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Remarks By Mayor Michael R. Bloomberg
"Housing Plan For New York City's 21st Century Neighborhoods"
New York Housing Conference/National Housing Conference 29th Annual Luncheon
Sheraton New York Hotel
I was talking to Katie Couric on the Today Show this morning. She asked me, "what's new in New York?" I said, "not much. A big budget deficit. Service cuts. A possible transit strike. My approval ratings plummeting. The Knicks in the NBA cellar. Same old stuff. "
All this must sound like déjà vu all over again to Mayor Koch. In fact, yesterday I was watching film of him from the 1980 transit strike. Ed-you didn't look a day younger.
But seriously, I'll be happy if, at the end of the day, New Yorkers remember me for the same reason they remember and love Ed Koch: for his tremendous record of achievement in areas like housing.
I also join Ed and all of you in honoring the memory of another giant: the former chair of the New York City Housing Authority, the late Albert Walsh.
Housing was a passionate concern of Albert's. So what's its future?
In this economic climate? There's been a lot of speculation in the news media recently about whether New York might return to the bad old days of the 1970s-when services fell apart and progress stopped.
There's a short answer to that question. Not a chance.
One big reason why: you, the National Housing Conference and New York Housing Conference, and what you have helped us achieve in communities throughout the city.
As exhibit "A," consider the example of our own Harlem. Every person in this room can remember thirty years ago, when Harlem was a community with a rich past, but an ominous future--
When it was a neighborhood with block after block of vacant lots and derelict apartment buildings-
When it was a community that seemed to be locked into a downward spiral of abandonment and decay.
Take a look at Harlem today. It has become one of the hottest residential neighborhoods in the five boroughs. Families are snapping up its magnificent 19th Century townhouses. Harlem's population, which was shrinking just fifteen years ago, is growing again.
Yogi Berra once said that you should never make predictions-especially about the future. But I'll ignore that advice and predict that Harlem has reached a turning point.
In the seventies, the word on Harlem was that it was a bad risk for private housing lending. Those days are long gone. It has not only stabilized-it's soaring. Now people want to put private housing money into Harlem.
That's a story that all of you know-because many of you have helped write it in communities throughout the city-in the South Bronx and Central Brooklyn, as well as in Harlem.
These turnarounds didn't just happen by chance. They have been the product of sustained and coordinated public policy and public investment that catalyzed a revived private market.
They are stories of community renewal that are far from over-and that are entering an important new phase.
Now we have to repeat those stories-albeit in difficult times. Today's challenge, as we work on other parts of the City, is to make scarce city dollars go farther in an era when deep cuts to capital spending for housing are unavoidable.
The solution is doing the kind of strategic investment and groundwork that turns dreams into realities by using limited public funding to encourage private investment.
We need to target our financial resources and policy initiatives to make more Harlem miracles-catalyzing private housing development in neighborhoods throughout the city.
We're the world's second home-a magnet for people who want to build better lives for themselves and their families.
That new generation of ambitious and hard-working New Yorkers, want just what my parents struggled to achieve, and what all parents want for their kids: the security that only good living accommodations in safe and stable neighborhoods can provide.
Without these homes and neighborhoods, New York will lose these people-and lose its future. That's why affordable housing is fundamental to our long-term economic prosperity.
Today I want to describe my administration's housing strategy for securing that future.
It's a strategy with two principal elements.
The first is innovative financing-a process of facilitating private housing investment with creative use of public financial resources.
Over the next five years, we will implement new strategies that will, combined with existing programs, create more than $3 billion in public spending on housing. That money will finance some 27,000 new units and preserve 38,000 more, for a total of 65,000 units.
This public spending will increase production of new units by 25% compared to the last five years. And it will, in turn, stimulate the private sector to make major new investments in our city.
Here's how the money breaks down. The City's Housing Development Corporation (HDC) will leverage a new pool of $500 million to finance construction of 17,000 units.
In addition to that, some $555 million will be redirected by the City's Department of Housing Preservation and Development (HPD) from housing maintenance to new investment in some 8,000 units.
And the remaining $2 billion is the continuing maintenance of effort by HPD in the City's housing capital and expense budgets-ensuring creation and preservation of some 40,000 units.
The second principal element is a combination of legislative and administrative change.
Here, the City will coordinate a variety of initiatives, including brownfield clean-ups, rezoning, land disposition policy and regulatory reform.
