Mayor Michael R. Bloomberg
Housing Speech
Grand Hyatt Hotel, 109 East 42nd Street
Thursday, May 1, 2003

Mayor: As Yogi Berra might have said, before I begin speaking, I want to say something: I'm not sure Yogi ever said any of those things. It's about someone whom most of you know-Jerilyn Perine, our commissioner for Housing Preservation and Development. She's not here because two days ago, she completed chemotherapy.

To quote the journalist Molly Ivins, having breast cancer is "massive amounts of no fun."

And over the last six months, Jerilyn has shown equally massive amounts of grace, good humor, and determination. Except for one small detail, I would call her a mensch. Her colleagues at HPD will be briefing her about this conference. So please join me in letting her know we're all in her corner-and we need her back in our corner.

Jerilyn runs what may be the most market-sensitive agency in City government. And that's as it should be. Because private and nonprofit developers -- such as you, the members of this association -- play the critical role in preserving and producing affordable housing.

City government has to play a part too. Our job should be to help the marketplace work -- by providing financial incentives for developing and rebuilding housing, and by gearing the regulatory processes toward increasing housing production and preservation. Those two ideas are the foundation of our city's five-year, $3 billion affordable housing strategy-providing incentives, reforming regulations. Our plan is called "The New Housing Marketplace. " It combines innovative public financing to encourage private housing investment…with legislative and administrative reforms- cutting the costs and reducing the risks of building and land acquisition.

We unveiled that strategy last December and made a commitment to preserve 38,000 housing units in our city by 2008, and build 27,000 more. That represents a 25% increase in new construction compared to the last five years -- and the biggest city commitment to new housing in 15 years. And we also named a top-flight neighborhood investment advisory panel, that includes Robert Ezrapour, and an array of distinguished housing experts with us today, including:

Former HPD Commissioner Felice Michetti… Successful business leaders in community-based housing ventures like Ronay Menschel of Phipps Houses, and Deborah Howard of the Pratt Area Community Council… Lenders with great affordable housing track records like Naomi Bayer of Fannie Mae, and Marc Jahr of Citibank's Center for Community Development and Enterprise… And distinguished scholars like Michael Schill of NYU's School of Law.

Well, today it's nearly five months later, and the question is, how're we doing?

And the great answer is: Great.

Technically, the starter pistol for our five-year strategy doesn't even go off until the beginning of the next fiscal year on July 1st. But we think getting affordable housing built is so important -- we've sort of jumped that gun. We're already moving forward on virtually every single element of the New Housing Marketplace plan. Since last December we've put the rehabilitation and production of approximately 8,000 housing units into the pipeline; We've assembled city-owned tracts for creating hundreds more; We're developing regulatory reforms that will speed private housing construction; And we're targeting residential rezoning that will catalyze construction and rehabilitation throughout the city.

Not that there aren't some political pitfalls in Albany and Washington.

But they're nothing we can't avoid, by doing a little preventive political maintenance now.

That's a concept that ought to be familiar to housing mavens-and I'll be asking for your help on those issues.

But let's begin with some very good-and very fresh-news about financing. As I said we were moving ahead on sponsoring some 8,000 new and rehabbed housing units this year.

Just yesterday, for example, our Housing Development Corporation closed with a private/non-profit development team on a $12 million agreement to underwrite 90 new studio and one- and two-bedroom apartments in Jamaica, Queens.

These are the first of thousands of new units that HDC will finance over the next five years.

They're also the first installment of HDC's expanded New Housing Opportunities Program-aka "New HOP"-that will include financing middle-income rental apartments like those in Jamaica-as well as thousands of owner-occupied units.

And there are over 900 more New HOP apartments in the pipeline for the rest of 2003.

Preservation is also moving forward.

Last month, working with Amalgamated Bank and HUD, we closed on a low-interest loan for repairs at North Shore Plaza, a 530-unit middle-income Mitchell Lama development on Staten Island.

They are the first of the 38,000 units the City has pledged to provide preservation financing for as part of the New Housing Marketplace.

We're committed to building and preserving low-income housing as well.

For example… some 750 apartments are queued up in our Low Income Affordable Marketplace Program, or LAMP, as it's called, including major projects in Brownsville, Brooklyn, and the South Bronx.

We're also working on acquisition and rehabilitation loans for more than 630 low-income apartments in Bedford Stuyvesant and East New York in Brooklyn.

We'll provide financing for thousands more housing units this year.

And at a time when gloomy financial news fills the newspapers and the airwaves, there's good news to report about financing developments on brownfields and in rezoned manufacturing areas.

A consortium of banks in the city -- specifically, CitiGroup, JP Morgan Chase, Deutsche Bank and HSBC -- has given our plan for a $200 million revolving fund to support such projects its seal of approval.

And they've backed that up with dollars.

They've agreed in principle to match every city dollar in the fund with four private dollars.

That means the cost to the city of this $200 million loan supply would only be $40 million. And that allows us to use the balance of $160 million we had committed to this fund to meet other housing needs.

City-owned land is a valuable resource for housing production. And for too long, it has been underutilized.

That's why we've committed to more aggressively make under-used City Housing Authority property available for new affordable housing.

The first major project of this kind will be in the Bronx. Within three months, we'll select a developer who will rehabilitate and build more than 200 units of affordable housing in vacant buildings, and on vacant land the Housing Authority owns in Morris Heights.

