Adam Tanaka
May 11, 2017 · 25 min read
An excerpt from the forthcoming documentary “City in a City.” The film looks at the past, present and future of Co-op City, America’s largest affordable housing complex, through the eyes of five of its fifty-five thousand residents. Directed by Adam Tanaka; Produced by Marybeth Allan and Scott Wagner; Written by Adam Tanaka, Marybeth Allan and Scott Wagner.

The Other Public Housing

Ask a typical New Yorker what they think of large-scale affordable housing and chances are they will picture “the projects.” Architecturally, they will think of austere, red brick towers in various states of disrepair. Socially, they will cite negative tropes of crime, drug use, and concentrated poverty. And while these stereotypes are misleading — as suggested by recent scholarship on “public housing that worked” — there is little doubt that most people see high-rise public housing as a botched experiment in social engineering.

What few New Yorkers realize is that there is another system of large-scale affordable housing hiding in plain sight. Scattered across the city, from the northern Bronx to central Staten Island, are hundreds of large-scale rental and cooperative developments built for the middle class, often — but not always — with government aid. These projects typically served families who earned too much to qualify for public housing but too little to rent or purchase on the private market, a group that in today’s policy parlance would have earned between 80% and 120% of area median income (or $70,000 to $110,000 for a family of four in 2016). In the early days, these projects mostly catered to white families. Today, developments like Co-op City and Rochdale Village rank among the largest middle-class communities of color in the nation. Although many projects are no longer governed by affordability restrictions, for decades they provided indispensable housing to the “missing middle” of New York City.

This article builds on my ongoing doctoral research to offer thoughts on how large-scale, middle-income housing may offer a partial solution to the pressing needs of New York and other high-cost cities. My own work is primarily historical in nature, but here I swap my historian’s mortarboard for a planner’s hardhat to consider how the policies of the past might inform those of the future. Clearly, past practices cannot simply be transplanted onto present-day conditions. But a deeper understanding of the city’s housing legacy can help us to think more creatively about its future. Indeed, in the face of looming budget cuts from the Trump administration, it may be worth reminding the president that his family fortune came not from luxury high-rises, but from subsidized blue-collar apartments built by his father in the outer boroughs.

Mayor Bill de Blasio cites Stuyvesant Town and Co-op City as models for the future of affordable housing (starting 52:30). Source: NYC Mayor’s Office.

I’m not the only one looking to the past to think about the future. In his 2015 State of the City speech, Mayor Bill de Blasio cited middle-income projects like Co-op City and Stuyvesant Town as models for his own housing agenda, praising them for their scale, their sense of community, and even, obliquely, their urban design. But the reference seemed largely rhetorical. By and large, de Blasio’s housing plans have prioritized small-scale, incremental approaches, with programs like inclusionary zoning dominating the news even though, by themselves, they offer little hope of solving the city’s needs. The administration’s boldest proposal, for a vast mixed-use project spanning the Sunnyside Rail Yards in western Queens, remains years, if not decades, from reality.

Multi-building, multi-block housing developments may seem like relics of the sixties, but given the severity of the city’s housing needs, they have much to teach us. In the pages that follow, I focus in turn on four aspects that I believe are particularly relevant to the contemporary housing challenge: subsidy, structure of ownership, sponsorship, and scale.

Workforce jobs in New York City, 2016. Source: Glassdoor.com

Subsidy

Mayor de Blasio’s Housing New York plan, launched in May 2015, places a heavy emphasis on financing units for low-income households. Of the 200,000 units of new and preserved housing proposed in the plan, 156,000 are reserved for households earning less than 80% of area median income ($72,500 for a family of four in 2016). This should come as no surprise. Most federal housing subsidies are geared towards lower income households, so it costs the city less to finance those units. Poor families also experience more severe rent burdens than their moderate- and middle-income counterparts.

Nevertheless, rent burdens for workers further up the income spectrum — including nurses, teachers, policemen, small business owners, and the lower-paid rungs of the so-called “creative class” — are increasing. According to a 2015 policy brief by the Citizens Budget Committee, over 150,000 non-poor households pay more than a third of their income towards rent. These households are generally considered to be “middle-income,” though that may not be a particularly useful definition, freighted as it is with the cultural baggage of one of the 21st century’s most ambiguous and overused expressions: the middle class.

