How to Avoid a Post-Recession Feeding Frenzy by Private Developers

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How to Avoid a Post-Recession Feeding Frenzy by Private Developers


Sept. 2, 2020

By Brad Lander - Member of the New York City Council.

Read More: https://www.nytimes.com/2020/09/02/o...and-banks.html

The last time New York City faced a cataclysmic economic threat, city leaders responded by cutting the social safety net and infrastructure investment, laying off thousands of workers and turning over public land to developers who got big tax breaks. Those leaders have been called “champions” who saved New York City after it almost went bankrupt in 1975. But the austerity and privatization they imposed paved the way for the inequality crisis where the wealthy thrive and so many others fight to survive.

- When the Brooklyn Navy Yard slowly declined after it was decommissioned in the 1960s, it could have been sold to a vulture fund to convert it to condos. Instead, the city put the yard under the control of a nonprofit development organization that generated a rebirth of manufacturing, innovation and entrepreneurship, beginning in the mid-1990s. Today 500 companies employ over 11,000 people in good jobs there, and an innovative high school prepares young people for STEM careers. When Covid-19 hit, many of those companies started manufacturing P.P.E. together. — In Chelsea, the city took over another property that was deemed blighted and, working with labor unions in the 1960s, created Penn South, a democratically controlled housing cooperative that limits resale prices to keep homes affordable. Over the past 50 years, Penn South, Mitchell-Lama and other limited-equity cooperatives have survived as other affordable housing has been privatized, providing a total of around 90,000 units of permanently affordable housing.

- Instead of letting distressed properties be auctioned off when owners default on mortgages and taxes, the city should step in. We could acquire and hold these properties temporarily through a city-controlled land bank, based on legislation I’ve introduced, and then transfer them to a growing network of community land trusts, nonprofit entities that hold land in perpetuity for publicly beneficial uses. — The city already plans to spend $8 billion in public capital funds on affordable housing and economic development over the next five years. A vast majority is slated for private, for-profit developers. Redirecting some of that to social ownership is a better long-term public investment. Residential property (including failed hotels) should become permanently affordable rental or cooperative housing like Penn South, what European countries call “social housing”, so that the generation of New Yorkers coming of age in this crisis will be able to imagine a future here.

- In 2016, a report by Comptroller Scott Stringer found that a community land bank could support the development of 57,275 units of affordable housing on vacant land that is already publicly owned and on privately owned tax-delinquent properties. For commercial properties, a citywide version of the Brooklyn Navy Yard development can provide affordable space for manufacturing, tech and sustainability-focused companies that commit to hire and train local residents, side by side with local arts organizations, youth employment programs and the locally owned small businesses that make New York City the place we love. We don’t yet know how many additional properties will fall into distress in the current crisis or how many we might be able to convert to social uses. But we need to get started now, before the feeding frenzy starts.

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