This will cut building and land acquisition costs, and lay the groundwork to attract more private construction.
Let me describe these initiatives in a bit more detail, starting with our financial strategy.
Between now and fiscal year 2008, HDC will make twice as much money available for affordable housing as it has over the last five years.
That public investment will be created by aggressively and creatively pushing the financial envelope on HDC's equity. To create these funds, we're going to put HDC's cash assets to work, and borrow against the mortgages that HDC holds.
The half-billion dollar pool this generates is expected to leverage four times as much money-or $2 billion-as private financing will accompany the public's initial investment.
This will be in addition to funds raised through HDC's traditional tax-exempt bond financing, which will come to some $750 million over the next five years.
This pool will finance the construction and rehab of more than 17,000 units of low- and moderate-income housing in targeted communities.
And for the first time, HDC will also commit a portion of these funds to middle-income housing. HDC's so-called "New-Hop" program will be expanded to include housing for middle class New Yorkers with incomes between about $38,000 and $63,000 a year.
These include teachers, police officers, firefighters, health care workers-the kind of people who make communities stronger.
To complement that pool of HDC funds, HPD also is performing a little financial magic of its own.
Over the next five years, HPD will redirect more than $555 million in planned city and federal funding to targeted neighborhood renewal.
Much of this money was originally intended for the rehabilitation and disposition of the City's in rem housing stock. But as you know, most of that housing has now passed to new private owners.
That's wonderful news. Private ownership is our ultimate goal. And for an added bonus, it will give us the opportunity to redirect those funds to targeted housing investments over the next five years.
Part of this re-directed funding includes equity we'll raise against the low income housing tax credit program - to achieve these goals.
HPD will, for example, provide low-interest loans to acquire and clean up brownfields for housing development. The bottom line is that all of these new and existing funds will preserve and create 65,000 units citywide between now and 2008.
This commitment demonstrates that, even in these difficult budget times, the city is not walking away from the job of funding affordable housing.
Today, we're distributing a plan called "new marketplace: creating housing for the next generation." It details how our commitment to housing will also extend to:
The public dollars in these programs represent an important part-but only a part-of the city's housing strategy.
Just as important is the second part of our plan-that is, to jump-start private investment in targeted communities by removing barriers to development and reducing costs of construction.
And we'll use a range of policy tools toward that end.
I mentioned HPD's capital program for acquiring and cleaning brownfields. Under the leadership of the Department of Environmental Protection, the city is conducting a comprehensive assessment of potential brownfields throughout the city with an eye toward beneficial reuse.
Complementing that effort in many neighborhoods, will be targeted rezoning of abandoned waterfronts and underutilized manufacturing areas for mixed residential and commercial use.
I have asked our city planning commission to move forward aggressively with rezoning plans in communities throughout the City, including: East Harlem, Jamaica, Long Island City, Port Morris, Morrisania, Park Slope, Greenpoint, and Williamsburg. We'll work with the city council to enact these zoning changes.
I also have asked Deputy Mayor for Economic Development and Rebuilding Dan Doctoroff to coordinate the disposition of City-owned land appropriate for residential development. This will ensure that we use our scarce land resources as effectively as possible.
For example, over the next five years, HPD will continue to make vacant, city-owned land available for the development of more than 7,000 new residential units.
HPD and the City Housing Authority (NYCHA) will collaborate to develop affordable housing on NYCHA's underused and vacant property.
And I've directed HPD and the Department of Buildings (DOB) to streamline the approvals needed to develop and rehab housing.
This must include working with the City Council to assess the feasibility of adopting a model building code.
That's the strategy: to make creative use of all the tools at our disposal-in the neighborhoods where they will have the most impact-to jump-start and complement private sector investment.
The success of that strategy is crucial to our city's long-range economic future. Keeping housing affordable-like improving the public schools-is vital to attracting and keeping talented and productive people in New York.
Housing will, for example, be key to bringing people and jobs back downtown. On Thursday, I'll outline my vision for transforming lower Manhattan into a true 24-7 residential and commercial community. New housing development is a critical part of that vision.
To help guide the housing initiatives we've outlined today, we have named a neighborhood investment advisory panel. It includes key partners from the finance, development, academic, and philanthropic communities.
To the members of it who are present today: thank you in advance for your time and talent.
Your work-and the continued work of the New York housing conference-will play a crucial role in neighborhoods throughout the city.
The British journalist Alistair Cook once described New York "as the biggest collection of villages in the world."
