[2017 Campaign Archive Post]
Halasa Housing Act
Comprehensive Housing Policy Seeks To Create New Affordable Units with Fees from Vacancy Tax, Linkage Fees, while offering new ideas on the Prevention of Tenant Displacement
NEW YORK CITY – District Three City Council Candidate Marni Halasa has unveiled her new and unique housing policy, which takes best ideas from New York and other leading cities to accelerate new permanently affordable housing production in a comprehensive way. Not only does Ms. Halasa intend to make a dent in New York City’s housing crisis, her solutions will also stand up to the real estate lobby, while bringing much needed relief to middle income families.
Ms. Halasa’s policy, the Halasa Housing Act, borrows ideas from the successful Mitchell-Lama program and then offers significant relief to low- and middle-income households by advocating that 35-percent of all new rental constructions should be designated as affordable housing, with an additional 35-percent of a gradual transitioning of existing units to an affordable housing standard.
Also, in an effort to help offset losses for landlords, Ms. Halasa’s plan calls for tax abatements and low-interest mortgages provided by a Mitchell-Lama designation. Ms. Halasa’s plan also implements smart financing mechanisms that guarantee New York City a steady revenue stream specifically earmarked for affordable housing. The result will create an abundance of affordable housing while lowering overall rents and reforming the high-rent blight.
“This policy allows for an affordable housing life-cycle with rents changing as incomes change and a continuous flow of units into affordable housing as other units price out, keeping the market flush with housing that meets all income demographics,” said Ms. Halasa. “The Halasa Housing Act that housing will never again be a major financial struggle for working families, the backbone of our city’s economy.”
Specifics of Ms. Halasa’s housing policy include:
- A new more practical measure of ‘housing cost affordability’ that provides a decent standard of living in today’s modern cities. Standards of affordability in housing should be assessed based on the costs of non-shelter needs (i.e.: food, clothing, transportation, insurance, education, retirement, etc.), not the ratio of housing costs to household income. Meaning, the percentage of income of household needs to cover necessary non-shelter expenses should be deducted from household income BEFORE assessment is made as to what reasonable housing costs for this household may be. Housing costs should NOT consume the remainder of the income, but should leave a reasonable amount of discretionary income. Assessment should be based on after-tax income.
- For all new constructions, for rent or for sale, 35% of units should be designated as affordable housing. Of the 35% designated as affordable housing, rents should be graduated to allow for affordability differences between low- and middle-income households. That is, rent for these units will be based on the income brackets they are intended to serve, with prices determined through a non-shelter needs assessment based on the newly adjusted affordable housing designation.
- Units that newly enter the market after shedding a rent-control or rent-stabilized designation will be designated for affordable housing if 35% of the building’s units are not already classified as such. Once a building meets the 35% affordable housing threshold, subsequent units can enter at market rates. For buildings that currently have no affordable housing and no rent-controlled or rent-stabilized units, as units become available every fourth unit will be designated for affordable housing until the 35% affordable housing threshold is met.
- In order to pay for new affordable housing stock, New York City will institute an annual Vacancy Tax on seasonal and non-domiciled apartments. Modelled after the successful Vancouver and Paris Vacancy Taxes, The Halasa Housing Fund, will tax units, “ghost apartments” that sit empty every year with an annual 1% tax on the property assessed value. Such a tax could also incentivize owners to live in (or rent out) the 50,000 apartments that currently sit empty in New York City, helping to ease pressure on rents throughout the city. In addition, Ms. Halasa also plans to institute a vacancy tax on landlords that let storefronts sit empty for months to help mitigate the impacts of the widespread practice of warehousing valuable commercial and residential units.
- Another idea Ms. Halasa proposes is to support is utilizing the Land Bank, an idea currently offered by New York City Comptroller Scott Stringer, in 2016, to develop an estimated 57,000 units of permanently affordable housing units on the 1,100 vacant lots in New York City, as well as on a smaller sub-set of privately-owned, tax-delinquent properties. Partnering with non-profit developers, who do not have the primary goal of making profit, the alliance would allow for more housing for lower-income New Yorkers than the current broken system of Mandatory Inclusionary Housing. Developers could ‘buy in’ to create a public authority, perhaps a sister to NYCHA, which would issue bonds to fund construction through non-profit sponsors. Non-profit developers who took on ambitious 100% affordable housing requirement would be given various incentives.
- In addition, New York City can charge a ‘linkage fee’ to residential and commercial developers citywide for additional monies for affordable housing. Last August, a Los Angeles City Council committee endorsed the Mayor’s linkage fee proposal, which is estimated to bring in between $75 million and $92 million per year to pay for the construction of 1,500 new units for low-income families. The fees would range from $8 to $15 per square foot for new commercial development (hotels, restaurants, shops) and from $3 to $8 per square foot for new residential development. Such fees would raise enough money to build new units without deterring private market construction. Incentives like an additional floor could be offered to developers in order to offset costs.
- Unlike the 1970’s, where tax abatements were used to stimulate construction in New York City, then hit hard with an economic recession, such subsidies are not necessary in this current era since New York City is an attractive place to build. Because of this, I propose ending the 421a tax abatement and using the tax revenue to contribute to the Halasa Housing Fund. In addition to affordable housing, HHF could also be used to improve public housing, which is currently in a $17 Billion dollar capital improvement budget deficit.
- Another way to solicit funds for affordable housing is also through Public Investment Value Capital (PIVC), a mechanism which would cap the rate of return that the landlord would be allowed to reap since his property benefits from the infrastructure built by the city and state. I would also like to commission a study to allow the New York State Pension Funds to invest more in affordable housing. I believe it would be a win-win situation where public sector employees could increase their portfolios.
- The Halasa Housing Act also will include a resolution for New York City to create a working group to advance a Tenant Opportunity to Purchase Act (TOPA), as has been enacted in Washington DC, and is currently being considered for passage in Massachusetts and elsewhere. A TOPA allows tenants the right of first offer to buy their building when an owner decides to sell. Tenants would be allowed to organize obtain financing, and either form a cooperative (potentially a limited equity coop) or assign their ownership rights to a non-profit developer or community land trust. Such an act has the potential to reduce gentrification and involuntary displacement and shift more existing housing stock into the control of tenants.
“This policy demonstrates to all New Yorkers, specifically those in City Council District Three, that there is one person running for office who understands the short and long term needs of the community and, quite frankly, is committed to governing with a heart,” said Ms. Halasa. “By ensuring that affordable housing is available and accessible to all income demographics, we can guarantee that every New Yorker has the opportunity to participate in the American Dream where housing is a human right.”