Indeed, “middle-income” is something of a Tower of Babel when it comes to housing policy. Even amongst high-cost cities, there is intense disagreement. The City of Boston defines middle-income families as earning between 70% and 120% of AMI. The City of New York, meanwhile, defines this group as earning between 120% and 165% of AMI, presumably to account for higher costs of living. Some have even argued that the city’s supposedly low-income programs actually serve middle-income families, due to the inflationary effects of federal formulae which factor in affluent suburban counties when calculating eligibility.

For the purposes of this article, “middle-income housing” refers to housing affordable to families earning between 80% and 120% of area median income (or $70,000 to $110,000 for a family of four in 2016). These households occupy what postwar policymakers dubbed the “no man’s land of housing”: ineligible for most subsidy programs, they are also increasingly constrained in the private market. Today, this in-between market is often referred to as “workforce housing,” an equally vague and controversial term that implies that residents of low-income housing do not work.

Developing a definition of “middle-income” to satisfy all parties is probably impossible, although developing a more operationally useful category — or categories — is essential. What is clear, however, is that the city’s income distribution is growing increasingly polarized, a dynamic that economist Richard Florida has called “the new urban crisis.” As of 2006, New York ranked 99th out of 100 metropolitan areas in its share of middle-income neighborhoods, and last in terms of its share of middle-income families. That same year, a report found that high housing costs were the biggest factor in motivating people to leave the city.

The erosion of the city’s middle class poses serious problems for economic competitiveness, let alone social mobility. As urban planner Karina Milchman has noted, “not only do members of this group tend to hold steady, tax-generating jobs, they also provide the customer base for a wide mix of businesses… Employers [also] fear that the city’s high cost of housing threatens their competitiveness because they require higher incomes.”

Recent research suggests that rising housing costs in productive cities like New York and San Francisco have implications not only for the competitiveness of individual cities, but for the nation as a whole, by decreasing labor mobility and reducing rates of skill acquisition. Economists Chang-Tai Hsieh and Enrico Moretti recently estimated that soaring housing costs in “superstar cities” cost the national economy approximately $1.6 trillion a year, as an increasing share of wages are funneled into rent and mortgage payments. Addressing the workforce housing crunch in high-cost cities, then, should arguably be on the agenda of the federal government as well as states and localities.

Middle-income housing programs active in postwar New York City, listed in order of enactment. Sources: Mitchell-Lama data drawn from NYU Furman Center for Real Estate and Urban Policy, CoreDataNYC; FHA 608 and 207 data drawn from Alan S. Oser, “The Vanishing Supply of Rentals,” New York Times, December 28, 1986; No-Cash Subsidy Public Housing data drawn from Bloom and Lasner, eds., Affordable Housing in New York, 116; FHA Section 213 data drawn from Alan S. Oser, “A Word to the Wise for Co-op Owners: Participate!” New York Times, April 16, 1995; Savings Bank/Life Insurance Housing and Redevelopment Companies data drawn from Citizens’ Housing and Planning Council, Directory of Large-Scale Rental and Cooperative Housing (New York, NY: Citizens’ Housing and Planning Council, 1957); Title I data drawn from Joel Schwartz, The New York Approach: Robert Moses, Urban Liberals, and the Redevelopment of the Inner City (Columbus, OH: Ohio State University Press, 1993), 175; Limited Dividend and Mitchell-Lama data drawn from New York City Comptroller, Affordable No More: New York City’s Looming Crisis in Mitchell-Lama and Limited-Divided Housing, February 18, 2004.

In the postwar years, the city, state, and federal governments played a major role in stimulating the construction of middle-income housing in New York City. Much of this development was intended to offset the decentralizing pressures of suburbanization and anchor the tax and consumer base within city limits. A housing shortage for returning veterans and an incipient baby boom also contributed to a sense of urgency. New York was not alone in pursuing a middle-income housing strategy, but its dense settlement patterns, liberal politics, and long tradition of intervention in the housing market meant that it did so far more aggressively than anywhere else in the country.[20] State and local programs like Mitchell-Lama, whose low-cost loans financed over 140,000 below-market apartments in the city between 1955 and 1978, were sui generis on the national stage.

