Feds could hobble affordable housing
City: Bill in Congress puts thousands of units at risk
By Erik Engquist
Published on February 20, 2006
Congress' attack on eminent domain could cripple New York's
affordable housing program, says city housing czar Shaun Donovan.
Two measures in particular concern Mr. Donovan, who is commissioner
of the Department of Housing Preservation and Development.
A bill passed last November by the House and pending in the Senate
could prevent the city from clearing enough land for developments
like Melrose Commons, which has revitalized 35 blocks in the
formerly devastated South Bronx. The bill would strip New York of
hundreds of millions of dollars in federal funding if the city used
eminent domain "for profit, or to increase tax revenue, the tax
base, employment, or general economic health.
Additionally, a rider on a recently enacted appropriations bill cuts
federal funding to states that employ eminent domain for "economic
development."
Those definitions are so broad that they could trigger penalties
when property condemned through eminent domain is transferred to a
nonprofit, as is customary in affordable housing projects.
"It's possible that we would have to stop work on all of our urban
renewal areas," Mr. Donovan says.
Of the 14,000 affordable housing units built or planned for 20 urban
renewal areas in the city, nearly 6,000 sit on land acquired through
eminent domain, he says.
Trojan horse
Affordable housing developments typically involve a mix of land the
city already owns or can buy from willing sellers. But property
owners often hold out, and that's where eminent domain comes into
play.
"At some point, the city is going to run into a parcel of land that
it just cannot acquire," says Jay Kriegel, who is lobbying on the
issue for the Bloomberg administration.
But Julia Vitullo-Martin, a senior fellow at the Manhattan
Institute, a conservative think tank, says the city is using a
popular cause, affordable housing, to cling to eminent domain powers
that it no longer needs.
"This is a Trojan horse," Ms. Vitullo-Martin says. "Cities have the
authority to use eminent domain to build affordable housing. But
this new twist is for projects that are primarily something else."
She cites Atlantic Yards, a Brooklyn project that entails building a
19,000-seat basketball arena, offices, stores and more than 5,000
market-rate apartments, but also would include 2,250 affordable
housing units.
Ms. Vitullo-Martin takes issue with the city's means, condemnation,
and with its end, subsidized development. "All over New York, people
are fixing up their property, building new neighborhoods," she
says. "Why do we need this kind of old-fashioned urban renewal
project when the city is doing so well?"
But housing advocates insist that the free market alone cannot
address the city's affordable housing needs, which makes eminent
domain an important, if dangerous, tool.
"There's been a lot of eminent domain abuse in the past, but there
are situations where it is really appropriate to do affordable
housing," says Brad Lander, director of the Pratt Center for
Community Development, a Brooklyn planning organization.
Many cities, including New York, have launched a major lobbying
effort to defeat the eminent domain bill in the Senate. The
legislation has stalled in the Judiciary Committee, which has been
preoccupied in recent months with the confirmation hearing of
Supreme Court Justice Samuel Alito and the domestic wiretapping
controversy.
Reason to be hopeful
Meanwhile, the city is waiting for a Department of Housing and Urban
Development interpretation of the appropriations rider. Mr. Donovan
says conversations with HUD officials make him hopeful that the
agency will let the city continue invoking eminent domain without
having to keep seized property.
"The traditional model of affordable housing we use now is private
ownership," he says. "The irony here is that [the congressional
measures] would force us to go back to a purely public housing
model, where affordable housing would be owned and operated by the
government, which I don't think anybody believes is a good outcome."
AT RISK
Planned housing units that could involve eminent domain.
Arverne (Queens) 3,874
Melrose Commons (Bronx) 1,463
Seward Park (Manhattan) 1,100
East Harlem (Manhattan) 700
Edgemere (Queens) 407
Brownsville II (Brooklyn) 400
South Jamaica (Queens) 160
Milbank Frawley Circle East (Manhattan) 110
Milbank Frawley Circle West (Manhattan) 100
West Bushwick (Brooklyn) 55
Clinton (Manhattan) 44
TOTAL 8,413
Source: Department of Housing Preservation and Development
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