De Blasio's difference

For the last decade, the progressive left has been begging for a mandatory inclusionary housing program in New York City requiring that all new residential buildings include a quantity of affordable housing. The mayor has proposed exactly such a plan. The community boards and the progressive left have rejected it. Why?

First, compare the mayor's plan with the Bloomberg model of inclusionary zoning. Bloomberg rezoned 120 neighborhoods in the city. Each one contained significant upzonings -- greater allowances for larger buildings, a give-away to developers. In addition to the upzoning give-away, Bloomberg offered developers the option to build even more space if a portion included affordable housing. Usually the bonus -- the added market-rate housing that the developer could build above the affordable component -- wasn't enough for the developer to bother with, so they didn't.

However, affordable housing non profits, which manage the affordable housing component and get their funding for doing it, and whose mission is to create or promote the creation of affordable housing, were the advocates for the inclusionary program. So you'd see the irony of progressive community-based non profits selling development and upzoning to the communities with the promise that the affordable housing would benefit the community. Carefully not mentioned was that the development would raise real estate values, the market rate housing attract more money, and landlords, seeing an opportunity to cash in on the upscaling of the neighborhood, would harass tenants in a thousand ways, and the result would be community displacement and a net loss of affordable housing, particularly steep if the developers didn't even bother with the inclusionary bonus.

Of course, the affordable housing wasn't for the community in the first place. The housing was delegated by raffle, and the housing wasn't often affordable to the locals anyway. So this model of community stabilization or preservation was what I call the Invasion of the Body Snatchers model of community preservation. The community is replaced with other individuals who purport to be just like them with respect to income. But they are not the community. And since the housing isn't affordable to the prior community, it's not even Body Snatchers, it's just wholesale snatching.

Mandatory IZ doesn't solve this conflict between the creation of affordable housing through development and gentrification/displacement. That's one reason why the community boards haven't cottoned to it. But you'd think that the progressive non profits would still be advocating for it. And here's a big difference in the structure of the mayor's proposal. Instead of rezoning neighborhoods one by one, his proposal changes the zoning law itself, so the city would be upzoned automatically without any further process. Community boards would have little say and the non profits would be left out as well.

Under Bloomberg, it was possible for the communities to ask for additional perks in the form of funding for the non profits -- legal services to help evicted tenants, for example. Under de Blasio's proposal, there's no opportunity for the community to leverage such additional funding.

More important, the de Blasio proposal doesn't kick in until there's an upzoning, so in effect, his proposal is just as voluntary as the Bloomberg model. With a little difference: since developers, prior to any upzoning can develop now without including affordable housing, we should expect them to lose interest in upzonings. It has been well observed that mandatory inclusionary housing has this kind of dampening effect on development. We should expect to see the non profits still advocate for upzonings, and less upzoning advocacy from the developers.

The Bloomberg model placed the developer in the drivers' seat, drawing the non profits onto the developers' bus for the sake of the affordable housing and their legal services funding, while they all throw the community under the very bus they're driving. De Blasio's model takes the developer out of the driver's seat, leaving the non profits on a bus going nowhere.

The irony is even more stark -- we should expect to find that the only people advocating for upzoning, gentrification and displacement would be the progressive non profits under the new model.

Bloomberg smoking gun, media fails to report on it

Remember how we were all told that the Bloomberg sugar "portion cap" exempted the Big Gulp because the Health Department had no jurisdiction over FSE's (gorcieries, bodegas, 7-Elevens, convenience stores)? All lies. 

The Appellate Division's decision against Bloomberg's sugar "portion cap" addresses a complex web of intriguiging policy issues indicative of the Bloomberg administration. If a legilsative body, the City Council in this case, fails in its mandate to write effective laws, can a mayoral administration usurp its function for the welfare of the public? Under what conditions?

