For the past two decades, Ronay Menschel and Adam Weinstein have led the Phipps Houses Group, New York City’s oldest and largest affordable housing provider. Founded in 1905 by Carnegie Steel’s Henry Phipps, the organization has built over 6,000 units, and currently manages 12,500 apartments, as well as community service centers, Head Start locations, vocational centers, and afterschool programs.
In the mid-1970s Ronay Menschel worked in Edward I. Koch’s Washington Congressional office and moved to the city to join his 1977 mayoral campaign. She served as his Deputy Mayor and Executive Administrator, spent eleven years on MTA’s Board, headed the Chancellor’s Advisory Council on Arts Education, and served on the Federal Reserve Bank of New York. She became Phipps’ CEO and President in 1993, and now chairs Phipps’ board. Mr. Weinstein worked in the Koch Administration after college. He then attended Harvard Business School, after which he joined Phipps where he has been CEO since 2001. Ms. Menschel and Mr. Weinstein talked with CityLand about sustaining a more affordable New York.
Mayor Bloomberg’s Priority. The Bloomberg Administration has made affordable housing a priority, Ms. Menschel said. She added that, following the fiscal crisis, Mayor Koch’s affordable housing policies had “set a pace” that the Bloomberg Administration has looked to as a model. Before, the housing discussion was “should there be affordable housing:” now “the discussion is how much.” This is a marked change from previous administrations, she added, saying that the Giuliani Administration did not focus on the issue and the Dinkins Administration did not articulate housing as a priority.
Unlocking Potential. Both Ms. Menschel and Mr.Weinstein agreed that development on large public sites is over. The reality is that these sites are no longer available, but the change also reflects a new philosophy in affordable housing construction. The emphasis is on mixedincome housing, Ms. Menschel said, adding that housing exclusively for the very poor creates a neighborhood that is only in “transition.”
Mr. Weinstein said that even as large public sites became less common and the City’s in rem stock diminished, Phipps’ work mushroomed. The Bloomberg Administration has been innovative in “unlocking the potential” of sites that remain publicly owned, Weinstein pointed out. As just one recent example, he pointed to NYCHA’s plan to sell off parking lots and underused parcels to affordable housing developers.
Affordability Defined. Mr. Weinstein said that building units of affordable housing is not about sites; “It’s about capital.” Affordable housing is “by definition housing that the market cannot sustain.” There is a lot of money available for low-income housing through federal subsidies, but this funding tends to focus on persons living below 60 percent of the area medium income, roughly $48,000 for a family of four. Families, however, are unable to borrow from traditional lenders unless their incomes are over 130 percent of the median income. Phipps tries to develop housing in the gap between low income and market rate housing.
Inclusionary Costs. When asked about the City’s inclusionary housing program, which allows market-rate developers to increase a project’s floor area by making a commitment to build affordable housing on-site or in the same area, Mr. Weinstein cautioned that the units may come at a hidden cost. He pointed to the Hudson Yards zoning text, which allows developers to use other affordable housing funds without disqualifying a project from the inclusionary housing bonus. An unintended consequence is that these projects will eat into the City’s bond limit. With the high cost to build housing in Chelsea, these projects can use enormous amounts of the bond limit to finance relativity few units. He acknowledged a value in bringing affordable units to Chelsea, but when the money could be used to build more units in Harlem and the South Bronx, Mr. Weinstein questioned whether it was worth the added cost.
Beyond Building. Talking about the importance of well maintained housing in stabilizing family life, Ms. Menschel said that people should not have to worry about going without heat while trying to educate their children. Ms. Menschel said a number of Phipps’ tenants were marginally employed, had significant literacy problems or needed help gaining access to public benefits. Phipps now offers ESL and literacy classes, eleven after-school programs, computer training, college advisement services, vocational programs and services for seniors. Ms. Menschel views these efforts as critical in helping people succeed and in sustaining enduring communities. — Morgan Kunz