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Supplemental Information on Housing and Land Use Policy in NYC

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Affordable Housing

Affordable Housing

For more than a century, governments have been wrestling with the problem of how to keep housing affordable in a capitalist economy. From the 1930’s to the 1960’s, the American government directly produced public housing. But beginning in the 1970’s, direct government production of public housing was replaced by an “alphabet soup” of programs that seek to produce and preserve “affordable housing” through tax incentives, credits, and grants designed to get private developers and non-profit housing organizations to build. The Federal government, state governments, and local city governments all play a role in designing and administering the various pieces of this “affordable housing” puzzle.
“Affordable housing” developments are targeted to households with specific income levels. The area median income estimates a metropolitan region’s range of household incomes and represents the midpoint in this range –one-half of households fall below the median and one-half above the median.
To calculate the AMI for the New York City area, the federal government considers household incomes in all the five boroughs but also the wealthier suburban counties of Nassau, Suffolk, Putnam, Rockland, and Westchester – significantly increasing the median household income.
The official AMI for the New York City metropolitan region for 2012 is $80,200 for a family of four.
New York City
Affordable Housing
Income Levels
“Extremely Low Income”:

0-30% of AMI [up to $24,060]

“Very Low Income”:

30-50% of AMI [$23,050 – $40,100]

“Low Income”:

50-80% of AMI [$39,000 – $64,160]

AMI is $80,200

“Moderate Income”:

80-120% of AMI [$64,160 – $96,240]

“Middle Income”:

120-250% [$96,240 – $200,500]

“High Income”:

250% and up [$200,500 and up]

The Agencies

The Agencies

NYCHA – New York City Housing Authority
DCP – NYC Dept. of City Planning
New York City Planning Commission

Brooklyn Borough Office:
16 Court St. 7th Fl.
Brooklyn, NY 11241-0103
Phone (718) 780-8280
Fax (718) 596-2609

Manhattan Borough Office:
22 Reade Street,
6th Fl. West
New York, NY 10007-1216
Phone (212) 720-3480
Fax (212) 720-3488

EDC – New York City Economic Development Corporation

New York City Economic Development
Attn: Intake
110 William Street
New York, NY 10038
Phone (212) 619-5000

ESDC – Empire State Development Corporation (New York State)

633 Third Avenue – 31st Floor
New York, NY 10017
Phone (212) 803-3130
Fax (212) 803-3131

NYC Community Boards
HUD — Federal Department of Housing and Urban Development

New York Regional Office
Jacob K. Javits Federal Building
26 Federal Plaza
Suite 3541
New York, NY 10278-0068
Phone (212) 264-8000
Fax (212) 264-0246

Albany Field Office
52 Corporate Circle
Albany, NY 12203-5121
Phone (518) 464-4200
Fax (518) 464-4300

New York State Dept. of Housing and Community Renewal

Hampton Plaza
38-40 State Street
Albany, NY 12207
Phone (518) 473-2526

New York City
25 Beaver Street
New York, New York 10004
Phone (212) 480-6700

HPD – New York City Dept of Housing Preservation and Development
HDC – New York City Housing Development Fund Corporation

110 William Street
New York, NY 10038
Phone (212) 227-5500

“Affordable Housing” at the proposed “New Domino” development

“Affordable Housing” at the proposed “New Domino” development:

The New Domino is a good example of how these programs work. The Community Preservation Corporation claimed that the 660 proposed “affordable” units are an improvement over most “affordable housing” developments because it targets a range of incomes – 100 apartments at 30% AMI, 100 senior housing units at 50% AMI, 310 apartments at 60% AMI, and 150 homeownership units at 120% AMI.When presented with this kind of technical breakdown of affordable housing, it is important to ask the question “affordable to whom?” The crucial problem is that the AMI on which these numbers are based is $80,200 while the median income for Williamsburg-Greenpoint is only $41,540. For the area immediately around the Domino Sugar site, it is even lower than this.
When we consider local median income instead of the entire metropolitan region, the “affordable housing” at New Domino suddenly does not appear to be very affordable at all.
Only the 100 apartments designated for families at 30% AMI ($23,050) are actually affordable to a majority of households in Williamsburg-Greenpoint. And even these leave the bottom quarter of local households – who make less than $20,000 – out in the cold.

