Di Blasio’s Gentrification Plan

by nosotroslospobres

Image Photo: Di Blasio with affordability champions from Goldman Sachs and the real estate lobby

About a month ago, most of the New York press was talking about a “housing plan” that Bill Di Blasio had come up with. They even said something about an “affordable housing plan”. A whole lineup of elected officials, plus “community leaders” (most of whom collect a salary made possible by their city councilmember and/or Chase) and “labor” leaders (well paid union executives, mostly in the building trades, few of whom have ever held a hammer in their hands) jumped over each other to talk about how great this was for the city and its people. The Brooklyn (go figure) borough president was quoted as saying “Build, baby, build.”   We just don’t know where the housing plan is. It’s in all the newspaper articles, but we went to their source—a 117 page policy document called “Housing New York”—and it turns out it isn’t really a housing plan at all.

Where’s the Money Coming From

First of all, the plan in all the papers is a 40 billion dollar plan. A lot of money. But “Housing New York” doesn’t have 40 billion dollars to spend; it talks about a 3 billion dollar investment by the city over the next ten years. Now, 3 billion dollars sounds like a lot to you and me, but to put it in perspective, it’s a billion dollars less than Con Ed’s average annual profit—and actually 2.3 billion dollars less than affordability champion Michael Bloomberg invested in 12 years in office. With state and federal money, they bring it up to 8 billion, or two good years of earnings at Con Ed—and that’s without mentioning all the other profits made by companies operating in or based in New York.   So where’s the other 32 billion coming from? Private investment. The market. Now, wait a minute. I may be off base, but it seems like the market hasn’t done such a great job at keeping housing affordable over the last twenty or so years. On the contrary, the market has put incredible pressure on communities of working people all over the city. Washington Heights, East Harlem, Harlem, the South Bronx (of all places!), the borough of Brooklyn, the Lower East Side, Astoria, Jackson Heights, I’m sure I’m leaving out a whole list of neighborhoods where working people, immigrants, people of color, are being priced out of their own communities, and they have no way to defend themselves against…the market. And that’s a regulated market, with most of the apartments rent stabilized, and all kinds of zoning laws and building regulations that slow new development.   This plan intends to take at least some of those barriers out of the way—especially zoning. That’s what the plan is really about, in the end, it’s not a housing plan, it’s a rezoning plan. Because the market doesn’t just provide you with investors—they show up when there’s an opportunity for them to make money. If you allow taller buildings in some places, construction in other places where no construction was allowed before, open up city controlled property for development, they will come. But, notably, the places where they are being invited in—El Barrio, Harlem/Washington Heights (called “Hamilton Heights” in the mayor’s plan), 149th Street in the Bronx, East New York—are all places that are already lined up for imminent gentrification.

What do we get out of it?

Now all the salaried, self-appointed “community leaders” will chorus, “but it’s going to be affordable housing.” Yeah, well, if we’re opening up our neighborhoods to 30 billion dollars of development by investors whose overriding imperative is to make money, we’d better hold out for something for ourselves, no? Let’s look at exactly what that might be.   According to the mayor’s plan, “In 2011 there were about one million extremely low income and very low income households but there were only 425,000 rental units affordable to those households.” (p.18) That’s very important information on a number of levels—first of all, we should see how the mayor defines “extremely low” and “very low” income households. Very low income, by the mayor’s numbers, means a household of four that makes forty one thousand dollars a year.   Okay. It’s hard for four people to live on forty one thousand dollars a year, but…isn’t that what almost all of us are doing? Isn’t that a pretty decent wage for a working family in New York? It’s four thousand dollars above the median household income for Washington Heights and Inwood ($37,092), for example. We’re not implying that we don’t wish people were making more money than that, rather, we’re asking, if not those people, who is this plan supposed to house? It turns out that Di Blasio’s compassion extends a long way, from the “extremely low income” household to the low, moderate and middle income household. The middle income household brings in $138,435 a year. I worry about them as well, I hope they don’t go hungry.   But I guess that’s fine, if we’re building a million new apartments, let them be “income diverse”. Oh, but wait…we’re building 200,000 new units of affordable housing, that’s what they said in all the papers. No, hold on…we’re…preserving 120,000 units, and building 80,000. This is confusing. Didn’t the mayor’s report just say that there is a deficit of 575,000 rental units for extremely low and very low income households?   Well, if 80,000 units is the best you can do, I guess we should dedicate it all to those income categories, no? At least it will help in a very small way to alleviate the crisis your own office describes. But unfortunately, most of Di Blasio’s friends don’t seem to be in the extremely low, or even the very low, income set. Here’s his plan:   “To promote long-term community revitalization and economic diversity, we will pilot a new mixed income program that targets 20 percent of a project’s units to low-income households, 30 percent for moderate income households, and 50 percent for middle-income households.” (p. 10)   Just to remind you, middle income households, in the mayor’s eyes, are those unfortunate four-person households who scrape by on $138,000 a year. Taking the mayor’s numbers from page eight of the plan, which are a little more generous to us very and extremely people, we see that the verys can expect to enjoy 12% of the 80,000 newly constructed units, for a total of 12,800 apartments; and the extremelys a whopping 8%, or 6,400 units. Now, I’m not a housing expert or even an employee of a nonprofit, but if there is a need for 575,000 units of housing for very low and extremely low income households, doesn’t the mayor’s plan fall a bit short when it produces 19,200 units for those categories?

