Updated Plan Includes Infusion of Additional $1 Billion
Largely from NYC Housing Development Corporation Reserves – Not Taxpayer Dollars
– Which Rose Even as Other Housing Finance Agencies across the Nation Faltered
The Mayor's Remarks as Prepared for Delivery at NYU’s Furman
Center for Real Estate and Urban Policy for the Inaugural Event of its New
Institute for Affordable Housing Policy Follow:
“Thank you, Ellen, and good morning, everyone. I’m delighted to be here for
many reasons. NYU has always had a special place in my heart, because of the
role it’s played for important women in my life. My mother graduated from here,
and my youngest daughter also recently completed her work at NYU’s Gallatin
School, for graduation in May. The Gallatin School actually allows you to create
your own major. If they’d done that when I was going to college, I probably
would have tried to major in Home Brewing.
“I want to thank the co-directors of the Furman Center for Real Estate and
Urban Policy, Vicki Been and Ingrid Ellen, for their great work and for inviting
me here today. I want to congratulate everyone associated with the Furman Center
on today’s launch of your new Institute for Affordable Housing Policy. And I
want to thank Ron Moelis, the CEO of L&M Development Partners, for providing
the seed money that will grow this institute.
“Let me repeat what is something of a mantra for us at City Hall: Our
policies – on public safety, education, reducing poverty, improving public
health, and creating affordable housing, too – are all data-driven. So we’re
looking forward to very productive input from this new research institute, to
help shape New York City’s affordable housing policies and programs over the
next four years.
“That makes this the perfect place to talk about the next four years, and to
present an update of our administration’s affordable housing plan: The New
Housing Marketplace Plan, which we originally announced in 2002, and which we
expanded in 2006.
“To begin, let’s talk about the housing environment we now find ourselves in.
Even in the best of financial times, creating and preserving affordable housing
in New York City is a challenge. And these are, as we all know too well, far
from the best of times. The collapse of the housing market – the dramatic
trigger for the worldwide financial meltdown of 2008 – has, thankfully, not been
as disastrous here as in many other parts of the U.S. But it’s certainly been
bad enough. The private market financing so many of your organizations rely on
to fund low-income housing development has dried up. Despite signs of hope in
the economy, here and nationally, foreclosure activity, particularly in
Southeast Queens, Central Brooklyn, and other communities, is on the rise. Many
apartment buildings bought at steeply inflated, speculative prices are now in
financial distress and at risk of landlord neglect – jeopardizing the well-being
of tens of thousands of tenants. And unemployment, depleted savings, and rising
debts have combined in a perfect storm, threatening many New Yorkers who’ve
worked hard to be part of the great American dream of homeownership with the
loss of their homes.
“Those are grim realities – and we have to face them squarely and address
them boldly. But we also have to recognize that they don’t compose the entire
picture. Not by a long shot. The housing ‘glass’ in our city
isn’t empty – or even half-empty. Because the reality is that our
Administration’s affordable housing plan – the New Housing Marketplace Plan –
continues to profoundly transform New York’s housing environment – for the
“Just consider these facts. Since 2002, we’ve funded the creation and
preservation of nearly 100,000 units of affordable housing throughout the five
boroughs. That’s enough to shelter the entire population of Pittsburgh. In no
small part because of those efforts, the most recent independent housing survey
mandated by our City Charter rates our housing stock in better condition than at
any time on record. And the supply of housing has also reached record levels,
outpacing the rate of our population growth. During 2009 – one of the worst
years in housing in a very long time – New York City still created and preserved
12,500 units of affordable housing – almost as many as the entire State of
California accomplished during that same period.
“But of course, many people, including many of you here today, have asked
yourselves, and asked us, too: With all the difficulties in the market, and with
the hard budget choices government faces, can New York keep it up? Or like
cities across the nation, will we have to scale back? Will we have to compromise
the goals of our New Housing Marketplace Plan: Building and preserving 165,000
units of housing – enough for half a million New Yorkers – by the year 2014?
“I’m here today to give you a one-word answer: Fuhgeddaboudit. We’re not
cutting back. We’re not turning back. We’re still on course
to hit our affordable housing targets on time.
“As you all well know, during the boom years, the costs of construction
really rose, and we’re also now operating in an environment with decreased
private market equity. To meet our aggressive goals in spite of these
conditions, we are pumping $1 billion more into the New Housing Marketplace
Plan, raising the total investment to $8.5 billion.
“Today, I’m going to explain where that money is coming from, and also spell
out the four parts of our strategy that will help us meet our goals – and
protect our invaluable public housing stock, too – even in these hard financial
“The four elements of our strategy are:
- Creatively exploiting private market forces;
- Vigorously combating residential foreclosures;
- Employing innovative – and fiscally responsible – financial management;
- And capitalizing on the combined talents and resources of government
agencies and our private and non-profit partners.
