As New York State budget negotiations reached a conclusion near the stroke of midnight on the last day of hearings, there was an obscure line item missing. The 421-a property tax credit in place since 1971 was meant to entice developers to build more housing in New York City. Its expiration in January and absence from the upcoming budget threw Mayor De Blasio’s hopes to construct more affordable housing in jeopardy.
New York City took a major step on March 22 toward increasing the diversity of its neighborhoods through the passage of De Blasio’s affordable housing plan. The law adds a condition for developments in certain neighborhoods that they must allocate a portion of their apartments for lower-income families. This condition is known as Mandatory Inclusionary Housing (MIH); it is an important model in the ongoing fight for housing diversity in our nation’s urban centers.
The strength of America’s cities lies in their diversity. A group of people seek out urban centers for their opportunity, stability, and constant vibrancy of daily life. Groups of differing socioeconomic levels in cities make up the varied workforce that is essential for our economy, and housing is the critical factor in the outcomes of a city’s people in their education, safety and upward mobility. How we plan and develop this housing greatly affects how diverse and vibrant our neighborhoods will be.
The recently passed Affordable Housing Plan aims to correct New York City’s tendency toward economic segregation. Concentrations of poverty are increasing in many cities across the United States, and it is imperative that New York and other municipalities take steps to ensure that our housing in the future does not maintain separate housing stocks for rich and poor.
There is a chronic housing shortage in New York that inflates prices and forces resettlement of low-income families to neighborhoods of existing poverty concentration. New York is an anomaly in its housing scarcity, as it perpetually urges the developer’s ever-hungry eye onto the next underdeveloped neighborhood. This profit-seeking eye often has disastrous consequences for longtime neighborhood residents, who may as a result no longer be able to afford living in their neighborhood. Over the past decade, large swaths of Brooklyn have been overrun by unchecked development and soaring prices caused by gentrification. It is the city’s job to now step in and exert regulations that protect neighborhood diversity in the face of these developments.
New developments shouldn’t be uniformly dismissed, as they have enormous potential because they can alleviate shortages in housing that keep prices high. Private developers have every incentive to construct developments for the wealthy, but few for affordable housing. This is where the government ought to intervene and correct for the natural tendencies of the private construction market to build solely for the wealthy.
In order to construct new units, developers must play by the rules set forth in the city’s zoning laws, which permit constructions of a designated “floor to area ratio,” a quantifier of density. This zoning is consistently urged higher in order to accommodate for swelling populations, either by changing the classification (R6 to R7, for example) or altering the maximum floor-to-area ratio for that classification.
New York City’s affordable housing plan allows for both, but with qualifications for altering the FAR for new developments. Cue the phrase “mandatory inclusionary zoning.” Any area subject to these new guidelines that increases the density in new buildings must allocate a certain percentage of units for low and middle-income families. Within the MIH program, new constructions must either contain 25 percent of units set aside for families earning 60 percent of the area median income (AMI), with 10 percent for 40 percent AMI, or a larger percentage of apartments (30 percent) for slightly higher incomes (80 percent). Using AMI as the determining metric attempts to ensure that the income brackets are appropriate for the neighborhood, as average incomes can vary widely from district to district. By mandating these mixed-income developments, the city can increase the diversity of these buildings and their surrounding neighborhoods while slowing the process of gentrification.
The plan faced fierce opposition from some tenant groups, such as Real Affordability for All, contesting the ways it defines “affordability.” The New York City AMI, (currently $77,688 for a family of three) is a federal metric that incorporates incomes of wealthier surrounding suburbs, and is therefore higher than the actual median income of $58,000. By pegging guidelines to the higher metrics, opponents of the plan argue that it allows developers to construct units that aren’t actually affordable for tenants.
There is also concern among tenant and advocacy groups about the economic effects of large-scale private developments in areas such as East New York and the Jerome Avenue Corridor in the Bronx on existing residents. While it is beneficial that new construction includes lower-income apartments, the overall impact of development will be escalating real estate prices, which could serve to displace residents priced out of their homes.
Re-zoning enables greater population density, but is that necessarily a good thing? Density can be easily equated with negative effects, such as increased noise, garbage, and decreased light from buildings of greater size. It can also have positive impacts. As Jane Jacobs argues in her book The Death and Life of Great American Cities, a certain degree of density within a district is actually essential to building the critical mass of people necessary to self-govern and advocate. Along with other architectural and planning factors, sufficient density is a necessary condition for flourishing city diversity. Density is often maligned when it is conflated with the overcrowding and the uniformity of more impecunious districts that lack socioeconomic diversity.
If this new surge in population of a district includes people of different income levels and culture, everyone benefits, so long as longtime residents are protected from the incipient displacement caused by escalating real estate values. New York City is on a path towards greater equality, building on gains such as its universal pre-K expansion. We will be watching to see if MIH lives up to its goals of creating a more diverse and vibrant city.
Photo Credit: Flickr, Bonnie Natko, http://bit.ly/1SwAH0u