If we’re not getting anything out of it, who is?

We have to wonder, if this plan is going to produce only 80,000 new units of “affordable” housing, where are those other 30 billion dollars of investment going? The press and the mayor’s document and the “labor” and “community” leaders are unanimous in telling us that without subsidies and tax abatements it will be impossible for developers to make a profit, and that certainly troubles us. But is it really believable? The model Di Blasio puts forward is a “50-30-20” model. That means half the apartments at market rate, thirty percent for middle- and moderate-income households, and twenty percent for low income. If, as the plan states, 80,000 units of affordable housing are to be created, and those together make up fifty percent of new development, then we can conclude that another 80,000 units of market rate housing will be constructed. Not to mention that some of these “affordable” apartments look like a pretty good investment for a developer. Middle income “affordable” apartments top out at $3,461 a month. That’s pretty good money for a landlord to get in East New York or on149th Street, especially when he has tax abatements and low interest loans to help him out. Even moderate income households will be paying more than anyone I know can afford–$2,517 a month.

Forever? Come on.

On page 9, the mayor’s plan talks about housing that will be “permanently” affordable to lower or moderate income renters. Forgive our skepticism, but…why would landlords, whose very reason for being in business to begin with is to maximize their profits, be willing to provide “permanently” affordable housing? We get even more skeptical when we look through the plan, because after page nine we don’t see any mention of a mechanism to require landlords to keep the housing they construct permanently affordable—all we see are low interest loans, tax abatements, and other rewards for landlords who do. Reminds us of Mitchell Lama, which is a New York state program initiated in 1955 that gave developers tax abatements and subsidies to build low and middle income housing. After twenty years in the program, developers had the option to “buy out” and rent their apartments at market rate. How did it work out? Usually in one of two ways; either developments were in areas where the market never went up, so landlords stayed in the program, but milked their investments for all they were worth. Those are the buildings you see scattered around the Bronx where tenants have to wait ten years for repairs. On the other hand, if the market went up, like in a place like Washington Heights or Harlem, landlords bailed as soon as they had the chance and started pushing out old tenants so they could rent to new ones at market rate. A building dear to our hearts, 3333 Broadway, is a good example of both approaches. While rents remained low, conditions in the building, which is on 135th and is home to more than 4000 people, were what they were in every slumlord’s tenement in Washington Heights—rats, roaches, heat and hot water problems, crime. Then the building was sold for triple its initial value, and the new landlords started marketing apartments with “hardwood floors and Hudson River views” for $2500 a month. Needless to say, the longtime tenants were an unwanted part of this equation, and 300 families (about 1100 people) were pushed out in a three year period, by the usual methods—harassment, neglect, legal tricks. This isn’t the place to evaluate the overall success or failure of Mitchell Lama. The point is that private investors aren’t investing to do anyone a favor, they’re investing to make a profit, and history shows us that private investors won’t keep housing “permanently” affordable in return for tax incentives and subsidized loans. Nevertheless, the mayor wants to put us all into the hands of these people one more time. Some might say he’s naïve, that he hasn’t got any idea how the real world of landlords, developers, gentrifiers and displaced tenants works. We think that’s unfair; if he was naive in that way, his campaign coffers wouldn’t have been full of developers’ donations. Maybe we’re the naïve ones.

