The Real Deal New York

New HPD commissioner faces challenges

March 31, 2009
By Jovana Rizzo

As the city’s housing prices fall, credit dries up and affordable housing goals are threatened, new Housing Preservation and Development Commissioner Rafael Cestero has a lot on his plate. Cestero took office in the middle of last month after his predecessor, Shaun Donovan, headed to Washington, D.C., to become President Barack Obama’s Secretary of Housing and Urban Development.

Donovan had been commissioner since 2004, and Cestero was his deputy between 2004 and 2007. As deputy commissioner, Cestero helped develop the city’s $7.5 billion New Housing Marketplace Plan, the mayor’s 10-year initiative to create 165,000 units of affordable housing. He also played a role in establishing the NYC Acquisition Fund, which helps developers create affordable housing through faster access to equity.

Real estate pros say Cestero has a lot to do, including reviewing old policies that might help the real estate community, and furthering the mayor’s affordable housing plan on a smaller budget.

“The good news is we’re pleased with the appointment,” said Steven Spinola, president of the Real Estate Board of New York. “He knows the agency and we’ll be able to start functioning full-time immediately.”

Spinola said that in addition to working on the affordable housing initiative, the 421-a tax abatement program, which was recently scaled back, needs to be re-evaluated.

Alan Wiener, a managing director at Wachovia and a former member of the city’s 421-a task force, agrees. “He can help the private sector by saying we have to look at 421-a, not create a new program,” Wiener said. Wiener said the biggest challenge Cestero faces is maximizing the number of affordable apartments he can create on a reduced budget. HPD already announced in January that the mayor’s plan to create 165,000 units of affordable housing by 2013 has been pushed back to 2014 because of the recession. Cestero was unavailable for comment as of press time.

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