Liveblogging the Marketplace Of Ideas: Turning Vacant Buildings Into Affordable Housing
Welcome to DMI's latest Marketplace of Ideas event! Today's event is on turning vacant buildings into affordable housing and will feature Boston Mayor Thomas Menino. Menino, who is now serving his fourth mayoral term, has reformed Boston's housing market in some pretty amazing ways. During the past decade, abandoned residential properties declined 77% as abandoned properties were turned into viable housing.
I'm excited about today's panel discussion, which will feature Manhattan Borough President Scott Stringer, Pratt Community Development Center Director Brad Lander, and Executive Director of the Parodneck Foundation Carlton Collier. DMI Executive Director Andrea Batista Schlesinger will be moderating the panel.
As anyone knows who has looked at housing prices recently, affordable housing is a really important issue in New York right now. DMI's "Saving the Middle Class" survey found that "affordable rent" was at the top of the list of concerns of the current and aspiring middle class in New York. I hope that Mayor Menino and the panel discuss ways that New York -- which has a good amount of vacant property of its own -- can learn from Boston's successful policies.
I'm here at the Harvard Club liveblogging the event, so check back for frequent updates!
DMI Founder Bill Wachtel starts things off by introducing the Mayor and panel. I asked Andrea why she wanted me to introduce this event today, and she said, "You have five children and you're raising them in NYC, so I figure that affordable housing is something near and dear to your heart." Bill makes a few baseball jokes, and then proceeds to introduce Mayor Thomas Menino.
Bill says that Thomas does something that most mayors don't -- "He puts a number and a date in the same sentence."
"Mayor Menino has thought outside of the box by looking for something very simple -- vacant property and abandoned buildings." Bill mentions that other cities are following Menino's lead and cites a conference in Pittsburgh.
Bill talks a bit about the panel, and the possibility of implementing similar policies in NYC. "If you can do it there, why can't you do it anywhere?" he asks.
He then introduces the panel -- Scott Stringer, Brad Lander, and Carlton Collier. "So, Mr. Mayor, with a caveat that no sports this morning, we welcome you, we thank you, and we're all ears."
Thomas steps up to the podium, and begins by mentioning the Red Sox and Harvard's property in Boston. I have the World Series trophy out in my car this morning, he jokes.
Someone in the audience replies that "We just got a report that there was a break-in in your car downstairs" and the audience chuckles.
End of the baseball jokes, and now it's down to business. "Do you realize that in the last presidential campaign housing was mentioned three times?" Thomas says.
It takes years to develop ideas for housing -- it won't get you in the next day's headlines. "It's so important that the leadership come from mayors and also the community groups." He talks about the great community development groups in Boston.
"To me, whatever happens downtown is great...but the most important thing is what goes on in your neighborhoods...I'm pro-business, but I'm also pro-neighborhoods."
He says that housing isn't a stylish issue, "but it's of paramount importance to strengthen America's cities." Cities help to strengthen the American economy internationally -- this issue is important from the neighborhood level to the world stage.
"I want to talk about the importance of abandoned building surveys....how we did it and why it worked for us."
Thomas says he has the greatest job in the world. "Being mayor of Boston allows me to help people." He says that creating partnerships "gives more resources and brainpower to achieve great things."
Now the history. Ten years ago, vacant buildings were contributing to crime and a variety of other problems. "Now we see another creature out there -- foreclosure." He mentions Boston's initiatives to deal with the foreclosure crisis. "We have a big crisis, and it hasn't reached its potential yet."
"It's a serious problem because Boston's neighborhoods are the foundation of our city...We looked past the problem and saw the possibilities."
Thomas says that first Boston conducted a buildings survey to get data and eventually found that most of the buildings were privately owned. After being contacted, some of the private owners fixed up their buildings, but others didn't. "If the owners didn't want to cooperate, we labeled it a 'house of shame'." They put photos of the vacant properties on TV and in the newspapers, "side by side of the pictures where they actually lived." The audience laughs.
"After a while they all dropped the issue," Thomas says. One owner started fixing up his property 30 minutes after getting bad publicity.
"We had a lot of fun with that...it was embarrassing, but an excellent motivator to individuals."
The mayor mentions Project Pride, which allowed the city to secure privately owned buildings that were used for criminal and drug activities. "People need to feel safe," says Thomas.