He was on to something.
We are a city of more than 300 neighborhoods. They're the places we call home...where our children go to school, shopkeepers serve their customers, and New Yorkers enjoy family life.
Our neighborhoods are what makes New York tick. Wall Street or Canarsie, Lincoln Center or Tottenville, Madison Square or Rego Park, 5th Avenue or Arthur Avenue. We believe in our neighborhoods passionately and we must nurture them.
And with this housing plan-and with your continued hard work-we'll make New York the biggest, greatest, most diverse and vibrant collection of villages in the world.
Thank you and happy holidays.
Mayor Michael Bloomberg's Budget Mid-Year Plan
On November 14, 2002 Mayor Michael Bloomberg presented his mid-year budget plan to close a $1.1 billion deficit in the current fiscal year and a $6.4 billion budget gap next year. The mayor is calling for nearly $844 million in service cuts and a 25 percent increase in the city property tax rates. He is also asking the State Legislature to extend the city's personal income tax to anyone who works in the city regardless of where they live. The city is also looking to employees to save $600 million by working more productively, possibly through a longer workweek. Under the mayor's plan, the municipal workforce would be cut by 8,000 employees by 2004, mainly through buyouts and attrition.
An excerpted, edited transcript of Mayor Michael Bloomberg's remarks.
The first question is what have we done in the first nine months. Did we act appropriately? I think the answer to that is that we did.
In the last nine months, we borrowed $1.5 billion and we did not raise taxes materially. With the cigarette tax and some fees, we basically said we were going to make it through by cutting services by $1.5 billion and borrowing a $1.5 billion.
Why did we not raise taxes earlier? The truth of the matter is that we were coming out of 9/11, and everybody was worried that people, residents, and companies would leave the city. Today we are 14 months after 9/11. People have come to realize that although we do live in a more dangerous world than we thought we did, but New York remains the safest big city, our police department, as much as any institution possible could, has developed the tools to keep terrorism away.
Now, we fundamentally have a problem in that our tax revenues have declined more than we expected. There is no way out of it but to raise taxes.
We are cutting services to the point where I think we can still provide public safety, clean streets, a better education for our children, comply with all of the court ordered mandates to provide housing and social services. This city is not going to cut its expenses below where the quality of life would deteriorate.
What I have tried to do is have every single commissioner look me in the eye and say, "I'm not happy, it's going to hurt, but I can still keep the quality of life in the city."
I've have learned that protests are part of the job. People have a right to protest and I encourage them to speak their mind. But the truth of the matter is, we have to close the budget deficit. If we don't, the financial control review board will come in. And last time the came in the fired 20 percent of the fire fighters, 20 percent of the police, and 20 percent of the teachers. That is not a pretty sight and we will not let it happen again.
Cutting $200 million from the education budget
We will not cut anything in the classroom.
Joe Klein has started rationalizing the system, looking at what worked in the past and what did not. He announced the downsizing the School Construction Authority to make it more manageable. We believe we can provide better services and dramatically reduce the costs of building schools. If we had done that 10 or 15 years ago, we would have double the number of classrooms we have today for the same amount of money.
We will clearly have to go without some programs that we like. And unfortunately in the case of education, there are probably a lot of bureaucrats that we don't have a need for. We will try to find them other jobs. My hope is that economy recovers so they can. But we are not going to cut teachers in the classroom.
Reducing the police force by 1,900 police officers
The police commissioner's judgement is, that with the cuts we have proposed, he can continue to keep the streets safe. I think we can be pleased with the job that the police department has done. When I came into office, conventional wisdom was that the economy is going down, we have had a dramatic reduction in crime, and therefore the great challenge was not letting crime go up too much. In fact, we have kept crime coming down dramatically. We are on target to have the lowest number of murders since we started keeping statistics. We have said it before. Crime is not coming back in this city. Period.
Eliminating 2,500 daycare slots and 2,000 spaces in programs that work to prevent abuse
There is no argument not to do more for children. But we just don't have the money.
Closing 32 out 340 senior citizen centers
Clearly in the case of seniors, people will be inconvenienced and won't get the services we would like to give them. We have to find some ways to balance and make sure that we do the best job we can. If it means closing two centers, we have to make sure there is another center nearby to pick up the slack. People will be inconvenienced, but we are not going to let anybody suffer.
