Sep 25, 2013

Does Landmarking Curtail Affordable Housing Development in Manhattan?

Study Finds No Affordable Units Created in Landmarked Districts Since 2008;
Study Finds Decline in Diversity, Higher Incomes in Historic Districts

A study by REBNY (The Real Estate Board of New York) finds designating large swaths of Manhattan as landmarked districts has stifled the creation of affordable housing in New York City, according to a press release issued by the Real Estate Board of New York. 

Their analysis found that since 2008, zero units of affordable housing have been constructed in landmarked districts in Manhattan, with just five units built since 2003.  There were 8,070 new affordable housing units built borough-wide from 2003-2012. 
In addition, of the 53,220 new residential units built in Manhattan during the 10-year period, a mere 1.9% -- 998 units – were in landmarked districts.

According to the study, census data shows that residents within landmark districts have significantly higher household incomes and are dramatically less diverse than other areas of Manhattan and New York City.

REBNY singled out density restrictions, landmark compliance costs, and a lengthy public review process as main reasons why housing and particularly affordable housing development is extremely unlikely on landmarked sites. 

A July 2013 study by REBNY concluded that landmarking in Manhattan is growing at a rapid rate, with nearly 30 percent of properties protected by landmark regulations.   In some neighborhoods, such as the Upper West Side and SoHo/Greenwich Village, the level of protected properties has reached a staggering 70 percent. Given this and REBNY’s most recent study, it is clear that certain areas of Manhattan are closing off opportunities for affordable housing for future generations. 

In addition to new construction, 114 affordable units were created through renovation – all built before 2008 on City-owned properties, with 85% of these units located within West Harlem’s Hamilton Heights/Sugar Hill Historic Districts and none south of 87th Street.

As a proud member of the residential brokerage division of REBNY, I appreciate all their analysis and lobbying efforts on behalf of the real estate industry and NYC economy. The study makes sense because landmarking curtails all new construction development. 

The whole idea of landmarking and preservation to preserve the historic and architectural integrity of a neighborhood or building. Unfortunately that includes affordable housing new construction developments. I'm pro development but I'm also pro landmarking. Not every neighborhood and building should be designated a landmark without a valid reason but every 19th century townhouse shouldn't be razed for a new glass sliver building. I beleive in moderation.

 As a broker who specializes in affordable housing the term "affordable" and "low income" in Manhattan is subjective. I have sold many HDFC coops in Manhattan. These "affordable" and "low income" coops are for households with maximum incomes of 120% to 165% of the NY metropolitan area as determined annually by HUD. 

The median income of the NY metro area for 2013 is $85,900 for a household of 4. The maximum income 165% is $141,735 or $99,330 for a 1 person household. Most HDFC coops are in prewar buildings that NYC owned by default and sold them to the existing tenants. it is a successful program that offers affordable housing, home ownership, limited equity and equity. These coops helped gentrify blighted neighborhoods like West Harlem’s Hamilton Heights/Sugar Hill Historic Districts that the study mentions.

Most of the new construction affordable housing in Manhattan is in the 80/20 program. Developers that build luxury developments get tax abatement's if 20% of the project is affordable.

While this is an excellent way of creating affordable housing the 20% is usually rentals and the income requirements are so low $20,00--$32,000 (approx varies building to building) that moderate income New Yorkers such as NYC teachers, policeman, nurses and many other working middle class New Yorkers make too much money for these units. 

A new  luxury condo going up on Riverside Boulevard by Extell Corp under the 80/20 program created a lot of media attention recently. Local politicians, activists and mayoral candidates all pandering with empty rhetoric about the separate entrances for the 80% wealthy condo owners and the 20% low income subsidized renters having separate entrances to the building. Much ado about nothing.

Personally I would very very happy to get a $million+ apartment on the Hudson river for $500/month no matter what entrance led to my luxury subsidized apartment. Not one politician or news article suggested the need for "affordable" housing for middle class New Yorkers. 

Manhattan certainly needs affordable housing. It needs affordable housing for the middle class. 80/20 is a great program but in my opinion it would be much better if it included affordable units for moderate incomes and for middle class New Yorkers.


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