'I Wouldn't Despair': HPD Commissioner Louise Carroll Defends City’s Affordable Housing Budget Cuts
New York City has sliced tens of millions of dollars from its affordable housing capital budget, but the head of the agency says the administration will still meet its goals this year.
“I wouldn’t despair, we intend to close projects in August, we intend to close projects in September and we intend to close projects in December,” Department of Housing Preservation and Development Commissioner Louise Carroll said during a Bisnow affordable housing webinar Tuesday.
When the coronavirus hit the city, Carroll said the city looked at its housing pipeline and realized it had already hit its goal of creating at least 25,000 affordable housing units in 2020.
“I recognize we did get a cut to our FY '21 budget. But I’d like to remind folks that the money we have, $800M in capital, to spend on our housing, is still a lot of money,” she said. “Relative to the $1.5B we spent last year … $800M looks like it's a huge cut.”
She added that the prior administration didn’t spend more than $452M annually on housing. Before the pandemic hit, de Blasio's FY 2021 budget included $1.2B for affordable housing. After a $457M cut, the city directed $741M this fiscal year toward building and preserving affordable housing, when the New York City Council approved its $88.2B budget last month. The reduction amounts to a 40% cut.
“This mayor has spent more on housing than any other administration,” Carroll said. “That $800M that we have to spend is still a sizable chunk of money.”
Affordable housing developer RiseBoro CEO Scott Short told Bisnow at the time that it will result in around 20,000 fewer affordable housing units produced in the city over the next couple of years. Analysis from the New York Housing Conference backed that figure up.
The housing affordability crisis in New York City has been going on for years, but has become even more urgent since the pandemic. Panelists on Tuesday’s webinar, which is the first of a three-part Bisnow series examining the policies, financing and planning of affordable housing, discussed landlords' role in finding solutions, handling community sensitivity to development and the need for federal funding.
“There is obviously a lot of distress and dislocation … There are challenges with the banks in terms of some of the underwriting because of challenges people were having with paying their rents, and with the sensitivity around racial injustice,” Capalino + Co. principal Woody Victor said. “[But] it’s definitely a great time to be in this space. Everyone has to put their thinking caps on and really try come up with some solutions.”
L+M Development Partners co-founder Ron Moelis, whose company has acquired, built and preserved nearly 30,000 residential units, said it is imperative the industry and the government work to try and keep people in their homes.
“It’s going to be a far bigger humanitarian crisis and cost to society and the city if people are forced out of their homes because of a lack of ability to pay rent,” he said.
He said rent payments have been much better than the industry feared, which he put down to the stimulus checks and unemployment payments many people received.
"It's an opportunity for us in the industry," he said. "I think there are ways to work within the system and create models that are not eviction-based, or at least creating models where evictions are last resort, not an early resort.”
New York’s five-month-long eviction moratorium expires Aug. 20, though real estate lawyers told Bisnow this week they are no longer expecting mass evictions to take place. Still, there are some 14,000 active eviction cases that landlords brought before the pandemic, The Real Deal reports, which will be able to move forward starting Wednesday.
Federal unemployment benefits providing those out of work with $600 each week expired Friday, and a federal moratorium on evictions at properties with federal government-backed mortgages expired a week earlier.
Moelis said affordable housing is an important economic stimulant for the city and generates jobs in times of recession. Carroll said for every dollar the city spends on affordable housing, it leverages just over $4 from the private sector and federal funding.
“This industry keeps a lot of people employed," Carroll said. "A high percentage of folks in construction are people of color. So, as we spend that money and we leverage the private sector, we are maintaining these jobs.”
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