A resolution passed at CB1’s July meeting calls upon the administration of Mayor Bill de Blasio to create protections for homeowners in Lower Manhattan, as part of his Housing 2.0 plan, which aims to build or preserve some 300,000 units of affordable housing throughout the five boroughs by 2026.
This highlights a more pervasive local shortfall: Earlier this year, the de Blasio administration posted an online, interactive map that tracked City-wide progress toward its affordable housing goals. This map shows that thousands of units have been created or preserved in other neighborhoods since the Mayor took office in 2014, during which period Lower Manhattan has seen the creation (or preservation) of only 143 affordable apartments at just three sites. And all of these were rental units, offering no benefit to people who own their apartments, or aspire to.
During that same period, according to statistics compiled by CB1’s staff, Lower Manhattan saw the creation of 2,872 new apartments, divided among 30 buildings (some of which were new construction, others of which were conversion of former office towers).
CB1 Housing Task Force Chair Tom Goodkind: “Local owners have issues that are worthy of our immediate attention. Those who have and will put down roots in our area through unit ownership seek advocacy.”
“Like all other groups, those who have and will put down roots in our area through unit ownership seek advocacy through our Community Board,” explains Tom Goodkind, who chairs CB1’s Housing Task Force, in which the resolution originated. “It is through reports and resolutions such as these, and the efforts of our members and staff, that we continue to ensure that our community’s housing needs are well met.”
The CB1 resolution enacted over the summer urges City Hall to implement three recommendations. First, the Board wants the municipal government to, “create additional affordable ownership units in the CB1 area through Mayor de Blasio’s Housing New York 2.0 Plan.”
Second, the measure presses the administration to, “limit New York City property real estate tax increases to the existing New York State Law of the lesser of two percent or the Consumer Price Index, annually, providing that it has no negative impact on school budgets.”
This points to a fiscal Scylla-and-Charybdis dilemma for homeowners. Although the percentage of valuation that New York City uses to calculate taxes on owner-occupied apartments has declined in the recent years, relentless increases in the assessed value of those same properties often greatly increases the net amount of tax an owner pays each year. The CB1 resolution cites a recent report by the Citizen’s Budget Commission, documenting that between 2001 and 2017, the average, compounded growth rate on property taxes for cooperatives and condominiums was 6.7 percent per year, which is many times the rate of inflation. And, as the resolution notes, “although New York State has instituted a property tax cap of the lesser of two percent or the Consumer Price Index, the cap does not apply to New York City.”
These factors, combined with the new Federal tax law that caps the deductibility of local real estate tax (along with state and local levies) at $10,000, and limits the mortgage-interest deduction to $750,000, create, “a disincentive to purchase,” the CB1 resolution notes.
Finally, the resolution asks the City to devise a way to, “limit rental conversions to condos and co-ops, allowing long-time renters to stay in our community.” This speaks to a trend under which Lower Manhattan’s white-hot real estate market has lured speculators to purchase rental buildings, find ways to evict tenants, and then sell their apartments as condominiums, at a huge profit.
“The resolution deals with the recent loss of South Bridge’s affordable ownership,” Mr. Goodkind notes, in a reference to the large Mitchell-Lama cooperative apartment complex located alongside the Brooklyn Bridge, which once guaranteed affordability to generations of residents by limiting the price at which apartments there could be bought or sold. Owners at Southbridge voted to withdraw from the Mitchell-Lama program in 2014, which translated into a windfall for people living their at the time (whose apartments were purchased at subsidized prices, but were suddenly eligible for sale at market rates), but a devastating loss to Lower Manhattan’s inventory of affordable apartments.
“In drafting this resolution,” Mr. Goodkind continues, “CB1’s Housing Task Force officially turned its attention to the significant percentage of our community who own their apartments. To formally approach this subject, our Housing group prepared a 27-page report, called the ‘Unit Owners Guide for Lower Manhattan,’ which is a research study and primer for those owning and seeking unit ownership in our community. It explains what goes into a purchase: locating, pricing, borrowing from a lender, and closing. It also discusses ownership and maintenance with resources for affordable ownership — and plenty of useful websites. In our research, we found that our local owners have issues that are worthy of our immediate attention, which is why this resolution was drafted.”