Nomination For The Worst Possible Public Policy: "Affordable Housing" In Manhattan
/I've previously written (back in January) that so-called "affordable housing" has to be, among the various government programs intended to assist the less-well-off, "the most expensive possible way to help the smallest number of people."
And yet additional "affordable housing" initiatives seem to have the full support of just about everyone around here. Fresh evidence came last week when still-Mayor Mike Bloomberg announced final agreement on the so-called SPURA project for the Lower East Side. (SPURA stands for Seward Park Urban Renewal Area.) According to a report in our local paper The Villager on September 19, Bloomberg, in announcing the new project that is now supposed to rise, said, “It’s a changing point of New York for the good, it really does have the support of everyone." Then he said, “If anyone is opposed, raise your hand or forever hold your peace," and apparently no one did. I guess it's unanimous! Except for me, of course.
If you have ever entered Manhattan via the Williamsburg Bridge, you have seen SPURA -- a vast wasteland of parking lots on the south side of Delancey Street that has sat vacant for decades. It's hard to imagine a clearer demonstration of the abject failure of government as housing developer. Here is a picture of the site that I took this afternoon:
SPURA site looking Southeast from Norfolk St. near Delancey St.
Here's another view looking more due East. You can see the approaches and one of the towers of the bridge toward the left of the picture.
SPURA was created way back in the 60s during the heyday of the urban renewal era. Politicians thought they could cure poverty by building public housing. You can see in the pictures some of the projects that actually got built around that time. But by the late 60s, the project-building era was running out of gas. They knocked down multiple square blocks of buildings that were deemed to be substandard, or "slums," and then just left the parking lots there for decade after decade.
The new development will supposedly contain 900 new apartments, half of which, or 450, will be "permanently affordable." Back to that in a moment.
Meanwhile, something else has happened. On the north side of Delancey Street there was a neighborhood more or less the same as the neighborhood on the south side of Delancey, in other words a "slum" at the time, but the government geniuses never got around to knocking it down. Most of the old buildings are still there, with some new mixed in. Gradually, this became a desirable neighborhood. Today, you might even call it chic. I'll throw in a few pictures to demonstrate. For example, just about 50 feet north of Delancey Street on Norfolk Street is a condo called the Blue, built in 2007. Picture:
According to data at streeteasy.com, there are 5 recorded sales at this building in the last 180 days, with an average price of $2,171,000. There is one current listing, valued at $1,596 per square foot. This would mean that a two-bedroom apartment would go in the range of $1.25 - 1.5 million. Streeteasy says that rental listings in the building average $64 per square foot per month, which would be in the range of $5000 - $6000 per month for a two-bedroom apartment.
Walk up Norfolk Street one short block to Rivington Street and you will find, for example, trendy clothing boutiques:
The very hot Schiller's Liquor Bar restaurant:
The equally hot THOR ("The Hotel On Rivington") Hotel:
As to SPURA, they haven't yet announced any specific prices of the so-called "affordable" apartments in the new development, but let's take some ballpark numbers. If a poor family is going to qualify for a two-bedroom apartment for close to free, that will amount to an annual subsidy of about $60,000. If a middle class family qualifies for a similar apartment for, say, $2000 per month, that will amount to an annual subsidy of about $40,000. Of course the City will not lay out this cash, and the subsidies will not appear in its budget or on its balance sheet. But the subsidies are absolutely real, because one of the options is that the City could rent out the apartments at market rate to someone else, take the cash, and then instead of handing out an apartment, pay the qualifying family all -- or more likely some part -- of the money.
And if you consider this alternative, you will quickly realize how little an "affordable housing" program accomplishes despite expending a vast amount of resources on a very small number of people. For the poor family, by providing them the apartment the City government has given up $60,000 it could have had by renting it to someone else, and it has still left the family in "poverty" as measured by official statistics, when it could have given the family cash of $25,000, thus removing it from poverty, and have had $35,000 left for other programs. If you wanted, you could then remove a second family from poverty and still have cash left over.
A $40,000 annual subsidy to a middle class family makes even less sense. How can we justify giving that kind of subsidy to a family that by definition is not even poor, even as other families are poor and are not receiving help?
But then, here in Manhattan, it is completely unanimous that this is a good idea. That is, except for me.