Unaffordable Housing

Can Bill de Blasio rein in the Brooklyn housing market? That question has had borough residents and housing experts alike on edge since the mayor, who made the ambitious campaign promise to create or preserve 200,000 units of affordable housing over ten years, took office in January. Now, three months after de Blasio announced to great fanfare his plan to make good on his bold pledge, many uncertainties remain about whether the progressive approach the administration plans to employ to achieve its aim—namely, mandatory inclusionary zoning—can be effective in preserving affordability in an increasingly unaffordable housing market. 

Rolling out his housing blueprint as “historic”—a favorite word of the mayor’s to describe his initiatives—he used the site of his announcement, 250 Ashland Place in downtown Brooklyn, to illustrate his plan. There, the Gotham Organization development company is building a residential project that represents a marked shift in approach from the Bloomberg administration’s methodology of incentivizing the creation of affordable housing. The building would keep 282 of the 52-story tower’s 586 units permanently affordable for low- and middle-income families—a ratio that breaks down to 50 percent market-rate apartments, 30 percent for moderate-income families, and 20 percent for low-income families—a distinct difference from the popular 80/20 model (80 percent market, 20 percent affordable), which qualifies developers to receive tax-exempt financing from the New York State Housing Finance Agency (HFA). 

“When we open up a site for greater development, we want to get the most back for the people we can,” de Blasio said of the 50/30/20 model employed at 250 Ashland. “If we make any kind of public investment, we want to get the most back for the people we can. We think there’s more that can be achieved than was achieved in the past, which is why we’re upping the ante.” 

Achieving more and greater affordability is the primary driving force behind mandatory inclusionary zoning. The basic thrust behind the government granting zoning variances and density bonuses, which allow buildings to be taller and bigger, developers agree that in return they will create a certain percentage of permanently affordable units. concept is that in exchange for the 

While specific details of how the policy will be carried out—such as what percentage of buildings the city will mandate to be affordable and what the city means by allowing on- and off-site housing to fulfill the affordable requirements of these developments— the mayor’s plan notes that one of Brooklyn’s poorest neighborhoods, East New York, will serve as a litmus test of sorts for his approach. Housing experts, however, are skeptical that the method will have its desired effect. 

“Mandatory inclusionary, it’s saying to a developer in East New York, ‘Oh, we’ll let you build higher,’ but that does nothing for you,” said a former city housing official, who spoke on the condition of anonymity so as not to offend the current administration. “If you build 20 stories, you’re still going to have to subsidize every unit in that property. It’s not like you’re cross-subsidizing units because you’re going to get rents at higher levels in some units in Brownsville and East New York than in others. There are swaths of the neighborhood, low- and moderate-income communities, where you’re required to have low-income units in these developments, but that’s the market anyway. It’s going to be helpful in some neighborhoods, but meaningless in others.” 

An analysis of the policy by the Association for Neighborhood Housing and Development offers a rebuttal to this view. ANHD found that up to 32,000 affordable apartments can be created by mandatory inclusionary alone, but only if the city applies it citywide, “regardless of past, present, or future rezonings or land use actions.” 

Using Brownsville, a low-income Brooklyn neighborhood adjacent to East New York, as an example, ANHD Executive Director Benjamin Dulchin makes the case that the policy allows the city the flexibility to apply capital and subsidy where necessary, with the caveat that the administration is targeting mixed-income neighborhoods instead of exclusively low-income areas. 

“The mayor understands that the additional market rate housing that is being built cross-subsidizes the affordable housing that’s being demanded,” Dulchin said. “That then frees up city subsidy, and city programs and city capital to buy the additional affordability where and when it needs. It may well include Brownsville, it may well be if you want to build housing that is genuinely stabilizing to the residents of Brownsville, you need to have essentially one part inclusionary and two parts additional subsidy and incentive. Having inclusionary across the city gets you affordable housing built in other places and frees up the capital and the subsidy where it is most needed.” 

The administration has also been careful to point out that instituting mandatory inclusionary across the city does not necessarily mean changing the face of neighborhoods from low-rise communities to skyscraper incubators. City Planning Commissioner Carl Weisbrod said as much in recent comments before the City Council, affirming that affordability would be required in new developments regardless of regardless of whether the city offers the builder incentives. 

Moreover, one of the primary benefits of mandatory inclusionary is that it allows the city to play the long game in ensuring that neighborhoods stay affordable. One developer, who has played ball with the city in providing affordable housing, makes the point that even if mandatory inclusionary does not generate cross-subsidy possibilities in the short term, “It assures that if the neighborhood changes over time that the government won’t have to buy affordability later.” 

The developer added, however, that mandatory inclusionary can be an imperfect model, specifically when neighborhood housing markets reach the point where they no longer need city subsidy to provide affordable housing. 

“If you have some point in the middle where the market could, without subsidies, support new construction in that middle-income range, [the city would] want to say at that point either we’re going to subsidize every project or development stops. That would be a reason not to do it.”