“Now let me address each element of that strategy, starting with the first:
Our creative use of private market forces for the public good. That’s an idea
that’s at the heart of the New Housing Marketplace Plan. For example, the
conventional wisdom has always been that a hot housing market is the deadly foe
of affordable housing. But when our housing market heated up, we made it our
ally, not our enemy. Our policy of inclusionary zoning used market incentives to
encourage construction of affordable units in new developments.
“Now, with the downturn in the housing market, we’re pivoting to make that
our ally, too. Even as we keep pushing ahead on housing production – in Hunters
Point South, in Coney Island, and all across the Bronx – today’s slower market
lets us employ policy tools that make preserving affordable housing attractive,
“When the housing market was hot, we had a hard time persuading developers to
make long-term contractual commitments to affordability. With the sky seemingly
the limit on where rents were headed, there wasn’t much incentive to do that.
Today, conditions are quite different and that makes our property tax
incentives, our low-interest refinancing and rehabilitation loans, and other
City subsidies that come with making long-term affordability commitments, a lot
more attractive than they were at the height of the market.
“We’re going to use those strategies to lock in affordability in housing –
for terms of at least 30 years, and in some cases longer – throughout the city,
for more and more New Yorkers. We are, for example, seizing this moment to make
owners of Mitchell-Lama developments in our city an offer we hope they won’t
refuse: the offer of low-cost financing, in return for guarantees to keep their
stock of housing affordable for middle-class New Yorkers.
“Our goal is to ensure that every existing Mitchell-Lama development – all of
which seemed imperiled just a few years ago – remains safely in the affordable
housing fold. And to address a similar problem – the number of stalled condo
projects in our city – along with Council Speaker Christine Quinn, we’ve
developed a ‘housing asset renewal program.’
“It uses an array of City incentives to convert those projects into
affordable apartments. And, yes, the acronym of this program is ‘HARP.’ That was
a stipulation from Christine Callahan Quinn, who is just a little bit Irish, in
case you were wondering.
“The second element of our strategy focuses on preserving affordable housing
by combating foreclosures. As we announced in last month’s State of the City, we
are mounting the most robust anti-foreclosure effort of any city in the nation.
And we’re attacking that problem on every front. Commissioner Rafael Cestero and
his team at the Department of Housing Preservation and Development are launching
a $10 million program to help at-risk homeowners refinance mortgages at
“The Department of Environmental Protection is throwing out a lifeline to
nearly 2,000 homeowners in the early stages of foreclosure by temporarily
freezing their water debts to the City. The Center for New York City
Neighborhoods, which our Administration and the City Council founded to help
head off foreclosures, has assisted some 6,300 homeowners across the city.
“The Department of Consumer Affairs is out knocking on doors across our city,
telling New Yorkers how they can keep home loan scammers at bay, and protect
their own homes. And their Office of Financial Empowerment, working in
partnership with the non-profit ‘Neighbor-Works America,’ is stepping up
foreclosure-prevention efforts in targeted areas of Manhattan, the Bronx, and in
Queens. But all that is just the beginning.
“We’re also taking steps to prevent foreclosures looming over some large
developments – foreclosures that would hurt innocent tenants and whole
communities. I firmly believe that the private housing market should determine
the ultimate outcome in such foreclosures. But at the same time, tenants
shouldn’t bear the brunt of bad business decisions that were not of their
making. So our Administration will keep a close eye on the resolutions of these
“We want to ensure that they’re done fairly, promptly, and that there’s
rational provision for reinvestment, not abandonment. And in cases where
buildings are suffering disinvestment and neglect, and the health and safety of
the tenants is put in jeopardy, we’re also taking immediate action. As we
announced in the State of the City, we’re creating a $750 million fund for the
rescue of such distressed apartment buildings.
The City’s housing finance agency, the Housing Development Corporation, is
providing $550 million – the lion’s share of those funds. It’s a dividend for
our city resulting from HDC’s very prudent and productive management of its
assets – a subject I’ll have more to say about in a few minutes. The other
monies for this purpose are coming from the Housing Acquisition Fund that we
established in 2005, in cooperation with the nation’s largest non-profit and
philanthropic underwriters of affordable housing.
“Low-interest loans from the fund will be used to rehabilitate the homes of
some 10,000 New Yorkers – and in the process, safeguard the safety and quality
of life for many thousands of their neighbors, which would otherwise be
seriously undermined by housing neglect and foreclosures on such a large scale.
And while we’re on the subject of preserving our city’s large private apartment
“Let me speak for a moment about the extraordinary efforts chairman John Rhea
and his team at the New York City Housing Authority are making to preserve our
city’s large-scale public housing. NYCHA developments are the home of some
403,000 people. That’s roughly one out of every 20 New
Yorkers – more people than live in St. Louis or Minneapolis. Currently, John is
overseeing a major upgrade and modernization of public housing, using $423
million in Federal stimulus funds.
