NEW YORK—With Governor David Paterson expected to present the State Budget on Dec. 16, the State Assembly Standing Committee on Housing held a public hearing Thursday on the growing cost of affordable housing, and how it may impact State-funded housing programs.
Assemblyman Vito Lopez, who chairs the committee, hosted the hearing at the State Assembly’s Manhattan office. Representatives from government and civic groups made remarks.
Lopez raised concerns that economic times are making it harder to sustain affordable housing. Owners of affordable housing buildings are feeling the pinch of higher water and fuel rates; builders of housing units are facing the double challenge of finding financing and increasing building costs. The State programs that subsidize affordable housing may have to fill in the funding gaps.
Much of the focus was on the Mitchell-Lama Housing Program, one of the programs that receive State funds. Deborah VanAmerongen, commissioner of the Division of Housing and Community Renewal (DHCR), testified. The task of her agency is to administer the building, financing, and renovation of affordable housing in New York State.
To address families facing foreclosure, the DHCR formed a Subprime Foreclosure Prevention Program that funds 15 local not-for profits that work with those families. Some counties are harder-hit by foreclosures than others, so the agency took into account the number of foreclosures in each of the State’s 62 counties. Queens, Brooklyn, Suffolk, and Monroe counties are among those with the most foreclosure filings.
“The financial crisis has had a devastating effect on the value on the low-income housing tax credit, which has always been one of the most reliable sources of equity for affordable housing developers,” she said. Tax credits that were worth over $.95 to the dollar last year dropped to $.75, according to VanAmerongen. She estimates that the gaps this creates would reduce housing development funding by $60 million this year.
Because the demand for affordable housing in Downstate New York is still strong, DHCR has amped up their funding efforts to help developers in Upstate New York, who have more trouble securing equity for their projects.
The Committee identified a few issues that need to be addressed legislatively. Assemblywoman Linda Rosenthal said that in her district on the west side of Manhattan, Mitchell-Lama building owners evicted residents only to receive a “puny fine.” One such case has resulted in a pending lawsuit between the subsidized residents of 3333 Broadway and their landlord who allegedly evicted them for higher paying tenants.
Rosenthal also raised the concern that the 7.5% annual rent increase for rent-stabilized units is too much for older renters to bear. “I have 75-year olds who come to me saying they have to pay $2,000 a month,” Rosenthal said.
Assemblyman Hakeem Jeffries suggested giving subsidies to get the community into luxury condos, which he hoped would be a “win-win” solution for both developers of unsold luxury condominiums built before the financial crisis hit, and seekers of affordable housing. “I’ve seen luxury condos sitting more than half empty,” Jeffries said.
Though VanAmerongen replied that it might not be feasible to expect developers to undersell their premium priced units, she pointed to an instance where her agency was able to convert a market-rate building into a veterans’ home.
Assemblyman Vito Lopez, who chairs the committee, hosted the hearing at the State Assembly’s Manhattan office. Representatives from government and civic groups made remarks.
Lopez raised concerns that economic times are making it harder to sustain affordable housing. Owners of affordable housing buildings are feeling the pinch of higher water and fuel rates; builders of housing units are facing the double challenge of finding financing and increasing building costs. The State programs that subsidize affordable housing may have to fill in the funding gaps.
Much of the focus was on the Mitchell-Lama Housing Program, one of the programs that receive State funds. Deborah VanAmerongen, commissioner of the Division of Housing and Community Renewal (DHCR), testified. The task of her agency is to administer the building, financing, and renovation of affordable housing in New York State.
To address families facing foreclosure, the DHCR formed a Subprime Foreclosure Prevention Program that funds 15 local not-for profits that work with those families. Some counties are harder-hit by foreclosures than others, so the agency took into account the number of foreclosures in each of the State’s 62 counties. Queens, Brooklyn, Suffolk, and Monroe counties are among those with the most foreclosure filings.
“The financial crisis has had a devastating effect on the value on the low-income housing tax credit, which has always been one of the most reliable sources of equity for affordable housing developers,” she said. Tax credits that were worth over $.95 to the dollar last year dropped to $.75, according to VanAmerongen. She estimates that the gaps this creates would reduce housing development funding by $60 million this year.
Because the demand for affordable housing in Downstate New York is still strong, DHCR has amped up their funding efforts to help developers in Upstate New York, who have more trouble securing equity for their projects.
The Committee identified a few issues that need to be addressed legislatively. Assemblywoman Linda Rosenthal said that in her district on the west side of Manhattan, Mitchell-Lama building owners evicted residents only to receive a “puny fine.” One such case has resulted in a pending lawsuit between the subsidized residents of 3333 Broadway and their landlord who allegedly evicted them for higher paying tenants.
Rosenthal also raised the concern that the 7.5% annual rent increase for rent-stabilized units is too much for older renters to bear. “I have 75-year olds who come to me saying they have to pay $2,000 a month,” Rosenthal said.
Assemblyman Hakeem Jeffries suggested giving subsidies to get the community into luxury condos, which he hoped would be a “win-win” solution for both developers of unsold luxury condominiums built before the financial crisis hit, and seekers of affordable housing. “I’ve seen luxury condos sitting more than half empty,” Jeffries said.
Though VanAmerongen replied that it might not be feasible to expect developers to undersell their premium priced units, she pointed to an instance where her agency was able to convert a market-rate building into a veterans’ home.
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