Ouster of HDC President Marc Jahr Raises Questions

A central tenet of Mayor Bill de Blasio’s policy agenda is his promise to build or preserve 200,000 units of affordable housing, a lofty goal that would add to the 160,000-plus units created or preserved under former mayor Michael Bloomberg’s New Housing Marketplace Plan, one of the largest urban affordable housing plans in United States history, if not the largest. However, the de Blasio administration has already discarded a key figure in seeing that plan through. Marc Jahr, the president of the New York City Housing Development Corporation—the finance arm of the city’s housing apparatus—was asked to resign on December 31st. Multiple sources with knowledge of the decision say that Deputy Mayor for Housing and Economic Development Alicia Glen ultimately made the determination to axe Jahr, despite the protests of several of de Blasio’s transition advisers.

Jahr’s departure was not publicly announced—there was no press release issued, nor any statement from the de Blasio transition team, and the HDC website now lists Richard Froelich, formerly the corporation’s chief operating officer, as “acting president.” But news of Jahr’s resignation traveled fast in housing circles, including among a broad range of individuals from grassroots affordable housing advocacy groups on up to housing experts in real estate and finance, many of whom were disappointed to see him leave. Most were under the assumption that Jahr would have some role in the de Blasio administration, even if it were not in the same capacity.

“HDC essentially was the major source of capital for the majority of the [housing] projects that the city delivered and Marc was the guy who kind of made that happen,” said Michael Gecan, co-director of the Metro Industrial Areas Foundation, a community organizing group that has collaborated with Jahr in the past. “I’m kind of surprised that he doesn’t have a prominent role somewhere [in the de Blasio administration] … There are a lot of very important positions that Marc would bring a lot of talent to.”

A number of sources interviewed for this article declined to be named for fear of jeopardizing their relationship with the new administration, though the near-unanimous sentiment was that de Blasio and Glen missed an opportunity in not keeping on Jahr, a connected veteran of city government with valuable ties to Washington and Albany. The de Blasio administration did not respond to multiple requests for comment.

“It is sort of a big question mark as to why [Jahr was let go]. Considering you’ve got someone really seasoned and well respected and very grounded in low income communities,” said a finance leader involved in city housing. “He has the respect of the private sector, capital sector, real estate providers, every commissioner that’s been there while he was at HDC. It’s unfortunate and questionable.”

Bloomberg appointed Jahr to HDC in 2007 after a five-year stint as New York regional director for Citi Community Capital, where he directed Citibank’s community development real estate lending in New York City, Long Island, Connecticut and New Jersey. Bloomberg had already established his New Housing Marketplace Plan in 2003, prior to Jahr’s arrival, later revising it from a four-year plan to create 165,000 units of affordable housing, to an 8-year plan. By the end of Fiscal Year 2014, which concludes on June 30th, insiders at HDC and the Department of Housing and Preservation Development are confident that the 165,000 number will be reached. Of that final number, roughly 70 percent are rentals, while 30 percent are homeowners, while the ratio of units preserved to newly constructed is roughly 2 to 1.

Jahr and HDC’s contribution to Bloomberg’s housing plan was significant. Before Bloomberg took office, HDC had previously concentrated on providing financing for large-scale rental developments, but under Jahr, HDC became one of the nation’s largest housing finance agencies in the country. A final report issued by the Bloomberg administration on the New Housing Marketplace Plan showed that HDC issued roughly 10 percent of all multifamily housing revenue bonds nationwide. Jahr’s deep familiarity with the complexities of the housing market and the intersection of finance and housing helped the agency leverage public and private dollars to help pay for the $23 billion total investment in the housing plan. With Jahr at the helm, HDC invested over $5 billion into the New Housing Marketplace Plan, largely through corporate subsidies and tax-exempt bonds.

“The reason Bloomberg was able to do this was that Marc Jahr basically conjured a billion dollars out of the city’s assets for affordable housing,” said a source who does work in affordable housing. “If it wasn’t for Marc, they would have never found that money. He did some financial magic to basically refinance the city’s loans and to free up that money which could then be invested in affordable housing development. If you’re planning on building 200,o00 units, you really need someone who knows how to do that.”

Jahr’s track record raises the question of why the de Blasio administration did not ask him to return. City housing sources indicate that de Blasio has been taking his cues on housing primarily from a close circle of advisors, including City Councilman Brad Lander, former HPD commissioner Rafael Cestero, who now heads the Community Preservation Corporation, and Deborah VanAmerongen, a strategic policy advisor for the law firm Nixon Peabody’s affordable housing practice. These sources say that all three strongly advocated for Jahr’s return. Reached by phone, Lander said he thought very highly of Jahr, calling him “somebody who helped me learn the ropes of affordable housing and was a great partner in that role.”

Another insider with knowledge of the Jahr decision said that Secretary of Housing and Urban Development Shaun Donovan personally called the transition team to advocate on Jahr’s behalf. In fact, Jahr’s supporters say that his relationship with Donovan, as well as members of U.S. Sen. Charles Schumer’s staff and key individuals in Albany were all invaluable to accessing the necessary capital to finance Bloomberg’s ambitious housing program. The federal government gives states permission to issue a certain amount of tax-exempt bonds on a per capita basis. The state then decides how much of that they want to share with New York City. One finance source called Jahr “a master” of acquiring additional tax-exempt bonds for the city to invest in affordable housing.

But several sources with inside knowledge say that Glen, who led the Urban Investment Group at Goldman Sachs, made the call to oust Jahr, with some suggesting the decision may have stemmed from a personal or professional grudge. A highly-placed housing source said that while Glen has some supporters, many who have dealt with her say she can be “divisive and vindictive,” and that she is “driven more by personal ego than by public service and commitment to public service.”

“There’s one person that doesn’t like him and that is the new deputy mayor and the general sense is that she disgracefully pushed him out,” the source said. “This was based on personal reasons, not strategic.”

Reached via email, Jahr expressed his wish that “HDC and HPD sustain their productive, collaborative work in the future,” but declined to comment any further on the circumstances of his resignation.

For now, as de Blasio drags his feet on naming replacements at both HDC and HPD—Bloomberg’s HPD Commissioner RuthAnne Visnauskas is staying on until a final decision is made—it remains to be seen whether Jahr’s departure will make it more difficult for the mayor to reach his 200,000-unit goal. The same housing experts who praised Jahr cautioned that “everyone is replaceable,” but most agree that HDC has become a coveted position, owing largely to how Jahr has helped redefine the agency’s role in housing development.