City Council Subcommittee Holds Hearing on Mayor’s Mandatory Inclusionary Housing Proposal

Hard-hitting questions from several Council members explored ways affordable housing could be provided at deeper levels of affordability.  On February 9, 2016, the City Council Subcommittee on Zoning and Franchises held a public hearing on Mayor Bill de Blasio’s Mandatory Inclusionary Housing proposal.  The hearing was held in the City Council Chambers in City Hall to accommodate the capacity audience.

At the February 9th hearing, Deputy Mayor for Housing and Economic Development Alicia Glen, Housing Preservation and Development Commissioner Vicki Been, and City Planning Commission Chairman Carl Weisbrod presented the MIH proposal to the Council Subcommittee.  Representatives of the AARP and the Bedford Stuyvesant Restoration Corporation were among those who spoke in favor of the proposal.  Manhattan Borough President Gale Brewer testified to her conditional support of the proposal.  New York State Assembly Member Deborah Glick and Real Affordability for All were among those providing testimony in opposition to the proposal.

Deputy Mayor for Housing and Economic Development Alicia Glen was the first to testify at the hearing.  She testified to the Census Bureau’s finding that New York City is in a “housing emergency,” as residential vacancy rates are currently below three and a half percent.  Additionally, New York City has lost 250,000 rent-regulated apartments since 1994, and today, more than half New Yorkers are rent-burdened—which is to say that they are spending more than 30 percent of their income on rent.  According to Deputy Mayor Glen, the MIH proposal would implement several measures aimed towards remedying both the lack of housing and the affordability of existing housing units.

Housing Preservation and Development Commissioner Vicki Been testified that MIH would provide permanently affordable housing to people of a wide range of incomes.  Additionally, the affordable units created under MIH would be permanently cross-subsidized by the market-rate units.  According to Commissioner Been, the MIH proposal lays out two options for market-rate developers to build affordable housing, but the City Council and the City Planning Commission would ultimately choose an option for each developer.  The first option requires 25 percent of the units be affordable for families earning an average of 60 percent of the area median income, or AMI, which amounts to an income of $46,620 for a family of three.  The second option requires 30 percent of the new residential units be affordable for families earning an average of 80 percent AMI, which equates to an income of $62,150 for a family of three.  Commissioner Been stressed that these affordability levels are minimums, and developers are free to reach deeper levels of affordability.

City Planning Commission Chairman Carl Weisbrod testified to the MIH proposal’s utility as part of Mayor de Blasio’s Housing New York plan.  According to Chairman Weisbrod, MIH would only be applied when developers seek to rezone a neighborhood or apply for a special permit.  As-of-right developments would not be affected, but under MIH, the City would at least be able to require affordable housing in exchange for the granting of special permits.  Chairman Weisbrod stressed that such applications would still be required to go through the ULURP process, which requires the Council’s approval.

Subcommittee on Zoning and Franchises Chairman Donovan Richards Jr. noted that half of New York City’s residents earn below 60 percent AMI and asked why affordability options as low as 40 percent would not be included in the MIH proposal.  Deputy Mayor Glen testified that MIH is “one piece of a much broader plan,” and that the de Blasio administration has committed to creating more than 20 percent of the affordable housing produced and preserved under Housing New York available to families earning below 60 percent AMI.

“Although this is the floor, we need to get down to the basement,” said Chairman Richards, who would like to see deeper levels of affordability reflected in the options set forth in the text of the MIH proposal.  “It’s going to be very hard for this Council to support MIH without options available for our local communities, so we’re going to have to find a way to come up with other options that will reach the communities that this very proposal is going to go through.”

Land Use Committee Chairman David Greenfield voiced his concerns over the death of 421-A, the tax-exemption program that required on-site affordable housing.  According to Chairman Greenfield, the MIH proposal mentions 421-A over 400 times, which indicates that the MIH proposal relies heavily on its existence to ensure affordable housing is not built off-site.  Chairman Weisbrod pointed to the budget and appropriations process as the safeguard which will allow the administration and future administrations to protect the promises made pertaining to affordable housing.

Council Member Daniel Garodnick questioned Chairman Weisbrod on the provision allowing the Board of Standards and Appeals to waive the affordable housing requirement upon the developer’s showing of hardship.  Chairman Weisbrod noted that the provision would only permit noncompliance with the affordable housing requirements upon a showing that the MIH’s requirements are the cause of the hardship, and that exemptions would be given only to provide the most minimum degree of relief necessary.

