Mayor de Blasio has released his $41 billion plan [PDF] to create 80,000 new units of affordable housing and preserve 120,000 more. The mayor's office calls the plan "the most expansive and ambitious affordable housing agenda of its kind in the nation's history."
Perhaps the most striking proposal in the plan is a change to the City's 80/20 Program, which called for 20% of the units of a new housing project using tax-exempt bonds from the city for low-income tenants. First, it's important to understand how "low-income" is defined:
"To promote long-term community revitalization and economic diversity, we will pilot a new mixed income program that targets 20 percent of a project’s units to low-income households, 30 percent for moderate income households, and 50 percent for middle-income households," the plan states. "Producing middle-income housing can also be a ﬁnance tool to cross-subsidize more deeply affordable units."
This is a diluted version of what The Real Affordability for All coalition was proposing—their split called for 50/50 between low-income households and those making up to around $80,000.
The plan also calls for a mandatory inclusionary zoning program [PDF], but is light on its specifics, saying only that it will pair the program with the controversial 421a tax break initiative, which is intended to encourage affordable housing but is often abused by builders who want to subsidize their luxury housing units.
[The new mandatory exclusionary zoning plan] will offer ﬂexible options for fulﬁlling the mandatory affordable housing requirement, including on-site and off-site options to promote a range of housing choices, and will target a range of affordability levels to ensure the program’s effectiveness and applicability in both stronger and weaker housing markets throughout the City.
The closest the report comes to using the word "gentrification" is in this same section describing the give and take required in the new zoning policy for squeezing out more affordable units from developers who ache for a swath of $4,000/mo 2-bedrooms deep in the heart of Jefftown.
In neighborhoods with strong housing markets, tax incentives should be limited to situations where they would: a) result in the production of more affordable housing than would otherwise be required under Inclusionary Housing; or b) target otherwise hard-to-reach income levels or household sizes. Rezonings that add substantial capacity for new housing in transitioning neighborhoods [emphasis ours] may require incentives to encourage developers to reach lower income levels, or may be able to promote permanently affordable moderate-income, housing without incentives.
As we have previously reported, the City can only do so much to increase and retain our affordable housing stock without the assistance from the state and federal governments. The plan indicates that "the City will work with our State partners to seek to…effectively repeal the Urstadt Law," which prevents the City from enacting more rent control measures, but given Republican control of the State Senate, repeal is far from assured. Officials told reporters today that measures to re-zone or zone undeveloped areas—or ones that may have the potential to provide more affordable housing—are already underway.
The report is also realistic about the dwindling funds coming from State and Federal sources. Only $2.8 billion of the $41 billion is coming from Washington and Albany. Another $8.2 billion will come from the City. Private funding accounts for $30 billion of the plan's $41 billion. While $1 billion of this will involve investment from the City's pension funds, there is a telling section headed: "Partner with financial institutions."
The City will create new relationships and expand existing ones with ﬁnancial institutions and insurance companies. As the ﬁnancial capital of the world, New York City can creatively leverage these institutions’ resources to support housing and neighborhood development, both in the neighborhoods in which their employees are based and in neighborhoods from which they draw deposits.
As far as we can tell, there is no call for a tax increase on the richest New Yorkers in this plan.
We'll have more analysis on Mayor de Blasio's housing initiative soon.