NEW YORK : De Blasio Unveils Affordable Housing Initiative
http://observer.com/2014/05/de-blasi...-housing-plan/
De Blasio Unveils ‘Most Ambitious’ Affordable Housing Plan in Nation http://nyoobserver.files.wordpress.c...sing.jpg?w=635 By Jill Colvin and Kim Velsey 05/05/14 Quote:
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http://observer.com/2014/05/de-blasi...-housing-plan/
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READ more on the plan here... http://www.nyc.gov/html/housing/pages/home/index.shtml |
This will be an epic war between the housing advocates and NIMBYs. I think it may actually tear apart the "progressive coalition" that brought DeBlasio to office.
But it's very, very good news for the city. The housing advocates have the public opinion, the mayor's office, the council president's office, and most top elected officials, and will win the battle. And if you want 200,000 affordable units, you will need a even larger number of market rate units to help fund this. |
At first glance, the "build baby build" attitude seems right. Ultimately, to be successful this will need tons of "luxury" market rate stuff to subsidies the affordable component. It's going to create a donut in the new market, where many won't be able to afford either market rate or affordable housing. But, the new units will take some price pressure off the existing unit base, so everybody wins.
Longer term it would be nice to see the NYC subway extended to Northern NJ. Building up in places like Jersey City makes more sense than deep in eastern queens or Staten Island (although everywhere in the region needs to add more housing). |
I don't think the units are high enough. For a city such as this, with all of the demand, there should be more units ( In terms of those newly constructed). 80,000 seems a little on the low side for NYC. Especially over a 10 year period.
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DELETE political rant.
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This will make the new market rate units much more expensive, since they have to subsidize the affordable units.
Sounds like he's trying to make it a city of rich+subsidized, not a city for the middle. |
This will never work, good start I guess.
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I think the devil is in the details on this one. It really depends on what the ratio of affordable housing is versus the added "upzoned" market rate housing. If the "net upzoning" is just for affordable housing, then yeah the plan is dead in the water. But, if the "affordable housing" is a political sweetener to allow a lot more market rate housing than is currently allowable, then I think that is a tradeoff worth making. It is in some sense economically sub-optimal, but the NYC housing market is already driven more by zoning politics than free market economics. Yeah, the middle/upper middle class are the direct losers from affordable housing requirements, but if this allows a lot more market rate development than the status quo, they will ultimately benefit (even if it is mostly through less price pressure on older units). |
The details can grow/shrink the level of subsidy required, but they're still a subsidy paid for by the market-rate units.
Further, going tall typically means more construction cost per square foot, particularly with highrises. It can be worth it if rents are high enough. But rents need to be substantially higher with the burden of inclusionary zoning. The result is that supply won't happen until rent pressure is high enough. Market rents might need to reset higher to make this worthwhile, and that will apply to the entire market, not just the new units. Inclusionary zoning has another big problem. The same dollars don't go as far as they would if, say, a housing non-profit got the same money. The onsite requirement suggests an emotional basis, not a desire to maximize housing. |
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How would you make New York City more affordable for the middle class and working class? |
^^ Multifamily to replace aging single family homes in Bronx, Queens and outer Brooklyn; annex portions of Nassau county and redevelop all of the LIRR stops with 30 story towers.
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All good points, I share your concerns. But, hope/think they can be overcome if the plan is bullish enough on increasing market rate housing.
If we start with the proposition that loosening zoning, will increase supply and lower prices (relative to a hypothetical baseline) then in theory there is an "affordable housing" trade off to be made to allow the politics of this to work. Quote:
Plus, developers in NYC are in some sense earning "monopoly rents" due to zoning rules limiting their competition and driving up aggregate land prices. They are selling units for well above their production + capital costs (i.e. economic profits are zero). Need to dust off the old economics text books, but I believe one of the ideas behind removing supply constraints is that per unit producer profits will fall, but overall production will rise. It’s more likely the most/all the cost of the IZ units is born by the developer rather than being passed along to the buyers. If this is eats into their “rents” then this won’t reduce construction overall. Ultimately, this requires some careful calculus (which yeah, I’m not sure they have done. De Balsio is not always known for his pragmatism). You need something massively pro-market (a big increase in allowable development) to offset a minor anti-market policy (IZ). If the scales aren’t right (too little new development or too much IZ), the whole thing will collapse. Quote:
I know construction costs psf rises as height increases, but how much does it rise going from say 3-stories to 5-stories or 15-stories to 20-stories? 20-stories to 40-stories? A big part of NYC real estate prices is due to land prices (which fall per sf of development). It seems there could be a happy medium, where psf construction costs rise or stay the same, while land costs psf fall. Quote:
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I'd allow supply to be added much more easily, which would address the market-rate segment at all levels directly or indirectly. And I'd put the whole city to work supporting low-income housing, via a fair method like property taxes. Here's the key: Don't disincentivize the very thing you need most. |
I'm not an expert in construction costs (though I sit next to several), but here are some themes. When you switch from woodframe to concrete the structural cost skyrockets. At 85' you're out of the reach of fire ladders so fire standards go higher. As a highrise gets taller egress standards rise. Also, with a taller building, you're generally devoting a larger percentage of each floorplate to structure and systems.
If you switch from short and squat to a skinnier and taller building, you're also adding a ton of exterior square footage and elevator/stair space per interior square foot. That may be fine if your goal is high rents. |
Excellent Excellent News!! The Plan is far from perfect, but it's an excellent start and it gets the discussion going. De Blasio is on the right track.
mhays, the subsidizing of the affordable units is only one component of the plan. Are you not excited about the other elements: reducing of regulatory burdens, relaxing minimum parking requirements around transit centers (which will reduce construction costs), the encouragement of development on vacant and underutilized city-owned and privately-owned lots. The city is contributing funding, hiring more planners, and encouraging its housing finance agency to generate billions for housing in the terms of bond sales. |
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Meanwhile, the city will go on building, and far more residents than otherwise would have (half a mil by estimates) will benefit from it. http://www.nytimes.com/2014/05/06/up...hpw&rref=&_r=0 Bill de Blasio Shows Liberals Can Be Pro-Development http://static01.nyt.com/images/2014/...ticleLarge.jpg http://static01.nyt.com/images/2014/...superJumbo.jpg MAY 5, 2014 Joseph Baro Quote:
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Good to see NYC leading the way on this, yet again.
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