It turns out that the cap was much more than an administrative remedy for an ineffective legislature. The big news in the decision -- which has not been adequately reported in the media -- lies in the cap's favoritism. The mayor and the Board of Health claims that they have no jurisdiction over FSE's (groceries, 7-Eleven's, bodegas). But the decision explains that this is simply not true:

With regard to the exemption of certain FSE’s (i.e., grocerymarkets, 7-11s, bodegas, etc.), the DOHMH does not deny that the exemption has no relationship to health-related concerns. Still, the agency argues that it was not based on impermissible reasons, but on the agency’s allegedly reasonable view that such FSEs cannot be regulated by the Agency under the MOU signed with the state’s Department of Agriculture. However, the Board’s claim that the MOU tied its hands is belied by the fact that the agency [the Board of Health] has previously used its regulatory authority to promulgate city-wide health rules that regulate all FSEs (see e.g. 24 RCNY HealthCode 181.07) [city-wide regulation of common eating and drinking utensils]; 24 RCNY Health Code 71.05) [city-wide prohibition on the sale of “any food . . . which is adulterated or misbranded”]). Moreover, the MOU envisions “cooperative efforts between the two agencies [to] assure comprehensive food protection” and to avoid gaps in food surveillance.” Yet, the agency offers no evidence of any prior attempt to coordinate witht he Department of Agriculture on the Portion Cap Rule. The failure to obtain such expansion resulted in a ban that includes exceptions which necessarily favor some businesses and products at the expenses of others. Accordingly, the selective restrictions enacted by the Board of Health reveal that the health of the residents of New YorkCity was not its sole concern. If it were, the “Soda Ban” would apply to all public and private enterprises in New York City. By enacting a compromise measure — one that tempered its strong health concerns with its unstated but real worries about commercial well-being, as well as political considerations — the Board necessarily took into account its own non-health policy considerations. Judged by its deeds rather than by its explanations, the Board of Health's jurisdictional rationale evaporates.

Judge Renwick writing for a unanimous decision of all four Appellate judges, my emphases

What's important here is not just that the mayor could have extended the cap to delis, bodegas, groceries and 7-Elevens. It's that the mayor and the Board of Health lied about it to the public. 

The mayor purposely exempted FSE's exactly at the moment when 7-Eleven began its entry into New York. No wonder he lied.  

There's further evidence of malfeasance. The court found that the Department of Health didn't bother to include research in its cap policy, instead accepting a policy draft from the mayor's office itself without any research background. The research is easily available and pursuasive, but the Board didn't bother with it. The policy was a ukase from on high, handed from one office and accepted by another without demur or even window dressing. It shows excesive administrative control and a lack of agency independence, responsibility and accountability. Agencies are supposed to have and use specific expertise, not just hand over orders from above. Otherwise the agency has no justification for its existence or its expenses. 

Legislative bodies respond to constituencies as well as research, so popularity might be an obstacle to writing sound law. That's a justification for an administration, or certainly for a regulatory agency, to step in, where its expertise is wiser than popular opinion. But to step in without providing the evidence of the greater wisdom is hubris. You'd think Bloomberg would have been more careful. 

The answer to the questions at the top -- when can an administration overreach for the benefit of the public? -- has its answer. Checks and balances of government serve a purpose. Overreaching allows abuse of authority and cronyism. 

The court found that the Health Department overreached as a regulative agency on other grounds as well. One ground seems ambiguous: They found that sugar is not inherently dangerous, but only in large quantities, so regulating it depends on behavior, not flat out substance banning. That seems to argue on both sides: how else can the regulatory agency control the substance without overreaching into behavioral social policies that belong to the legislature? If the legislature is ineffectual, why not overreach? Is the slippery slope there too steep?

This seems to me to trade on a false dichotomy. Behavior is not the only means of controlling sugar. The soft drink industry can be burdened with the regulation, not the consumer. Problem is, the city has no jurisdiction over corn syrup production or use. 

In all organizations ruled by law, there are sectors that are protected from change, others that are easily pushed. By definition, those are the disempowered. Here it is the low-income consumer. Monsanto and Pepsi et al. should be burdened, not the consumer. In our society labor and consumers are mere pawns. Corporations and their products control our politics, our imagery, our information, our visibility. The bigger they are, the more control.