Ultimately, the fiscal gamble to subsidize middle-income families in central city housing was undermined by deeper social and economic forces. Over the course of the 1960s and 1970s, the erosion of the city’s manufacturing base, intensifying “white flight,” and an influx of poor, often low-skill minority families thinned the ranks of the city’s middle class. At the same time, rising inflation eroded project finances. By the mid-1970s, New York was on the verge of bankruptcy, having lost hundreds of thousands of tax-paying jobs and residents to the suburbs and beyond. Some blamed middle-income projects for accelerating these changes by sucking middle-class residents out of formerly integrated inner city neighborhoods.

In the aftermath of the 1975 fiscal crisis, New York’s housing strategy changed dramatically. As the federal government cut back on its commitments to low-income housing, state and local authorities were forced to pick up the slack. In a city increasingly flush from finance and real estate, middle-income housing became harder to justify on fiscal grounds. Programs like Mitchell-Lama, hampered by high interest rates and a vanishing market, were suspended indefinitely. In their place came infill and rehab programs like the New York City Housing Partnership, which did much to stabilize inner city neighborhoods but, with their emphasis on conventional homeownership, did little to ensure longer-term affordability.

Today, in the context of surging population growth and skyrocketing home prices, the need for middle-income housing is once again acute. But in a city that is growing rather than shrinking, the challenge of how and where to build new housing is far greater. The allocation of scarce public resources to middle rather than low-income households is also a tough proposition, morally and politically, no matter how critical the retention of middle-class families to the city’s longer-term growth.

Funds for middle-income housing are scarce. Since the 1980s, federal regulations have largely restricted the use of tax-exempt bonds to low-income housing, leaving middle-income units dependent on city capital funds, zoning bonuses, tax exemptions, land write-downs, and other comparatively incremental tools. Recent proposals for a federal Middle Income Housing Tax Credit (MIHTC) have floundered because critics have asserted that a shortfall of market-rate, middle-income housing is only a problem for pricey coastal cities. They are right. But while the problem may seem local, the loss of middle-class families from America’s most productive cities has broader repercussions for the country’s economic health.

One possible source of funds would be to tap into the vast hidden subsidy of the mortgage interest tax deduction, a legacy of Gilded Era tax reform that mostly benefits middle- and upper-middle-class suburban homeowners. In New York City’s renter-dominated market, these ownership subsidies are of little use. Another option might be to expand existing tools like tax-exempt bonds, housing trust funds, and Community Reinvestment Act (CRA) credits to encompass a broader range of incomes.

Any reforms would have to balance funding for middle-income with lower-income households. But given the lower per-unit costs of subsidizing workforce units, expanded support for middle-income households need not imply a one-for-one tradeoff. More middle-income housing would also relieve pressure on the existing rental stock, increasing options for lower-income households. Perhaps most importantly, reframing the affordability crisis as a middle-class problem would dramatically expand the political constituency for housing assistance. As Brookings analyst Robert Lang has noted, “the reality is that affordable housing becomes a major political concern only when it affects the middle class or, more specifically, when it is perceived as a problem by the middle class.”

With 15,372 apartments spread across 300 acres, Co-op City is the largest housing cooperative in the world. Families earning between $50,000 and $150,000, depending on family size, can purchase two bedroom units with balconies for $22,500. Photo by the author.

Structure of Ownership

Today, affordable housing policy debates are often characterized by clashes between those who call for increased access to homeownership and those who call for more rental apartments. But there is a third approach to housing those with fewer means that many policymakers seem to have forgotten: the limited-equity cooperative. Often described as a “halfway house” between renting and owning, limited-equity co-ops offer residents the low monthly costs and limited hassles of rental housing with the stability, security, and tax advantages of homeownership.

The basic concept is straightforward. Income-qualified residents purchase shares in a cooperative corporation. They are then granted use-rights to a particular unit. Monthly payments cover the cost of utilities, debt service, and real estate taxes (although in New York City, the latter are typically reduced). Upon moving out, residents must sell their shares back to the corporation. Although by-laws vary from one co-op to the next, outgoing residents typically make no profit from sale, getting their original down-payment back and their accumulated amortization payments on the project’s underlying mortgage loan. While residents do not benefit from any upswing in the property’s market value, they do gain from the forced savings accrued from any difference between their monthly co-op payment and what their payment would have been on the private market. Just as importantly, the housing unit remains affordable to the next buyer.

