Q: What are your priorities for the coming session?
CY: One of my priorities is stimulating growth in the affordable-housing sector through tax incentives or zoning incentives such as a fully refundable housing tax credit. Last year we worked on a bifurcation bill which would have split the state and federal housing tax credits to make them more appealing to private investors. It’s something I think would have great economic and social benefits. I don’t always agree with [Assembly Housing Committee] Chairman [Vito] Lopez, but we work together very well, and I think he’s always interested in expanding affordable housing too. So hopefully we can work together to get a result.
Q: What was your reaction to the governor’s call for a Tenant Protection Unit in his State of the State speech?
CY: I’m more focused on expanding affordable housing. I think that’s the solution. These are downstate and upstate issues. There’s a terrible problem with vacant housing stock in certain areas of upstate. Last year we passed the 421-m program that targets underutilized areas and revitalizes them for commercial and residential use. And so I want to look for more creative solutions along those lines. I am concerned because there are anticipated federal cuts in lowincome and moderate-income housing programs, so we’re waiting for the other shoe to drop on those. There could be substantial cuts.
Q: Are foreclosures on your radar screen?
CY: We want to ensure foreclosure remediation services to keep individuals in their homes when possible, so I was glad to hear the governor speak of that.
Q: What do you see happening with the renewal of the J-51 program?
CY: We want to provide these incentives to owners to make these improvements, because it’s a quality-of-life issue for the tenants. So we’ll be working on that. And also, the Roberts decision is still hanging out there…. We passed a bill on it last year in the Senate, and we’d like to work to come to a final resolution with the Assembly and the governor. If we don’t bring some kind of closure to it, it affects the residential housing market. It is an inhibitor for people to invest in real estate right now, and obviously that could be a tremendous problem.
Q: What are your priorities for the coming session?
VL: Part of our list is restorations to two important housing support programs. One of them is the [Neighborhood Preservation Companies and Rural Preservation Companies] programs, which were totally eliminated in the budget, to the tune of approximately $12 million…. My second priority is the restoration of the mortgageforeclosure- prevention programs. I’m going to be asking for $18.8 million to bring all of the NPCs/RPCs to what they were four years ago, and I’m going to be asking for approximately $20 million to do the restorations to the mortgageforeclosure program.
Q: What will happen to the J-51 program?
VL: Where any type of program offers subsidies through tax breaks, we also would like affordable housing. I believe that was the reason the Roberts decision went against the owners of Stuy Town, because they were getting that tax benefit, and the logic of the court decision was: As long as you’re getting that benefit, you should stay in stabilization.
Q: What else do you hope to accomplish?
VL: We’re going to be looking carefully at the title-insurance legislation…. There are major disputes in some churches in Brooklyn, and in other places where the Jewish community has wars between the different sects. It’s very easy to cross-file and almost hold up the ownership for years.
Q: With the governor talking about leveraging the private sector for public-sector improvements, could that be done for affordable housing at the state level?
VL: I have some disagreements with the mayor, but his affordable-housing initiative of $7 billion really helped stimulate the economy, [and] also built a lot of housing. I’m trying to push for a capital initiative much broader than what we currently have…. The question is the additional money. It’s very hard to do additional funding unless it’s done by capital financing through bonding. That’s something that I’ve conveyed to the governor, conveyed to the speaker, and I will continue to do that because I think that it meets both purposes. And tax credits to build affordable housing also will go a long way.
Q: How is the New Housing Marketplace affordable-housing plan going?
MW: We want to see if we can finish the plan not just on time but maybe a little early. One, we need to be aspirational; and two, while we are completely bludgeoned budgetarily, the way we’ve been affected is going to be more so on the capital side two years down the line. We have other development objectives, such as expanding significantly our supportive housing construction and production. There is an unanticipated passion that I feel around it, and to the extent that we can find new models, new ways to expand supportive housing, we’re still committed to coming up with the answer of how we’re going to do it. We’ve really just started scaling up on our overleveraged/distressed multifamily preservation efforts. That’s the direction we want to go in, especially in light of the need to not let our stock be claimed by the downturn. You can see the same neighborhoods that we’ve invested in are the same neighborhoods that had the huge infusion of capital that caused this risk.
