Middle-income residents are being pushed out of homes

Whether 5731 Broadway becomes a homeless facility or not, the issue of homelessness is unlikely to go away soon, and could use much more focus.

A poll by Quinnipiac at the beginning of March showed that 96 percent of New Yorkers think homelessness is a serious problem, and more than 70 percent think the city is doing too little to help.

The increase in homelessness has steadily been rising from 24,000 in the 1990s, to 31,000 in the 2000s, to 63,000 today. When Mayor de Blasio entered office in 2014, the homeless in shelters stood at 51,500.

The problem has only grown worse, with many causes. A long recovery following the financial collapse of 2008 (after which time, more regulations were clamped on financial markets lessening the booms and busts that dislocate jobs and people) has resulted in more well-off renters who have pushed up rents. 

Private equity firms have been buying up rent-stabilized properties, and since they have the financial wherewithal to exploit loopholes, they can recoup costs by finding ways to push out tenants.

And since 2007, nearly 172,000 rent-stabilized units have been de-regulated (there are about 990,000 rent-stabilized units today).

The core of Mayor de Blasio’s approach — the 421a tax break — is not working. Devised in 1971 at a time the economy was collapsing, the tax exemption was meant to stop property owners from abandoning buildings. But in today’s world, the exemption is used to give developers a large tax break to set aside 20 to 30 percent of units for below-market rate tenants, who are chosen by city officials in an income-based lottery.

The problem is that if only 20 to 30 units in a new 100-unit building are “below-rate,” the majority — or 70 to 80 units — are market rate. The result is tremendous overbuilding to get the 80,000 of “affordable housing” units the mayor is aiming for.

An example of this is the Mill Pond Park-Pier 5 project in the South Bronx where the city is selling parkland at bargain prices in neighborhoods that desperately need green space, and where there is the potential for a common waterfront for all New Yorkers. The developers the city is being so generous with will end up creating mostly market-rate housing in neighborhoods that need below-market-rate housing. 

Across all boroughs, this is getting replicated. A glut in upper-income units is being created for people that don’t need them (those earning more than $80,000 a year have plenty of choices) and an insufficient number of units is being created for middle income and poorer folks.

The 421a tax break, in the meantime, costs the city millions of dollars in uncollected property tax ($1.4 billion in 2016, and $10 billion by 2024). That is money that could be used to build the infrastructure needed to supply new water, sewage, electricity lines and schools.

Not only this, but there’s an aesthetic affect as well. The appearance of high-rise after high-rise turns our cityscape into what Jane Jacobs has described as the “blight of dullness.”

There are many approaches, but what can help reduce homelessness is when construction does occur, 100 percent goes to middle-income folks (making between $30,000 and $80,000), and for NYCHA public housing.