In the 1930s and 1940s, real estate and banking interests repeatedly blocked attempts by housing reformers to establish a federal agency to finance limited-equity cooperatives. Instead, the single-family home, owned outright, became the dominant middle-class housing typology. Source: Bell Park News, 1950, Series 13, Box 134, Robert Moses Papers.

In the 1950s and 1960s, there was a building boom of limited-equity co-ops in New York. Labor unions were particularly keen advocates. City, state, and even, briefly, the federal governments, extended their support to resale-restricted housing as a strategy for stabilizing middle-income families in central city areas. To this day, limited equity co-ops represent over 20% of owner-occupied units in the Bronx and 6% citywide.

Unfortunately, 1970s inflation wrought havoc on co-op finances, as interest rates and fuel costs skyrocketed out of sync with resident incomes. A controversial “rent strike” at Co-op City in the mid-1970s pitted cost-burdened residents against New York State, which held the project’s mortgage. In the aftermath of the rent strike, politicians and policymakers soured on the co-op model. Save for a spate of low-income co-op conversions in the 1980s and 1990s, the approach was increasingly relegated to the sidelines. But today, in the context of relatively stable interest rates and operating costs, the model merits revisiting.

Recent studies have demonstrated the continued efficacy of the co-op approach. Co-ops have higher social capital and lower crime rates than rental buildings with similar demographics. Co-ops have lower monthly housing costs than affordable rental housing managed by the same companies. Co-ops are a lower risk to lenders, even though they often pay higher rates, and have been more resilient in the face of the foreclosure crisis than private homes. Finally, co-ops opt out of affordability restrictions less frequently than investor-owned rentals, even when located in high-value areas.

The city already has several well-established programs to support the preservation of existing cooperatives, including the Affordable Neighborhood Cooperative Program and the Mitchell-Lama Preservation Program. But on the new construction side, much more could be done to shift the needle in favor of shared equity ownership. The many tools at the disposal of private rental developers — bond-financing, tax credits, and so forth — could also be made available to nonprofit cooperatives, along with appropriate supports for long-term affordability. In much of central and northern Europe, resale-restricted housing remains a key component of the urban middle-class market. We have much to learn from our peers across the Atlantic.

The United Housing Foundation (UHF), a nonprofit developer affiliated with New York City’s largest labor unions, built over 30,000 units of middle-income cooperative housing between the 1950s and 1970s. Source: Kheel Center on Flickr.

Sponsorship

Today, most affordable housing is built, owned, and operated by one of three entities: for-profit developers, neighborhood-based non-profits, or larger non-profits operating on a citywide or regional scale. There are important differences between these organizations in terms of constituency, mission, and access to capital, but by and large they are small-scale outfits piecing together a dizzying array of public, private, and philanthropic funds to make projects pencil out financially. Whether non-profit or for-profit, developer equity typically represents only a fraction of total development cost.

Postwar projects, by contrast, were often developed by what urban planner Ed Logue called a “one-stop service”: large institutions that single-handedly undertook conception, land acquisition, financing, construction, and management. Many of the city’s earliest middle-income projects were built by life insurance companies. Frustrated with low returns on mortgage loans and government bonds, insurers decided to branch out into large-scale rental housing and assembled an in-house staff of architects, planners, and real estate experts to implement their vision. These projects served multiple purposes for their corporate sponsors: delivering a steady financial return, improving the public image of the industry, and helping to house a growing fiduciary workforce. Unlike speculative real estate developers, insurers sought steady, long-term yields rather than short-term profits. At Parkchester, a 12,272-unit, market-rate project in the central Bronx, MetLife achieved rents that fell halfway between federally funded public housing and conventionally financed private housing.

An organizational chart of the United Housing Foundation (UHF), the city’s most prolific developer of middle-income housing. The nonprofit developer was comprised of two separate entities: the UHF, which focused on legislative and educational initiatives; and Community Services, Inc. (CSI) the UHF’s development arm. Each development sponsored by the UHF was a separate corporation managed by a board of resident-shareholders. Source: “Cooperative Housing by Experts,” CHPC Housing News, 10:1 (October, 1951), 3, Series 7.1, Box 157, Folder 3, Citizens Housing and Planning Council Archives.

