Providing Housing for the New Millennium Housing Preservation and Development

Housing in New York City has always been influenced by a changing urban landscape, population and demographic shifts, and a class-conscious economic and social strata that determined how people lived and in what neighborhoods they chose to call home.

From the first row house or tenement building constructed in the early 19th century to the luxury high-rises that now dominate Manhattan's skyline, the problems of housing millions of urban dwellers fell to social reformers like photographers Jacob Riis and Lewis Hine, among others, and then, ultimately, to the government. Private developers and architects created various housing schemes through the years to improve the squalid living conditions that the dense tenements gave rise to. The first government subsidized housing project arrived in 1935, when the New York City Housing Authority transformed 24 tenements on Avenue A and Third Streets. Eventually slum housing in neighborhood after neighborhood was torn down and replaced by federal government-subsidized low or moderate income housing, and private developers soon put their own indelible stamp on New York City's landscape with towering apartment buildings that come replete with the finest first-class amenities.

From the Ground Up

Today, the task of creating, administering and encouraging affordable housing falls to agencies like the New York City Department of Housing Preservation and Development (HPD). HPD, under the direction of Commissioner Jerilyn Perine, not only regulates the city's existing housing stock of 3.2 million dwellings but also provides loan assistance to building owners and developers, educates owners, landlords and tenants, and enforces building code violations.

HPD is the largest municipal developer of affordable housing in the country, and over the next four years, the agency plans to spend nearly $1.5 billion to support its housing preservation aims and community development activities.

In addition, the agency acts as liaison for the city, which is trying to divest itself of large numbers of distressed buildings that will be converted to private residential housing through the use of public/private partnerships and community grants programs. The city's housing stock is also aging rapidly; 60 percent of its units were built before 1947.

"HPD is charged with the enforcement of the housing maintenance code as well as the development of housing and that would include the preservation of housing units," according to Kimberly D. Hardy, deputy commissioner for community partnerships. Preserving housing is accomplished in a number of ways, says Hardy, including but not limited to providing capital subsidies for construction projects and lead remediation and abatement; maintaining existing buildings; rehabbing buildings under city ownership; and making sure building codes and other safety regulations are followed.

"We are almost finished. I think at the all time high, there were close to 96,000 units in the 1980s and that number is under 10,000 now," explains Hardy about the transfer of public housing into private hands. "So we've made substantial progress. With regard to the stock that's remaining what we'll continue to do is to try and get it back into the hands of the private sector, primarily through neighborhood developers or entrepreneurs, and local community development and not-for-profit groups. We've been very successful with that formula."

Some of the buildings are occupied but most are vacant. "The agency's primary focus has been to divest itself of the ownership of units of housing. Number one, it saves the city millions of dollars if it doesn't have to maintain the stock," says Hardy, who adds that there is a cost to maintain vacant buildings as well. "When you get them back into the private sector, we're able to restore them to the tax rolls and obviously provide more affordable housing units to a city that desperately needs housing. For the last 16 years, we've done that and we'll continue to do that," until the city's divestiture of remaining housing units is complete, she says.

Focus on Home Ownership

HPD is also interested in entering the private housing market and using some of its resources to provide new housing opportunities to that sector of the marketplace, Hardy says. HPD has developed several programs that enable New York City families to purchase new homes on vacant city-owned property or newly renovated city-owned homes. City subsidies and other types of financing tools offer the benefits of home ownership to low-, moderate- and middle income families, according to Hardy. In one such program, HPD works in tandem with the New York City Housing Partnership to create new homes throughout the five boroughs for families that earn between $32,000 and $75,000 per year. The families would live in condos, single-family townhouses and two- and three-family homes. Under the New Foundations program, new one to four-family owner-occupied homes and co-op/condo units are being built, and the Alliance for Neighborhood Commerce, Home Ownership and Revitalization (ANCHOR) program transforms vacant city-owned land into mixed-use condominium and limited-equity cooperative projects accompanied by ground-floor commercial and retail space.

HPD has sponsored the construction or rehabilitation of more than 204,000 homes and apartments across New York City since 1988. And since 1994, over 73,090 apartments and homes have been constructed or rehabilitated through city-sponsored programs, including 12,850 homeownership townhouses, co-ops and condos, according to HPD.

