315 cheap apartments are only a beginning
We would have liked to have said that on Monday, Gov. Pataki and Mayor Bloomberg announced a bold new plan to build affordable housing in Lower Manhattan, but the reality is the pair announced that they were able to find only $50 million of the $21 billion in aid for Lower Manhattan to build 315 affordable apartments Downtown.
Thats 315 more than it looked liked would have been built prior to the announcement, but still far short of the need. It certainly is true that the $21 billion in federal aid was to help Downtown recover from an attack on America and not to build affordable housing, but the two goals are not incompatible. More can and should be done to encourage affordable housing.
The $50 million will be combined with the remainder of the $1.6 billion in tax-free Liberty Bonds slated for residential development. About five percent of the previously approved bond projects will be for affordable units.
As we have said before, the bonds for residential projects should be used only when they fulfill another need such as encouraging historic preservation, providing the necessary jumpstart to a stalled project, or to build more affordable housing.
George Pataki said the $50 million was needed because developers could not afford to build structures with 20 percent affordable units using Liberty Bonds alone. Wed like to know how he could be so sure.
Developers have been tripping over themselves to apply for the bonds to build residential units. Most of the $1.6 billion has already been approved or is in the pipeline, as they say. Had the governor and mayor waited a few more months, there may have been little money left to finance affordable units. Given the popularity of the residential bonds, wed have liked to see the governor put his theory to the test rather than dismissing the possibility that he could have convinced developers to build middle income housing in exchange for getting tax-free bonds.
Reportedly, Pataki and his appointees to the Lower Manhattan Development Corp. were resistant to the idea of using any money for housing as opposed to Mike Bloomberg, who wanted to use more than $50 million.
If true, our mayor still does not come out looking like a prince on this issue hes just a little better than Pataki. Bloomberg and his deputy, Daniel Doctoroff, have not adequately explained why they did not step in to save the middle-income apartments at Independence Plaza North. Many of the apartments in the Tribeca complex are now likely to move from the middle income to the luxury housing category.
Bloomberg said he hopes that 2,000 of the 10,000 new apartments he expects to see in Lower Manhattan will be affordable. We agree with the goal. Now, wed like to see the plan to get there. The mayor and governor took a good first step this week assuming that it was a first and not a last step.
Abusing Liberty Bonds
Unlike the residential Liberty Bonds discussed above, the office Liberty Bond money has not been moving. The tax-free bonds have not been enough to overcome a sluggish real estate market. With most of the $6.4 billion in commercial bonds languishing, Forest City Ratner has had the audacity to apply for the bonds to build a Tines Square office tower for The New York Times.
Madelyn Wils, a Lower Manhattan Development Corp. board member, called this a flagrant misuse of Liberty Bonds. We couldnt agree more. The Times has shifted the responsibility to its developer, but we think the paper of record cant wash its hands of this one. To its credit, the Times was the first to report about Ratners application. The paper, in contrast to its recent troubles, also received well-deserved praise and Pulitzers for its coverage of the 9/11 attack and its aftermath. It would be a terrible irony if the Times ended up benefiting indirectly from a program intended to help Lower Manhattan rebuild after the terror attacks, while helping to siphon money away from Downtown.