2554 Days Late and $1 Billion Short


Rudy Giuliani thought the housing plans he pitched last week in his state of the city speech were so important, he leaked them to the press a day in advance. But it wasn’t until a full hour and seven minutes into the 90-minute, January 8 address that Giuliani even mentioned housing. Even so, the delay was minor, considering that seven years of his administration have passed with housing earning little attention at all.

Now, as his mayoralty winds down, Giuliani thinks it’s time to rev up a four-year spending plan to bring on line about 10,000 units of affordable housing. No matter that three of those four years will be under someone else’s administration, and that 10,000 units are nowhere near what the most conservative estimates show are needed to ease the city’s housing shortage. Rudy’s finally ready to do something to the housing budget besides cut it, and to him, that is apparently something to brag about.

In truth, the mayor should blush at his proposal, which doesn’t even begin to remedy the years of damage he’s done by cutting the number of housing inspectors and litigators who prosecute renegade landlords, and slashing the capital budget for housing.

Indeed, a chart of inflation-adjusted capital spending on housing that compares the Koch, Dinkins, and Giuliani administrations looks like a side view of the Coney Island Cyclone: After reaching steady heights under the two Democrats (about $700 million a year), the budget precipitously plunges in the first Giuliani year (to $262.1 million), then levels out and remains flat. Project onto that graph the mayor’s plans for the next four years (about $332 million a year), and the roller coaster zips up a bit, but never comes anywhere near the pinnacles of the late 1980s and early 1990s.

“I don’t see how what he’s proposing can be seen as anything but a first step; it’s certainly nothing to get excited over,” says Patrick Markee of the Coalition for the Homeless, who designed the chart. “Over the years, you can see what a whack Giuliani took out of the capital budget,” which fell to a low of $120.7 million in 1998. The slash is especially disturbing since funding under Koch and Dinkins came during recession years, while Giuliani’s paltry spending happened during years of surplus.

It would actually take well over 100,000 available units of housing to achieve a vacancy rate above 5 percent.

Now, Giuliani says he wants to spend (and have his successor spend) $600 million in city money over the next four years, or about $150 million annually, with the private sector kicking in an equal amount, for a total of $1.2 billion over four years. Three city programs would be expanded to build 3100 new apartments and homes and to renovate 7100 units in 133 so-called in rem buildings, which became city property after private landlords abandoned them decades ago. The plan essentially continues Giuliani’s initial goal of divesting rental property. The city has long considered itself a landlord of last resort, and indeed some of the worst housing conditions are found in city-owned buildings.

“It’s been a self-fulfilling prophecy,” says Peter Marcuse, an urban planning professor at Columbia University. “The city doesn’t want to own and manage housing, and so it makes political choices to cut budgets and get rid of competent people. No wonder it’s a bad landlord. The mayor’s main goal is to get the city out of the housing business, but the goal should be to see that New Yorkers are adequately housed.”

The city is in a permanent housing emergency, defined by the state legislature as a vacancy rate of 5 percent or less. The most recent rate, based on 1999 data, shows a vacancy of 3.19 percent. On paper, it would take about 39,000 additional vacant available units to exceed 5 percent. But in reality, overcrowding and population growth would fill those apartments rapidly, and it would actually take well over 100,000 available units to achieve a vacancy rate above 5 percent.

Marcuse argues that returning property to the private sector, which abandoned it in the first place, is rife with trouble: If the economy turns down, abandonment is likely to recur. And if the market remains strong, gentrification and displacement are unavoidable. For instance, although the city’s main programs for returning in rem buildings to the private sector offer current tenants some rent protections, rents in vacant apartments are considerably higher. That puts economic pressure on entire communities.

“What ultimately happens,” says Marcuse, “is that a neighborhood is no longer affordable to those who have the greatest need.”