New York City Housing Authority Update

New York City Housing Authority Update

I keep returning to the case of the New York City Housing Authority (NYCHA) because it is such a perfect illustration of the socialist economic model in practice. There about 170,000 NYCHA apartments, housing around 400,000 people. Most of the apartments were built from about the late 1940s to the 1970s, to be technically “owned” by the City of New York, although nobody expects any return on the investment. Maintenance and upkeep are in the hands of a unionized bureaucracy, headed by a Commissioner reporting to the Mayor. The unionized staff gets paid for going through the motions, rather than for assuring that the residents are receiving a good-quality housing product. Nobody ever gets an extra dollar of pay for getting the buildings ready to go for the next ten years, or for the next generation.

Actually, it’s far worse than that. The commissioners turn over every few years, and their only interest is in not having the buildings fall apart on their watch. The employees have union contracts that perversely reward inefficiency. For example, NYCHA’s plumbers have negotiated themselves a deal where all shifts are Monday through Friday, 8 AM to 4:30 PM, and any work outside those hours gets paid at “overtime” rates. Clearly, the plumbers maximize their income when the plumbing is old and prone to regular breaks, requiring emergency calls during the nights and weekends when the pay is time-and-a-half or even double. Fortunately for them, the genius economic planners who put this NYCHA thing together some 40 to 70 years ago never considered the possibility that after such a period of time the buildings would need major capital upgrades. No plan was ever put in place to provide for such upgrades. As the buildings get older, the breakdowns become more frequent and worse. The living conditions get worse and worse, while the employees make more and more money.

Mostly, NYCHA has been out of the news lately. But thank the Lord for the New York Post, which will not let go. . . .

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Status Report On New York's Quest For "Climate Leadership"

An important focus of this blog is on trying to find the true “climate leader” among all the world’s political jurisdictions. After all, somebody needs to get out front to save us from the climate crisis. But who? Germany? They adopted the Energiewende policy in 2010, and have since thrown hundreds of billions of dollars at transitioning to “renewable” energy. Result: windmills everywhere, consumer electricity bills triple the U.S. average per kWh, and emissions essentially flat since the 2010 start of the program. China? They were awarded the mantle of “climate leadership” by the New York Times back in March 2017, shortly before Pravda figured out that China had hundreds of gigawatts of coal power plants under construction in their own country, and many hundreds of more gigawatts of such plants under construction in other countries around the world. The talk of energy transition was all a charade.

So now it’s time for some real progressives to show how it’s done. As reported here on June 19, New York ‘s legislature has now passed the Climate Leadership and Community Protection Act. The goals of the Act are to get 70% of electricity from “renewables” by 2030, followed by reduction of all carbon emissions — not just from the electricity sector — by 85% below 1990 levels by 2050. Admittedly, this new Act has just been passed. But we’ve been talking about transitioning to renewable energy for many years. Surely we should be setting the example for the world by now. Let’s take a look at where we are, and what the plans are from here. . . .

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New York Tightens Up Its Rent Regulation

A couple of weeks ago, I reported that there was “excitement in the air” here in New York. The cause of the excitement was the prospect of significantly tightened and expanded rent regulation, made possible by the ousting in the 2018 election of what long had been a narrow Republican majority in the state Senate. Now the state Senate would have a comfortable Democratic majority, joining the already-existing large Democratic majority in the state Assembly.

Being a Democratic legislator in New York means believing that preventing increases in rents makes housing “affordable,” and also has no meaningful downside consequences such as disinvestment in the regulated housing. Therefore, tight rent regulation is a key step in the march toward perfect justice and fairness in the world. Obviously then, tightening and expanding rent regulation would immediately rise to the top of the agenda in the newly constituted legislature. My previous post reported on bills on the rent regulation topic that were getting floated in May. Now, it looks like both houses of the legislature have passed a lengthy “reform,” with the title of “Housing Stability and Tenant Protection Act of 2019,” which the Governor promptly signed. Here is a link to the as-passed bill on the legislature’s website, with an indication that it is what the Governor has signed.

How bad is it? Believe it or not, it could have been even worse. But, it is plenty bad. . . .

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More Excitement In The Air In New York: Rent Regulation To Be Expanded And Tightened

A couple of months ago I wrote about the excitement in the air in New York City as the newly elected state legislature, with large progressive Democrat majorities in both houses for the first time in many years, looked set to pass a “pied-à-terre” tax for New York City on high value condos owned by non-residents. Finally, we were going to get even with those evil out-of-town mega-billionaires for their sin of coming to our city and spending their money. The idea was that the state legislature would authorize the City to impose special real estate tax surcharges thought sufficient to raise some $650 million per year from just 5400 super-wealthy people who owned very-high-value residences. That would be some $120,000 per year from each one of them. Take that, billionaires! One guy — a hedge funder from Chicago named Ken Griffin, who had just bought an apartment on “billionaire’s row” for $263 million — was theoretically going to get socked for about $10 million per year.

