Testimony

The Real Estate Board of New York to The Committee on Housing and Buildings Regarding the Mayor’s Housing Plan

Ryan Monell

Vice President of City Government Affairs

June 30, 2022

REBNY thanks the Committee for the opportunity to testify on Mayor Eric Adams’ recently released plan entitled Housing Our Neighbors: A Blueprint for Housing and Homelessness.

New York is facing a housing crisis. A key driver of this crisis is the lack of housing production and inadequate supply to meet the needs of our growing and diverse city. According to the most recent U.S. Census, from 2010 to 2020, the number of New York City residents grew by roughly 630,000 people, while the number of housing units grew by only 206,000. Since 2018, New York City’s pace of housing production has decreased by nearly 8,500 units. Additionally, New York City Metro area housing production continues to fall behind most other major U.S. cities including Seattle, Austin, San Francisco, and Los Angeles. These statistics were confirmed in a recent report from the research firm AKRF, which identified that New York City needs 560,000 new units by 2030 to address both the deficit in production over the last decade and the units necessary to address future job and population growth.

In particular, with rental units comprising nearly 63% of all residential stock, rental housing is the most important housing type for the city. Even so, New York City is plagued by a shortage of rental housing units, particularly rental units for lower income households. With persistently high rates of homelessness and overcrowding, there are simply too few available affordable options for New Yorkers’ housing needs.

This crisis requires a multipronged approach to preserve in good quality the units we have today, to facilitate new production, and to allow for the conversion of underutilized, underdeveloped, or unregulated space in order meet our needs. Such solutions require close collaboration between state and local governments and the private sector. With government resources – land and financial – limited and unable to meet our needs, the private sector must be a partner.

REBNY commends Mayor Adams for proposing several smart policy changes in this plan that, if implemented, would help close inequities in our housing system, promote housing quality and improve access to housing. REBNY applauds the inclusion of NYCHA in the housing plan and goals for improvement and tenant inclusion as important components for a thriving New York City.

REBNY looks forward to continuing to collaborate with this Committee and the entire City Council to further these important efforts. More specific comments on the housing plan can be found below.

The Creation of Affordable Housing

A key point of the Mayor’s plan is the aim to invest in high-quality, safe, and affordable housing in all five boroughs, with an emphasis on removing barriers that prevent equitable growth and increased costs for housing access. Proposals in the Mayor’s plan include updated zoning to leverage incentives to develop more supportive and affordable housing, reducing parking requirements that will allow for additional unit production and decreased building costs, opportunities for micro-units, and support for the legalization of accessory dwelling units.

REBNY supports these initiatives. However, for each to achieve the greatest impact possible, State action will be required. For example, an amendment would be needed to change the state multiple dwelling law to return authority to New York City to establish appropriate density caps for residential use and districts, which currently is capped at 12 floor area ratios (FAR). With this change, New York City government would then be able to pass local zoning text changes to allow for appropriate density that leverages transit and job access.

Secondly and equally as important, to boost housing production, the State must create an as-of-right tax abatement. Such a tool should support the creation of significantly below-market rental units, especially in high income and high-cost neighborhoods. This program is needed because building and maintaining rental housing in New York City is incredibly expensive both due to an inequitable property tax system and highly constrained land use market. Even municipalities with a property tax system that taxes rental housing at lower rates compared to our own employs tax tools to support the development of affordable housing in high opportunity neighborhoods. City and State subsidies alone cannot replace the now expired 421a program, as the public sector does not have sufficient resources to replace private development’s ability to create new rental housing, including below market rate units, especially in higher cost neighborhoods.

Additionally, the Mayor’s plan smartly recognizes the need for greater homeownership opportunities as part of a thriving housing ecosystem. The plan recognizes that there is a lack of homeownership units available to moderate- and middle-income households. Examples of smart policies include the proposed program to drive conversion of zombie homes into affordable homeownership opportunities and an expanded down payment assistance fund. The plan also proposes more capital for the OpenDoor term-sheet and regulatory changes to the program to streamline administration. To maximize success, these changes should be complemented by State action that addresses barriers to the conversion of under resourced rental housing to middle income and affordable homeownership units.

As is the case with housing production, tools such as as-of-right tax abatements like the J-51 program are needed to support a quality housing stock, including for low and middle-income cooperative homeowners. The J-51 program has been a critical tool for improving the aging building stock of New York City and is used widely throughout all five boroughs to help offset costs surrounding capital improvements. Indeed, about half of all cooperatives in the city, including Article V Redevelopment Companies, Mitchell-Lama co-ops, and naturally occurring affordable housing, have benefited from the program. Unfortunately, the most recent program expired on June 30, 2022. New York City has a rapidly ageing housing stock, with the latest Housing Vacancy Survey reporting that four out of five units were constructed prior to 1974. This means nearly all our housing is 50 or more years in age and past the useful life for critical building systems. Creating a tool to spur investment in the housing stock for both cooperative and rental units should be an important aspect of any comprehensive housing plan.

Reducing Administrative Burdens

The plan proposes to reduce administrative burdens to accessing and leasing housing and maintaining housing quality, including by increasing resources for sources of income discrimination outreach and enforcement, by attempting to pass a criminal justice background bill with the City Council, and by reducing barriers to participating in voucher programs.

REBNY believes that the principal criteria for identifying if a tenant is qualified for housing should be their ability to pay without regard to the source of income from which the tenant pays their rent. Rental assistance or voucher programs are a proven cost-effective method of ensuring people can stay in their homes and access new ones if so preferred. Enabling additional and more effective use of rental assistance, especially in high-amenity areas, will expand housing choice for New Yorkers across neighborhoods. It is laudable the administration will seek to auto enroll participants in SCRIE/DRIE, make better use of technology, and integrate inspections to ensure safe, affordable apartments are occupied faster without needless red tape. Quality apartments under City control should not remain vacant with so many families and individuals remaining in shelter for extended periods.

In the FY2023 City budget, REBNY advocated for additional investments be considered specifically for staffing to help facilitate the processing of vouchers through NYCHA and HPD, particularly the Emergency Housing Vouchers that must be utilized by the end of 2023. While REBNY was pleased to see some resources allocated in the budget, more can certainly be facilitated via additional investments to best support the initiatives in the Mayor’s Plan to reduce administrative red tape. Such investments should also ensure that source of income discrimination enforcement is resourced.

Homelessness

The Mayor’s plan aims to address housing instability to prevent homelessness, increase support for New Yorkers experiencing homelessness, and accelerate a return to permanent housing while ensuring that those who previously experienced homelessness remain stably housed.

Help for New Yorkers before they experience housing instability and enter the shelter system will always be less expensive than paying for emergency hotel rooms and dealing with the long-term health and social impacts of homelessness. However, the City must also do more to ensure that once housing is provided or stabilized, if additional support is required, that those needs are met for the long term. An emphasis on housing alone risks losing sight of the myriad of other underlying reasons a household may not be able to remain stably housed on their own.

That is why it is positive that the Mayor’s plan acknowledges the need for a continuum of housing options and care. The City must continue to dedicate funds for the construction or conversion of supportive housing units and provide continued support to those individuals placed into market rate housing due to a lack of available appropriate units. Funding must also be allocated for accompanying on-site supportive services, job training and a robust assistance fund to cover hard costs for property owners.

Providing housing support vouchers to people on the verge of homelessness is a prudent use of taxpayer money. The combination of housing assistance, direct supplementary assistance to cover basic needs for homeless individuals, and operational assistance to the providers housing these New Yorkers is equally critical to the provision of units to break the cycle of homelessness.

Thank you for the opportunity to submit testimony.

Topics Covered

  • Housing