Organized labor also played a key role in the city’s postwar housing market. Unions stood to benefit from moderate cost housing as builder, lender, and occupant. Some unions, such as Local 3 of the International Brotherhood of Electrical Workers, sponsored projects directly. Others operated through the United Housing Foundation (UHF), a nonprofit development company that built over 30,000 units of cooperative housing between the 1950s and 1970s. Many early UHF projects were financed by below-market interest rate loans from union pension funds which lowered monthly costs for residents. The UHF also served as general contractor and property manager, charging low fees and leveraging economies of scale across tens of thousands of apartments citywide. In an era of mass suburbanization, labor-sponsored co-ops enabled workers to live close to union halls and shop floors.

The Urban Development Corporation (UDC), a quasi-public agency chartered by governor Nelson Rockefeller in 1968, was perhaps the best-known model of the “one-stop shop.” Conceived in response to the escalating urban crisis of the 1960s, the UDC was granted extraordinary powers by the state legislature: the ability to issue tax-exempt bonds, condemn property, and override local building and zoning codes. These factors eventually contributed to the UDC’s financial collapse, as the organization engaged in increasingly risky ventures whose costs outweighed revenues. But in the intervening period the organization was exceptionally productive, building over 15,000 low-, moderate- and middle-income units across the city and raising the standard of design in below-market housing.

Neither insurers, unions nor public agencies are in the development game any longer. Life insurers and union pension funds shifted most of their assets out of middle-income housing long ago in search of higher returns, and rarely evince the same place-based civic duty that they did in mid-century. Unions, meanwhile, have hemorrhaged membership and political clout, and are now mostly seen as high-wage adversaries of affordable housing. In the 1980s, the UDC was reinvented as the Empire State Development Corporation and has since focused on commercial and industrial projects. In an era of community-driven planning, the idea of granting a public authority the ability to override zoning is more pie-in-the-sky than ever.

Who might today’s “one-stop shop” be? Which institutions still have a big enough stake in the city to advocate for large-scale development? Municipal government, the city’s biggest employer, is one obvious option, and indeed city-financed projects already stipulate 5% set-asides for income-eligible municipal employees. Universities and medical institutions — the so-called “eds and meds” — might also lend a hand. Healthcare is the fastest growing sector in the city: in 2013, hospitals employed over 200,000 workers, while home care, ambulatory care, and nursing home workers accounted for another 250,000. Some hospitals, including NewYork-Presbyterian, already participate in housing schemes. But given the projected growth in healthcare needs in coming years, stronger partnerships are needed. Even Wall Street might be compelled to offset its inflationary impacts on the city’s housing market. Last year Google pledged to build 1,500 apartments near its headquarters in Menlo Park, California — not for its own employees, but for the general public, including a share of below-market units. REITs, private equity firms, and other financial institutions have also evinced growing interest in the steady returns of middle-income rental housing in high-cost markets.

Built by MetLife Insurance Company in the late 1940s, Stuyvesant Town is the largest housing development in Manhattan. In recent decades, changes in rent stabilization laws led to the conversion of several thousand units to market-rate rents. Last year, however, a deal between the city and new owner Blackstone led to the twenty year preservation of 5,000 units at middle-income prices. Source: Wikimedia

Scale

Perhaps the most obvious change in the city’s development patterns since the 1950s and 1960s is in the scale of new housing projects. In the postwar years, planners, designers and developers pursued vast projects that overrode the city’s street grid with campus-like superblocks. Projects regularly exceeded 1,000 units, and some, like Co-op City and Parkchester, were virtual “new-towns-in-town” with more than 10,000 families apiece.

Bigger didn’t always mean better, but there was a sense that larger projects had particular advantages. For example, larger projects could achieve substantial economies of scale in infrastructure layout, design standardization, and property management. Bigger projects also enabled investments in supporting uses such as playgrounds, shops, and community facilities. These sorts of strategies were precisely what enabled builders like the UHF and MetLife to pump out so many units in such little time. In the late 1960s, state housing commissioner Charles Urstadt stated, quite simply, that “it takes as much work by planners to clear the way for 100 units as for 1,000, and what New York needs is a large quantity of housing in a hurry.”