Q: What is the impact of these budget cuts?
MW: We’ve been slashed across the board on our HUD grants. Over 50 percent in two years. The capital subsidy cuts for our projects are humongous. They start affecting us very soon, but definitely impact us even more steeply two years out. That’s distressing…. Maybe we’re just not going to do as much as we did before. And then, on the housing development side, we’ve always been focused on whether we have enough capital subsidy to make it to the finish line. We’re now focused on whether personnel will be pushed to the point where, irrespective of how much capital you have, are you going to make it to the finish line?
Q: What type of J-51 renewal will you recommend?
MW: The more we looked into J-51, the more we realized it’s not really as effective as it could be…. It needs to be modernized on a multitude of levels. I’ll give you an example. The base off of which the tax credits or exemptions are calculated really only represents, say, 30 percent of the actual capital expenditure that is made. So I spend $100 on a window and you’re going to give me some kind of a tax exemption, but you’re going to use your schedule that is 15 years old and accords me a $30 credit against which it’s all calculated…. Secondly, we are going to look at a number of different measures that will allow us to refocus J-51 to the kind of capital investment that we want to see—capital investment in multifamily, likely outer-boroughtype rental buildings. Then, lastly, there is a component just of overall administration. We need to make it a better program from a customer-service standpoint…. We’ll see what happens as it gets churned through the sausage factory that is Albany.
Q: What are your priorities for the coming year?
ED: One of them we just got passed. That’s a disclosure bill that will require banks to disclose information to [the city Department of Housing Preservation and Development] on all properties that they are going to initiate foreclosure proceedings against.
Q: Does this mean the foreclosure crisis is not over in New York City?
ED: I certainly hope things are starting to trend in a different direction. I think we can take lessons learned from the past and put laws on the books now.
Q: Are you monitoring how the Legislature’s response to the Roberts decision will affect New York City?
ED: Obviously, the J-51 program, I believe, should remain in existence. It has been vital. But in light of the Roberts case and the profound economic impacts that the case would have on owners and tenants alike, that’s another case that we’ll be watching, because this is another program that’s been vital to maintaining this city’s affordablehousing stock…. We’ll have to watch it…so that there are very few interruptions to the overall housing market.
Q: How well is HPD doing at creating or preserving 165,000 units of affordable housing?
ED: Obviously, when you build the number of units that they’re building, and you’re managing an $8 billion capital fund and the investment that they are, some problems will occur. But I think by and large HPD has done a great job, and the program has served the city as a whole tremendously.
Q: What other creative housing ideas are you pursuing?
ED: I certainly would like to take another look at the economic impact of solar-panel programs on city properties and city-owned buildings. Tax incentives for the private market to install solar on residential buildings. It could be a major energy saver in the relatively near term. In the very short term, if it’s implemented en masse, it could be something that a lot of New Yorkers get to work, which could be good. Long-term, the economic benefit to the city and state in terms of income tax revenue could have some tremendous potential. Some people will argue it has to be heavily subsidized, and there might not be enough subsidies around for it. But I just think the economic opportunity in terms of jobs and energy savings, potentially, could have a profound short-term impact.
Tags: affordable housing, Albany, assembly, Budget Cuts, capital, Catharine Young, City Council, Department of Housing Preservation and Development, Erik Martin Dilan, foreclosures, Homeless, Housing Committee, J-51, mathew-wambua, Neighborhood Preservation Company, New Housing Marketplace, NPC, roberts, RPC, Rural Preservation Company, Senate, Stuy Town, subsidy, tax credit, tax incentives, tenant protection unit, tenants, title insurance, Vito Lopez, zoning
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