Poor people: Use the rear door

NEW YORK'S "progressive" de Blasio administration has approved city subsidies for a building with a separate, rear entrance for low-income people that has become known as a "poor door." The building, located on the ultra-posh Riverside Boulevard on Manhattan's fashionable Upper West Side, will have 55 affordable apartments for low and moderate-income people and 219 "market-rate"--read luxury--apartments.

The ordinary people will be forced to use an entrance on the back alley. The rich people will have their own entrance directly facing the street.

The rich will be on the upper floors with a beautiful view of the Hudson River. The rest will face the street.

Best of all, the rich people will never even have to meet their poorer neighbors. Or as New York Magazine put it, the entrance will "[spare] all the residents from the terrible awkwardness of regularly encountering people whose lifestyles differ from theirs."

Real-estate developers insist that low- and moderate-income people should just be happy they're getting apartments at all. Or as R. David Von Spreckelsen, the senior vice president at Toll Brothers, which specializes in luxury buildings, told The Real Deal "low-income renters are very fortunate to live in a new building in a great neighborhood." It may be just a coincidence that Toll Brothers has built a high rise building in Williamsburg, Brooklyn, with its own poor door.

The New York Times has a more honest explanation:

As nearly the entire Upper East Side from Lexington Avenue to Fifth can lay testament, rich people like to live among rich people. A developer erecting a structure with $3 million apartments is going to worry, not irrationally, that those apartments will be less marketable if they are next door to those renting for $1,000 a month."

When the "poor door" hit the news, the de Blasio administration rushed to say that it will never happen again. Still they were forced to admit that it would take at least two years to change the zoning laws that made it possible. The administration isn't saying how many more poor doors could be created in those two years.

Leticia James, the New York City Public Advocate (the citywide, elected ombudsman), normally a close de Blasio ally, attacked the mayor's poor door plan. She told a City Hall press conference, "This administration vowed to look at the zoning laws, but the mayor's housing plans says that it will continue to allow this kind of segregation, which we as a society abhor."

EVEN WITHOUT poor doors, developers and landlords are finding new ways to keep their rich tenants happy. They are giving them parking spaces, gyms and even swimming pools. Naturally these amenities are off limits to the ordinary people in these buildings.

But the poor door is only a symptom of a larger dilemma. De Blasio's plan to create affordable housing relies primarily on developing mixed-income buildings. It's based on "inclusionary zoning"--giving developers financial incentives to build affordable apartments.

When developers agree to rent to low-, moderate- or middle-income tenants, they can make even larger profits by building higher, wider buildings with more apartments. The extra apartments can then be used for market-rate tenants where the real money is to be made.

The inclusionary zoning plan even gives developers tax credits for creating affordable apartments. The New York Post reported that Extell Development Co., which is constructing the building with the poor door at 40 Riverside Boulevard, saved more than $21 million in taxes on five of its luxury buildings in the first year alone by complying with the inclusionary zoning rules. As part of the deal, Extell will even get permission build an additional floor of market-rate apartments.

Under city regulations, some "affordable" apartments can go to relatively prosperous people like "middle-income" families making up to $150,325 a year. Others are reserved for very needy low-income families making $34,360 a year or less for a family of four.

Even these income levels are artificially high because they are based on a percentage of the median income for the New York Metropolitan Area as a whole, rather than just New York City. This includes suburban communities with some of the highest incomes in the country in addition to very poor New York City neighborhoods.

Many of New York's very best non-profit developers are being compelled to include market-rate apartments in their affordable housing plans. They have no other way to cover the extravagant costs of bank loans, buying land and then constructing and operating a building.

Often their buildings will have a third low-income tenants, a third moderate-income and a third market-rate tenants paying the highest rents. These non-profit organizations can even be forced to develop buildings with as many as half market-rate apartments. All this as these developers never make a penny in profit.

Not surprisingly, non-profit developers often get complaints from their market-rate tenants. They resent the fact that their low-income neighbors have homes every bit as nice as theirs. Some are asking for special amenities like parking spaces reserved just for them.

At the very best, de Blasio's reliance on mixed-income housing means building less new affordable housing for poor and working people and more for the 1 Percent. At worst, it creates pressure, even on non-profit developers, for two-tier housing with special facilities for the rich.

In one sense, de Blasio is absolutely right. His strategy is the inevitable result of an affordable housing plan that relies on bribing developers with planning permission and tax incentives.

But there is an alternative. De Blasio, as the mayor of the largest city in the country and the hero of the liberal wing of the Democratic Party, is ideally placed to lead a movement for federally funded public housing.

That would eliminate the need to build new housing for rich people. There would be no more pressure for poor doors or special swimming pools.

Public housing can come in every shape and size--not just high-rise buildings. The city could even take over vacant land or abandoned buildings to build desperately needed affordable housing.

So far, all this is a bridge too far for Bill de Blasio. He'd rather play it safe and stick with the private market. Even if that means more poor doors, bloated profits for developers, and subsidizing housing for the wealthy people who need it the least.