De Blasio creates plan for housing to combat homelessness
On Nov. 18, Mayor de Blasio proposed a $2.6 billion plan to combat the homeless issue in NYC and to provide aid to those who need it.
November 23, 2015
Facing rising homelessness rates in New York City, Mayor Bill De Blasio announced a $2.6 billion plan to combat the problem on Wednesday. The plan is to create 15,000 supporting housing units in New York City where residents would pay one-third of their income toward rent and have on-site access to a network of professionals who assit them in overcoming the challenges that left them homeless.
On Wednesday, the mayor addressed a crowd at Times Square to discuss this city’s independent initiative amidst bureaucracy in Albany, New York.
“We are acting decisively,” De Blasio said. “We are not waiting on Albany.”
Currently, $620 billion dollars have already been allocated to the “Housing New York” affordable plan. Capital costs alone account for $1 billion and operational costs are an additional $96 million. The plan is expected to have a positive impact on some of the 58,000 individuals in the city’s shelter system.
Deborah K. Padgett, professor of social work and global health at NYU, noted that despite recent efforts to combat rising rates of homelessness, it is still a major issue in the city.
“While homelessness rates have gone down in many parts of the U.S. they have risen in New York and a few other cities,” Padgett said. “In these places, the situation is as visible and troubling as it was in the late 1980s. The big difference today is having a means of ‘ending’ instead of ‘managing’ homelessness.”
Public health experts like Simona Kwon, assistant professor at the NYU School of Medicine, are aware that a disparity exists between the health outcomes of the homeless population and those who are not homeless. Kwon said efforts to provide fair and equitable housing like De Blasio’s could have a significant impact on the existing health disparities.
She added that there is a critical need for working across the private and public sectors.
“In terms of sustainability, support and developing acceptable, accessible and appropriate housing, the mayor is going to have to build consensus and work in a coalition in partnership with government, health, private, public sectors and advocacy groups to have the impact needed,” Kwon said.
Critics of the mayor’s plan believe De Blasio is too close with the real estate developer community and is ill-informed about economics to realize that developers act in their own interest.
Scott Baker, community activist and president of Common Ground, criticized the proposed development strategy because it will drive up the cost of land in the city.
“Developers have become addicted to subsidies in the form of tax breaks and high borrowing costs that can only be alleviated by high selling costs,” Baker said.
To combat the problem, Baker suggested a higher tax for developers.
“The city would get all the revenues it needs, while developers, newly untaxed on their actual buildings, would rush to build or refurbish every square foot of inefficiently used land, providing housing and business opportunities for everyone,” Baker said.
A version of this article appeared in the Nov. 23 print edition. Email Tegan Mosugu at [email protected].
Dan Sullivan • Nov 23, 2015 at 6:17 pm
The article made an important error when it described Scott’s proposal as “a higher tax for developers.” I am sure Scott proposed a higher tax on land values, which would fall on all land and would have precisely the effects Scott described. Merely taxing developers would drive them away and have an opposite effect.
Scott Baker • Nov 23, 2015 at 1:00 pm
The Mayor’s proposal is in no way a practical solution. Besides being wholly inadequate to the scope of the problem, his overall support of luxury developers at the cost of affordable housing negates the meager benefits of his direct investment, which, as has been noted by others, takes place over a long 15 year period. What are people supposed to do in the meantime?
See my group’s website for what the real issues are: http://commongroundnyc.org/ and keep in mind that the site is a few years old now and things have only gotten worse.
Fact: The NYC Department of Planning has said 6% of NYC buildable land is officially vacant.
Fact: Many of the most high-priced luxury buildings pay next to nothing in property taxes (e.g. One57, where two condos recently sold for $95m and $100m respectively, has a 95% tax break under the 421a plan, which costs the city $1.1b/year).
Fact: there are parking and empty lots all over the city that pay 1/10th the property tax of efficiently used lots with multi-story buildings right beside them (e.g. West side of 2nd Avenue between 35th and 36th streets)
Fact: A joint Picture-the-homeless/Hunter College study showed that there is enough vacant housing to house every sheltered homeless person 3X over! One of the reasons cited for why this space isn’t used is that there is no tax incentive to force it into production as housing. Instead, the city pays millions more for SROs and even hotel rooms that are inefficient and dangerous.
Fact: The NYC Dept of Finance calculates there is half a trillion in land value alone in NYC (double that if land values were properly assessed. We at Common Ground-NYC have a database using their data that proves it). If this land was subject to an 18% Land Value Tax, every other deadweight loss tax could be eliminated – sales, wage, fixed capital taxes.
Fact: When Governor Al Smith untaxed buildings and left just the tax on land from 1920-1931, we had a building boom that was 4X the national average, even in the roaring 20s, and 11X the regional average. It’s why we STILL have so much pre-war housing today.
Fact: Mayor de Blasio promised to tax vacant land at build-upon tax rates when running for Mayor. It was in his campaign literature and even written up in Crain’s magazine, at least twice. He has not fulfilled that promise, leaving idle hundreds of acres of potentially buildable land that is held for speculation instead.
I could go on, but see also my presentation on Case Studies in New York City Property Development, given at the Henry George School, here (video and slideshow):
http://www.opednews.com/Diary/Case-Studies-in-New-York-C-by-Scott-Baker-Georgism_Henry-George_Land-Value-Taxation-141024-865.html
See also my e-petitions below, and my book, “America is Not Broke!” especially chapter 2 on Land Value Taxation, or the slideshow on that on the book website here: americaisnotbroke.net.
I can’t speak to the Mayor’s motives, but I do believe he is too cozy with the Real Estate developer community, and doesn’t know enough about economics to realize they not only don’t act in the city’s interest, but not even in their own – e.g. they have become addicted to subsidies in the form of tax breaks and high borrowing costs that can only be alleviated by high selling costs. In fact, a Land Value Tax on nearly the full rental value of NYC Land would drive down the selling price of Land so much that it would spur a boom in affordable housing unlike anything the city has ever seen. The city would get all the revenues it needs, while developers, newly untaxed on their actual buildings, would rush to build or refurbish every square foot of inefficiently used land, providing housing and business opportunities for everyone. This has been been proven in hundreds of studies (see attached document).
The Mayor’s proposals are worse than a drop-in-the-bucket, they actually punch new holes in the already leaky bucket of lost opportunities and distract us from the real solutions.
– Scott Baker, president of Common Ground-NYC