Today, largely in reaction to the perceived failures of urban renewal and public housing, planners emphasize small-scale, infill projects that blend discreetly into surrounding neighborhoods. As urban planner Marc Norman has pointed out in a previous issue of the Real Estate Review, today’s most heralded affordable housing developments, like Via Verde in the south Bronx, tend to be “highly complex deals with complicated site conditions.” These projects may be less offensive to contemporary urbanist sensibilities and less susceptible to neighborhood backlash, but they are also less effective at achieving scale, speed, and replicability.

Parkchester, A Great Way to Live.” Video by Parkchester Preservation Management.

Indeed, we may have underestimated the desirability of project living. Now that the park has bloomed, the towers no longer look so grim. In a strange turn of events, monolithic mid-century projects like Parkchester are now marketed nostalgically as “a village in the midst of the city,” where “life slows down” and “people know their neighbors.” Large-scale developments are also better equipped to house an aging city. Many offer on-site access to retail, medical care, and social activities. Single-floor apartments accessible by elevator are a panacea to mobility-constrained seniors. It is little surprise that Co-op City is now the country’s largest naturally occurring retirement community (NORC).

Contemporary large-scale developments need not mimic the sterile slabs of the sixties. Low- or mid-rise buildings may be more appropriate, depending on location. But some degree of standardization would be crucial for lowering costs and speeding development schedules. As UHF president Abraham Kazan once noted drily, “buildings are made to live in, not look at.” As the city’s most prolific developer of middle-income housing — much of it spacious and still highly desirable — he might be worth listening to.

Clearly, building large-scale projects today is easier said than done. The outer boroughs are no longer dotted with farms, golf courses, country clubs, and other large, vacant parcels the way they were in the 1950s. Bulldozer renewal is also out of the question — politically and ethically — even though several of the city’s most celebrated housing projects were a product of so-called “slum clearance.” The few large-scale sites still in play tend to be air rights projects suspended over active rail yards that necessitate enormous upfront capital costs.

Existing and potential large-scale development sites in New York City.

One cheaper alternative that may warrant revisiting is land reclamation. Co-op City, Starrett City and, most famously, Battery Park City, were all the product of landfilling that created whole new neighborhoods without displacing a single site tenant. While the creation of new land on the Hudson or in the harbor may have environmental impacts, so does sprawl on the city’s edges. New landfill sites might also be equipped with flood-proofing technologies to better protect against sea-level rise. Although land reclamation may seem like a thing of the past in the United States, it is still standard practice in land-strapped East Asian cities like Tokyo and Singapore. Federal policies such as the short-lived New-Town-In-Town program of the early 1970s might be reinvented for today’s needs under the bipartisan banner of infrastructure investment.

Another possibility involves the infilling of existing middle-income projects, many of which have large amounts of underutilized land. Similar initiatives are now being pursued at various public housing developments throughout the city. While sure to draw resident ire, infill represents a rare opportunity to raise new funds for capital improvements while also expanding the city’s stock of middle-income housing. Plentiful opportunities also lie in parking lots, racetracks, and other underutilized parcels just beyond city limits, though to date regional politics have largely stymied efforts to increase the housing supply.

Hunters Point South, currently under construction in western Queens, is the largest affordable housing development built in New York City since the 1970s. Source: Crain’s New York

Conclusion

Hunters Point South, a 5,000-unit middle-income development on the Queens waterfront opposite Midtown Manhattan, gives some idea of what the future could look like. The project, currently under construction, consists of an entirely new neighborhood, with shops, parks, and schools. At its 2011 groundbreaking, then-Mayor Michael Bloomberg described Hunters Point South as “the largest new affordable housing complex in more than three decades.”

Large, it certainly is: New York has not seen below-market development on this scale since Starrett City opened in 1974. But the project’s definition of “affordable” stretches the concept to breaking point, with so-called “middle-income” families defined as earning up to 230% of AMI ($220,000 for a family of four in 2016) and moderate-income families as up to 165% of AMI ($157,000 for a family of four in 2016). This is a far cry from the workforce agenda advocated for in this article. Indeed, this is housing for people with options — and as long as the city continues to refer to this kind of pseudo-luxury development as “middle-income,” broad-based political support for workforce housing will remain elusive.