The 310 apartments at 60% AMI ($48,120) are affordable only to the top 45% of households in Williamsburg. And the 120 “affordable homeownership units” at 120% AMI ($96,240) are out of reach to all but the richest 11% of households in Williamsburg.Yet all of these 660 units are considered “affordable” in the current policies. And the Community Preservation Corporation and its partner investors would have received large subsidies in the form of direct funding, low interest loans, and an alphabet soup of tax breaks from Washington DC, Albany, and City Hall for providing these units.
Public money for the “New Domino” would have likely included over $100 million combined in Federal Section 8 subsidies and low income housing tax credits, direct funding and low interest loans from New York City HPD/HDC, and 421a property tax breaks from New York City (see policy glossary below)
And of course, in return for shouldering the “burden” of providing these mostly unaffordable“660 affordable” units, the developer wins the government approval to construct 1,540 multi-million dollar luxury condominiums in waterfront towers up to 34 stories high.



The Domino Sugar Factory could never be transformed into residences without a change in the New York City zoning laws. Zoning is the most powerful tool that a city government has in affecting real estate development and the socio-economic fabric of city neighborhoods. Changing a neighborhood’s zoning means changing what property owners are allowed to build and what kind of businesses are allowed to locate there.
To put it most simply, zoning is the law that controls the size and use of the structures that can be built on a piece of property. There are three broad categories of use: residential (houses and apartments), commercial (stores and restaurants), and industrial (factories, workshops, warehouses).
Zoning can have more specific and complex rules such as open space requirements, height limits, or can offer a “bonus” in the size of the building allowed if the developer provides a “public amenity” such as open space or some amount of “affordable housing”
Changing zoning laws – or rezoning – has been a primary tool of the Bloomberg administration in changing the fabric of New York City. Since 2001, Bloomberg’s Department of City Planning has rezoned over 100 neighborhoods.
In other neighborhoods like Harlem, Williamsburg, Downtown Brooklyn, or the Lower East Side, zoning changes have been much more drastic. Land formerly reserved for industry has been opened up for residential development, and entire corridors have been upzoned – allowing for much larger high-rise construction.
“Memorandum of Understanding”
A developer’s commitment to affordable housing can be built into legally binding zoning codes or memorialized in non-binding “memorandums of understanding.” An MOU serves as the public record of a developer’s promise. But there is nothing to force the developer to follow through on the promise. At the New Domino, the Community Preservation Corporation used an MOU to codify its affordable housing commitment rather than writing the commitment into the legally binding zoning.
In 2012, the Community Preservation Corporation sold the Domino Sugar site to a new developer, Two Trees Management Company, for $180 million. Two Trees has stated that it will not follow the stipulations of an MOU signed by another developer.

The Uniform Land Use Review Process (ULURP)

The Uniform Land Use Review Process (ULURP)

Established in 1976, the ULURP is a defined procedure of public hearings and governmental decision making that must take place for any change in New York City land use. This includes changes to the zoning laws, site selection for capital projects, housing/urban renewal plans, and the sale or acquisition of city-owned property.
The numerous public hearings seen in The Domino Effect were all filmed as the New Domino project moved through the ULURP during the spring and summer of 2010.
The ULURP begins with an application to the City Planning Commission by the developer or city government agency seeking the change. The City Planning Commission certifies the application and sends it to the local Community Board. The Community Board then has 60 days to hold a public hearing on the proposal and adopt and vote on a written recommendation. The decision of the Community Board is considered “advisory” and has no legal authority.
After the Community Board, the application moves to the Borough President of the affected borough. The Borough President has 30 days to compose and submit a written recommendation to the City Planning Commission. The Borough President has the option to hold a public hearing but is not required to do so. Like the Community Board, the Borough President’s vote is considered advisory and has no legal authority.
After the Borough President, the application moves on to the City Planning Commission itself, which has 60 days to hold a public hearing and approve, approve with modifications, or disapprove the application. The City Planning Commission’s decision is legally binding and if a project is disapproved at this stage, it dies.
After the City Planning Commission, the application moves to the City Council, which has 50 days to hold a public hearing and take a vote on approval, approval with modification, or disapproval the decision of the City Planning Commission. The Council’s decision is legally binding and if a majority vote for disapproval of the application, the project dies unless the Mayor issues a veto. The Council can override the veto with a two thirds majority vote.
Although it allows the opportunity for the public to testify at three or four different hearings, ULURP is often criticized for lacking true public participation. The Community Board’s vote on a project is only advisory and it regularly ignored by the City Planning Commission and City Council. The hearings allow members of the public to speak one at a time for 2 to 5 minutes with very little interaction or discussion. Hearings are almost always held during the workday, making it very difficult for regular citizens to attend.
It is also very clear that with many projects, “the fix is in” before the ULURP process even starts. Agreements are worked out in advance with local politicians and organizations, and the public hearings become a charade with the same testimonies delivered by the same professional supporters at every hearing. The process we witnessed for the New Domino illustrates this process perfectly. The Community Preservation Corporation did not initiate ULURP for the New Domino until nearly five years after purchasing the site and negotiating with local politicians and organizations for support. Regular citizens are rendered powerless by this kind of process.