We're also moving forward with administrative reforms that we think will cut the costs for private developers. A multi-agency group chaired by Buildings Commissioner Patricia Lancaster is expected to release recommendations soon for a badly needed revision of the city's Building Code.

These regulations are intended to update the code to reflect modern standards and practices, and eliminate needless procedures and delays.

We need it.

Finally, as to rezoning: Yesterday, the City Council approved our Administration's proposed rezoning of sections of Park Slope in Brooklyn.

This is the first step in realizing another vital element in our housing strategy:

Using targeted rezoning for mixed residential and commercial use, to increase the supply of land and drive the cost of housing production down.

The areas we propose to rezone are key locations for the incentives our housing plan provides.

In Park Slope, we will make available -- on a first-come, first-served basis -- $6 million from our housing plan to encourage affordable housing.

We expect this will yield more than 100 new affordable apartments and leverage an additional $16 million in private investment.

Bottom line: Yesterday's action should produce hundreds of apartments that are convenient to Downtown Brooklyn and Lower Manhattan.

Perhaps even more importantly, working with the City Council, we think we've established a framework that sets the stage for other rezonings in neighborhoods from Greenpoint, Brooklyn…

To the Far West Side of Manhattan… to Hunters Point in Queens…that, in total, can produce tens of thousands of units of housing.

That, in a nutshell is the progress report on the New Housing Marketplace: forward movement on every front, and in every borough, we think laying the groundwork for building and preserving thousands of new apartments throughout the city this year and in the years ahead.

But we need your investment and involvement to keep that plan on track.

We also need your help in making sure that the policymakers in Albany and Washington do the right thing for New York City.

Let's start at the State level.

The City, as you can read in the newspapers virtually every day, faces a roughly $3.8 billion shortfall in our budget for the next fiscal year.

Because the State mandates so much of the City's spending, and controls so much of our ability to raise revenues, State action is imperative in closing that gap.

I'm confident we'll get that action. I said it again and again. But prudence also dictates that we have a contingency plan just in case I'm wrong, and we don't get that help.

We have such a plan, and it includes cuts in virtually every City agency and program-including housing.

In this fiscal climate, there just can't be any sacred cows in the budget. But we also can't afford to make cuts that violate compassion, conscience and common sense.

The great poet, W.B. Yates, once wrote that "too long a sacrifice can make a stone of the heart." The heart of New York City will never be hardened to the urgent needs of our people-especially the need for housing.

In the contingency budget, the bottom line for the New Housing Marketplace would be delays to some 2,000 units in our 65,000-unit plan.

That represents 2,000 families who need homes in our city, and whom we need to keep as New Yorkers.

We simply can't let that happen.

So I call on the members of this statewide association to remind your representatives in Albany that New York City is the dynamo of the state's economy. We need housing to help the city generate jobs and investment; and we need housing for our people.

Second, as to Washington -- where the issue now coming to a head is how cutting or eliminating taxes on dividends will impact low-income housing tax credits.

In government, the law of unintended consequences is often the cruelest law of all.

So it's essential that reducing or ending dividend taxes not create the unintended consequence of making low-income housing tax credits less attractive.

Now, there's probably no one in this room who needs to be reminded how important such credits are in underwriting affordable housing. Corporations purchase the credits to reduce their taxes-and then they get allocated to developers of affordable housing.

Over the last 15 years, HPD has used some $123 million in Federal tax credits to subsidize production of nearly 18,000 units in New York City.

We have to make sure low-income tax credits remain an attractive investment for corporations…

Specifically by ensuring that the amount of tax-free dividends they pay -- will not be reduced by the tax credits they buy.

This is an issue where the dean of the City's congressional delegation, Congressman Charles Rangel, is taking the lead.

If you haven't done so yet, I strongly urge you to get behind him and other members of our congressional delegation. Let them know you support their efforts to protect the New Housing Marketplace.

Speaking of dividends: It's true that we won't see some of the dividends from our housing plan for years to come.

Given the city's current budget problems, some people may think that's a luxury we can't afford now.

That's exactly wrong.

Building for the future is a responsibility we can't shirk-especially now.

We are not going to push our problems-or our responsibilities-off on our children. New York City has been down that road before-during the fiscal crisis of the 1970s-and we know exactly where it leads. We're still paying the price for that mistake. We won't make it again.

New York City's short-term financial recovery-and our long-term economic health-depend on our ability to attract and keep the best and the brightest-the dreamers and the doers.

To do that, we need housing for people of every income level-those who are successful now-and those who are about to write their success stories right here, in all five boroughs of New York City.

To do that, we need you to be part of the new housing marketplace… To take advantage of the full range of public financing resources, and to put up your own equity… To assemble sites and put together deals…and to be optimistic about New York City's future. Because there's every reason to be optimistic. Yes, we've got some short-term budget problems; so does virtually every other city and state in the nation. But no other city has the competitive advantages that New York City enjoys-and I wouldn't trade our hand for the cards that any other city now holds.

As a city, we need to dream big civic dreams-and then make them happen.

It's part of who we are; it's encoded in our DNA as New Yorkers.

It's what will keep this the world's second home.

A few weeks ago, we lost a great New Yorker who understood that: Senator Daniel Patrick Moynihan.

A reporter once asked Senator Moynihan what New York City would be like 100 years from now. His answer: "Different. Better. Magnificent."

By working together…

City government… the members of this organization… people willing to invest time, treasure and talent in the hard work of building homes for the next generation of New Yorkers can make that bright and hopeful prediction become a reality.

Thank you.

Keep up the good work.