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Opinion

Federal Tax Reform Could Turn City’s Housing Crisis into a Humanitarian Disaster


picture the homeless vacant lots

protesting unused vacant property (via @pthny)


In New York City, the demand for affordable housing far exceeds supply. Seventy percent of the city’s homeless shelter residents are families. Families who should be in homes.

Now, as the United States House of Representatives and Senate look to the conference committee to reconcile their respective tax reform bills, the housing crisis that began in the 1980s will become a catastrophe unless we, the people, intervene.

On paper, both the House and Senate plans retain the Low Income Housing Tax Credit (LIHTC) — which funds 90 percent of the nation’s affordable housing developments. However, the House tax bill eliminates tax-exempt private activity bonds (PABs) that fund half of all LIHTC projects.

Although the Senate bill retains PABs, both bills cut the corporate tax rate from 35 percent to 20 percent, dramatically reducing the value of tax credits that fund the remainder of LIHTC projects.

Also included in the Senate bill is an amendment that imposes what amounts to an international alternative minimum tax on any corporation with significant foreign operations. As a result, some large corporate investors might be deterred from claiming the LIHTC.

No matter how the reconciliation pans out, it is clear that, if passed, federal tax reform will devastate more than a million low-income New Yorkers searching for homes. And this isn’t the first federal policy to squeeze out affordable housing.

Under President Reagan, government spending on subsidized housing was slashed from $26 billion to $8 billion, contributing to a dramatic spike in homelessness. As a private sector solution, Reagan signed the LIHTC into law in 1986 to counterbalance the cuts to direct federal spending.

LIHTC’s market-based answer to affordable housing was successful enough that subsequent administrations maintained the program while continuing to whittle away at Housing and Urban Development (HUD) funds. LIHTC became the best — or rather, only — hope for Americans in need. But in cities like New York, LIHTC wasn’t enough to mitigate the surge and suffering of homelessness.

Although LIHTC helped develop or preserve approximately 122,000 affordable properties in New York City from 1994 to 2014, the city still endured a net loss of 150,000 rent stabilized apartments, leaving tens of thousands of New Yorkers with nowhere to go but the street or a shelter.  

Mayor Bill de Blasio responded to this crisis with a pledge to add 100,000 affordable units by 2020. But experts at Novogradac & Company estimate that, if the House tax bill passes, that number could fall by two thirds.

Even if PABs are retained in the reconciled bill, the corporate tax rate reduction alone will result in the loss of around 300,000 affordable units nationally.

By squeezing the funding pipeline for affordable housing tighter than ever before, both bills crush the supply of affordable housing and the low-income families that rely on it.

This cannot happen — not on our watch, not in our city, and not in our country. This isn’t a partisan issue, it’s a moral one. We have a duty, to our city and our neighbors, to speak out against any provision that would threaten the supply of affordable housing at this most critical time in our country’s history.

Although the House and Senate have approved their respective bills, the final version has yet to be agreed upon. Now is the time to urge our representatives to reject any final bill that removes the tax-exempt status of PABs and cuts the corporate tax rate.

***
George McDonald is founder and president of The Doe Fund. On Twitter at @GeorgeTMcDonald and @TheDoeFund.

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The City’s Bogus Compromise with Uber Would Hurt Riders with Disabilities


accessible cab

(photo via nyc.gov)


The hustle and bustle of New York is a part of its identity: we New Yorkers are always on the move. Our officials must fight for equal access to transportation, but as those of us with disabilities know, accessible methods of travel are shamefully limited. This is why the Taxi and Limousine Commission (TLC) has apparently been negotiating with private for-hire car companies like Uber and Lyft on the issue of wheelchair accessible taxis for several months.

This could have been an encouraging sign, but last week, it became clear that TLC is more interested in cutting a backroom deal with Uber and Lyft than it is with seriously listening to wheelchair users. The TLC has even gone so far as to ignore sensible calls for action in favor of a proposal initiated by the very same companies who created this crisis.

It has been clear that the city’s yellow taxi accessibility program is on the ropes – mainly because accessible taxis cost much more to operate and maintain than regular taxis. The TLC created the Taxi Improvement Fund (TIF), which takes 30 cents from each yellow cab ride to support drivers with accessible vehicles. But it has become increasingly clear to disabled riders that the current TIF program is not enough. Drivers are struggling to make ends meet, and the program is in danger of complete collapse.

That is why I have called upon the TLC to mandate that ride-hail companies, including multi-billion dollar giants like Uber and Lyft, contribute to the TIF. Since these companies have proven to less than friendly to disabled riders, they should have to pay a higher fee.

This plan is simple and effective. The TIF is a city fund overseen by the city, rather than a state tax, so this tweak wouldn’t require any changes to state law or any approval from state officials. (For some reason, the TLC recently tried to convince me that it would require state approval, but that is just not true.) Not only is it easy to implement, but this proposal would provide critical support for the drivers who need it most and help wheelchair users navigate the city.

It is a win for all stakeholders. Elected officials get an easy fix to a critical problem, cab drivers already doing the right thing get support they need, and New Yorkers with disabilities get greater transportation access.

Not so fast, though.