Who is CPC?

Who is CPC?

Above, Community Preservation Corporation representatives testify at the City Council meeting in June 2010 at the final public hearing of the ULURP process for the New Domino
The Community Preservation Corporation is a consortium of over 80 banks and insurance companies founded in 1974 under the leadership of David Rockefeller.The original mission of CPC was to pool private and public resources to help make loans available to distressed, formerly “red lined” inner city neighborhoods. Face with the demands of the Community Reinvestment Act to make loans available in these neighborhoods, the banks invented CPC as a means to pool resources and reduce risk. With the resurgence of the urban real estate market in the 1990’s, CPC began to also fund market-rate luxury developments in gentrifying neighborhoods. It later formed its own development subsidiary called CPCR and partnered with the Katan Group in 2005 to purchase the Domino Sugar Factory for $55 million. After spending over five years gaining public approval for “The New Domino” project, press reports in early 2012 revealed that CPC was nearly bankrupt from numerous failed luxury developments. In June 2012, CPC entered into an agreement to sell the site to Two Trees Development for $180 million, effectively using the profits from rezoning Domino Sugar to bail out the rest of the company.

2005 Rezoning of Williamsburg-Greenpoint

2005 Rezoning of Williamsburg-Greenpoint

The 2005 rezoning of Williamsburg was a major turning point in the development of the neighborhood. Zoning on the waterfront was changed from industrial to ultradense residential “R-8” zone, preparing the way for luxury tower development.The Williamsburg-Greenpoint community was initially united against this proposal under the banner of the “North Brooklyn Alliance” with the support of local City Councilmembers fearing skyrocketing rents and lost industrial jobs would result. Hundreds of local residents turned out to protest the 2005 rezoning at each public hearing and the Community Board voted nearly unanimously against it.
When the plan reached the City Council, the Bloomberg administration modified the proposal to include incentives to designate 20% of new units for affordable housing. With this change, local Councilmembers and some community groups, including Churches United, decided to drop their opposition and support the rezoning.
Because of the 2005 rezoning, on the East River waterfront, developers are now allowed to build roughly 25 stories without providing any “affordable housing” but can built up to 40 stories if they designate 20% of the development’s units for “affordable housing.” This bonus is called inclusionary zoning. Two large developments have been built on the waterfront since the 2005 rezoning – “The Edge” and “Northside Piers” both of which started construction in 2007 and took advantage of the inclusionary zoning bonus and took advantage of the inclusionary zoning bonus. Both waterfront developments have received tens of millions in public money from federal, state, and local sources, illustrating the tangled web of policies involved in achieving even a modest amount of “affordable housing.