"As the market grew stronger, owners that sat on their properties returned it to productive uses." Currently, information about the vacant properties is on the city's website so that private developers can see them.
"Since 1997, the total number of abandoned buildings has declined 66%, and residential buildings have decreased by 77%", said Thomas.
Thomas mentions Leading the Way, the name for Boston's housing strategy, and begins to talk about public housing. "We had about 1200 units of public housing that were completely abandoned, that had been boarded up for years," he says, and discusses renovating these facilities. "Nobody down at 1600 Pennsylvania Avenue cares about public housing -- public housing is a foreign language there."
"Boston's neighborhoods animate our city," he says, and talks about how neighborhoods are a "barometer" for the city. He also mentions selling vacant lots. "Because the price was so reasonable for a piece of property in our city, we wouldn't allow them to build on it." Some of the lots were turned into parks and gardens.
More on abandoned properties on the website. "I'm not in the embarrassment business...but it's unacceptable" for people to have vacant lots in the inner city while they live in an extravagant house in the suburbs, he says.
"It's no magical wand, it's just hard brunt work." He says that housing and education are his two top priorities, because when they both work then the city works.
"On the housing issue you have to think outside the box." And with the "house of shame," he says, you can have a lot of fun. "What we did was advertise in their local paper," he said. "After about six months of that, they got it," he says. "Thanks you very much."
Time for the panel. "Good morning everyone," says Andrea. "We have a fantastic panel here." She begins to introduce them, starting with Scott Stringer, the borough president of Manhattan. "He voted against every attempt to weaken rent regulation," she says of his twelve years in the New York Assembly.
You recently undertook a vacant building survey in the borough of Manhattan, she says. "Can you talk about that and what you may have found?"
"We have this incredibly wealthy borough, but when you went around to the other communities," that just wasn't true. "We came up with data that was truly extraordinary," he says.
71% of vacant buildings were north of 96th Street, and many were privately owned. He says that vacant property was taxed differently above and below 96th street, and discusses tax incentives.
Andrea introduces Brad Lander, director of the Pratt Center for Community Development. "From what you can gleam from this conversation, what is relevant from Boston's experience to what we are experiencing here in the five boroughs?" she asks.
Brad says he wants to clarify what New York did, and what the city still needs to learn. He says that NYC took 100,000 mostly vacant units by tax foreclosure in the '70s and put them back on the market. "The big difference is that these properties were taken by tax foreclosure." He said that with those buildings, the city didn't have to do a field survey, they just had to notice that people weren't paying their taxes."
In the mid '90s the city stopped taking buildings through tax foreclosure, and shifted to other strategies. These strategies left a gap -- privately owned properties with landlords that are paying their taxes." "There's no place in the system, as long as they keep paying their taxes." He says that what NYC needs to add to its "menu of affordable housing programs" is a way to deal with these buildings.
Andrea has another questions. "It boggles my mind that in NYC there are people who own property who choose not to develop." Why is that?
Scott has an answer. "It's time for us to stop looking at abandoned buildings as a liability and start to look at them as an asset." He says that all five boroughs should be surveyed, and incentives developed for owners to do something with the property. "We're losing hundreds of millions of dollars in taxes from these vacant buildings."
"What's the point of counting homeless people when we don't count vacant property?" he asks.
Brad has an answer, too. He says that the market enables owners to keep vacant buildings and lots -- renovating or building is expensive in NYC today. People wait to fix up buildings until the market is stronger. And he says sometimes ownership disputes or inheritance disputes contribute, too.
Andrea says that when Bloomberg unveiled his housing plan he said that we had reached the end of abandoned housing in NYC. Is this true?
Carlton begins by questioning the very nature of affordable housing. "Affordable to whom?" he asks. He mentions some new condos on 145th street that are selling for $300,000 for a studio apartment.
"I think one of the biggest problems...has a lot to do with money," he says. He mentions the rapidly increasing prices of housing in NYC in the past 30 years. "Luckily I bought my house 20 years ago," he says. "Don't show off," Andrea retorts, and the audience laughs.
"We're not encouraging people to build on vacant land, we're encouraging people to hold on to it," he says. "That seems to be the trend of what is going on here in the city." People aren't building on these properties because they're waiting for their windfall. He mentions the issue of infrastructure, and the stadium being built in Brooklyn. He also talks about congestion problems.
"In the past 10 years, more people have moved into NYC than the entire population of Boston." He says that NYC needs a different approach. "What incentives can we give folks so that they can build housing?" he asks. "We need affordable housing for low-income people."