The TLC is considering a proposal – one that originated with Uber, Lyft and other for-hire vehicle providers themselves – that would create a two-year pilot program allowing companies who opt in “to provide accessible service via a central dispatch system.”

The currently-negotiated plan is that companies would provide accessible vehicles to riders who request them in under 15 minutes, 60 percent of the time in the first year and 80 percent in the second.

I know that this proposal will not result in any meaningfully positive changes for wheelchair users like myself.

Despite from the fact that these companies have a track record of promoting falsehoods when it comes to accessibility and have frequently avoided actually putting accessible vehicles on the road, there is nothing in this proposal to hold them accountable.

In fact, it looks like this so-called pilot program would amount to little more than words.

This potential compromise also does nothing to solve the TIF crisis and would likely lead to the end of the city’s accessible taxi program. This outcome would leave the many riders who depend on wheelchair-accessible vehicles in the hands of private companies, who, at the very best, would only promise to provide a car within 15 minutes 60 percent of the time.

In a city with a terrible track record on wheelchair accessibility – have a look around any subway station – ceding this ground is an unacceptable outcome that will leave New Yorkers with disabilities without a reliable method of transportation.

That is an outrage. Fortunately, a sensible solution is out there – but it is up to the TLC to do the right thing, and the time is now.

***
Dustin Jones is president and founder of United for Equal Access New York, a disability advocacy group.

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High Stakes for Affordable Housing in City Council Speaker Race


cornegy speaker forum crop

Robert Cornegy (far right) at a City Council Speaker forum (photo: @RobertCornegyJr)


Eight members of the New York City Council are asking their colleagues to elect them as the new Speaker after the new legislative body is seated January 1.

Seven of the candidates oppose allowing Airbnb and other on-line platforms to continue their assault on our scarce affordable rental housing. But one of them, Robert Cornegy, Jr. of Brooklyn, does not.

In a June 2016 opinion piece for City & State, Council Member Cornegy argued that Airbnb brings extra income to his struggling constituents in Crown Heights and Bedford-Stuyvesant, ensuring that they can continue to live in the rapidly gentrifying neighborhoods. This column was straight out of the Airbnb playbook, and contradicted by the fact that roughly 75 percent of Airbnb revenue in New York City is generated by commercial hosts with multiple listings, not “regular folks” renting their own place.

North and Central Brooklyn are the epicenter of gentrification in New York City, and Airbnb has played a destructive role. In Council Member Cornegy’s district, there were some 3,400 listings for Airbnb in October. Of these, almost 1,300 were for entire homes. If these “entire homes” are in apartment buildings, then they are illegal, as short-term rentals are against the law if the tenant is not present. (Renting out a room while the tenant is living in the apartment is not illegal, although tenants who do so risk eviction if the landlord finds out.)

Airbnb’s negative impact on Council Member Cornegy’s district is merely one part of a larger trend in the borough. Four City Council districts stretching from Williamsburg to Crown Heights are represented by Steve Levin, Antonio Reynoso, Laurie Cumbo, and Cornegy. These four districts combined had Airbnb listings for more than 16,000 units in October. By contrast, the top four Council districts in Manhattan combined had 10,800 listings.

A study last March by Inside Airbnb tallied the host photographs in the 72 predominately African-American neighborhoods in the city. The Airbnb host population in these communities was 74 percent white, while the white resident population was only 13.9 percent. White hosts in these neighborhoods earned 73.7 percent of the income from Airbnb rentals. Despite Airbnb’s claim that they make it possible for people of color to supplement their incomes, it is clear that the newer, white residents in these gentrifying neighborhoods are the main beneficiaries of the “sharing economy.”

So, who suffers? These units have been withdrawn from the rental market because short-term rentals are more profitable. Long-term residents therefore face a tighter market, and are subject to harassment and rent gouging.

This is not only a Brooklyn or even a New York problem. From Vancouver to London, local governments are taking action to curb short-term rentals. Airbnb’s response is to stonewall, and enlist surrogates to spin its public relations web.

I have a friend whose family owns a restaurant in a year-round resort town in the northeastern United States. He told me recently that until a couple of years ago, the cooks and waiters could share a house for $700 to $800 per month. Now there are no such rentals available, because owners can make that much in a weekend through Airbnb.

The sheer scope of this crisis makes the future of New York City’s government all the more critical. The rest of the nation and even the world look to us as a model for policy and politics, and we must do everything we can to make our housing market more affordable.

Ensuring that the next Speaker of the City Council is a true advocate for tenants, and for preserving our threatened stock of affordable rental housing, is the first next step in addressing the host of problems we face: weakened rent laws, lax enforcement by state and city, predatory speculators paying excessive prices for apartment buildings with an eye to driving out the rent-regulated tenants, constant upward pressure on rents, construction as harassment, and more.

We cannot afford to have in our house of government a Speaker who will not fight to protect the homes of its citizens. I urge Council Member Cornegy’s colleagues to take a look at this before casting their votes, and show that they stand with tenants, not the companies that are forcing them out.

***
Michael McKee is treasurer of Tenants Political Action Committee. On Twitter @TenantsPACNY.

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