Away from the water in the interior of the neighborhood near the Bedford and Lorimer “L” subway stops, the City changed the zoning from a special mixed use district that protected industrial uses to one that opened the entire area for residential development.In The Domino Effect, we see the effects of this zoning change when Phil DePaulo takes us on a walking tour of the area near Roebling and North 8th St where many active industrial shops were bulldozed for condominiums. Herb Engler’s shop was also forced out of its longtime home due to the 2005 rezoning.
Although many of the condominium projects developed from 2005-2008 are still vacant or abandoned at various stages of construction due to the recession, the increased density of the rezoning has also placed tremendous pressure on neighborhood infrastructure, schools, subways and buses, and parkland. The affordable housing, parks, and funding for community organizations promised by the City to help with the impact of the rezoning have been subject to delay and denial.
The 2005 rezoning has profoundly changed the neighborhoods of Williamsburg and Greenpoint. Thousands of new wealthy residents have accompanied hundreds of new luxury buildings, placing tremendous pressure on lower-income and rent-regulated tenants, industrial businesses, and older retail shops to vacate for higherpaying residents and businesses.

Getting Technical: Glossary of Specific Policies & Subsidies

Getting Technical: Glossary of Specific Policies & Subsidies

421a is a NYC property tax break for new residential developments that allows landlords – and later their condo owners — to pay virtually no property tax for 10 or 25 years depending on the specific circumstances. In Manhattan and select parts of the other boroughs, developers must provide 20% “affordable housing” in exchange for receiving the 421a – but this is again the very flawed, not actually affordable, “affordable housing.” 421a allows new buyers of multi-million dollar luxury condominiums pay no property tax while longtime neighborhood homeowners have their homes reassessed for record sums due to the gentrification from the new condos. In the last 25 years, fewer than 10,000 affordable housing units have been produced by 421a but the program has cost the City billions in revenues.*The 421A property tax break is now costing New York City over $1 billion a year in revenues. $1 billion could build a whole lot of real affordable housing.
*To put this cost in context, the entire budget of New York City’s Housing Preservation and Development (HPD) agency is less than $200 million a year.
J-51 is a NYC property tax break that allows residential building owners to recover 75% of the cost of building renovations on average. J-51 allows owners who renovate their apartments to be exempt from increases in property tax for up to 34 years. J-51 was established in 1955 to encourage landlords to upgrade their tenement buildings to hot water plumbing. But over 600,000 apartments are still receiving the subsidy today and it costs the City hundreds of millions in revenue each year. A recent court ruling made it illegal for building owners to receive the J-51 while converting rent-regulated apartments to market rate, making it less of an overt gentrification subsidy.
*J-51 is now costing New York City over $250 million each year in tax break expenditures. J-51 is up for renewal in 2012 and must be extended by the State Legislature in Albany – or could be significantly altered or eliminated to shift this money to providing true affordable housing.
*To put this cost in context, the entire budget of New York City’s Housing Preservation and Development (HPD) agency is less than $200 million a year.
J-51 is a NYC property tax break that allows residential building owners to recover 75% of the cost of building renovations on average. J-51 allows owners who renovate their apartments to be exempt from increases in property tax for up to 34 years. J-51 was established in 1955 to encourage landlords to upgrade their tenement buildings to hot water plumbing. But over 600,000 apartments are still receiving the subsidy today and it costs the City hundreds of millions in revenue
each year. A recent court ruling made it illegal for building owners to receive the J-51 while converting rent-regulated apartments to market rate, making it less of an overt gentrification subsidy.
*J-51 is now costing New York City over $250 million each year in tax break expenditures. J-51 is up for renewal in 2012 and must be extended by the State Legislature in Albany – or could be significantly altered or eliminated to shift this money to providing true affordable housing.
ICAP – Industrial and Commercial Abatement Program is a property tax exemption program for the construction/rehabilitation of eligible industrial and commercial properties. Created in 1976 as the Industrial and Commercial Incentives Program (ICIP), this subsidy was intended to prevent the department of business from NYC during the period of urban crisis. It offers 10 to 25 year exemptions from property tax. ICAP is the second-largest NYC tax subsidy program with accosts of $681.6 million in Fiscal Year 2012 according to the most recent tax expenditures report from the Department of Finance. ICAP can be looked at as the commercial “sister” of the 421a subsidy. Studies by the EDC and the Manhattan Borough President in 2007-2008 found that only 8% of the subsidies went to industrial businesses, with the vast majority going to fund office and retail development. These reports also found that the subsidy was completely unnecessary – the vast majority of the projects would have been built without the subsidy. Reforms of the program in 2008 – and its renaming to ICAP – eliminated some of the most blatantly wasteful subsidies to retail in Midtown Manhattan but largely kept the program intact.
Low Income Housing Tax Credits (LIHTC) are federal subsidies administered by the US Department of Housing and Urban Development (HUD). LIHTC was created in 1986 to “incentivize the private market to invest in affordable rental housing.” Every year the IRS distributes the tax credits per resident to state housing agencies (in New York, this is the NYS Department of Housing and Community Renewal). State agencies then award the tax credits to developers of eligible projects. LIHTC are often rewarded to financial investors who partner with non-profit developers to fund “affordable housing” projects. To be eligible to receive LIHTC, a development must either have 20% of the units affordable to households at 50% AMI ($40,100 in NYC) or 40% of the units affordable to households at 60% AMI ($48,120 in NYC). LIHTC is almost always combined with subsidies from the State and City in funding an “affordable housing” development. A report by President Obama’s Economic Recovery Advisory Board estimates that LIHTC costs the federal government $6 billion a year in revenues. Many question the efficiency of the program – it’s estimated that only 35 cents on the dollar actually goes to housing development and the rest is pocketed by investors and other middlemen.