Scott has a response. One of the amazing things that's happening above 125th Street, he says, are the advertisements that say "Welcome to Soha'." He jokes that they call Washington Heights, "Hudson Heights" and there are now million dollar apartments there. "Part of what we have to do as a city is put the word 'plan' back into community boards." He says that communities need to be able to negotiate zoning and rezoning. "It's a new day now," and the way that we address the problem needs to change.
He says that we need to "beef the grassroots up" so that they can help in the fight.
Thomas compares New York City to Boston. "It's important that we get the community involved in the planning process," he says. He says that Boston has community groups that must meet with developers. "I want the community to get benefits," he says.
"We don't have rent regulations in Boston," he says. "It's the incentives you give these folks and the programs you have in place that make it work." The community process is what substitutes for rent controls. "It's people working together." He talks about home funds and other funds that help to make housing affordable. Banks, the city, the state, and other funds are helping build affordable units.
Andrea asks how the 77% of residential units that were bought were renovated and the percentage that was made affordable.
Thomas says he could make up something, but Andrea jokes that "we're trying to discourage that type of behavior." The audience chuckles.
Brad's turn. "We need to reform the system in a way that's proactive and puts communities in the front," he says, agreeing with Thomas. I think there are really intriguing links between vacant properties and rent regulation, he says.
He says that rent regulations have resulted in the multiple dwelling system, which has been neglected and isn't as useful. But he says that if we link the system with vacant property, it could be "an extraordinary data resources." We have to prevent people from being able to pull vacant buildings out of the system through warehousing, he says.
Thomas brings the community back into the conversation. "We have to bring the community back into the process," he says, "but sometimes we go beyond the community," mentioning the example of building housing for mentally ill or handicapped people. "But 99% of the time that community process works."
"The difficulty is talking about some of the neighborhoods where abandonment is very very high." He mentions all the abandoned buildings in downtown Cleveland, and how when jobs left Cleveland buildings became abandoned. Unless we combine economic development with building revitalizing, we don't see the complete picture.
"We're changing the dynamics and complexion of neighborhoods when we go into these vacant lands," he says. He also mentions New Orleans, and the rebuilding process -- do we gentrify, change the dynamics?
"New York is so schizophrenic," says Scott. He says that there has been a community board system since 1950, but we don't give communities the resources for the boards to actually function. "We have the structure in place, and we ignore it at our own peril. "We have this model, but we just don't take it seriously." He suggests that this isn't just "pie in the sky stuff," and that it's possible to reform the system, naming Philadelphia and Boston as examples. He mentions pending legislation in Albany that would change the tax structure. "It's not to punish people, but it recognizes that land is what's valuable here, and that's a precious commodity."
Andrea starts to talk about other cities. There is a reclaiming vacant buildings campaign, she says. "There is a real movement, but there are different types of cities involved in that movement," she says. To what extent is your effort here in Manhattan applicable to the other boroughs where the market isn't the same?" she asks.
Scott has an answer. The developers already know what's vacant, he says. He says that the city needs to survey and then take it to the next level. If HPD [Department of Housing Preservation and Development] is listening today, call 212-669-8300 he says, and the audience chuckles.
Thomas talks about incentives, and creating jobs. "How do you incentivize people to open business in urban areas? he asks, and talks about integrating diverse populations into the conversation. "Why is abandoned property there? Because people don't see any hope in that neighborhood." Some people don't want to deal with the issue of diversity in our cities...but you have to make sure that everyone feels welcome.
Carlton talks about the properties in the outer boroughs, and rehabilitation of buildings. "It costs over $200 a square foot to rehab these buildings," he says. "How do you get that money back?" When you're looking at places like Brooklyn and Staten Island, you can't charge the high rents that cover that rehab. This is why tax credits and subsidies are especially important to the city.
Carlton asks the mayor about average rent in Boston.
Thoma says that the average rent in Boston depends on the neighborhood. He says that rent is about $1000-$1200 for a two bedroom apartment in Hyde Park. I think a lot of people here might be moving to Boston, says Andrea, and the audience laughs, thinking of NYC's high rent prices. "That's why we have free breakfast at these events," jokes Andrea.