“Even more importantly, he has put together a public-private financing plan
that will leverage Federal funds for the long-term operating needs of some
18,000 NYCHA units. They’re in developments that have never before qualified for
Federal funds, because they were financed locally. Talk about
no good deed going unpunished! John’s plan would go a long way toward making
NYCHA financially solvent, and ensuring good living conditions for NYCHA
“So I want to remind you all today: There’s a March 17th
deadline for enacting the necessary local and State legislation in support of
this NYCHA plan. Please urge the City Council and Albany to pass those
laws. This is one of the most important steps that we can
ever take to preserve affordable housing in New York City.
Let’s not pass it up!
“John’s plan for NYCHA is a gold-star example of the kind of sound fiscal
management that our Administration prides itself on and employing such
innovative and responsible fiscal management is, in fact, the third prong of our
four-prong strategy to meet our affordable housing goals.
“New York City is fortunate to have the best public financier of affordable
housing in the nation today. I’m talking about the City’s Housing Development
Corporation. Last year, HDC was, in fact, the Number 2 affordable housing lender
in the entire nation. The nearly $1.5 billion it provided was
only, and only barely, exceeded by the Bank of America – which operates in a
national, not local, market.
“Over the past two years, the finances of other housing agencies across the
nation have suffered enormously. The State of California’s housing finance
agency, for example, required a $5.4 billion Federal bailout just to stay
afloat. Housing agencies in Illinois, Florida, and other states are in bad
“Now, consider this contrast: Under President Marc Jahr’s expert management,
HDC’s financial resources have actually grown in value right through the
recession, even as they’ve also helped us create thousands of units of
affordable housing. The value of HDC’s assets has increased from $8 billion to
$10 billion during the past two very difficult years. And
HDC’s bonds have retained their very strong ‘Double-A’ rating.
“Here’s the bottom line when it comes to our affordable housing. To complete
the New Housing Marketplace plan we’ve had to find a way to increase funding
from the original estimate of $7.5 billion to a new projected cost of $8.5
billion, as I said at the top of my remarks. Clearly, we’re in no position to
use scarce tax dollars to fill this gap. In fact, falling City revenues have
forced us to shrink HPD’s capital budget. But because of
HDC’s prudent and productive investments, we’ve been able to fill the holes in
the New Housing Marketplace Plan budget. That includes funding our
anti-foreclosure efforts too. The public’s money managers don’t often get the
credit they deserve. It’s not the most exciting, glitzy
profession. But let me tell you: Today, HDC is the affordable housing cavalry
riding to the rescue of New York City!
“Fourth, and finally, the New Housing Marketplace will succeed because of the
strong collaboration that’s been its hallmark from the start. And in today’s
perilous housing environment, collaboration among City agencies, and also with
you, our partners in the private and non-profit sectors, is more important than
ever. Our frontline housing agencies – HPD, HDC, and NYCHA – all work together
closely in the New Housing Marketplace. But they’re not alone.
“I mentioned what many City agencies are doing to battle foreclosure. Let’s
not forget what others do on other fronts, too. The
Department of City Planning has guided the rezonings that have unlocked the
potential for new affordable housing from Jamaica to the South Bronx. The
Department of Buildings rewrote a long-outdated Building Code, making it easier
to construct new housing in our city.
“We also benefit from our strong collaborative relationships with the State
Department of Housing and Community Renewal, the State’s Housing Finance Agency,
and also with the federal Department of Housing and Urban Development. And the
major foundations and philanthropies that have pulled together to support the
New Housing Marketplace Plan have created a model now duplicated in cities and
states across the nation.
“Our affordable housing allies also include the people in this room: The
leaders of our city’s affordable housing community. New
Yorkers are fortunate to have you. Your experience and
sophistication – your policy savvy and your street smarts – can’t be matched in
any other city in the nation.
“We’ve been through quite a lot together. We launched the
New Housing Marketplace Plan in the teeth of the post-9/11 recession. It was a
time when many thought that New York City was finally down for the count. We
showed them wrong. Our city came roaring back.
“We’ve been partners through good times and bad since then. And now, in the
face of the worst recession in more than 60 years, we’ve worked especially hard
to save this city and the neighborhoods we love. Some of us are old enough to
remember what New York was like when the city seemed to hit bottom in the 70s.
We saw what decades of housing abandonment and neglect did to our communities.
And we’re not about to let it happen again. Not now. Not
“During the past eight years, we’ve made so many of the right choices for
this city. Crime is at an all-time low. Our public schools have improved
dramatically. We’ve added significantly to the best system of municipal parks
and playgrounds in the nation. And we’re creating the affordable housing that
working and middle-class New York families need.
“For all those reasons, we’re poised to come out of the recession in better
shape than any other city that I can think of. The short term
will test us – no question about it. I’ve never sugar-coated the challenges we
face – and I’m not going to start now. We will have to be even smarter, more
efficient, and harder-working than we’ve been in the past.
“But we’ve known tough times before. And if we work together, and remain
confident and strong during the difficult days ahead, we’ll see all our hard
work for this city be rewarded. And we’ll have the satisfaction of knowing that
the best days for New York are still to come. Thank you all,
and God bless.”