hpd presentation on development and displacement

8/20/2019 HPD presentation on development and displacement

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Housing New York :

Pairing Neighborhood

Investment with ProtectionsAgainst Displacement

Vicki Been

Commissioner

Housing Preservation and Development

City Law Breakfast

November 13, 2015


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A Confluence of Factors Has PutPressure on New York City Renters

• Urbanization

• Stagnant wage and job growth

• Inadequate production of new housing

• As competition for housing increases but wages do not,

housing costs impose an extraordinary burden uponNew York City renters, especially low and moderateincome households


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Gap Between Rents and Incomes

Index of New York City Median Gross Rent and

Renter Household Income 2005 - 2014

Data Source: American Community Survey


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NYC’s Housing Production Is too Low

Source: U.S. Census Bureau


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Limited Supply of Affordable Units

Supply and Demand Among Extremely Low Income andVery Low Income Renter Households

Supply Demand

Data Source: Housing and Vacancy Survey (U.S.Census), 2014.

There are more than two Extremely Low Incomeand Very Low Income households for every onehousing unit that is affordable to them.


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200,000 New or Preserved Units

• To address the shortfall in housing supply, especially forlow and moderate income households, we have a dualstrategy for investing in neighborhoods, and will leverageall federal, state, and local tools to:

• Secure the new construction of undersupplied low income andmixed income housing

• Preserve existing low and mixed income housing developments – both already subsidized and not yet under an affordability

program


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We Are Right on Target!

21 months in, the City has closed on 30,155 homes -- 15% of theplan’s goals

• New Construction: 11,693 39%

• Preservation 18,462 61%

86% of the homes are for extremely-low, very-low and low-

income residents – those making less than $62,150 for a family

of three


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Obstacles or Opportunities?

• Limited supply of City-owned land that is readily developable,enough for perhaps 16,000 homes over the remaining 8 years of

Housing New York

• To open up other development possibilities will require both

considerable infrastructure and resiliency investments

• Land costs are increasing rapidly so private land requires more

subsidy

– Between 2009-2014, land prices rose dramatically around the

city: Manhattan +34%, Brooklyn +96%, Queens +51%


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Creating Opportunities for theDevelopment of New Affordable Housing

• Currently studying seven areas for rezonings; up to eight moreto come

• Introduced the most ambitious Mandatory InclusionaryHousing program in the nation to increase the amount ofhousing built as affordable

• Reformed 421-a to tie tax incentives to production of higherpercentages of affordable housing, at a broader range ofincomes, in every area of the City

• Made our voluntary inclusionary policies easier to use to createmore affordability in neighborhoods with the best job andeducational opportunities

• Introduced Zoning for Quality and Affordability to reduceregulatory barriers to affordable homes, especially homes forour seniors


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Investing in Neighborhoods


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No Neighborhood Should Be Left Behind


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East New York


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East New York: Pitkin Avenue – ExistingConditions


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East New York: Pitkin Avenue – Vision


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East New York: Atlantic Avenue – ExistingConditions


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East New York: Atlantic Avenue – Vision


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Who Benefits?

• People worry that the existing residents of neighborhoodsseeing substantial investment, especially the poorestresidents, will not share in the benefits

• More specifically, they fear that they will be displaced as theneighborhood becomes more desirable

• They are concerned that the improvements and investmentswill not be targeted to their vision of the community – that theirconcerns and hopes for the neighborhood will not be solicited,or will be ignored

• They worry that the new affordable housing built will not beaccessible to them – because they will make too little or toomuch for the incomes served, or because so many people willapply for the housing


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The Problem of Displacement

• Displacement, defined broadly, includes: – Current residents moving away because of rising costs or a loss ofcommunity

– Low and moderate income families unable to find affordable housing

• Harms caused by displacement:

– Residents have to leave their homes and the neighborhoods in whichthey have invested energy, and which are critical to identity and culture

– Individuals and businesses have to move to less desirable locations

– Homeowners can’t carry increased expenses and have to leave beforerealizing increase in property values

–Current residents unable to enjoy the benefits of revitalization

– the newstores are too expensive, the jobs available don’t match their skill sets

• These harms fall more heavily on poor and minority residents whohave fewer alternatives when moving


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Relationship Between Investment andDisplacement

