Testimony to a New York City Council Housing Buildings Committee Preserving Affordable Housing: Stuyvesant Town and Peter Cooper Village

Brad Lander
Director, Pratt Center for Community Development
September 25, 2006

Chairman Dilan, Councilmember Garodnick, members of a committee, appreciate we really many for a event to benefaction this testimony. My name is Brad Lander and we am a executive of a Pratt Center for Community Development. We work for a some-more just, equitable, and tolerable city for all New Yorkers by assisting communities to devise for and comprehend their futures. As we know, we are deeply committed to formulating and preserving affordable housing for a far-reaching operation of New Yorkers.

Much of a discuss about Stuyvesant Town and Peter Cooper Village (ST/PCV) so distant has centered, understandably, on dual themes:

1. On MetLife’s preference to sell a property, and a ways in that their enterprise for a distinction in a billions violates a suggestion of a public/private partnership and estimable supervision subsidies they primarily perceived to build a buildings, as good as any thought of good corporate citizenship.
2. On a intrepid and vicious efforts of a tenants, with clever care from Councilman Garodnick, to squeeze a buildings in sequence to safety them as affordable housing for thousands of middle-class and working-class New Yorkers who live there, that we trust consequence support from a City of New York.

These are indeed vicious areas of focus, and we will residence any of them briefly. we also wish to place appetite on what we trust this Council and a whole city need many to learn from this situation: If we wish to safety a diverse, mixed-income, affordable city, where low-income, working-class, and now clearly middle-income New Yorkers can live, afterwards we contingency act fast and strongly to strengthen New York’s lease regulations.

MetLife’s Plan: Earn Millions by Helping to Eliminate Affordable Housing
I know we were as confounded as we was to review in this Saturday’s New York Times about a cruel efforts of MetLife and their broker, CB Richard Ellis, to boost a sales cost of a properties, by charity intensity buyers a “road map for displacement” in a charity documents. Those papers outline for buyers how they can deregulate about 4,600 apartments, housing for some-more than 15,000 people, boosting rents from a operation now of $1,096 to $1,581 — solidly affordable middle-class rents — to a operation now of $2,406 to $5,842, solidly oppulance rents. Not usually do they advise assertive eviction and approach displacement, though also branch a developments into gated communities and providing an “elite private school” to interest to “the perceptive tastes of Manhattan’s market-rate unit community.” This is a corporation, utterly literally, perplexing to acquire billions, by assisting modify New York from a diverse, mixed-income city into a stadium for a rich. While they have a authorised right to do so, they should not censor behind “accountability to shareholders” — publicly-held companies have reliable responsibilities. They are not compulsory to maximize boost by offered products that are damaging to a health or a city. MetLife should be embarrassed, and clever vigour should be put on them to accept a tenants bid, if they wish to continue to do business as a corporate citizen in this city.

Support a Tenants’ — and City’s — Opportunity: A Permanently Affordable Cooperative
On a second theme, a efforts of a tenants and Councilman Garodnick to squeeze a buildings are critically important. In all likelihood, a usually approach to save this housing as a mixed-income place where working-class and middle-income New Yorkers can live is by a non-eviction, mild acclimatisation led by a tenants. we wish them all a best of fitness in this truly drastic effort.

Their efforts are estimable of financial support from a City. we remonstrate with a new New York Times editorial that suggested opposite open support for these efforts, suggesting that a resources would be improved spent during reduction costly locations in a outdoor boroughs. If affordable units are mislaid during ST/PCV, it will put ever-more ceiling vigour on rents in a outdoor boroughs. And in general, it is some-more cost-effective to safety a affordable units we have than to emanate new ones.

There is one vicious caveat. Any publicly-supported mild acclimatisation contingency embody resale restrictions that protection that a complexes will sojourn affordable for middle-income families good over a initial buyers. It would not be suitable for us to yield millions simply to capacitate families there now to stay for a few years, and afterwards distinction almost on sale. Unfortunately, this is what happened in a new understanding during a West Village Houses, where a City contributed a estimable sum to capacitate a tenants to squeeze a development. Tenants there who bought their units will be means to sell them during a marketplace cost in usually 12 years. While this is improved than saying those tenants evicted and all of a boost going to landlords, we trust that a taxpayers of a City should not compensate many millions for usually 12 years of affordability.

Fortunately, there are ways to pretty change a probability for stream residents (and destiny shelter buyers as well) to build adult equity and a city’s need for long-term affordability. There are models of “permanently affordable homeownership” around a country, and that will work in 21^st century NYC. One probability is to brace resale to a area median income, that goes adult modestly though pretty from year-to-year. we would be happy to speak serve about these models.

Strengthen Rent Regulations for a Diverse Affordable 21^st Century New York City
The many vicious doctrine of this situation, however, is that we contingency dramatically strengthen a City’s lease regulations if we wish a different and affordable city. While it is MetLife’s private, corporate preference about possibly to distinction by widening a city’s polarization, it is a public, domestic weakening of a lease laws that creates it possible. ST/PCV usually offer affordable housing for now since of lease regulations, that have kept units affordable even as market-rate prices have risen dramatically. Most of a stream tenants have been means to stay since of lease regulations, and they usually have a convincing choice to squeeze since of lease regulations.

If we simply did not concede supposed “high rent” cavity decontrol — as was a conditions before 1994, and as should be a box now — we could keep ST/PCV affordable for a prolonged term, for a stream and destiny families, though spending one singular open dollar! MetLife would still make copiousness of money; they simply wouldn’t have a event profiteer. The doctrine is clear: We contingency finish or dramatically restructure supposed “high rent” cavity decontrol, and tighten a gaping loopholes by that landlords have already deregulated some-more than 145,000 apartments.¹

This will take estimable domestic will. We will possibly need to dissolution a Urstadt Law or convince Albany to have a bravery to assistance us save a city. AG Eliot Spitzer recently discussed a probability of indexing “high rent” decontrol, that is now set during $2,000. Had it been indexed to acceleration when it was set in 1994, it would now be during $2,750, and it would be a good understanding harder for MetLife to deregulate thousands of units. This is usually one small, though unsentimental step. If we could act fast to lift a threshold, it would directly diminution a cost a suppositional buyers would be peaceful to compensate … and therefore boost a chances of success for a tenants’ squeeze effort.

Since a intensity sale was announced, we have been meditative about lease regulations in a whole new approach — not usually as a largest affordable housing program, though as elemental to preserving a different and affordable city in a time of growth. Not as an aged resolution to a WWII-era problem … though as a surprisingly fair, cost-effective, and reasonable resolution to a critical 21^st century problem.

¹ we titillate a Councilmembers to review a new news by a NYC Rent Guidelines Board, Changes to a Rent Stabilized Housing Stock in New York City in 2005 (NYC RGB, 2006), that papers these losses.

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