Gotham Gazette
Sean Campion, senior research associate at nonprofit watchdog Citizens Budget Commission, recently authored a report that found that New York’s housing stock growth has not kept pace with job creation, exacerbating the housing crisis. Policy decisions over the years have created uneven levels of allowable density, massive areas with low-density zoning, hard-to-develop vacant lots, and a scarcity of as-of-right development sites. Stringer’s plan seeks to correct some of those issues, but could run up against hurdles, Campion said in an interview.
“[Stringer] called for both more capital and targeting capital better at deep levels of affordability. There's obviously less of that to go around,” he said, pointing to the city’s budget crunch. Even if a Stringer administration kept funding flat, it would mean fewer units get built at deeper affordability. “That trade off is still there. But obviously in a more constrained environment, that's more difficult to do.”
Operational funding will be the bigger challenge, Campion noted, as the city’s revenues have nosedived with big budget gaps expected next year. Stringer has proposed raising those funds by replacing the “regressive and inequitable” mortgage recording tax with a “more progressive” Real Property Transfer Tax, changes that would together raise about $400 million in revenue each year. Those tax amendments, along with 421-a’s expiration, would require approval from the state Legislature.
“Given the budget shortfall plus the declines in just the number of real estate transfers in general, particularly on the commercial side, that could put a dent in that in the short-term,” Campion said.
Though CBC has not taken a position on Stringer’s universal affordable housing proposal, Campion did address the idea to do away with 421-a and provide subsidies on a discretionary basis. “Making it discretionary would probably depress housing production,” he said. “There are a lot of faults [with 421-a]. It can be better targeted, it’s expensive. But because it’s as-of-right, developers know what the program is, and they know what they're getting into when they're buying land, running projects.”
“One of the benefits of development in New York City in general is that you can build things as-of-right without discretionary approvals, but we still need 421-a to make the economics work because the tax on multi-family development is so high...Making the tax incentives discretionary effectively makes all development discretionary,” he added.