• Most of the more recent and rigorous studies of gentrification find thatpoor households and renters do not move out of gentrifyingneighborhoods at unusually high rates

• While low income families face a great deal of housing instability ingeneral, most of the research shows that renters move away no more

often, or even less often, in gentrifying than in non-gentrifying poorneighborhoods

• Some research shows that homeowners in gentrifying neighborhoodsare more likely to move than if they lived in poor, non-gentrifyingneighborhoods (likely as they realize gains in value)

• The research also shows some gains for those who remain ingentrifying neighborhoods (increasing incomes and greaterneighborhood satisfaction)


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But the Fear Is Real and Raw

• Research shows what happens on average; people worry that this time, this neighborhood, this confluence of factors will be different

• Research is limited by methodological and data challenges

• Low income tenants and homeowners face considerable housinginsecurity regardless of gentrification or other changes to

neighborhoods

• In-movers may be different than they would have been absent theneighborhood improvement, so the demographics, and the look andfeel, of the neighborhood may change

• Fear is part of broader national, and local, concern that the American dream of improving one’s situation is fading


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So How Will We Protect AgainstDisplacement?

• Preserving the affordability of existing subsidized housing, andbringing more of the existing stock under affordability restrictionsthrough rehab and other subsidy programs

• Requiring all new housing that receives tax exemptions, or is builtthrough land use changes, to include affordable housing

• Securing even more affordable housing, and even deeper affordability,through City subsidies

• Strengthening rent regulations

• Preventing harassment of existing tenants

• Helping local residents take advantage of new affordable housing

• Providing places for neighborhood institutions to remain

• Tying improvements to economic development and local hiring


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Preservation Efforts

• Taking a more data-driven approach to preserving affordability• Working with landlords to keep Mitchell-Lama, HUD-assisted, and

Low Income Housing Tax Credit (LIHTC) apartments from goingmarket rate when existing affordability requirements expire

• Targeting preservation and outreach strategies to neighborhood

needs and focusing on transitioning neighborhoods• Reaching out to small building owners to help preserve affordability

through Neighborhood Preservation Helpdesks to offer physical,financial, and technical assistance

• Using our Green Housing Preservation Program to finance energy

and water efficiency improvements that will lower utility costs andpromote long-term affordability


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Unprecedented Commitment to Build AffordableHousing in Areas Undergoing Change

• Mandatory Inclusionary Housing will require that 25% to 30% of thehousing be permanently affordable

• HPD’s subsidy programs and financing tools will achieve additional

affordable units, and deeper affordability where appropriate

• For example, in East New York, we have committed to:

– Use our subsidies to achieve 100% affordability in at least half of thedevelopment that occurs over the next decade

– Ensure that all HPD-financed development will provide at least 40%,and in some cases, 45%, of the housing for families making between$23,350 to $38,850

– Breaking ground on construction of over 1,200 units of affordablehousing within two years of ULURP


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Strengthening Rent Regulation, Which EnsuresAffordability in Many Changing Neighborhoods

Source: U.S. Census Bureau. See 2014 Housing and Vacancy Survey

R t St bili d St k I C iti l f th


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Rent Stabilized Stock Is Critical for theLowest Income Families

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

200%

Rent Regulation Status of Households inUnsubsidized Rental Units

Rent Stabilized Private, non-regulated

Source: 2014 Housing and Vacancy Survey (U.S. Census); source of housing assistance is self-report and classified

based on calculation of HUD Income Limits (FY2011)

W A hi d Si ifi t R f b t


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We Achieved Significant Reforms butMore Needs To Be Done

High-rent vacancy decontrol: Raised to $2,700 per month andindexed to RGB increases, but we need to raise the thresholdhigher

Vacancy allowance: Rent increases upon vacancy weremodified for units receiving preferential rents, but we need to

further limit vacancy allowances and protect tenants withpreferential rents

Major Capital Improvement (MCI): The time over which the MCIis spread out was extended, but we also need to prevent the

increases from raising the rent permanently Rent Guidelines Board Increases: This past summer, RGB

voted the lowest rent increases ever, with 0% increases for oneyear leases, and 2% for two year leases


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Preventing and Addressing Harassment

• Rent regulation reforms increased civil penalties forharassment

• Mayor de Blasio has devoted significant funding in legalservices for renters who fear they are being harassed toleave their apartments, or who are being evicted – A total of $76 million for legal assistance for low-income New Yorkers by

