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Sunday, February 2, 2020

Why New York’s POLS’ ‘Affordable Housing’ FIXES Only Make Everything WORSE

Why New York's pols 'affordable housing' fixes only make everything worse

Post Editorial Board

City pols refuse to learn: Subsidizing rent won’t solve Gotham’s “affordable housing crisis.” It’ll just make it worse.
Last week, two mayoral wannabes — city Comptroller Scott Stringer and City Council Speaker Corey Johnson — rolled out housing plans that call for ever-larger subsidies: Stringer would force developers to pick up some of the rent for 25% of all units they build; Johnson wants to hike subsidies for apartments for the homeless.
Neither plan would make a dent in the housing shortage, because neither would lead to more housing. And Stringer’s scheme is likely to strangle development, perhaps on purpose: He openly bashes gentrification, though it means more housing.
What New York pols (and Stringer and Johnson are all too typical) won’t admit is that the best way to spur new units is to make building costs lower. Instead, they keep jacking up costs and expect developers to keep right on building . . . and paying.
They raise minimum wages builders must offer. Slap oppressive taxes on property. Impose costly building regulations.
Then they cap the rent that regulated apartments can charge and make it harder to evict tenants that don’t pay, as state lawmakers did last year. That has already lowered building values and even prompted landlords to take units off the market rather than spend money on needed repairs — because the new laws don’t let them recover their costs.
The rent regs have led to severe apartment-hoarding, further limiting supply and fueling prices in the unregulated market.
Stringer was right when he called the system “broken:” The city’s housing programs, he argued, have “reinforced unaffordability.” And rather than fix the system, “we keep doubling down.” He blasted Mayor Bill de Blasio’s housing plan in particular for failing to focus on the poorest tenants.
But his solution is to quadruple down: He’d force developers to take a hit on every residential building they put up — and eliminate their 421-a tax break to boot.
Is he kidding? That kind of confiscatory rule would “discourage” the creation of any housing, but “especially affordable housing,” warns Rent Stabilization Association prez Joseph Strasburg.
And there’d be no shortage of tenants seeking below-market units, so wait-lists would be as long as ever. Some fix.
Johnson ignores that dynamic, too. He’d boost the value of rent vouchers for the homeless, at a cost of up to $240 million a year. Yet the more valuable the voucher, the more people will claim to be homeless to get one. Worse, by focusing on rent, Johnson underplays the actual key drivers of homelessness — mental illness, substance abuse and other deep dysfunction. Upping the value of vouchers won’t touch those problems.
Stringer insists it’s time to “break out of the existing policy paradigm.” He, Johnson and other pols should heed those words — and end the subsidies game altogether.

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