Right now, New York State charges you New York State taxes regardless of where you live. All we are asking Albany to do is to conform New York City's tax collection policy to the state's. People who say they are not taxed as commuters, don't look at their tax bills.
It the general policy throughout this country, for municipalities that have income taxes to charge non-residents. Not just at the state level, but at the city level. Cities like Los Angeles, Cincinnati, Cleveland, Pittsburgh, Daytona, St. Louis, Newark, Kansas City, San Francisco, and Yonkers Ă all tax non-residents. Taxing non-residents isn't new. New York State does it every single day and so do many cities.
This is not a commuter tax that I have called for. I've simply called for the city taxes to conform to the state tax. I worry very much about the people in the suburbs who work in the city. I am committed to providing them with the services that make this the city that they want to come into everyday. Everybody has to pay. And I'm going to have to make it as fair as possible.
Nobody can guarantee the future, but I don't think it is realistic today to say that people are so worried they are leaving the city.
The vacancy rate on commercial rate in this city is half of what it is in virtually other major city. And real estate prices remain very strong. These two factors and the fact that I know of no major company that is even suggesting they would move their headquarters out of the city, gives us comfort to say now we can address the problems we have differently.
If we stand up and take the necessary steps no matter how painful those may be, people will not just stay here, they will come to New York.
Everybody understands that there are costs for services. Those municipalities that address their problems openly and prospectively are the places where you want to have your business and raise your family. Those are the cities that will be the great cities of the future. And we are determined to make sure that New York remains one of them.
Every hotel in New York City is back to pre 9/11 capacity. Most hotels are full. The bad news is that they are full of American tourists as opposed to European tourists. The reason that makes a difference is that European tourists tend spend four times as much as domestic visitor. The disappointing lack of return of European tourists has more do with people not flying than with people not liking New York. There is no European city that isn't complaining about the same thing.
The crime rate is continuing to come down. It is quite amazing when you realize what has happened to the economy and every sociologist would tell you that it would have gone up. The welfare rolls are continuing to come down.
We had a big group of restaurant owners in here. They all will tell you that the police are doing an excellent job, particularly in the last month when we focused on some people who were loitering in the streets, panhandling, and the squeegee guys.
Squeegee guys are not going to come back in this city.
People who want to reduce the size of the workforce overnight just don't understand how government works.
We can go and cut people and the overtime we would need to maintain the services would wipe out economic benefits of those cuts. What is more, you don't build a workforce that is flexible and works hard by laying off.
I said in the beginning that layoffs would be my last act. And I will only layoff if we can not get through this any other way. But with cooperation with labor, and with early retirements and buyout, I believe we can continue to downsize the labor force without layoffs.
If we can't, nobody will stand up and say we are not going to do it. We will layoff people. But my hope is, and my expectation is, that with enough cooperation from everybody, we will not have to do it.
For all municipal unions, we are going to be able to pay our labor force more only if we get productivity enhancements. There just isn't any money. Our budget requires $600 million in productivity enhancements. That means more flexibility, longer hours. That's just to balance the budget so we don't have layoffs.
And going forward, we are not going to wait two years for a contract to expire and then negotiate. We are going to have to say, "You don't get raises for a period that has already passed." We don't have a way to raise that kind of money.
I can not find corruption in this city. Yes, there is a handful; we have lot of employees and nobody's perfect. I can't tell you there is a lot of waste in this city. Sure there are some things that we shouldn't be doing that we do. But they both tend to be very small. And I can't find a program in this city that doesn't really benefit people. The fact of the matter is this city and the previous mayors have all done a pretty good job.
You can't just say let's go cut corruption, waste, and meaningless programs. Fundamentally, they don't exist.
In the 1970's, the city lost control. We cut back services in this city by firing police officers, teachers, firefighters and every other type of municipal worker. So much so, that crime went out of control, trash wasn't picked up, the schools got worse, the fires didn't get put out. We can not ever let that happen again in this city.
The other thing that happened in the 1970's was that we borrowed and encumbered our children with the responsibility for the mistakes that we were then making. Just think about the following: this year, and the next, and the year after that, and the year after that, this city will pay approximately $500 million in interest and principal on loans that were taken out back in the 70's.
There are reasons to think that the city is in far better shape. Today, unlike then, we have the financial controls in place and a law that requires us to balance the budget. In the 70's, we got out of control because we spent too much. Right now, we have a problem because our revenues have declined.
Download a summary(in PDF format) of the First Quarter Budget Update and Financial Plan