De Blasio’s Plan to Reduce Affordable Housing in Soho/NoHo/Chinatown

De Blasio wants to fool the public into believing that his plan for rezoning SoHo/NoHo/Chinatown will diversify incomes and increase affordability in those neighborhoods. The opposite will in fact be true — his plan will likely reduce the existing affordable housing stock, and produce very little new affordable housing. And even if it does, the new developments, which will include at best roughly three times as much super-luxury housing as “affordable,” will make the area as a whole richer and its housing more expensive than they currently are. 

New Affordable Housing

We have already documented at length why De Blasio’s proposal will result in very little new affordable housing. Plainly put, the plan by design allows as much or more market rate development to be built when developers don’t include affordable housing — as compared to when they do — in every instance where the City predicts that affordable housing will be built. This means that it offers tremendous financial incentives to developers not to include affordable housing by making it more profitable if they don’t. Given the availability of such alternatives, the City’s affordable housing projections must be based on uncommonly held views about developers’ propensity for charity. 

Existing Affordable Housing

The City has mostly ignored concerns about the elimination of the well over 650 units of affordable housing within the rezoning area. To the extent that it has addressed them, it has raised two arguments. 

The first argument, advanced at the July 8 CB 2 public hearing, discounts existing affordable housing in the neighborhood in favor of the projected new affordable housing, because only the latter is income-restricted, meaning that only households earning certain incomes can live there (there are both minimums and maximums). This argument, redolent of Reagan’s “welfare queens”, summons the image of undeserving wealthy individuals enjoying the benefits of rent stabilized rent. This scenario, while possible, stands as an exception against the norm of low- and moderate-income tenants who would have to leave their neighborhood but for their rent regulated housing they’ve called home, in many cases for decades. A demographic analysis of the neighborhood (full analysis here) shows that 47% of households within the 7 census tracts comprising the rezoning area earn as little or less than the households for whom the new affordable housing is reserved, and almost 20% of them earn less than the poorest households targeted by the new affordable housing. It would be interesting to hear City officials explain where they imagine these low-income residents live if not in the existing affordable housing that they insist on disregarding and endangering. 

The second argument, also set forth at the July 8 CB2 public hearing, maintains that unspecified anti-harassment measures (none of which are part of the plan) in combination with, one supposes, magic will prevent landlords from displacing tenants and eliminating affordable housing units in their buildings. As it happens, the adverse impact of De Blasio’s plan on current low-income residents and on the affordable housing stock is not just a remote possibility; it is a great likelihood. 

We have been doing an ongoing series that documents instances of tenant harassment in the neighborhood. This practice has been common in recent decades even though the current zoning limits the upside of displacing residents from affordable units by prohibiting the development of much larger buildings on those sites. De Blasio’s plan, however, relaxes or eviscerates those limitations, creating a large financial incentive to pursue those larger market rate projects and push aside the obstacles (e.g., rent regulated tenants) that stand in the way. Here is how a landlord would go about it:

A rent stabilized unit becomes much easier to eliminate when there is no one living in it. For that reason, a landlord’s first step often entails an effort to remove tenants from their unit. Two mutually reinforcing strategies lend themselves to that goal — a buyout and harassment. A landlord can offer a tenant money to leave, as has happened for years in the area. Under the new rezoning, this would happen far more often, because the greater financial gains that De Blasio’s plan makes possible by enabling the construction of much larger buildings allows developers to pay that much more to buy a tenant out. Alternatively, if tenants refuse the money, the landlord can harass them into submission or into accepting the buyout. The methods for doing so are various and occasionally ingenious. In theory, some are also illegal, but as we’ve documented and every New Yorker knows, enforcement is lax and inconsistent at best, and the system favors landlords even when vigorous enforcement takes place. Landlords know how to evade enforcement. They can stop just short of the threshold for the legal definition of harassment or they can count on the logistical challenges of enforcement and on the fact that intent — a required element for a finding of harassment — is hard to prove. If a landlord cuts off your heat in February, as happened to Sharon and Victor a few years ago, and you report it to New York City’s Department of Buildings (DOB), the agency will send an inspector maybe three days later, by which time the heat may be back on. If your heat is shut off for a couple of days every week for weeks on end, could you easily attribute that to intent rather to just bad luck? Here again, we can expect such practices, already familiar in the neighborhood, to vastly increase in frequency and intensity under De Blasio’s rezoning, because it renders much more profitable the elimination of affordable housing in order to build vastly larger buildings. 

Once landlords remove affordable housing tenants, be it through buyout or harassment, they would then go to DOB and secure a permit for construction that would constitute a demolition for purposes of the New York Division of Housing and Community Renewal (DHCR), the state agency that regulates rent stabilized housing. On the basis of that permit, DHCR would grant permission not to renew leases on the affordable units, thereby allowing the landlord to get rid of them for good and build luxury housing, or offices, or hotels, or big box chain retail, or NYU dorms and other facilities (or a combination thereof) in their stead. 

In the face of recalcitrant tenants who won’t budge from their homes despite monetary offers and harassment, landlords can still procure construction permits from DOB to undertake demolition work. Given this permit, DHCR would then grant the permission not to renew leases, provided that landlords provide the affected tenants with a standard compensation. This offers landlords with yet another way to proceed with the business of demolishing affordable housing units so as to reap the substantial financial rewards that the De Blasio plan makes available.  

Tenants can resist the above efforts. In doing so, however, they stand at a disadvantage. These conflicts are expensive, time consuming, and offer no assurance of victory. For landlords, such battles are part of their business calculus. For tenants, they take a financial and emotional toll on their lives. The De Blasio Administration, however, seems to care very little about the cost that its plan will impose on current low- and moderate-income residents — whose incomes are the same or less than those whom the new “affordable” housing is designed to serve — by greatly increasing the likelihood of their displacement. Indeed, for all its faux-progressive posturing, this administration seems to care very little about affordable housing except as a way to rationalize its proposal’s massive developer giveaway. If it did, it would not include upzonings that incentivize the destruction of existing affordable housing, and it would not offer so many loopholes and alternatives to providing new affordable housing in development. 

We and our allies stand firmly behind the goal of making the neighborhoods within the rezoning area more affordable and integrated than they currently are, as does Community Board 2. The City’s proposal and its false promises, however, will not accomplish those goals.

Find out more about the SoHo/NoHo Upzoning plan here, and urge city officials to oppose it here.