Affordable Housing - Myth and Reality
The Coalition for Fairness in SoHo & NoHo recognizes the need for more affordable housing in New York City and supports creating new affordable housing. But the SoHo, NoHo, and Chinatown rezoning plan provides no guarantee that any affordable housing will be built. Developers are simply not incentivized to build affordable housing over office and retail buildings.
We support affordable housing both in our “backyard” in SoHo and NoHo, and in other sites that can accommodate 100% affordable housing, such as the FBI parking lot at 2 Howard Street and the 5 World Trade Center site. We want our teachers, emergency responders, nurses, and anyone else who wants to live here to do so.
An illustration by DCP showing affordable housing that is unlikely to be built. Image source: nyc.gov
Loopholes for Developers
Although the rezoning plan advertises that it will create 900 units for low-income households through the MIH (mandatory affordable housing) plan, the actual rezoning plan includes no guarantee that any affordable housing will be built. Unlike 87% of all MIH programs which received subsidies and guaranteed 100% affordable housing, the City provided no housing subsidies in SoHo and NoHo, and the MIH requirements are easy for developers to bypass.
Furthermore, the small difference in allowed densities (FAR) for commercial vs residential uses will most likely lead to large retail development (similar to the Adidas store on Houston Street) and office buildings, in lieu of residential developments. There are no affordable housing mandates for new commercial developments that the rezoning allows.
The mandatory inclusionary housing (MIH) in the rezoning only applies to residential developments above a 25,000 sq ft per lot limit. Developers could easily circumvent the MIH requirement by opting for fully commercial or mixed-use buildings where the residential component does not exceed that limit. Developers can also claim difficulties and pay into a fund that will bring no affordable housing to our neighborhood. In a strong real estate market like SoHo and NoHo, where new luxury condos could sell for an average of $6.5M, developers will have very strong incentives to pay into a fund and not build affordable housing.
These are just some of the multiple loopholes and exemptions that will result in a net increase in luxury condos, offices and big-box retail that cannot possibly accomplish a more socio-economically diverse neighborhood.
In order to create true affordable housing, NYC cannot leave the matter to market forces and the goodwill of real estate developers and landowners. Instead, NYC must provide real subsidies that will guarantee the creation of true affordable housing.
Destruction & Displacement
To make things worse, the upzoning has put a target on the backs of existing low-income residents, especially in so-called “opportunity areas” where developers and landowners are destined to generate windfall profits by demolishing existing affordable housing. This threatens the most vulnerable population in our neighborhood.
We urge the city to preserve the diversity of our neighborhood and support, not penalize, residents in their efforts to continue to live here. The MIH program has been poorly designed and has resulted in displacement rather than creation of affordable housing as recently detailed in a report by NYC Public Advocate Jumaane Williams. In particular, the de Blasio MIH plan was never designed to work in a mixed-use zoning area where commercial incentives will crowd out any affordable housing.
Will the conversion fee help create affordable housing?
There is no plan to use any of the conversion fees to help create new affordable housing. We are concerned that – because the fee encourages demolition – it will result in destruction of existing affordable housing.
Will the Arts Fund help create affordable housing or diversity?
There is no evidence to suggest the Arts Fund will promote affordable housing, diversity, and racial equity in SoHo and NoHo or elsewhere.
Is it true that the rezoning will allow a family making $42,000 to live in SoHo and NoHo?
No, The main MIH program option is based on 60% of median area income, which in this case is above $80,000. It is unlikely that developers will choose the “deep affordable” option without any subsidy from the City.