And then, as quickly as it had arisen, the excitement dissipated. Somebody noticed that the high end condo market in Manhattan was already in sharp decline. This tax threatened to kill it off completely, along with the jobs of the people building and selling the apartments. Meanwhile, the tax looked to be relatively easy to evade, as by a mega-billionaire subleasing his apartment and staying in a big hotel suite. The originally-$650 billion estimated annual tax take started to drop like a stone. Today, the pied-à-terre tax idea seems to have died, although with the legislature still in session anything could happen.

But suddenly a new excitement is rising up. A key progressive agenda item, tighter and stricter rent regulation, long blocked by the formerly Republican-controlled state Senate, now looks set to sail through before the legislature winds up in June. Finally, we will be able to achieve perfect justice and fairness in rental housing prices, through the magic of government command and control. . . .

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How Corrupt Is The New York "Affordable Housing" Game?

How Corrupt Is The New York "Affordable Housing" Game?

In New York City we have a dizzying array of taxpayer-subsidized “affordable housing” schemes: low income public housing; mixed income public housing; “limited equity” co-ops; the so-called “Mitchell-Lama” program; 80/20 and 70/30 “inclusionary zoning” requirements; and plenty more. Something around 1 million people live in one type or another of these subsidized projects. That would be about 1 person out of eight in the City.

The whole idea with these schemes is that each resident pays substantially less than what would be the market rent for the same unit. After all, by hypothesis, we have a “crisis” of housing cost, where market rate apartments are priced too high for many people to afford. Therefore, we need politicians to provide taxpayer-financed subsidies to create a large tier of the “affordable” apartments. The actual rents for each “affordable" apartment are then determined by a political rather than a market process. In the case of the low-income projects, the rent is set as 30% of the tenant’s income, meaning that a tenant with no income could pay as little as nothing in rent, even when the apartment is in a desirable location. Other apartments in different programs first have a rent set, and then are allocated to people whose income has been determined to be appropriate for that rent. Sometimes these politically-determined rents might be relatively close to a market rent for a comparable apartment in the same area; but other times the “affordable” apartments are located in desirable areas, and the local market rent for a comparable apartment could exceed the “affordable” rent by a factor of five, ten, or even more. Such disparities occur, for example, in desirable Manhattan neighborhoods, as well as in waterfront areas in Manhattan and also Brooklyn.

So we have large numbers of apartments that would have market rents of perhaps $3000 up to even $10,000 per month, going for perhaps $500 to $1500. Of course, long waiting lists develop for these subsidized apartments. Some designated political gatekeeper gets to decide who gets the next apartment when it becomes available. Now, what is the chance that such a process can proceed for years and decades without pervasive corruption? . . .

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New York Gets Crazier And Crazier Every Day

We last examined the total insanity of New York City progressivism back on April 23, with a post titled “Mayor de Blasio Sets Out To Accelerate New York City’s Decline.” The particular focus of that post was a proposal from our Mayor to impose onerous efficiency standards on office buildings as the latest progressive idea to “save the planet” from the scourge of climate change. If you thought that that proposal just had to represent the ultimate low point of progressive craziness, and that it couldn’t possibly go any lower, then you just haven’t been paying attention. In the last few weeks, the new emergency rules and bans that must be imposed immediately by government to save the world have been coming ever faster and faster. You almost can’t learn about one before the next one is upon you, each one somehow more urgent in the case made for it, more burdensome in its application to the citizenry, and yet even more trivial in potential effect (if any at all) on the planet or the environment or whatever it is we are trying to “save.”

First up, the package of six bills covered in that April post, going by the collective name of the “Climate Mobilization Act,” promptly passed the City Council and became law. The CurbedNY website provided a summary of the bills on April 22, including this gem:

Come 2024, the legislation mandates landlords move toward cutting their building emissions 40 percent by 2030, and would put the city on a path toward reducing its carbon emissions by a whopping 80 percent by 2050.

Of course, the new law puts the steepest burdens on the buildings that are already the most efficient (e.g., modern skyscrapers), while exempting huge categories of buildings that are the least efficient (e.g., City buildings, low income public housing, rent regulated apartment buildings, single family houses). Some City Council members took the occasion to make totally delusional statements about what they think will be the effect of their handiwork. For example, one of the prime sponsors was a guy named Costa Constantinides from Astoria, Queens. His comment:

“There are talks about the Rockaways, Coney Island, and neighborhoods in Staten Island literally being wiped off the map by the end of this century if we do not act,” said [Constantinides]. . . . “No single-handed policy can completely reverse the effects of climate change, but this policy, when enacted, will be the largest emissions reduction policy in the history of New York City or any city anywhere.”

Or this from City Council Speaker (and my own representative) Corey Johnson:

“Our planet is closing in on a breaking point … we have to transition from investing in fossil fuel infrastructure to clean, renewable energy,” Council Speaker Corey Johnson said during the vote. “We have to act decisively and we have to act now.

Do these numbskulls actually think that by upgrading the energy efficiency of a few office buildings in New York they can somehow affect the level of the oceans? . . .

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