Leonard Grunstein responds to NY Times front page article

Leonard Grunstein recently wrote a letter to the editor responding to a New York Times front page article, Public Housing in City Reaches a Fiscal Crisis.” Grunstein cites the articles as being further proof that the NYC Housing Authority can no longer rely on its current financial model.

According to Grunstein, the deficit faced by the agency is too great to solve the city’s current housing problems. “Rather than using costly government grants and subsidies to keep a flawed agency on life support, the city needs to tap into the power of capital markets.” Grunstein identifies a few options for taking advantage of capital market wealth, including relying more on public-private partnerships such as that of Battery Park City rather than relying fully on public funding.

To read the full response, “Money for Public Housing,” click here.

 

 

Letter to the Editor: De Blasio And Affordable Housing

In a letter to the editor of Gotham Gazette article, “De Blasio Pins Affordable Housing Hopes On Mandatory Inclusionary”, Leonard Grunstein advises Mayor-elect Bill de Blasio, that mandating the construction of middle-income housing only to city-owned land, could be an alternative.

He notes the article correctly highlights the challenges of requiring affordable housing. The highlights include: a possible domino effect that would create less affordable housing, due to slowing of new development of market-rate housing; tenants facing extra construction costs so that owners can make up for loss incurred by the affordable units; and lastly building to accommodate more people puts more strain on public service, who would need to plan for more schools and better infrastructure.

The policy would require developers to have a percentage of their building’s units as permanent affordable apartments. Developers who participated, would receive increased building heights and tax breaks.  Currently there is similar version that is optional.  Many developers have chosen to opt out of this policy; does this foreshadow what is to come if the policy became mandatory?

In his alternative solution, Grunstein suggests:

“One alternative de Blasio should consider is to mandate the construction of middle-income housing only in the development of city-owned land.  The city successfully took this tact with Seward Park, a strip of city-owned land on the Lower East Side, by obligating RFP respondents to make at least half of the housing units there affordable. Refining the requirements to be more capital market friendly may have enabled an even greater amount of middle-income units.”

If de Blasio followed through, it would strengthen New York’s middle class.  It would create a need to work together with the real estate industry.

Read Leonard Grunstein’s full letter here.