Cuomo's petty play for housing bonds

The glass-half-full take on the political feud between Gov. Andrew Cuomo and New York City Mayor Bill de Blasio is that the city and state will jockey for ownership of progressive policies that will benefit New Yorkers in the long run – an ongoing effort to outflank one another on the left. But the governor’s decision to strip the city of control over affordable housing bonds is bad policy and an egregious power grab that reeks of petty one-upmanship.

Cuomo’s contention that the increased state oversight over the doling out of bonds – or “volume cap,” in housing parlance – will not slow the development of any housing project de Blasio wants to move forward is naïve at best. The Public Authorities Control Board, which would have veto power over the bonds, is a three-member entity controlled by the governor, the speaker of the Assembly and the Senate majority leader. If Cuomo, Carl Heastie or John Flanagan wanted to kill a housing project, or make it subject to budget horse-trading, they now would have recourse to do so.

State Budget Director Robert Mujica’s reasoning that the Control Board’s veto power over volume cap would bring additional transparency to the process is also puzzling. The PACB has never been particularly open about its approval process – the New York Times aptly characterized the body as “shadowy” in a Wednesday editorial – and typically only chimes in at the very end of negotiations, rubber-stamping bond allocation per the governor’s instructions.

While the volume cap negotiations are largely conducted behind closed doors, sources familiar with the discussions say that the talks are apolitical and more concerned with nuts and bolts, such as closing housing projects in December as opposed to February because of the expiration of site-specific tax credits.

That’s not to say that it’s unreasonable for Cuomo to argue for the state to receive a larger slice of the volume cap pie, especially given his plan to invest $20 billion in affordable housing over the next five years. If the state wants to pursue deeper levels of affordability than the 80/20 developments that the bonds can be used for, it now has increased capital to do so, thanks in part to its Medicaid redesign and an influx of settlement money. But that doesn’t justify punishing the city’s Housing Development Corporation – which has done an excellent job of smartly investing those bonds into affordable housing in the five boroughs – just to get more volume cap.

There is a reasonable way for the state to bargain for housing bonds that doesn’t involve politicizing the negotiation process. With the federal government throwing record amounts of volume cap to the state – and the city getting up to $600 million in bonds as recently as 2014 – the state would be well within its right to strike some sort of compromise with the city and reduce allocations back to past levels of $300 million to $400 million.

It would be a shame for Cuomo to undermine de Blasio’s plan out of spite, when they are both working toward a common goal of providing affordable housing in an increasingly expensive market.