors helps finance the building of housing for
low-income families.
“You’ve
got this kind of perfect storm of factors that is making the financing
difficult,” said Bernie Carr, executive director of the New York State
Association for Affordable Housing, a trade group made up of
developers, general contractors, lenders and others. “To extend the plan for a
year seems actually very reasonable to me.”
Mr.
Carr and other housing advocates said they believed the mayor remains committed
to the plan, which they said has now become more than a housing initiative.
“It’s not just a matter of needing 165,000 affordable housing units,” said
David M. Muchnick, coordinator of Housing First!, a coalition of builders,
community groups and others. “It’s very much needing the thousands of jobs that
production of those units saves and creates.”
Mr.
Bloomberg, during his weekly radio address on Dec. 14, spoke about the
challenges facing his housing plan.
“Now,
with the economy stalling and even the most qualified developers having a hard
time getting credit, we know we can’t keep that pace up,” Mr. Bloomberg said,
according to his prepared remarks. “So we’re stretching out our schedule for
completing the second half of our housing program to six years instead of the
five years we’d planned for at first.”
The
mayor’s radio address came the day after President-elect Barack
Obama announced that he had selected Shaun Donovan, the city’s
housing commissioner, to lead the federal Department of Housing and Urban Development.
Mr. Donovan had been the driving force behind the mayor’s plan.
A
spokesman for the mayor, Marc LaVorgna, said the extension was tied to the
mayor’s announcement in May that he would stretch a four-year construction plan
for the city to five years amid signs of a declining economy, delaying a number
of projects involving not just housing but also transportation and school
construction, to save money.
Mr.
Bloomberg first announced the plan in December 2002, 49 weeks after he was
sworn into office in January 2002. Known as the New
Housing Marketplace Plan, it had a goal of 65,000 units by 2008 and
was expanded in 2006 to 165,000 units by 2013.
It
was and has been a huge undertaking, the largest housing plan of its kind in
the country, with enough units, as the mayor often points out, to house the
population of the city of Atlanta. It relies on a number of strategies to reach
the 165,000-unit goal, including zoning changes, financing incentives for
developers and the identification of land that city and state agencies own but
no longer use.
Nearly
57,000 units of the 82,500 financed have been rental housing, and the rest have
been homeownership units, including single-family homes and condo units,
according to city data as of September.
The
plan had until recently been marked by signs of success. One of its key
elements, the New York City Acquisition Fund, which helps
small developers and nonprofit groups compete for land in the private market,
received an award in
September from Harvard’s Ash Institute for Democratic Governance and Innovation.
In
2007, the city’s Independent
Budget Office released a report that found that the plan was on track
toward completion, though it raised questions about the financing. The report
noted that most of the units to be preserved could be financed through the
capital budget of the city’s housing agency. But the bigger challenge for the
plan was in building tens of thousands of new units by 2013, and the report
predicted that “a reassessment of its goals and assumptions may be necessary.”
