Last week, Mayor Bloomberg went to the Queens Museum of Art to announce a breathtakingly bold initiative to prepare New York’s infrastructure for the next 20 years – as well as its next million people. The mayor envisioned massive investments in transportation, water, waste disposal, park land and housing, proposing close to $20 billion in vital capital spending in just one sentence of the speech. To anyone who loves this city, the mayor’s plan was exciting in its scope and its vision.
But something about the speech was profoundly off-key. With tens of thousands of apartments leaving rent regulation for the free market every year, thousands of Section 8 vouchers being taken out of circulation by the federal government and the removal of dozens of Mitchell-Lama and project-based Section 8 buildings from affordable housing restrictions every day, there was one unanswered question in the mayor’s speech: Just who exactly will be able to afford to live in New York City in 2030?
Ironically, on the same day the mayor was speaking in Queens, the National Low Income Housing Coalition released a new report finding that a typical New Yorker needed to earn more then $20 per hour working full time, 52 weeks a year in order to pay rent on the average two-bedroom apartment in this city. While living in New York has always been expensive, the explosion in the cost of housing and the loss of tens of thousands of once-affordable units in solidly working-class neighborhoods threatens to price an entire generation of low-income and middle-class families out of the city before any of the mayor’s bold new plans come to fruition.
Among working-class New Yorkers, there is an increasing sense that the city Mayor Bloomberg described isn’t for them. On Nov. 30th, the owners of Starrett City in Brooklyn – the largest federally subsidized affordable housing development in America – announced plans to put their 5,881 affordable apartments on the auction block. The sale of Starrett City came two weeks after 11,200 affordable apartments at Stuyvesant Town and Peter Cooper Village in Manhattan were sold to investors bent on transforming a complex built for returning World War II veterans into a village for the wealthy.
New Yorkers know they are getting priced out. What they might be surprised to learn is that a good chunk of their tax bill is going to pay for tax breaks to the same luxury developers and condo buyers that are pricing them out of their communities.
In the 1970s New York City’s 421-a property tax exemption program was created to encourage developers to build new housing in a city that had fallen on hard times. In the 1980s, it was adjusted to help encourage affordable housing. But to this day, developers in some parts of the city still receive a 10 to 15 year “as of right” tax break for any new, market-rate, multifamily development. As a result, exclusively high-end buildings in every corner of the city are receiving large tax exemptions.