Section 8 Vouchers, also known as the “Housing Choice Voucher Program”, are vouchers that are distributed from the federal HUD to local public housing authorities (in NYC this is NYCHA) and then to low-income tenants. The voucher covers the difference between 30% of the household’s income and the cost of the apartment.
Project-Based Section 8 is the sister program to Section 8 vouchers and follows the same affordability structure. The difference is that the vouchers in projectbased Section 8 are tied to a particular development. The landlord enters into a contract to open his building(s) to Section 8 for a period of 10 to 20 years. Tenants pay 30% of their income towards rent and the federal government covers the rest of the price. Many housing advocates argue that Project Based Section 8 is very inefficient as an affordable housing program. It subsidizes rents in apartments where landlords are making sizable profits, does not create permanent affordable housing, and is often much more costly than funding affordable housing produced directly by the government or non-profit organizations.
Rent Regulation is a set of laws that regulate rents and leases in certain privately owned apartment buildings in New York City, generally buildings with six or more units built before 1974. In a rent-stabilized building, landlords can only raise the rent by a small percentage decided annually by the Rent Guidelines Board. Unlike the “affordable housing” programs, rent regulation does not relate the price of the rent to the income of the tenant. More than 2.5 million New Yorkers in over 1 million apartments – about half the city’s total – are covered by rent regulation – far more than all other affordable housing programs combined. But rent regulation is under siege. In 1998, a provision called vacancy decontrol was added that allows landlords to remove apartments from rent regulation when tenants move out.
Already more than 300,000 once-affordable apartments have been lost in New York City. Some investors build their entire profit-making strategy around “flipping” rentregulated apartments by removing existing tenants.
Public Housing is housing directly built and owned by the government. Public housing and the governmental authorities that oversee it (NYCHA in NYC) was first initiated by the Federal Government in the New Deal era of the 1930’s. The programs were greatly expanded by Title I of the 1949 Housing Act which gave the local authorities the power to execute urban renewal “slum clearance” and demolish existing buildings to make way for public housing towers. In New York, the Title I “projects” were concentrated in the Lower East Side, East Harlem, the Bronx, and Brownsville in Brooklyn. Concentrating public housing in low-income communities of color stigmatized public housing as many of the developments became centers of crime and social dysfunction. The backlash from this and to urban renewal in general, and continued opposition from conservatives, led public housing to be abandoned by the American government during the 1970’s. But the projects built during this period survive and remain home to nearly half a million New Yorkers.
Many other cities like Chicago and St. Louis have demolished their public housing but New York’s remains – for now. When thinking about public housing, it’s important to remember that nothing requires public housing to be built in “towers in the park” architecture or to be home to only very low-income families. Yet to consider the construction of new public housing on different models is considered out of the question, contemporary “affordable housing” policies always requires a middle-man in the form of a non-profit or private developer.
Community Development Corporations (CDCs) are non-profit, neighborhood based organizations that engage in the provision and development of community benefits. Some CDCs operate social service programs like senior care and youth programs, while others focus on the development and preservation of affordable housing, or business incubator space for small businesses. In New York, CDCs played a major role in preserving housing during the 1980’s when many neighborhoods were abandoned by the private markets. In Williamsburg, CDCs like Los Sures and St. Nicks Alliance were very successful in combining public grants and private funding to rehabilitate abandoned housing units. But some question if the CDC model is the best option for a neighborhood under the opposite pressure of gentrification. Dependent on grants from government and limited financing from the private sector, CDCs are in no position to out-compete profit-minded speculators in the housing market. Since CDCs are heavily dependent for funding on same forces usually cheerleading the gentrification, the banks and the Bloomberg administration, they are in no position to challenge these forces. When local development policies like zoning are crafted, it is often the local CDC that is given the “seat at the table” to represent the community’s interest. This position can undermine other grassroots efforts to organize in opposition or in support of an alternative.
Community Reinvestment Act is a federal law passed in 1977 to encourage banks and savings associations to offer credit to low and moderate income neighborhoods.
The federal government evaluates each bank’s performance in lending to low and moderate income neighborhoods and issues a rating and written report. The Community Reinvestment Act (CRA) intended to counter the practice of “redlining” by which banks refused to offer credit to low-income neighborhoods, usually with large minority populations. In New York City, the CRA spurred the creation of the Community Preservation Corporation in 1977 to help area banks meet the requirements and lower their risk by pooling resources on investments. While the CRA has helped funnel billion in investment to the neighborhoods most adversely affected by the 1970’s—1980’s urban crisis, it has some serious problems. One way in which banks have learned play the CRA is to invest in market-rate luxury projects in gentrifying areas that are still classified as “low-income” but are quickly changing.
It has also been argued that the CRA helped fuel the growth of risky lending to minorities during the 1990’s and create the real estate bubble market that burst in 2008.
“197a” Community Plans are plans composed and submitted by community boards or other local organizations and submitted to the City Planning Commission and City Council for official approval and adoption. “197-a” refers to the section of the City Charter that outlines the rules for this kind of official community planning. But unlike an official rezoning plan composed by the City government, 197-a community plans are “policy guides” and are not legally binding. This weakness has been harshly exposed in recent years, most notably in Williamsburg where the goals and visions of the 197-a community plan adopted by the City Council in 2003 were completely ignored by Mayor Bloomberg’s 2005 rezoning. Communities that have spent years of intensive work putting together 197-a plans have seen the City treat them with contempt and disregard.