Carlton talks more about rehab, and Scott responds. "We haven't motivated our elected officials to create the same types of credits and finances for affordable housing, he says. "Every election, housing is mentioned as an afterthought." We've never had a housing bond act in this state, he says. He suggests creating a referendum and leaving it to the voters. "Voters need to decide, not politicians."
Brad returns to the idea of approaching vacant buildings in different markets. We've only in the past few days fixed certain tax laws, he says. He says that the J51 tax abatement rules needs to be fixed here, but might be slightly different in different cities.
Scott jumps in. "Or we could sit down and figure out a different tax structure for abandoned buildings," he says. Right now we tax buildings -- imagine if we created a system of incremental land value taxation." I don't know what the result would be, but he we need to figure out the "next bold move" as it relates to tax policy. "Let's research what's going on in other cities and other states. Land is our asset and commodity."
Guest questioner time! Andrea introduces Chuck Lesnick, the president of the Yonkers city council.
Chuck says that he feels that historic buildings were left out of the conversation. He talks about the "tear down trend," of old Victorian buildings being torn down and replaced with ugly buildings. He says that from a green perspective it's good to reuse buildings, and talks about reforms that Yonkers has made to deal with old buildings.
In Boston, you have a state historic tax credit....we don't have a good one in New York State. How has the state historic tax credit in Boston helped you?
Thomas says that there is a 90 day delay on destroying a historic building in Boston. "It's worked out pretty well," he says. He talks about preservation, and conflicts that can arise between preservation and other issues. "You don't just want to look at buildings, you want to look at the whole landscape of your community."
He talks about tearing down old bridges. "My battle everyday is to maintain the historical nature" of the city, he says. He talks about rebuilding behind old facades. "It's always an ongoing battle with the preservation community," he says, but that the 90 day ordinance is working.
Brad has an answer too. In NYC the greatest preservationists are the affordable housing advocates, he says. He says that NYC doesn't have the historic tax credit system, but that it may be time to take a further look. He says that preservation and affordable housing advocates can come together to save multi-family rent stabilized buildings from being torn down and replaced with condos.
Andrea asks, who wants these condos from a policy side?
People who are worried about the bottom line, says Brad.
Andrea introduces Sam Miler of Picture the Homeless, and Sam asks a question. He says that you could house every homeless person in the city in Manhattan alone, based on numbers of homeless people in shelters and streets and the number of abandoned buildings.
Scott has an answer. What I would recommend is that we introduce legislation to do a yearly count, he says. "It would be the best bang for the buck." He says that we need to change the tax policy and do a vacancy count. He also talks about the sustainability component and using green standards.
Brad talks about the homeless -- just fixing up vacant buildings won't solve homelessness. He talks about a hypothetical question that asks what to do with 35,000 homeless people in the city.
"Bringing the attention to the homeless people in our city is a moral crisis," he says, and there's a bit of applause in the back of the room.
Carlton talks about the work that the Parodneck foundation has done to find housing for homeless people and the elderly and to prevent foreclosure and fight predatory lending. "Brad and I talked about this 15 years ago before it became the flavor of the month," he says.
"And the banks said they didn't see this coming," Andrea says, and the panel chuckles. Carlton talks about working with people to prevent abandonment and homelessness at the same time. "There has to be a balance," he says.
Thomas talks about how homelessness is a multifaceted issue. He talks about a "clearinghouse" in Boston that brings together different homeless services and shelters. When you look at homelessness, you have to look at the whole picture -- addiction, reentry, education, and other issues. There is a 66% recidivism rate for people recently released from prison. They get better social service in prison than out of prison.
On to Scott. He talks about creating housing while the current housing stock is being depleted. It's going to take more intervention to do something big and bold if we're going to get ahead of this curve," he says. If you look statistically at how much we're losing on the back-end, are we really making it on the front-end? He says that we need to look at the situation in a holistic way.
An audience member asks about politicians who have "lost touch with their own electorate." Why is it that we don't have something in place that forces developers to put current residents in the same building? She also asks about infrastructure.
Carlton addresses the issue of developing, and that residents must be housed at 30% of their income. He says that if a person is displaced, the developer must find someplace else for the person to live.
Brad says that this isn't always true, and talks about "harassment provisions." Those only apply in a couple of small locations -- they're the exception instead of the rule, and they need to be made the rule." He says that warehousing and new developments have increased harassment and displacement of tenants.
