City Councilmembers and the head of the city's Department of Housing Preservation and Development are denouncing Governor Andrew Cuomo's withholding of federal affordable housing funds and plans to micromanage the city's use of that money. Housing Commissioner Vicki Been told the City Council's housing committee on Thursday that the construction of 1,200 below-market-rate apartments have been held up by the governor's withholding of hundreds of millions of dollars in tax-exempt bonds late last year. The governor's plan, announced in January as part of his proposed budget, to require an opaque state authority to approve each use of the bonds in the future, is a "poison pill" that will paralyze the construction of cut-rate housing in the city, she said.
"We could be two years into working through a project, and at the last minute the Public Authorities Control Board, one member, could say, 'I don't approve that project,'" she said. "It introduces enormous uncertainty. Where there's uncertainty there is additional cost."
To recap, the New York Times reported last week that the governor plans to horn in on the as much as $900 million a year the state gives the city in federal bonds for use in his own, not-yet-unveiled housing plan. The move would stifle de Blasio's proposal to build 80,000 new below-market units in the next decade, and has already held up the apartments mentioned, because in November when the city made a by-all-accounts-routine request for $300 million in already-budgeted financing, the state said that only $90 million was available. Yet, as Crain's New York Business reported, the state ended the year with more unused borrowing authority than usual, indicating that the state sat on the money.
Department of Housing Preservation and Development Commissioner Vicki Been with Mayor Bill de Blasio (Mayor's Office/Flickr)
In his latest budget, Cuomo proposes to micromanage the city's use of the bonds by requiring that his appointee at the Empire State Development Corporation sign off on bonds going to the city, and requiring that the aforementioned Public Authorities Control Board, controlled by Cuomo and the Assembly speaker and Senate majority leader, approve every affordable housing development proposed in the city using the bonds.
As Politico New York explains:
For years, New York City has received an automatic allocation from Albany, which is based on a formula set by law. This year's allocation, for instance, came in at $283 million. In the past, the governor has always given the city more funding in two disbursements each year, often after other projects throughout the state fall through.
The housing bonds, known in the industry as "bond cap" or "volume cap," are responsible for a significant chunk of the affordable housing built in New York City — 17,000 of the roughly 40,000 units the city has created over the past two years. De Blasio received $594 million in 2015, and had another $100 million carried over from the previous year.
Brooklyn Councilman Brad Lander called the proposed rules an "assault" on city affordable housing, and said, "It would be catastrophic for our ability to produce and preserve affordable housing if those state poison pills go through."
A spokeswoman for the Governor's Office said the proposals are still up for debate.
"Talks with the Legislature regarding this proposal are ongoing," Dani Lever said. "Everything is still on the table and the state is discussing several options, including certain exceptions or thresholds for size of projects, issuing agencies or specific regions."
Previously, she was unapologetic about the move, telling Politico in January, "Accountability is paramount when we are talking about the distribution of hundreds of millions of taxpayer dollars."
Another way to read the scheme is the latest in a long series of maneuvers designed by Cuomo to undercut Mayor Bill de Blasio for having the gall to complain about the governor's petty vindictiveness.
