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Tuesday, June 25, 2002

Statement of New York City Council Member Alan J. Gerson

To the New York State Housing Finance Agency.

Hello my name is Alan Gerson. I am the City Council Member for Manhattan’s first Councilmanic district representing lower Manhattan, Battery Park City, Tribeca, Chinatown, Soho, Noho and part of the Lower East Side. Thank you for the opportunity to offer comment on this important matter.  As the elected representative for lower Manhattan I have a special responsibility to make sure that redevelopment downtown both respects the needs of existing residents and reflects their values as well.  Our community strongly believes that preserving downtown’s affordable housing must come first, before creating more luxury housing. The community also believes that new housing development should add to the area’s economic and cultural diversity. Federal Liberty Bonds intended to rebuild our neighborhood should be employed in a manner consistent with these principles.

With little to no input from the lower Manhattan community, the New York State Housing Finance Agency has suggested using Liberty bonds to provide nearly three hundred million dollars of tax free financing to develop three luxury buildings. Meanwhile, a major housing crisis faces many downtown residents who already live in affordable housing.  Thousands of downtown residents reside in Mitchell Lama rental units. These families lived through the tragedy of September 11 and stayed in their community without incentives. In the coming months and years they will be in danger of eviction because Mitchell Lama owners will soon be able to buy out of their contracts. Has any effort been made to study how the State and the City can use Liberty bonds and other federal resources to help these residents?

I also understand that only five percent of the units to be built will be reserved for those earning less than 150% of Area Median Income.  Both the number of units proposed and the standard of affordability proposed are unacceptable. New York’s Housing Finance Agency and its City counterpart, the New York City Housing Development Corporation have a consistent record of financing development that benefits the public, usually by building mixed income, and moderate income affordable housing.  Unfortunately, despite the generous, specially allocated, public financing offered, HFA has chosen to lower its affordability requirements from the modest twenty percent typically allocated to lower income New Yorkers in its mixed income projects to a paltry five percent for above middle income residents.

I do recognize that market rate housing will play a major part in future development downtown, and that some liberty bonds will rightfully be used for that purpose.  But we insist that a significant amount of the bonds be used in conjunction with other resources to preserve downtown’s endangered affordable housing, including providing existing tenants with the wherewithal to purchase and rehabilitate their own buildings.

It is not my intention stop the development of the projects discussed tonight, but it is my duty to insist that they do not serve as a precedent for further Liberty Bond financed development. Please find a better way to use the resources intended to rebuild lower Manhattan.

Thank you and I look forward to working with you on this issue.

Council Member Alan J. Gerson