Aiming for affordability: A Q&A with HPD Commissioner Vicki Been

When Bill de Blasio was elected mayor of New York City in 2013, his administration quickly began work on a detailed proposal to follow through on his goal of creating or preserving 200,000 units of affordable housing in New York City, introducing its Housing New York plan a year later. At helm of the 10-year effort, which could very well define de Blasio’s legacy, is the city’s Department of Housing Preservation and Development. HPD Commissioner Vicki Been recently talked with City & State about progress on the mayor's affordable housing plan, using subsidies to support more lower-income housing, and getting an A from the city comptroller’s office.

C&S: When Bill de Blasio was campaigning for mayor and said he wanted to create 200,000 units of affordable housing, what did you think?

VB: We’ve actually exceeded our goals (each year), so right now it doesn’t look like such a stretch, but it is a stretch goal. Every single person that I talked to about taking this job told me it was impossible, but we are doing it.

One of the things that makes the mayor special is that he pushes people really hard, and that’s tough, but it makes you be more ambitious; it makes you go beyond what you really thought was possible.

C&S: How would you assess the progress so far on the affordable housing plan?

VB: We are ahead of schedule. There are subgoals that you really can’t judge until the end. For example, (the goal) was 80,000 new and 120,000 preserved (housing units), but then we did Stuyvesant and Riverton, which were enormous. It looks like we’re out of whack because we got that enormous preservation hit. But you have to look at this over the long term. It would be silly to turn down an opportunity like Stuyvesant or Riverton because that would put us a little bit out of line.

The one goal that I think is always going to be the hardest for us is meeting the extremely low and very low income levels. We promised that we would have 20 percent of our affordable housing units be for people with extremely low or very low income. We’ve had to completely revamp all of our programs, and that’s just going to take a while. We’re making progress, but we’re not going to know that we’re there until literally the very end. 

C&S: With the East New York rezoning, city officials said they would try to use subsidies to reach those with lower income levels after the zoning passed. Is there a finite amount of resources you can put toward this?

VB: We do have a limit. Money doesn’t grow on trees. The subsidies that we will commit to build affordable housing and to drive down the average median income levels that can be served, that’s part of the $8.2 billion. It’s in the 10-year capital budget. Now, it was budgeted based upon that commitment that we would do 20 percent of the created units at extremely low and very low income levels. If we were to do more than that, we would have to pull money from somewhere else. But people should not be afraid that we won’t provide the affordable housing in a rezoning area, because that money is there.

The only thing that’s not there firmly is we do use project-based vouchers from the federal government to reach a lot of those extremely low income levels. At 30 percent area median income, you’re not paying the buildings’ bills. I, at a bank, can’t underwrite that. So project-based vouchers are critical for that because they supplement the rent that the tenant can pay. We’re very dependent upon those federal Section 8 vouchers. That we don’t control, but they’ve been relatively steady.

The other things – like if the neighborhood needs a new school or new roads – a billion dollars is set aside for the Neighborhood Development Fund. Will that be enough for 15 rezonings? Probably not. Probably, at some point, more money will have to be allocated to that. 

C&S: What does the administration mean when discussing preserved affordable housing?  

VB: There are a whole bunch of different buckets of preservation. The traditional bucket was we build something, and it has a 30-year regulatory agreement. At the end of those 30 years, its regulatory agreement is expiring, so it could take all those units market rate after the current tenants vacate them. What we try to do, at that point, is to say, “You need a new boiler; you need a new roof. Let’s do that rehab. We will loan you the money, grant you some money, but then you need to re-up your regulatory agreement for another 30 years.”

What we’ve tried to do is add a lot more buckets. So we will go to an owner that may never have had anything to do with us before and say, “We see you’re in financial distress … Let us work with you to give you a loan to buy that boiler and fix that roof. And then we need you to enter into an agreement to preserve the affordability for, lets say, 30 years.” 

You have to report your energy use. And your water bills are going up because everything is leaking and inefficient. We’ll go in, do a sort of floor-to-ceiling, basement-to-roof inspection of the building and figure out what it needs in terms of energy efficiency upgrades. Then we’ll loan you the money; we’ll get you some grants to do those investments – again, if you sign a regulatory agreement.