Public Advocate Letitia James abandoned her prepared speech to describe, in a distressed fashion, an email she received notifying her that families making up to $200,000 would be eligible for affordable housing units at a residential development in the Fort Greene neighborhood of Brooklyn.  However, Commissioner Been assured her that under MIH, these residential units would not be considered affordable.

Manhattan Borough President Gale Brewer, the only Borough President to conditionally support the MIH proposal, testified that she supports the MIH proposal as it exists in the larger context of Mayor de Blasio’s Housing New York plan.  According to Borough President Brewer, the MIH would exist alongside a voluntary affordable housing initiative, which would allow developers to build more units than would be permissible as-of-right if they also provide affordable housing units.  Additionally, Borough President Brewer testified that her conditional support exists due to the several commitments she received from the City Planning Chairman Weisbrod and HPD to ensure the creation of more affordable housing units at deeper levels of affordability than are laid out in the text of the MIH proposal.

New York State Assembly Member Deborah Glick submitted testimony in opposition to the MIH proposal.  In Assembly Member Glick’s view, because the MIH proposal seeks to address the affordability issues affecting all five boroughs in one zoning text amendment, it is too limited in the level of affordability provided.  Assembly Member Glick echoed Council Member Greenfield’s concern with the MIH proposal’s loophole allowing for the construction of off-site affordable housing, which Glick referred to as the “poor building” option.

Associate Director of AARP for New York City Chris Widelo testified in support of the MIH proposal.  “Without MIH, developers will still create housing throughout the City, and the units they create will have no requirement of affordability,” he said.  According to Widelo, many AARP members have expressed concerns over whether they will be able to afford to retire in New York City.  Widelo testified that the MIH proposes to ensure the creation and maintenance of affordable housing is protected for low- and middle-income families.

Bedford Stuyvesant Restoration Corporation President Colvin Grannum testified in support of the proposal.  He provided anecdotal evidence of how MIH would have improved the affordable housing situation in the Bedford-Stuyvesant neighborhood and the surrounding neighborhoods, such as Clinton Hill and Fort Greene.  Since these neighborhoods were rezoned in 2007 and 2012, approximately 2,000 new residential units have been built.  Only 130 of these new housing units are affordable, and only 45 of the affordable units are permanently affordable.  According to Grannum, if these same 2,000 residential units had been built with MIH in effect, approximately 590 permanently affordable housing units would have been created.

Maritza Silva-Farrell, Coordinator of the Real Affordability For All coalition, testified that the coalition supports the goal that MIH seeks to achieve, but does not support the MIH proposal as written.  According to Silva-Farrell, the MIH proposal must reach deeper levels of affordability, such as 30 percent AMI.  Additionally, AMI calculations should be neighborhood-specific, rather than following a citywide AMI.  Further, Silva-Farrell testified that the MIH proposal should require developers benefiting from density bonuses to provide career-oriented jobs to the neighborhood residents affected by the rezoning.  For example, the MIH could require 30 percent of the hours worked in constructing developments be completed by local residents.  “Our message to developers is simple: Either build it right or don’t build it at all,” said Silva-Farrell.  She noted that the MIH proposal, as currently written, would exclude the vast majority of residents that it is intended to help.

Council Member Jumaane Williams inquired into where the money would come from to get to 30 percent AMI.  In response, a representative of Real Affordability For All testified that the answer is to have developers pay more, as they will be earning more from the additional units they will be able to build with the density bonus they receive.  Council Member Williams urged Real Affordability For All to continue to work closely with the Council to come up with legal ways to achieve greater levels of affordability and to provide jobs for neighborhood residents, and noted that such provisions could come in the form of a companion bill if they cannot legally be included in the MIH proposal.

According to the Council staff, 26 speakers testified in favor and 40 speakers testified in opposition at the February 9th hearing.  Many of those who testified in support of the MIH proposal agreed that it is better than nothing, as the current state of the zoning text does not require that the City receive anything in exchange for granting developers special permits. Those who testified in opposition to the proposal expressed concerns primarily over the level of affordability that would be provided by the affordable housing units created under MIH.

The Council Subcommittee is expected to vote on the MIH proposal, as well as the ZQA proposal, in the coming weeks.

City Council: T4068-2016 (Feb. 9, 2016).

By:  Jessica Soultanian-Braunstein (Jessica is the CityLaw Fellow and a New York Law School Graduate, Class of 2015)