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Land Use, Housing & Zoning
Resolution on the Mandatory Inclusionary Housing Text Amendment.
WHEREAS, The Department of City Planning proposes to add a new section to the Zoning Resoution to establish a framework for Mandatory Inclusionary Zoning; and
WHEREAS, Production of affordable housing would be a condition of residential development when developers build in an area zoned for Mandatory Inclusionary Housing, whether rezoned as part of a city neighborhood plan or a private rezoning application; and
WHEREAS, There would be no expiration to the affordability requirement of apartments generated through Mandatory Inclusionary Housing, making these new units a long-term, stable reservoir of affordable housing; and
WHEREAS, DCP has proposed two options for affordability requirements available in the Manhattan Core; and
WHEREAS, Option One would require that 25% of residential floor area must be for affordable housing units for residents with incomes averaging 60% AMI ($46,620 per year for a family of three), and
WHEREAS, Option Two would require that 30% of residential floor area must be for affordable housing units for residents with incomes averaging 80% AMI ($62,150 per year for a family of three); and
WHEREAS, While the proposed MIH contemplates an additional "Workforce Option" where 30% of residential floor area must provide affordable housing units for residents with incomes averaging no more than 120% AMI ($93,240 per year for a family of three), this option does not permanently ensure the presence of units for low- or moderate-income households in a new development; and
WHEREAS, The 2010-2012 American Community Survey 3-Year Estimates show that 43.6% of renters in our Public Use Microdata Area (comprising Community Boards 4 and 5) pay 30% or more of their household income on rent and therefore are considered to be "rent burdened;" and
WHEREAS, According to data from Zumper, rents in Manhattan Community District neighborhoods of NoMad, the Flatiron District, Koreatown, the Garment District, and the Theater District all are among the priciest NYC neighborhoods with median asking rents for a One-Bedroom exceeding $3,500 per month; and
WHEREAS, The 2010-2012 American Community Survey 3-Year Estimates show that 55.5 percent of the households in our Public Use Microdata Area have incomes of less than $100,000 per year; and
WHEREAS, The 2010 Census shows that while 22.8% of the population in our city is Black Non-Hispanic and 28.6% of our city is of Hispanic origin, only 4.1% of our community district's population is Black Nonhispanic and only 7.7 is of Hispanic origin;
WHEREAS, Given the high rent burden in Manhattan Community District 5, very high asking rents for market rate apartments, and a demographic profile that includes far fewer Black or Hispanic households than the city as a whole, we believe it would serve an important public interest for furthering affordable housing goals and goals of neighborhood integration for the MIH text to include an "Option Four" that has a 50% affordable set aside for a range of incomes (from low-income to middle-income) where units serve households with an average income of 75% AMI; and
WHEREAS, The Bay Area Economic Market and Financial Study on Mandatory Inclusionary Housing prepared for the New York City Housing Development Corporation shows, on Table 21 and Table 22, that in "Very Strong" markets like those in Manhattan Community District 5, a 50% affordable set aside where household income averages 75% of AMI ($58,275 per year for a family of three) is more than economically feasible for both rental development benefiting from a 421-a tax exemption (though not even using 4% LIHTC and Tax-Exempt Bond Financing) and condominium development; and
WHEREAS, While it is critical that many of the new units in development facilitated through an increase in permitted residential floor area serve low-income households (i.e. 40% AMI and 60% AMI), a sizable number of units in a new building could, under our proposed "Option Four," be set aside to serve households with income at 100% AMI or more ($77,700 per year for a family of three); and
WHEREAS, While it is critical that many of the new units in development facilitated through an increase in permitted residential floor area serve low-income households (e.g. at 40% and 60% of AMI), a sizable number of units in a new building could under our proposed "Option Four" be set aside to serve households with income at 100% of AMI or more ($77,700 per year for a family of three); and
WHEREAS, While the special permit under proposed 73-624 may appear similar to the variance under 72-41, it would be far easier for a developer to obtain because there is no uniqueness finding; and
WHEREAS, Because the economic hardship finding under 73-624 is nearly identical to finding (b) under the 72-41 variance, we are gravely concerned that the Board of Standards and Appeals would be bound through precedent to grant relief due to the BSA's use of the "capitalization of income method" to project value from a subject site and BSA's acceptance of methodology establishing the value of a developable square foot on a subject site based on potentially highly speculative nearby vacant land purchases; and
WHEREAS, Instead, there should be a mechanism through which a developer, who believes a project is not economically feasible, goes to the NYC Department of Housing Preservation & Development and can seek a time-limited subsidy to make a project viable while maintaining affordability requirements; and
WHEREAS, We believe that the existing 72-41 variance provides an adequate safety valve to seek permanent relief from compliance with zoning; and
WHEREAS, While the option to place affordable units off-site and in the same community district may appear to result in the same public benefit as having units on-site, the permanent cross-subsidy for on-site units vs. the likelihood that 100% affordable off-site projects will seek future public subsidy make off-site units more expensive and risky for taxpayers without affording any increased benefit in the amount of affordable housing or quality of housing; and
WHEREAS, It is critical that tenants of affordable units not be excluded from building amenity space (e.g. children's playroom or common roof area) through prohibitively high fees; therefore be it
RESOLVED, that Manhattan CB5 recommends denial of the Mandatory Inclusionary Housing zoning text amendment unless the following conditions are met:
1) The MIH text is amended to include an "Option Four" where 50% of residential floor area would be set aside for households with income averaging 75% of AMI but that require that some of portion of those units serve lower income households (i.e. 40% AMI and 60% AMI) and some portion serve middle income households (i.e. 100% AMI or more); and
2) The MIH text is amended so that the special permit to waive or modify the affordability requirement is replaced by a process in which the NYC Department of Housing Preservation & Development reviews developer pro formas and can provide time-limited subsidy to make a development feasible; and
3) The MIH text is amended to prohibit an "off-site" option because there is no ongoing obligation for a "market-rate" project to provide long-term support for an off-site affordable project making it likely that an off-site project will seek public subsidy in the future which is costly to taxpayers; and
4) The MIH text is amended to require that HPD only approve an Affordable Housing Plan where there is a guarantee that tenants of affordable units will have affordable access to all building amenities.