Miscellany

As we said at the beginning of this article, a month has already gone by since the mayor made public his “housing plan”. We could spend another month writing about the ways it hurts communities of immigrants, working people, and people of color. We could talk about the size of the units the mayor wants to construct. He thinks that constructing more studio apartments would respond better to the city’s “changing demographics”; smells like hipsters. What about the 575,000 households of very and extremely low income who don’t have adequate housing—think they’re looking for studios? We could talk about how the mayor wants higher density, and what that would mean for New York—particularly, he talks about crowding new construction onto NYCHA properties. We could talk about decision making. Planning for the project is strictly consultative, with no change to the zoning process to allow for real democratic participation by the communities that will be affected—it all comes down, as it does now, to the mayor and the city council making the decisions. We’ve seen, in the Columbia expansion, and in the “River to river” plan for 125th Street, how much importance the mayor and the city council attach to community input. One thing, though, that we KNOW the liberals will be asking us, is this: “It’s easy to criticize, but do you have any better ideas?” As a matter of fact…

What Exactly is the Housing Crisis

If we’re going to talk about solutions, first we have to be clear—what exactly are the problems we’re trying to solve? If you’re mostly worried about the artist who comes from out of town and wants to find a nice studio space to rent in an up and coming neighborhood, look no further—Di Blasio’s plan will work fine for you. We must move in different circles than the mayor, because somehow we’re not worried about those people, people who can maybe write home to get some help with the rent from their parents, or people who can just move back to Ohio or wherever if it really is just too expensive for them to make it here. ImagePotential beneficiaries of the Di Blasio studio apartment initiative

We’re worried about communities of people of color that have existed for forty, sixty, in some cases a hundred or more years, being pushed aside by the wave of gentrification Di Blasio’s plan will contribute to. We’re worried about working families who already live here and are having trouble paying the rent, or whose buildings are falling apart—those 575,000 very and extremely low income families who don’t have adequate housing right now. We’re worried about people migrating from countries whose economy has been wrecked by US corporations and they arrive here needing a place to stay and a place to work. We’re worried about all the people who can’t go back to Ohio.

Limited Equity Housing

It’s pretty obvious that if you want to make working class communities stable and affordable, you can’t do it by changing zoning for private developers.   If you want to stop the market pressures that force people out of their homes, you can’t do it building studio apartments for hipsters. If you want immigrant working people to have a safe, affordable place to live you can’t do it by building apartments that rent for $3500 a month. ImageWorking people live here? I don’t believe it.

What can we do instead? To begin with, communities of working people need relief from rising rents and deteriorating conditions, and private landlords won’t ever give us that—it just doesn’t make sense that they would. We can only give that relief to ourselves. One example we can look at is Amalgamated Houses in The Bronx. Amalgamated is a cooperative housing project that was founded in 1927 by the Amalgamated Garment Workers Union. The union had enough money and enough cooperators to get a mortgage that let them build a 1500 unit complex (already a tenth of what Di Blasio will build for the very and extremelys). The cooperative is limited equity, meaning that you can’t sell your apartment to anyone but the co-op, and the co-op buys it back for what you paid for it, adjusted for inflation. A two bedroom apartment at Amalgamated costs about $29,000, with a monthly maintenance of $800. The prices are adjusted for income, and there are income caps so the complex maintains its working class character. Best of all, residents aren’t at risk of being pushed out of their homes by rising rents or harassment and neglect by their landlord. People will say that the idea is fine, but it’s on such a small scale that it can’t be a solution to the problems we have now. If it’s true that Amalgamated is too small to make an impact on the housing crisis, let’s look instead at the largest housing cooperative in the world—Co-op City, also in The Bronx. Chances are you’ve heard about everything bad that ever happened at Co-op City. The original construction left much to be desired. It was built on a swamp. It’s sinking! It defaulted. It went through a sixteen month “rent strike” when cooperators refused to pay their maintenance. They had to spend billions removing asbestos. Amalgamated has had problems too—probably the worst one was accusations of racism in the allocation of apartments. Working people running their own affairs, in this kind of society, is always sloppy. But what you don’t hear about is that Co-op city has been an enormous success—40,000 working people in comfortable, safe, affordable apartments for the last 46 years; a community that is 60% black and 30% latino and yet is in no imminent danger of being displaced. Talk about impact—can you imagine a cooperative community of 40,000 Dominicans in the middle of Washington Heights? It would slow down the gentrifiers, that’s for sure. Co-op City is based on the same principles as Amalgamated—a limited equity co-op, with income restrictions, where you can only sell back to the co-op itself. The results are similar, too; a one bedroom for $13,500 and $579 a month maintenance, a two bedroom for $20,250 and $869. Can Di Blasio beat that?