Face the new EV

EV Grieve has been following the piecemeal clearance of all the commerce on 14th Street for some yet unknown development. Locals expect a huge high rise like the ones we saw south of Houston (The Ludlow, Blue, THOR, SVA), so I thought I'd show what is allowed there --

Photo: DCP

except maybe all glass and steel and ground floor storefronts. You can imagine which stores.

The strip from Avenue A to 1st Avenue is zoned for mixed use commercial and residential space with an 80 ft height cap and a maximum floor area ratio of 4, about the size of an Old Law 6-story tenement. It's similar to the EV/LES 2008 rezoning but without any affordable housing provision (beyond the 421a tax incentive which keeps it affordable only for about 25 years).

Will the developer get a variance to build higher? The Board of Standards and Appeals doesn't give out variances like candy -- the developer has to show some rationale. Otherwise the city wouldn't have spent millions on rezoning 120 neighbrohoods under Bloomberg. 

Demand for luxury apartments is higher than ever

Luxury apartments are rising higher now to meet increased demand. But "demand" is a gloss for at least three independent economic functions: 1) the quantity of those seeking an apartment relative to the availability of supply, 2) their willingness to part with their disposable income for living space (the "opportunity cost" of space), 3) the sheer quantity of their disposable income. There's a fourth function: a decline in use value that increases the exchange demand -- the willingness of apartment seekers to double up and share a space. Even if that doesn't directly raise prices of luxury apartments, it raises them indirectly. Raising prices down the ladder raises up top as the options narrow. 

The 19th century argument that the cost of living space would always rise as capital expands was definitively disproved in the 1960's and '70's when large swaths of Manhattan saw rental declines, in some places precipitous declines to zero and even below (landlord abandonment or arson, the city giving properties away to residents). This wasn't a shift of capital as with Detroit -- Detroit's experience gave support for Engels' warning that the immobility and economic inflexibility of home ownership for labor would be a curse as capital shifted locations, although in Engels' case he thought it wasn't so much capital shifting as that labor needed mobility to shift so it could sustain a strike by seeking work elsewhere. 

In New York it was a cultural shift to the suburbs partly encouraged by government both by construction of suburbs and of infrastructure to take residents to and from the suburbs. That's why Robert Moses is so much blamed for the bankrupting of NYC. Capital did not shift to the suburbs, leading urban dwellers out of the city; capital was still in the urban center when Moses allowed the tax base to shift to the suburbs, and capital followed. It can't be blamed on the loss of manufacturing base: New York is growing in population and in wealth and tax base, but not in manufacturing. The move to the suburbs was a government-facilitated cultural shift that eventually spiraled the city downward as the eroded tax base undermined services, and middle class flight undermined public education. Explicit race-based programs like red lining and slum clearance closed the coffin. 

The new demand for upscale housing shows distinct reflexes of its distinct functions. The quantity of apartment seekers will gentrify outer boroughs as long as central upscale development lags demand. The price of space will rise as long as the willingness and wealth is there. The draw in New York seems to be its density, safety and convenience. It's a party for the rich. 

So why do all these rich folks come here and why are they willing to pay ever more? Is it the nightlife here? Or that NYC is the chain store capital of the US? Maybe it's just NYU. 

I'm making a list

of Bloomberg's moves to help developers ignore, violate or avoid the law, starting with
1) the stealth development rule that allows illegal developments (details here),
2) curtailing public review of private developments (more here),
3) planning a charter revision that will allow developers to bypass community boards, eliminate the borough presidents and the public advocate and generally downsize government (article here -- this one he seems to be keeping on the back burner until he gets re-elected),
4) failure to collect fines for Department of Building and Environmental Control Board violations.
Want to add to the list?
Susannah B. Troy and Phil De Paulo both point out that illegal developments have been the cause of several Fire Department fatalities. The city doesn't even review all architectural plans anymore. It's collusion between development and government. And who is government supposed to serve?