The Biden administration’s infrastructure bill will deliver $65 billion to improve internet access nationally, including enough to New York to possibly wire every low-income rental for broadband.
The upgrades would boost property values for owners of that housing, too, without costing them a dime.
When the money arrives — NYSAFAH expects it next year — it will be in two buckets: roughly $42 billion to build out the infrastructure for broadband and $14 billion to help households pay for service.
Households needing home internet access most are those close to the federal poverty line. The Pew Research Center found in 2019 that barely half of households earning less than $30,000 a year — a few thousand above the poverty threshold for a family of four — had a home broadband subscription. In New York, one in three low-income households lacks access, according to a September report from the state comptroller.
For many, the issue is affordability; ”a home broadband subscription might stretch budgets too thin,” Comptroller Thomas DiNapoli wrote. For others, particularly those in rural areas or thinly serviced neighborhoods in New York City’s outer boroughs, buildings don’t have the connections needed for fast service.
The city and state have some provisions in place to expand internet access to low-income renters. The city’s Department of Housing Preservation and Development requires new affordable housing projects that tap municipal money to provide high-quality internet as part of the lease. And as of July 2020, all new construction or “substantial rehabilitations” that receive money from the state are “encouraged to enhance access to broadband services.”
NYSAFAH has been working to cover the rest of the state’s nearly 400,000 affordable units. “The vast majority are untouched by either of those funding mechanisms,” said Jolie Milstein, NYSAFAH’s president and CEO, and a number are not adequately connected to the internet.
The association is still working out exactly what that number is. NYSAFAH is mapping how many affordable units statewide are missing broadband. Previous investigations have underestimated the need — the result of counting one unit’s connectivity on the block as the entire block being covered, for example.
In 2018, the Cuomo administration declared that 99.9 percent of the state’s units had access to broadband. Gov. Kathy Hochul launched a mapping initiative in September that will look at service on the address level. Findings are expected by May.
NYSAFAH said by year’s end it should complete its tally, which it can then use to inform grant recommendations submitted to the governor for the federal funding.
“The federal infrastructure money, we anticipate, would be the perfect resource to do this affordable housing retrofit,” Milstein said.
An obstacle to outfitting all affordable units could be stipulations on where the money goes. Milstein said if funds are earmarked exclusively for rural areas, where installation is costly, it could chew up a portion of the funding. Also, some of those areas have a substantial number of second homes, which is not what Congress intended to subsidize.
The state comptroller’s office said nearly half of those without available broadband live downstate — in New York City, Long Island and in the Mid-Hudson Valley, areas that would miss out if the money were funneled to rural localities.
Another extra expense is adding broadband to older buildings. Concrete construction requires the installation of “hard assets” in each unit, Milstein said, which is labor-intensive. Those heftier fees could likewise eat into the state’s allotment.
For landlords, however, the broadband package should bring all of the benefits and none of the cost.
Milstein said the greatest reluctance she has seen among developers and property owners considering a broadband retrofit is the price of installation.
The infrastructure package would cover that expense. And so far, landlords would not be required to pay for service. The $14 billion in the broadband package will give households earning less than 200 percent of the federal poverty line a $30 monthly voucher to offset their bill. Low-income elderly New Yorkers are already eligible for $19.99 monthly service, although it is poorly marketed and the application process is tricky.
And as a cherry on top, the building updates would likely boost property values for affordable housing owners. A 2016 study by the Fiber to the Home Council Americas found adding broadband to multifamily units increased property values by 2.8 percent.
Rental values rose by 8 percent on average and net income by 11 percent per apartment.