Mayor Michael R. Bloomberg’s plan to create or preserve 165,000 units of housing for low- and moderate-income families by 2013 has been pushed back one year because the economic recession has stifled the financing of low-cost housing.
The one-year extension is the first major setback for one of the mayor’s oldest and most ambitious initiatives: his 10-year, $7.5 billion effort to build or preserve housing affordable to 500,000 low- and moderate-income New Yorkers. It officially began in 2003 and had progressed five years later to the point that in September, Mr. Bloomberg and city housing officials celebrated reaching the halfway mark on schedule, with 82,500 units financed.
But Mr. Bloomberg announced the extension in December during a speech and in one of his weekly radio addresses, neither of which received much attention beyond housing advocates.
Seth Donlin, a spokesman for the city’s housing agency, the Department of Housing Preservation and Development, said in a statement last Wednesday that the mayor’s goal of creating or preserving 165,000 units remained unchanged and that “only the timeline is altered.” He said that the delay affected less than 10 percent of the overall plan and that “we continue to close on new developments at a time when many others are having to abandon their plans.”
Advocates and developers of low-income housing described the one-year extension as a reasonable concession in uncertain and difficult economic times, though some believed the plan could stretch not just to 2014 but perhaps 2015.
“It’s not a surprise to me that the mayor’s housing plan has had to adjust to the times,” said Josh Lockwood, executive director of Habitat for Humanity — New York City, a nonprofit developer of low-income housing. “There’s only so much that’s under the mayor’s control.”
Many of the projects in the plan rely not only on government subsidies but also on private financing from lenders, a stream of money that has tightened in recent months. Another factor that has slowed development of so-called affordable housing is the drop in price of low-income housing tax credits. The sale of the federal tax credits to investors helps finance the building of housing for low-income families.
“You’ve got this kind of perfect storm of factors that is making the financing difficult,” said Bernie Carr, executive director of the New York State Association for Affordable Housing, a trade group made up of developers, general contractors, lenders and others. “To extend the plan for a year seems actually very reasonable to me.”
Mr. Carr and other housing advocates said they believed the mayor remains committed to the plan, which they said has now become more than a housing initiative. “It’s not just a matter of needing 165,000 affordable housing units,” said David M. Muchnick, coordinator of Housing First!, a coalition of builders, community groups and others. “It’s very much needing the thousands of jobs that production of those units saves and creates.”
Mr. Bloomberg, during his weekly radio address on Dec. 14, spoke about the challenges facing his housing plan.
“Now, with the economy stalling and even the most qualified developers having a hard time getting credit, we know we can’t keep that pace up,” Mr. Bloomberg said, according to his prepared remarks. “So we’re stretching out our schedule for completing the second half of our housing program to six years instead of the five years we’d planned for at first.”
The mayor’s radio address came the day after President-elect Barack Obama announced that he had selected Shaun Donovan, the city’s housing commissioner, to lead the federal Department of Housing and Urban Development. Mr. Donovan had been the driving force behind the mayor’s plan.
A spokesman for the mayor, Marc LaVorgna, said the extension was tied to the mayor’s announcement in May that he would stretch a four-year construction plan for the city to five years amid signs of a declining economy, delaying a number of projects involving not just housing but also transportation and school construction, to save money.
Mr. Bloomberg first announced the plan in December 2002, 49 weeks after he was sworn into office in January 2002. Known as the New Housing Marketplace Plan, it had a goal of 65,000 units by 2008 and was expanded in 2006 to 165,000 units by 2013.
It was and has been a huge undertaking, the largest housing plan of its kind in the country, with enough units, as the mayor often points out, to house the population of the city of Atlanta. It relies on a number of strategies to reach the 165,000-unit goal, including zoning changes, financing incentives for developers and the identification of land that city and state agencies own but no longer use.
Nearly 57,000 units of the 82,500 financed have been rental housing, and the rest have been homeownership units, including single-family homes and condo units, according to city data as of September.
The plan had until recently been marked by signs of success. One of its key elements, the New York City Acquisition Fund, which helps small developers and nonprofit groups compete for land in the private market, received an award in September from Harvard’s Ash Institute for Democratic Governance and Innovation.
In 2007, the city’s Independent Budget Office released a report that found that the plan was on track toward completion, though it raised questions about the financing. The report noted that most of the units to be preserved could be financed through the capital budget of the city’s housing agency. But the bigger challenge for the plan was in building tens of thousands of new units by 2013, and the report predicted that “a reassessment of its goals and assumptions may be necessary.”