Scott says that when people are involved on a community level then the end result is better. "I know these skylines are changing," he says, and it's not all bad. "Development without community participation and input makes absolutely no sense." He says that the people who make these areas valuable have "sweat equity" in their communities. The communities that are available today were really different 40 years ago, and they're the ones who are in danger of being forced out.
"We are a city of new immigrants," he said. He says that the "dream is deferred if the entry fee is" a one million dollar condo. Imagine if young people can't come to this city because of a million dollar entrance fee, he says.
"Let's stop settling for crumbs and let's start creating community."
Brad agrees, but says that communities only have input in a reactive way. You never end up talking about the infrastructure investments, he says, and mentions the traffic problems that result from new buildings.
Scott wants to disagree. "The mechanism is in place [197A Plans], and all we have to do is take it seriously," he says. He says that the community boards' pro-actively developed 197A plans are often set aside and ignored by city planning, which doesn't force developers to abide by them. He says that we just need to take the community process seriously.
Thomas agrees that traffic and infrastructure problems need to be part of the whole process. "That needs to be put in place as soon as the process starts." It shouldn't be an afterthought.
A few more questions from the audience. The director of Jamaica Housing Improvement Inc., which works with predatory lending, says that she sees the people who are affected by these problems on a day to day basis. She says that people who are most in need are excluded, and that the people who have worked for years are still having homes taken away. "If the bulk of the community could hear some encouragement" to participate in community boards, then everyone affected could become more involved.
Brad says that they should talk afterwards about ways to get more people involved in community boards.
A housing developer from Harlem asks why government should be involved in subsidizing housing. He says that Harlem used to be a wealthy community. What right does the city have to tell developers -- who are accountable to their stockholders -- how to develop their own property?
Carlton talks about going to Harlem in the late '60s. "It bothers me now to go to Harlem and see all this economic development and jacking up the prices." I walk down 125th Street and look at all the mom and pop stores that are being run out of town. How do we work with low income families who have been living there for decades? He says that people have a right to their neighborhoods, even when economic times change.
Thomas has an answer. "You're coming to our neighborhoods, you better do what we want." Those people have been living there for years, and they need protection.
Scott says that developers often come to the city and want to do more than what they're allowed.
Andrea says that the conversation is about government maximizing its role -- it isn't the government versus the developers.
Someone in the audience asks about empowerment zones.
Brad says, "First we need to elect a new President, and then we need a new urban policy."
"The President doesn't care about cities?" jokes Andrea, and Thomas says "It's not in his vocabulary."
Another audience question. "What happened to the Department of Finance?" Don't they look at every tax lot in the city?
Scott says that they're looking at it from a tax assessment view, which is different from an abandoned building survey.
Andrea says that time is running out, so she has a closing question. She mentions the Brookings Institute report on housing. "Every decision made today has ramifications for the future," she reads. How today's mayors address their cities' abandoned properties will determine how future generations look back on them. How will today's mayors be looked at 100 years from now, she asks.
"Great!" says Thomas, and the audience laughs.
Brad says that Mayor Bloomberg will get credit for Plan 2030, but if we don't come up with a new set of policies to support affordable housing, then we won't look back well on this time.
Carlton says that the "what is affordability" question still needs to be addressed. We're not building homes for people with salaries under $30,000. "It's going to be a great injustice to low income people." He also talks about gentrification and community sustainability. "We need to take a step back and figure out what we're doing," he says.
Scott says that it's difficult to be able to do something that's forward thinking when you're not planning for your reelection. "We have to not think in two and four year election cycles." We need systems to get elected officials to implement policies that force them to think beyond their own political viability.
Thomas talks about partnerships with the federal government. He says that suburban communities have to be involved too. He says that the suburbs around Boston created 473 affordable housing units while he created thousands. "To do affordable housing you have to be creative," he says. He also mentions public housing for low-income people.
"You have to stand up and say that you'll do it and not care about the political limitations." He says that there's no term limits in Boston. "So you could be today's mayor of tomorrow," jokes Andrea, and the audience laughs.
Thomas has one more thing to say. "We don't have a government in Washington that cares about people and cares about cities. This business is all about people."
Andrea wraps up the conversation by saying that the event highlighted three ideas that DMI emphasizes:
1. Reality is the best place to make public policy.
2. Change the conversation by changing who participates in it.
3. It's about leadership. Disconnected agencies won't make it happen, and Mayor Menino has succeeded by connecting different groups.
Comments? Questions? Help us continue the conversation here on the DMI blog!