There are solutions everywhere

A lot of people these days say that gentrification is inevitable, there’s no way to stop it. Just like people said globalization was inevitable. The truth is a little bit different—corporations spent billions of dollars and years of effort busting unions, breaking up opposition, and fighting trade barriers in order for capitalism to “globalize”. It didn’t just happen. In the same way, it has taken money and time and effort for developers to get us into the housing mess we’re in now. It doesn’t have to be that way. If you decide to focus on solutions, instead of on problems, you can begin to see them everywhere. Let’s look at our own neighborhood of Washington Heights, Inwood and the West Bronx. Where are you going to get the money or the people to start a co-op like Amalgamated?   One place you might look is at livery cab bases. For some reason, it’s one of the best kept secrets that almost every livery cab base in the Dominican community is a worker-owned cooperative. Between them there’s a lot of potential economic power, and it might as well be directed to housing, considering that plenty of drivers at plenty of bases are feeling pressure to move, either from rising rents or from landlord harassment. One base, Seaman, already owns a building in The Bronx where drivers have co-op apartments. Let’s fantasize for a minute; just in a limited way, just here uptown. Five bases get together and pool resources, ask for a mortgage. Where are they going to buy? Well, for one thing, plenty of property is changing hands in Washington Heights. What if part of a real housing plan included a provision that limited equity cooperative buyers had the right to match any offer on a building? What if the 11 billion dollars of HDC bonds the mayor’s plan mentions on page 101 were directed to providing low interest loans to limited equity co-ops instead of profit-making developers? What if city unions, and private unions as well, insisted that their pension funds be invested in this type of development, which would benefit their members both directly and indirectly?

The Shortest Road to a Real End to the Housing Crisis

Limited equity housing cooperatives, founded by workers’ organizations, are only one of the potential solutions to the housing crisis caused by gentrification, and in and of themselves they leave other problems unaddressed; and cooperatively run taxi bases are only one of the potential catalysts. Even these limited solutions, though, so much more desirable than what is proposed by Di Blasio, aren’t going to happen the way things are going. The fact is that there are almost no “working class” organizations in the city. Unions are tied to politicians in Di Blasio’s party who are lining up behind his “plan”. “Community Based Organizations”, for the most part, aren’t based in the community—they get their money from big corporations and from the government, and as much as anything else they serve as a political base for one politician or another who is their benefactor. ImageTengan cuenta…Club Deportivo in the sights of propertyshark.com

There isn’t a short cut to an end to the housing crisis—what it will take is for working people to organize ourselves, and work for our own interests. That means that we have a lot of work ahead of us. We need to study the communities we are a part of. We need to look for potential—like those taxi bases, like buildings where tenants have managed to force the landlord to sell to them, like the hundreds of social organizations, from political clubs to regional clubs to dominoes clubs, that exist in Washington Heights. We need to be talking to all those organizations about the potential that we see and the potential that they see for a community based on solidarity and autonomy. We need to make alliances and take actions together with other working people towards taking this crisis out of the hands of the people who caused it and getting control of it ourselves. From where we are, it looks like anybody who tries to take any shorter path to a solution, anybody who tries to make the market or politicians or developers work for us, is just wasting the precious time of at least 575,000 people, maybe more.

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