Of all the vague notions that real estate players have about Governor David Paterson, the idea that he will support new affordable housing could be the most solid.
Paterson has said little about his devotion to property tax reform or his zeal for making sure the city’s big projects that are already underway succeed, since Governor Eliot Spitzer’s abrupt resignation last month over his ties to a prostitution ring.
However, experts say that Paterson, the lieutenant governor from Harlem who was sworn in March 17, will probably work to craft new incentives and find new funding to create housing that low- and moderate-income people can afford. Experts suggested that the $400 million housing fund that would pay for affordable and supportive housing, which Spitzer proposed in his State of the State address, has enjoyed enough support in key legislative districts and from Paterson that it seems likely to proceed.
“Governor Paterson has a strong background working on affordable housing issues as a state senator,” said John Raskin, an organizer with West Side advocacy group Housing Conservation Coordinators. “He is in a good position to prioritize both new funding mechanisms and reforming rent laws.”
Real Estate Board of New York president Steven Spinola, citing an e-mail sent last month by
state Housing and Community Renewal Commissioner Deborah Van Amerongen, said the fund “is still alive.”
“At the moment, the $400 million is on the Assembly side of the budget,” Spinola said, adding that the Senate has proposed a fund half that size.
So will the governor push for the higher number?
“Paterson’s biggest problem is, ‘How the hell do we figure out how to set a budget?’” Spinola said last month. “But I can’t imagine he’s not going to be an advocate for affordable housing.”
An Albany insider, who asked for anonymity because he once worked for Paterson, confirmed that the new governor — who worked on fair housing issues for the NAACP before becoming a state senator — could easily score points with legislators by embracing a cause he knows.
“It’s a priority for a lot of legislators,” the source said.
Where that affordable housing gets built is another mystery. Observers said it is unclear whether Spitzer’s controversial proposal to sell land north and south of the Javits Center, which would help fund the affordable housing program, will go forward. The north parcel would have to be rezoned by the city, and Mayor Michael Bloomberg opposes its sale because without it, he told the New York Times, future expansion plans for the Javits Center will be hobbled.
And upstate cities need affordable housing as sorely as the Big Apple does, portending more political deals.
A logical place for state-supported affordable housing in New York City could be over Hudson Yards. The state-owned, 26-acre rail yard is the largest parcel of undeveloped land in the city. Tishman Speyer won the bid to develop the site from the MTA last month.
Both developers’ advisors and Anna Levin, a leader of the local community board, have noted that the required city zoning on the yards’ eastern side requires high densities that could mean enormous building costs. Tax credits for affordable housing on the yards’ western side could offset those big costs.
“Everyone involved would like to re-look at the zoning,” said an advisor to one of the bidders for the site, who asked for anonymity to avoid revealing his client’s concerns. The western portion of the rail yards will undergo rezoning now that the state has selected a bidder, so Paterson can now try to work affordable-housing funds or incentives into the equation.
But as with every issue before the state, handicapping what Paterson plans to do is a dangerous exercise. Observers pointed out that nobody knows whether projects near Hudson Yards, like the transformation of Penn Station into Moynihan Station, whose future looked bleak last month, will ultimately survive.
What’s more, Paterson may be wading into a morass he can’t easily correct, some industry insiders said.
“The rail yards deal had become so muddled and so vulnerable in the shaky credit market that many of us think the whole deal is destined to fall apart, and that on-site affordable housing will have to wait until some day when the rail yards will realistically be developed,” said one real estate veteran, who asked for his name to be withheld.