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NEWS & LETTERS, May-June 2010
Public subsidizes private 'affordable housing'
New York City--The extreme scarcity of affordable housing for workers affects both those looking for new housing and those who already have it. The overall vacancy rate is only 2.8% and for monthly rents under $1,300 it is .06%! Over 30% of all NYC renters pay more than 50% of their income in rent, while 60% of those whose annual incomes are under $30,000 pay more than 50%. More than one million affordable housing units are in private rent-regulated buildings. The loss of these units through vacancy decontrol far outpaces the construction of new units. The Pratt Center estimates that 40,000 new "affordable" units may be added in the next 10 years through tax-subsidized private development. The State Division of Housing reported that 18,000 regulated units were decontrolled in 2008 alone. At that rate, in the next 10 years, 180,000 affordable units will have been decontrolled.
The subsidized 421a Program reserves 20% of the new construction for "affordable" units. Yet none of the units built sold for less than $650,000. $800 million in Liberty Bonds went to revitalize lower Manhattan affected by Sept. 11, 2001, yet of the 2,272 units financed, only 110 were "affordable." Of the Hudson Yards on Manhattan's West Side 13,000 new units only 616 would be affordable.
Bruce Ratner's 22 acre "Atlantic Yards" in Brooklyn plans to construct 16 luxury towers with 6,430 units plus an arena for the New Jersey Mets. One third will be luxury condos and the remaining rentals. About half of the rentals will be "affordable", but this includes an annual income up to $131,000 even though the median annual income for Brooklyn is $32,135. Ratner got eminent domain to demolish small town houses, small businesses, rent-regulated buildings, and incredibly low prices to buy land as well as huge public subsidies.
Community residents and activists have been fighting this mega project in the courts and in the streets for years. New York's political leadership, including Governor Paterson, U.S. Senator Schumer, Mayor Bloomberg, Brooklyn Borough President Markowitz and Attorney General (and gubernatorial hopeful) Andrew Cuomo, all showed up in Ratner's support for a ground-breaking ceremony. The sell-out politicos were met by raucous protesters who disrupted the "celebrations." Neighborhoods that experience this kind of development become gentrified, motivating landlords who own smaller regulated buildings to sell or pressure existing tenants to move. Small businesses often have to move.
Why can't the city and state build truly affordable housing? Or provide subsidies and tax breaks to non-profit groups such as unions so that they can build affordable housing, instead of giving private developers hundreds of millions in tax breaks? In capitalism, profit takes precedence over any social need whether education, healthcare or housing, and the real estate lobby largely finances the election of public officials. Publicly financed housing would lower the extreme demand for affordable housing, lessening the super profits of landlords.
--Tom Siracuse
Chair of the Rent Controlled Tenants' Committee and the Manhattan Local of the NYC Green Party
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