2017

• Together with the state’s Tenant Protection Unit, Attorney General

Schneiderman, and DOB, we formed first ever tenant harassmentprevention task force

• HPD and DOB are working together to proactively increaseinspections of buildings with owners we have reason to worry about

• City Council passed legislation to prevent harassment throughrepeated buy out offers

P idi H i f L I N


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Providing Housing for Lower Income New Yorkers

• Housing New York committed that 20% of the 200,000 units willtarget very low and extremely low income, up from 12%

• More and deeper affordability required now than ever before:

– 421-a requires units going as low as 40% AMI ($31,080 for a family ofthree)

– Proposed MIH requires averaging to 60% AMI ($46,620 for a family ofthree) or 80% AMI ($62,150 for a family of three), which can be tailoredin each rezoning to include very low income bands

• HPD introduced new subsidy programs to provide housing forincomes as low as 30% of AMI (as low as $15,232 for single adult

households)

P idi H i f B d R f


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• Too much of our housing was targeted at the incomebands required by LIHTC ($46,620 for a family of threein 2015)

• Goal is to provide economically diverse neighborhoods,

not to concentrate poverty

• Part of displacement fear is that young adults movingback after college, parents and grandparents can’t live in

the same neighborhood because a range of housing isn’t

available; having a mix is crucial

Providing Housing for a Broader Range ofIncomes


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Why Not Even Deeper Affordability?

• Issue is simply a tradeoff – going deeper would requirehundreds of millions more in City subsidies, or meanproducing fewer new units

• The cost of operating a new rental apartment barely

breaks even with rents at 30% AMI—we’ve covered thecosts in the past through federal Section 8 vouchers, butthe federal government has cut funding for vouchersdramatically

• Our obligations to fair housing are to promote diversity,not to have all the new housing match the existingincomes of the neighborhood


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• We are focusing on those with extremely low incomesthrough: – preservation policies

– homelessness prevention efforts

– supportive housing commitments – NextGen NYCHA to ensure better fiscal and physical health inthat critical housing

– our broader economic development strategies

• Housing alone cannot solve poverty; we must continue

to call on our partners at the State and Federal levels toincrease their investments in the lowest incomeresidents, and in housing through vouchers, seniorhousing programs, and improvements to LIHTC

New Housing Is Only Part of the Strategy


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Marketing and Leasing of our Housing

• Community preference

• Increased marketing and counseling

• Housing applications now available in seven languages

• Housing Ambassadors Program

• Financial counseling services

New Approach to Neighborhood Planning


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New Approach to Neighborhood Planningand Community Engagement

• New “NYC Neighborhood Planning Playbook” • Capital budgeting process now aligns investments of different

agencies

• Neighborhood infrastructure fund ensures growth is accompanied byneeded amenities and services

Making Our Investments Serve the


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Making Our Investments Serve theCommunity

• Building opportunity for MWBE and non-profit developersto promote local hiring

• Using our buildings to house critical community facilities,

job training centers

• Hire NYC

• Economic development for job growth

• Support for small business services

In Sum Multi Pronged Strategy to Ensure


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In Sum, Multi-Pronged Strategy to EnsureInclusive Development

• Use our investments to meet the needs of thoseneighborhoods that have traditionally been underserved

• Encourage all residents, especially the most vulnerable

residents of those neighborhoods, to participate in thevisioning and planning for investment

• Ensure growth is always accompanied by affordable housingto ensure economically diverse neighborhoods

• Mitigate unintended consequences for those people who maybe vulnerable to displacement

Bottom Line: We Must Shape Development


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Bottom Line: We Must Shape DevelopmentRather than React to It

• Market forces will change neighborhoods whether ourrezonings, Mandatory Inclusionary Housing or Zoning forQuality and Affordability proposals are adopted or not

• Those proposals give neighborhoods the best tools anycity in the country has provided to shape thedevelopment to their needs

• Wishing/demanding that things stay the same won’twork!


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“… my mission is to make sure the people who made our

neighborhoods great can still stay in the neighborhoods they

love…. The difference today is that we, we the people, willdecide what kind of development we want. The city government,together with the community, will set the terms for the future.”

—Mayor Bill de Blasio

hpd presentation on development and displacement

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