Large-scale, middle-income housing will not solve all the city’s problems. Low-income families still need support, of course, and portions of middle-income projects could be set aside for both lower-income and market-rate residents. There is also the bigger labor market question of middle-income jobs, which have been in steady decline since the 1970s. It seems foolish to subsidize large housing projects without tackling the other piece of the equation: stagnant wages. That’s why new housing projects like Willets Point in Queens, sited in an area better suited for manufacturing, are wrongheaded.

Noted urbanist Jane Jacobs derided middle-income housing projects as “marvels of dullness and regimentation.” The UHF — the developer of the Penn South cooperative, above — shot back that “if people live out on Jane Jacobs’ streets, it is because the insides of their buildings are so unpleasant.” Today, Penn South remains below-market affordable, while Jacobs’ beloved Greenwich Village is one of the city’s most expensive neighborhoods. Source: Becoming Jane Jacobs.

Smaller scale tools are also crucial for maintaining income mix at the neighborhood scale. Reforms targeting the existing housing stock, like the legalization of accessory dwelling units and basement apartments, should be pursued. Inclusionary housing is also a solid program. Indeed, existing neighborhoods have much to offer. As Jane Jacobs so powerfully argued in The Death and Life of Great American Cities, one of the fallacies of modernist planning was its disregard for the social and economic value of the “organic,” incrementally developed city. But large-scale increases in housing supply of the sort proposed in this article would actually help existing neighborhoods, slowing price increases, relieving development pressures, and maintaining diversity. Ultimately, cities need more kinds of neighborhoods for more kinds of people, if they want to remain diverse, dynamic, and desirable. The best way to get there is not just to tinker with existing neighborhoods. We must also build entirely new ones.

Acknowledgements: Many thanks to Carl Weisbrod for his feedback and to Jerold Kayden, Alexander Garvin, Carolyn Grossman, Thomas Hill, Yonah Freemark and John Mangin for their assistance in developing and refining this article. Thanks also to the Harvard Radcliffe Institute for Advanced Study, the Harvard Joint Center for Housing Studies, the NYU Furman Center for Real Estate and Urban Policy, the New York City Housing Development Corporation, and the New York City Department of City Planning for providing financial support, intellectual community and/or office space. Finally, thanks to numerous residents and management at Co-op City, Parkchester and Stuyvesant Town for opening my eyes to the possibilities of large-scale living.


Commentary by Carl Weisbrod

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Carl Weisbrod is a national authority on city planning, affordable housing policy, urban development, and public-private real estate development. In his four decades of experience, Carl has brokered and led complex public-private partnerships, from both the public and private side, and has created innovative strategies to spur economic development. His record of visionary, creative, and successful urban development initiatives has made him an internationally sought after advisor.

Carl has served the City of New York as Chairman of the New York City Planning Commission and Director of the New York City Department of City Planning, where he was a key architect of New York City’s ambitious, pioneering affordable housing program. He was also the founding President of the New York City Economic Development Corporation. Throughout his career, he has guided transformative urban initiatives.

Two-thirds of all New York City households live in rental housing; a majority of these renters are “rent-burdened,” which means they are spending more than one-third of their gross income just to keep a roof over their heads. More than 60,000 individuals (25,000 of them children) are homeless and reside in shelters, hotels, or “transitional” cluster housing. And, tens of thousands of families are estimated to be doubled up in overcrowded apartments where they are in precarious circumstances, including the risk of being dispossessed.

Almost all New Yorkers, save those who are very well off financially, home owners, or those fortunate enough to live in some form of rent regulated housing, are suffering under the pressures of an overheated real estate market where the overall supply of housing is insufficient to meet the demand created by a city population now at its all-time high of 8.55 million.

Not surprisingly, however, the burdens of the housing crisis fall most heavily on the poor: almost 1.0 million city households in 2014 had incomes under $42,000 (for a family of four), but fewer than 425,000 apartments were affordable for them, leaving a shortfall of more than half a million units for extremely low and very low income households.

Mayor Bill de Blasio’s comprehensive Housing New York plan, launched in May 2014, has a ten-year goal of developing 80,000 units of new affordable housing and preserving 120,000 existing affordable units. Almost 80% of this housing is targeted toward low-income households. The de Blasio administration quadrupled (from 2% to 8%) the percentage of new and preserved affordable housing targeted toward extremely low income households earning less than $25,100 for a four person family compared to the previous city administration, and since the program started has actually financed almost twice as much (to 14%) going to this population. Nevertheless, one of the main criticisms from housing advocates is that the city’s program is not doing enough for the very poor.

