“The system is broken”: Staffing woes stall affordable projects

Staff shortages at city agencies are threatening to stall affordable housing projects at a time when developers are already shying away from starting new ones.

Developers say personnel problems at the Department of Housing Preservation and Development have already delayed closings on construction financing for affordable housing.

“The criteria to get into the pipeline is completely mystifying at this point,” said one developer who asked not to be named.

“I could…design the most beautiful building that’s sustainable, that checks all the boxes. I could have complete community buy-in. I could have a nonprofit partner,” he said. “At that point, I will still have no idea when I will get construction financing.”

The developer added that such delays prevent people from being paid fees that hinge on financial closings.

“You cannot solve the housing crisis if people are expected to hold a property for 10 years before they see the lion’s share of the development fee,” he said. “The system is broken.”

In May, the New York Housing Conference sounded the alarm about staffing levels. In a policy brief, the group reported that as of March, HPD had 2,244 staffers, down 7 percent from before the pandemic and 16 percent below what the city budgeted for this year.

The memo signaled particular concern over vacant positions for project managers and housing inspectors. As of July, the City reported, the agency only had one full-time employee in its unit for Low Income Housing Tax Credits, an essential element to many affordable projects.

And as of April, City Planning had 18 percent fewer employees than the city budget allows, according to the Citizens Budget Commission.

Meanwhile, developers have largely stopped embarking on multifamily projects with affordable rentals until the state revives or replaces the property tax break 421a, which the legislature has shown little interest in doing.

Rachel Fee, executive director of the New York Housing Conference, said this week that the agencies still have “a long way to go to turn things around.”

“The consequences for not hiring is that development suffers,” she said. “We know the pipeline has slowed down a lot.”

These agencies are not alone: The city froze hiring during the pandemic and has been suffering from attrition since. Compounding matters, City Planning, HPD and the Department of Buildings face fierce competition for engineers and urban planners. Private employers typically offer higher pay and work-from-home flexibility, while the city is requiring employees to come to the office five days a week.

The Citizens Budget Commission has called on the city to look at its hiring and onboarding processes, which are time-consuming and may exacerbate staffing issues. Champeny also posited that the low headcounts at labor-intensive agencies may be scaring away job candidates.

“If there is a division that has 10 people, and you only have three, do you really want to be the fourth?” asked said Ana Champeny, vice president of research at the Citizens Budget Commission.

Some agencies also face internal competition: HPD and the city’s Economic Development Corporation have poached at least 11 employees from City Planning in the past year, according to a search of LinkedIn profiles. Others have gone into the private sector or, in some cases, left for positions in other cities.

It is not unusual for city employees to switch agencies or leave government, especially when a new mayor takes office. But replacing them has been extremely challenging.

“It is an incredibly tight labor market,” said Champeny.

“City Planning is hiring at a fast clip, and we are also preparing to implement new measures to speed up the review of applications of all sizes,” a spokesperson for the agency said. “Ours is a highly dynamic and capable team and many other city agencies and the private sector have traditionally eyed our highly talented staff.”

An HPD spokesperson echoed that point on behalf of the housing agency, saying it is “staffing up quickly” to recover from the pandemic-related shortage.

Mitch Korbey, chair of Herrick’s land use and zoning group and a former City Planning official, noted that the agency, which has fewer than 300 employees despite being approved for 340, has a headcount similar to those of its counterparts in smaller cities. Los Angeles, with half as many people as New York, has more than 400 planning staff and Chicago, with less than a third of New York’s population, has north of 150.

“It is remarkable what they are able to accomplish with the staffing they have,” Korbey said of his former agency.

The extent of delays to affordable housing projects will not be clear until the city releases data on June closings. The de Blasio administration made a point of announcing numerical goals for affordable housing units financed. Mayor Eric Adams, however, decided against having such public targets.

This article has been updated with comments from two city agencies.