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Housing Starts: Property Tax Reform | Fannie Mae’s Pension Problem | “Real Affordability For All”

Housing Starts | April 3rd 2014

Keisha Jacobs of the Real Affordability for All campaign asking Mayor de Blasio to build more affordable housing in Brooklyn

  1. An indescribable system, threatened. The most notable thing about the lawsuit that threatens to blow a hole in New York City’s property tax system may be that it took so long for someone to file it.The city’s tax set-up is widely acknowledged to be irrational, unjust and absurdly complex, effectively causing renters in one of the least affordable cities in America to subsidize an unusually low tax rate for single-family homeowners, and the owners of condos and co-ops. [Capital New York – 04/02/14]
  2. Fannie Mae holds quiet equity stake in $1B portfolio: sources. The government-sponsored enterprise Fannie Mae holds a confidential, $60 million equity stake in the 3,962-unit apartment portfolio that Urban American and other partners bought for $938 million in 2007, several sources told The Real Deal. The stake remained under wraps even as housing advocates publicly pressured Fannie and the portfolio’s publicly-known owners, Urban American Management and the City Investment Fund, over what the advocates considered to be an over-leveraged acquisition, during and after the prior real estate boom. [The Real Deal – 04/02/14]
  3. Progressive groups want more affordable housing from Mayor de Blasio. Progressive groups are calling on Mayor de Blasio to close a ‘luxurious loophole’ and create more affordable housing units in rapidly gentrifying Brooklyn neighborhoods.  From 2008 to 2012, 61 buildings were built in Brooklyn that will receive $158 million in tax breaks - but only five include below-market-rate apartments, according to the report from the Real Affordability for All Campaign. [New York Daily News – 04/03/14]
  4. A tale of two housing courts. In New York City’s housing court, 90% of tenants facing an eviction do not have legal representation, while 98% of landlords do. Mark Levine, Council Member from NYC’s 7th District, discusses his proposal to increase funding for low-income tenants who end up in housing courts. [WNYC – 03/28/14]
  5. Council questions Domino developer’s math. In a contentious hearing, City Council members pressed the developers of the Domino Sugar factory project on the Williamsburg waterfront to explain how many market-rate and affordable-rental units it was planning to build. Two Trees Management developer Jed Walentas acknowledged that the numbers were not yet final, but that the project is likely to include up to 2,300 market-rate apartments, with as many as 700 affordable units. He said that 537,000 square feet of the 2.2 million square feet of residential space would be devoted to below market-rate apartments. [Crain’s New York Business – 04/01/14]
  6. Tenants strike against public pension fund-backed landlord. More than 50 tenants of an apartment complex at the northeast corner of Central Park huddled under umbrellas on Saturday to announce a rent strike, taking aim at a landlord financially backed by New York city and state pension funds. The 600-unit development, the Heritage, previously called Schomburg Plaza, is part of a group of five apartment complexes that exited the federally funded affordable housing program called Mitchell-Lama and ended up in the hands of new owners seeking to charge market rates. [New York World – 04/03/14]
  7. For a Ground Zero developer seeking subsidies, more is never enough. The developer and philanthropist Larry A. Silverstein has cut a striking figure in New York City. He owns the H.M.S. Bounty-size yacht favored by his peers and has dominated the rebuilding of Ground Zero for nearly a decade. Along the way, he has internalized a developer’s rule of thumb in New York: Only a rube puts much of his own money at risk. Billions of dollars in Liberty bonds, insurance money, developer fees: Year after year, Mr. Silverstein has shaken the public tree and benefits have fallen to the ground. [New York Times – 03/31/14]
  8. High rents have Bronx locals packing up: Gentrification comes to Highbridge, Grand Concourse. Lucia Davis grew up in the Grand Concourse section of the Bronx and has lived there happily for nearly 35 years.  But as she walked through Franz Sigel Park with her 4-year-old daughter on a recent afternoon, she confessed that her own children may have to grow up elsewhere. Because of rising rents, she and her husband are considering existing the city. ‘You’d think you could afford to live in the Bronx,’ she said. ‘But the prices are going up, and a lot of people are moving out.’ Welcome to the Highbridge and Grand Concourse neighborhoods of the South Bronx, where income growth in recent years has been among the highest in the city, but in the process has begun to push up some of the city’s lowest average rents. As a result, something else has risen as well: homelessness. [Crain’s New York Business – 03/31/14]
  9. Apartment rents climb as vacancies drop. Apartment landlords continued to push through hefty rent increases at the start of the year, although the pace of the rises was slightly weaker. Rental rates increased 0.6% during the first quarter, according to data from 79 U.S. metro areas that was released Tuesday by Reis Inc., a real-estate research firm. While that was a little slower than the 0.8% rise in last year’s fourth quarter, rents were up a hefty 3.2% from a year earlier and have risen 13% since rents began their upward trajectory in 2009. [Wall Street Journal – 04/01/14]
  10. Squatters in the Lower East Side. In the 1970s, New York City was in grave fiscal crisis. Many in the middle class fled the city for the suburbs, deepening the city’s debt by the loss of their tax dollars. In 1975, the crisis reached a near breaking point, the cash-strapped city flirting dangerously with defaulting on its debts, which would have led to bankruptcy. Services were slashed, public-sector employees laid off; the city’s corporate and financial interests succeeded in rolling back the New York working class’s power. [Jacobin Magazine – 04/03/14]
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