The New Housing Marketplace

Despite the city's growing fiscal problems, the centerpiece of HPD's current effort is implementing Mayor Michael R. Bloomberg's affordable housing initiative that will increase production of new housing opportunities when the new fiscal year begins in July.

"What's so exciting is that it's a $3 billion commitment for over five years to create or preserve more than 65,000 homes in the city," says Hardy. "Although we've had a significant new construction program in the last few years, we expect to create 25 percent more newly constructed homes."

"We are laying the groundwork for building and preserving thousands of new apartments," Bloomberg announced. "Given the city's current budget problems, some people may think investing in housing is a luxury we can't afford," according to the mayor. "That's exactly the wrong thinking. Building for the future is a responsibility we can't shirk [from] - especially now. We're not going to push our problems - or our responsibilities - off on [to] our children.

"New York City's short term financial recovery - and our long term economic health - depend on our ability to attract and keep the best and the brightest - the dreamers and the doers. To do that, we need housing for people of every income level - those who are successful now - and those who are about to write their success stories right here, in all five boroughs of New York City."

Hardy notes that a "key component of the mayor's plan is to focus on home ownership," and the agency will accomplish that by providing downpayment assistance to qualified homebuyers, who will purchase homes in targeted neighborhoods.

The agency will also provide help to employers so that city residents can live in the neighborhoods they serve. "We also have an employer assistance plan where we will hopefully help employers retain employees as well as attract new employees within the city," says Hardy.

Hardy mentions that several new co-op buildings are going up in the Harlem area, but in the near future, new development will likely be a mix of both co-op and condo. Areas such as Park Slope in Brooklyn, and a number of industrial and manufacturing areas, are also being rezoned to allow for more affordable housing, she says. Other targeted development areas include West Harlem, Jamaica, Long Island City, Hunts Point, Morrisania, Greenpoint, Williamsburg and the Hudson Yards, according to Hardy.

On the Job Training

Another aim of HPD, she adds, is to provide educational assistance and training to allow building professionals and homeowners to learn about everything from boiler maintenance to sound financial management. HPD's Housing Education Program offers a variety of training courses for owners, property managers, housing professionals, superintendents, landlords, shareholders, unit owners and tenants.

More than 12,000 owners, managers, maintenance and building staff and housing professionals have attended the HPD's free classes. Instruction ranges from water and energy conservation seminars to heating plant maintenance, building management and finance, business ethics, fair housing and the law.

HPD, in conjunction with the EPA, also offers lead paint certification courses for lead paint abatement workers, supervisors, contractors, assessors and inspectors and is aimed at preparing them for all issues related to compliance with Local Law 38 and state and federal lead paint remediation regulations. The courses also alert owners and managers to dangers for children from lead-based paint, molds and fungi, mildew and vermin infestation. For further information, register online at www.nyc.gov/hpd or apply at http://www.nyc.gov/html/hpd/html/for-tenants/hep-app.html.

Loan Programs

HPD, through a companion agency, the Housing Development Corporation (HDC), will make opportunities available to developers to participate in the new housing process, Hardy says. "We think there will be a number of opportunities for development through our loan programs. Developers that are interested in acquiring buildings or already own buildings can continue to come to us for loans," for which they would receive a number of city-sponsored tax incentives for new construction and/or rehabbed buildings, she says.

More development opportunities might exist in neighborhoods where the housing stock is older and not as well maintained, she says. "Replacing a heating system costs the same amount on Park Avenue as it does in Bushwick but your rent roll is higher on Park Avenue so it's far more likely that those infrastructure investments have been made," Hardy says.

HPD will make $500 million available to develop and preserve 17,000 units of housing for low-, moderate, and middle-income New Yorkers through the New Housing Opportunities Program (HOP), which uses proceeds from taxable bonds. This program targets primarily middle-income families but will allow those earning between $37,680 to $62,800 to apply, accommodating professionals such as police officers, firefighters, teachers and health care workers. HPD also runs the Small Homes Private Loan Program, which provides loans for a moderate-to-gut rehabilitation of buildings containing from one to 20 units. Properties must be at least 50 percent residential and privately owned. City capital funding, loaned at one percent interest over 30 years, combined with federal grant funds and bank financing produce a below market rate loan for developers.

For further information on this and other HPD programs, you can call the city hotline at 311 or contact HPD's general information line at 212-863-8000.

Debra A. Estock is Managing Editor of The Cooperator.

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