There is something mildly humorous about the City and the City Planning Commission Chair referring to Mandatory Inclusionary Housing (MIH) as a progressive affordable housing program. Admittedly, it is humour tinged with a bit of cruelty; kind of like when you’re bald and someone calls you curly. I suspect, however, that the intent behind the City’s relentless use of the progressive label is less to get laughs than to dupe the public into believing, by dint of repetition, that this program somehow advances the goal of justice and equity in the City. Let us not be duped. There is nothing progressive about the MIH program or about the planning proposals that have metastasized around it, such as the SoHo/NoHo/Chinatown plan. Today, we evaluate this plan in light of its progressive aspirations, and enumerate the ways in which it falls short. Then, we outline what a truly progressive alternative might look like.
“Progressive” is a notoriously slippery notion to define, and the Mayor has himself never shared his own working understanding of the concept. For our purposes, we will therefore rely instead on the definition advanced by the self-identified Progressive Caucus of the City Council. This makes sense insofar as City Council will soon be hearing and voting on the SoHo/NoHo/Chinatown rezoning, and since it presumably is against its own progressive principles that the Caucus — which includes the Councilmembers of all the directly affected neighborhoods — will consider the City’s proposal. The Caucus puts its mission as that of “advancing policies to build a more just and equal New York City.” Earlier versions have elaborated upon this succinct formulation to describe those policies as ones “combating all forms of discrimination” and “offer[ing] genuine opportunities to all New Yorkers, especially those who have been left out of our society’s prosperity.” This vision of progressiveness thus entails, at a minimum, combating inequality by promoting the welfare of disadvantaged New Yorkers.
Moving on to the SoHo/Noho/Chinatown proposal, we should start by pointing out that MIH, the central pillar on which the plan’s progressive aspirations hang, is a regressive housing policy in conception and even more so in effect. By design, MIH relies on market mechanisms to provide a public good, an approach typically associated with (pardon the “n” word) neoliberalism. More specifically, the program allows the construction of substantially more market-rate residential development than existing rules allow, provided that projects beyond a certain size include a small affordable housing set aside. Under the current program, the required affordable housing is beyond the means of most low-income New Yorkers. In other words, MIH generates tremendous wealth for landowners through upzonings in the hopes that a small portion of that wealth will trickle down in the form of semi-affordable housing.
Already inequitable in conception, MIH has an even less equitable impact in practice, first, because the realization of the value created by upzonings often requires the displacement of existing vulnerable populations, and second, because in weaker real estate markets, MIH produces almost no affordable housing in the absence of additional public subsidies. In sum, MIH makes the wealthy much wealthier, imposes a cost on the least well off, and, theoretically–though often not in practice–yields some benefit to mostly middle income families.
As seen above, MIH alone contravenes the progressive goal of building a more equal New York. The SoHo/NoHo/Chinatown plan, however, has taken an already regressive program and exacerbated it. The rationale behind applying MIH in SoHo, NoHo, and Chinatown stems from the program’s obvious shortcomings in other neighborhoods, where it has arguably decreased affordability by triggering real estate speculation and displacement, while producing little affordable housing beyond that financed with further public monies. In SoHo, NoHo, and Chinatown, the reasoning went, the strength of the real estate market would provide incentive enough for developers to undertake projects despite the affordable housing set-aside requirement. And these projects would not risk the displacement of local lower income residents, because, in the City’s telling, there are hardly any. To make certain that the development incentive won’t be lost on developers, the plan proposes an enormous upzoning. It would allow development up two and a half times the size currently allowed (and actually infinitely larger — literally — than currently allowed for residential development, since the existing zoning doesn’t allow residential development), promising an enormous windfall to landowners in the area, including those who have donated generously to De Blasio’s electoral campaigns.
The application of MIH in SoHo, NoHo, and Chinatown does not entirely wash away the program’s regressive, neoliberal, trickle-down aroma. But it has nonetheless been used by the City in an effort to ward off the criticism that MIH has harmed vulnerable residents without producing much affordable housing. A couple of issues, however, have frustrated this effort. For starters, and notwithstanding the City’s characterizations to the contrary, about a third of the households in the rezoning area earn less than the NYC median income. In fact, 25% of households earn less than the income required to live in the most affordable housing that would in theory be produced under the City’s proposal. Many of these households–which consist primarily of senior citizens and Asian-americans–would be displaced from the neighborhood under the new plan, because the upzoning creates a great incentive to demolish the rent regulated housing where a good portion of them live. The plan would put lower-income Asian-americans especially at risk, because the magnitude of the upzoning correlates roughly with the concentration of Asian-american residents throughout the rezoning area. Under whose definition would a plan with such racially disparate impact count as progress? One would hope not the Progressive Caucus.
But it gets worse. As we have documented at length, the multiple profitable alternatives to residential development included in the plan create a strong disincentive against projects with enough housing to trigger the affordable housing requirement, and thus the rezoning is unlikely to result in the creation of much if any of the promised “affordable”-ish housing. Thus, the City’s own proposal negates the rationale for applying MIH in these neighborhoods to begin with. Adding it all up, then, de Blasio’s plan offers tremendous wealth to landowners in order to ostensibly encourage development that would produce affordable housing for households that are wealthier than the ones that these projects would often displace, and then it offers incentives against the inclusion of any affordable housing in these developments. As a result, this proposal would make the neighborhood wealthier and less diverse than it currently is. If this is De Blasio’s idea of a progressive plan, one hates to think what his version of racially invidious and inequitable one would look like.
A Progressive Alternative
For the sake of brevity, we will skip other inequitable dimensions of the City’s plan, such as the way it penalizes long standing residents who have enhanced the value of their homes through sweat equity, or how it paves the way for big box retail chains to displace small businesses. Instead, we will conclude by briefly outlining what a progressive plan for the neighborhood might look like. First, it would change the zoning to allow residential as-of-right development, which is currently not allowed under the current zoning. But it would premise this change on an affordable housing mandate that would reach broader and deeper affordability bands than MIH. This upzoning would also apply to the conversion of existing commercial buildings to residential uses. It would not, however, increase much, if at all, current allowable development densities so as to avoid creating an incentive to demolish rent regulated housing. This plan would also propose the use of public funds to help affordable housing developers acquire underbuit non-residential buildings, such as parking lots and 1-3 story commercial structures with no residents, and develop them as 100% affordable projects (just a few such sites would match the City’s unrealistic projections of new affordable unit production under its plan), or as close to 100% as possible.
If only someone would propose such a plan… Oh wait! Someone has. It is called the Community Alternative Zoning Plan for SoHo/NoHo and was endorsed by well over a dozen groups, including SoHo, NoHo, and Chinatown community organizations, tenant groups, business groups, and yours truly. What did the City do when confronted with this alternative? They slandered the plan and the groups behind it, saying it was unworthy of consideration and that those behind it didn’t actually care about affordable housing (how’s that for irony?).