Adam Tanaka takes a different approach, asserting that the city should take a page from the post-World War II era and focus on building large moderate-income projects, emphasizing home ownership, for households earning between $70,000 and $100,000. He argues that New York ranked next to last among the largest 100 metro areas in its share of middle-income neighborhoods and that the loss of middle-income housing threatens the city’s economic competitiveness.

The Housing New York Plan currently targets 11% of new/preserved affordable housing to middle-income families earning between $100,000 and $140,000 and an additional 11% toward moderate-income families earning between $70,000 and $100,000. Indeed, to date, almost 25% of the affordable housing produced by the plan is for moderate- or middle-income families.

As someone who was born and raised in two middle-class developments (Parkchester and Fresh Meadows), I am acutely familiar with their benefits. The resource they provided to postwar families, enabling them to remain in the city and raise their children here was profound. These developments, and others like them like Rochdale Village, Stuyvesant Town and Co-op City, are still important bastions of middle-class housing.

Mr. Tanaka suggests there are three compelling policy reasons to prioritize middle-income housing on scale: 1) the cost of subsidizing middle-income housing is less per unit than the cost of subsidizing low-income housing, thus enabling the city, for the same dollars, to generate more desperately need housing; 2) unless the city helps anchor the middle class, it may become principally one for the very rich and very poor (the “dumbbell effect”); and 3) the availability of housing is essential to attract and retain the human talent that drives the city’s economy.

These arguments do have merit, although with regard to Mr. Tanaka’s first point, because federal tax credits currently only finance housing for those at 50–60% of AMI and does not offer such credits for middle-class housing, the up-front city subsidy required for middle-income housing is greater than for poorer households, albeit this differential lessens over time. Should the value of tax credits be reduced or eliminated, Mr. Tanaka’s point would become more compelling.

However, the lack of large tracts of land to build housing on scale makes a replay of the big housing projects of the post-war years almost impossible. Farms and private golf courses are no longer available (public golf courses are mapped parkland and can’t be alienated without the approval of the state legislature — a daunting endeavor). Landfill, which enabled the development of Battery Park City, is no longer environmentally acceptable. Even if federal environmental policy changes under the Trump administration, it is hard to envision New York State or city policy reverting back to the landfill era. Urban renewal through eminent domain, that in the past resulted in the displacement of thousands of poor people to make way for middle-income residents (e.g. Lincoln Center area) flies in the face of social equity. Decking over railyards or other non-housing complexes is expensive, and would require a cross subsidy from high end market rate housing or unsubsidized commercial uses.

Even if the practical obstacles to create new middle-income redoubts could be overcome, would the social policy be appropriate? The de Blasio administration is committed to creating neighborhoods with a diverse mix of incomes, not separate neighborhoods for the rich, middle-class and poor. There is compelling social evidence that poor children who grow up in economically diverse neighborhoods do better than those who grow up in neighborhoods with concentrated poverty. This is the policy underlying New York City’s ambitious Mandatory Inclusionary Housing zoning program. And, while my middle-class neighborhoods provided many advantages, they also imposed a stultifying conformity on those living there which prevented us from experiencing the rich cultural, ethnic, economic, and racial diversity of urban life.

Mr. Tanaka does make an important point regarding the availability of housing sites that lie just tantalizingly outside the city limits. Almost one-third of the city’s workforce consists of commuters from the region and the expansion of middle-income housing opportunities in New York’s suburbs would benefit both the city and the region as a whole.

Providing housing for the middle class is important for the reasons Mr. Tanaka notes — and New York City does steer more than 20% of its affordable housing program to moderate and middle income families — but practical, equitable, and social considerations suggest that this is best done in the context of economically diverse neighborhoods and economically diverse developments, while encouraging the surrounding region to focus more on the middle class.

Harvard Real Estate Review

A student-run publication investigating the intersection of real estate, technology, and design. We foster collaborative conversations between students and industry professionals to explore solutions to contemporary urban issues.

Adam Tanaka

Written by

Harvard Real Estate Review

A student-run publication investigating the intersection of real estate, technology, and design. We foster collaborative conversations between students and industry professionals to explore solutions to contemporary urban issues.

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