Stuyvesant Town was an example, where it had never gotten city money before. It actually doesn’t need a rehab. What it does need is tax relief. So we said, “Extend the rent stabilization so that you promise to keep it rent-stabilized for another 30 years, and we will give you relief from the mortgage recording transaction, one of the taxes.”

C&S: So it’s basically getting an agreement from landlords of existing housing to maintain a certain amount of affordable housing, often by having the city help the landlord through any one of several strategies.

VB: Exactly.

C&S: There have been some cases where, once affordable housing is in place, rules are not followed. What role does HPD have in overseeing these developments?

VB: We are subject to criticism there because you know, for example, we weren’t carefully checking on the 421-a tax abatement recipients. We worked with the attorney general. We’re cleaning all that up. But that should never have happened. We’re trying to build computer systems to make sure that no commitment, no requirement is not accounted for.

We’re going to be rolling out in the fall what we call HPD Works, a sort of cradle-to-grave picture of our housing. It will say, for example, we just closed this deal, the regulatory agreement requires the following things and here is the list of all the things that we need to watch. A trigger will go, “Mortgage folks, you need to make sure that you start collecting the mortgage in five years; homeless marketing unit, you need to make sure that they’re providing their 10 percent of units for homeless families.”

Are we there yet? No. This is a long-term plan. But we’ve invested very, very heavily in that.

And then the other thing is that we’ve restructured our organization. It used to be that we had one assistant commissioner who was in charge of both intergovernmental affairs and regulatory compliance on things like prevailing wages. We’ve so ramped up our enforcement that I separated the jobs and we now have an assistant commissioner who is only in charge of regulatory compliance.

C&S: Every year the city comptroller gives grades on how much business agencies do with minority- and women-owned businesses. I saw that HPD was the only agency that got an A. Do you have any specific strategies that have worked well?

VB: I am really proud of this. One of the linchpins of the program is a capacity-building course. We get both people inside of HPD and HDC and some of the other agencies, but also the real leaders in the field, who come in once a week and teach them how to build affordable housing in the city. And it’s an incredible networking thing. And they’re not just MWBEs, they’re also nonprofits.

A second thing that we’ve done is we said, “We have all of these MWBEs who have been building 50-unit projects, how do we get them to 100-unit projects?” They can’t win a request for proposals for a 100-unit project because they’ve only built 50. So we set aside some city-owned land. Then we said, “Joe has done 50-unit projects; he’s done a good job, so we’re going to ask three Joes to bid on a 100-unit project. And we’re going to take a chance on them, and we’re going to watch very carefully so that they can’t fail.” And that nobody’s done.

The people who build our projects should look like the communities in which they’re building. We want people who have connections to the local community because if they have connections they know how to hire locally, they know how to tailor the retail locally. It’s just a better model.

To build 200,000 units of housing, we need a lot of people. And the industry is a great industry, but it had become the same 20 firms. So we wanted to infuse that. We’ve been doing that with MWBEs, but also I would say the first year that I was commissioner, I spent one lunch or breakfast every week meeting with a developer and saying, “Why aren’t you doing our work?” Then I either fixed the reasons that they said they weren’t or tried to bring them in. Now we’ve got two great new groups that came from Boston, we’ve got New Jersey developers.

C&S: Besides the Housing New York affordable housing plan, what other major priorities or goals matter to you?

VB: I love building a team, and we’ve done a lot of work bringing in new folks and introducing new programs. I would be in meetings with some just incredibly talented people, but they weren’t very good at public speaking, so we started sending people to public speaking school or we started targeting people who had management and leadership potential, but weren’t quite there yet.

I also really love the policy issues. The truth of the matter is there are hundreds of little things that make a huge difference. Let me give you one example. People complain that their number comes up, they get called in to bring in their documents and show what their income is, and they fail at that point. We looked hard at why people are failing at that point. Some of it is they don’t realize how much work it is to document their income, so they don’t have their papers together. We have people who work with them and try to help them get ready.

We also learned that some people were getting dinged because of a credit score. We said, “First of all, we need to help people improve their credit scores.” And we then changed our regulations to prohibit a developer from excluding somebody solely on the basis of credit score. We saw that we had a problem with people getting dinged because of criminal records – we limited the ways in which criminal records can be used. I could go on and on. These are just little tiny things compared to a Mandatory Inclusionary Housing (zoning template), but they make a real difference.