A Neighborhood Changing

A Neighborhood Changing

Although Williamsburg was undergoing change and gentrification since at least the early 1990’s, the 2005 rezoning radically accelerated the process. The influx of thousands of luxury apartments and condos on formerly industrial land has increased displacement of the Latino population and helped average rents in the neighborhood to double. Before 2000, there was not a single $2,000 apartment in Williamsburg — now you are lucky to find a two-bedroom apartment for less than $2,500. The flood of luxury and conversion of rent-controlled apartments to market-rate has far outpaced the addition of new “affordable housing.

Further Reading

Further reading:

Tom Angotti. New York for Sale. 2008Winifred Curran. “From the Frying Pan to the Oven.” Gentrification and the Experience of Industrial Displacement in Williamsburg, Brooklyn.” Urban Studies 44. 2007
Susan Fainstein. The City Builders. 2001
Jason Hackworth. The Neoliberal City. 2007
Alyssa Katz. Our Lot: How Real Estate Came to Own Us. 2009
Kim Moody. From Welfare State to Real Estate. 2007
Brian Paul. “Affordable Housing Policies May Spur Gentrification, Segregation.” Gotham Gazette. 2011
Suleiman Osman. The Invention of Brownstone Brooklyn. 2011
William Sites. Remaking New York. 2003
Laura Wolf-Powers. “Upzoning New York City’s Mixed Use Neighborhoods: Property-Led Economic Development and the Anatomy of a Planning Dilemma.” Journal of Planning Education and Research 2005
Sharon Zukin. Naked City. 2011