The Real Estate Board of New York (REBNY) is the City’s leading real estate trade association representing commercial, residential, and institutional property owners, builders, managers, investors, brokers, salespeople, and other organizations and individuals active in New York City real estate. REBNY thanks Chair Sanchez and members of the committee for the opportunity to testify today on a slate of bills regarding an affordable housing development pipeline and the creation of a fair housing plan.
New York City is in the throes of a housing crisis, marked by a severe lack of new production and, consequently, an absence of affordable housing needed to meet the city’s diverse socioeconomic needs. REBNY’s most recent Construction Pipeline report shows that in Q2 2023, 3,088 proposed multiple dwelling units were listed on job filings, representing a 60% decrease from the same period last year. Notably, the number of proposed units in Q2 2023 is 15% below the overall median and 29% below the average since Q1 2008.
Furthermore, according to REBNY’s latest Multi-Family Foundation Report that provides a real time understanding of construction projects that are beginning work, there were 25 new filings in May 2023, remaining well below the monthly average of 83 filings in the first five months of 2022. Moreover, there were 413 filings in the first five months of 2022 and only 120 filings in the same period in 2023, representing a staggering 72% decline.
According to the Department of City Planning: “Irrespective of the considerable spikes in 2015 and 2022 and NYC’s contribution to the region’s total permits, the overall production per capita in the region for the decade fell behind fast-growing U.S. metros, namely those in the Sunbelt like Orlando, Houston, Dallas-Fort Worth, Phoenix, and Atlanta.” We are also behind metro regions like San Francisco-San Jose and Washington DC.
REBNY appreciates the Council’s commitment to addressing the lack of affordable housing in New York City and to maximize the public benefit derived from new City-financed housing development. While increasing affordable housing reporting requirements and mandating the creation of an affordable housing plan would strengthen our understanding of the city’s long-term housing needs, such measures alone will not adequately address the acute shortage of housing that drives the city’s affordability crisis. To effectively tackle this crisis and develop lasting solutions, we must adopt a comprehensive approach that fosters collaboration amongst the city, state, and private sector.
BILL: Intro 362
TOPIC: The bill would require HPD to submit quarterly reports to the Council regarding affordable housing development projects that involve any form of City financial assistance.
SPONSORS: Council Members Salamanca, Louis, Hanif, Ayala, Restler, Abreu, Richardson Jordan, Sanchez and Riley
REBNY supports the Council’s aims to better understand how the city invests in affordable housing and who benefits most from these investments. Improvements to HPD’s reporting data will support more informed policymaking. The reporting requirements in this bill should be additive, not duplicative, to information already collected under Local Law 44 of 2012, and the Council should consider the utility of a quarterly report versus providing additional information in alignment with open data access. However, New York City’s affordability crisis will persist without tools that allow supply to contend with demand.
BILL: Intro 1031
TOPIC: The bill would require HPD and DCP, with cooperation from any other relevant agency, to create and submit to the Mayor and the Speaker of the Council a fair housing plan every five years, with the first plan due January 2025.
SPONSORS: The Speaker (Council Member Adams) and Council Members Sanchez, Salamanca, Riley, Louis, Ayala, Powers, Abreu, Avilés, Bottcher, Cabán, De La Rosa, Dinowitz, Farías, Feliz, Gennaro, Gutiérrez, Hanif, Hudson, Joseph, Krishnan, Mealy, Menin, Moya, Narcisse, Nurse, Ossé, Restler, Rivera, Stevens, Ung, Velázquez, Williams, Won and Brewer
Like Intro 362, REBNY appreciates the Council’s aim to improve New York City’s affordable housing pipeline through production targets and a strategic equity framework. However, this bill is only one part of a larger solution.
As aforementioned, new construction has plummeted in recent years. Creating new housing requires collaboration between state and local governments and the private sector. To generate new affordable housing opportunities for New Yorkers, the State must create an as-of-right tax abatement. According to NYU Furman Center, the majority of multifamily units, nearly 70%, completed between 2010 and 2020 were built using a 421-a exemption. Very few units are built without some form of support. The lapse of 421a in June 2022 has stalled the City’s already low rate of housing production.
In addition, it is essential to understand how this measure will be enforced. Clear mechanics for enforcement and accountability must be in place to ensure the goals outlined in the bills are met. Intro 362 would require a citywide assessment of the total number and type of units that need to be produced or preserved to achieve affordable access to housing by households of all socioeconomic levels. Key questions to answer will include how the Council and Mayor ensure that their determined number of units will be built, what happens if one or both agencies fail to submit the plan, and what happens targets fall short. It is incumbent upon DCP and HPD to develop robust internal reporting procedures.
The Council’s proposed bills are just one part of a broader strategy that is critically necessary to tackle the affordable housing crisis effectively and efficiently. REBNY looks forward to working with this Committee and the entire City Council to make meaningful progress in ensuring every New York City resident has access to safe, affordable housing.
Thank you for your time and consideration.