A bold stand against the homeless super-rich

NEW YORKERS have waited nearly a dozen years to hear Mayor Michael Bloomberg identify a public subsidy for the city's richest residents that he's against. The mayor has enthusiastically showered developers with generous tax abatements for luxury housing, pushed through infrastructure investments for private benefit, and even privatized streets and parkland.

At long last, however, the city has learned just how much generosity toward those least in need is too much for the mayor. Bloomberg is apparently concerned that rich people will clog up the city's homeless shelter system--and he's against it.

In his weekly radio address on March 8, the mayor urged that the city be relieved of its obligations under the state constitution and a series of court orders to provide shelter to the homeless. As a result of the requirement, the mayor said, the city is helpless to prevent people from choosing to be homeless and flooding into the shelter system.

"You can arrive in your private jet at Kennedy Airport, take a private limousine and go straight to the shelter system and walk in the door, and we've got to give you shelter," he said.

We can assume that the mayor's insight into the lives of the families and individuals who populate the shelter system is limited. According to Forbes, Bloomberg is the seventh richest American, with a net worth of $27 billion. He owns 11 houses for his personal use.

He has no need for a limousine from the airport, because he can hop from whichever of his two jets he happens to be using directly onto his own helicopter. To save even more time, he is on the waiting list for a $30 million airplane/helicopter hybrid that was originally developed for military use. While he brags about riding the subway, Bloomberg is less vocal about the fact that a chauffeur drives him from his townhouse to the subway entrance.

THE MAYOR is well aware that his neighbors on the private jet tarmac are not flocking into the shelter system. Nor does he sincerely believe that people who can afford to house themselves are gaming the system by choosing free accommodation in shelters.

What he's really reacting to is the fact that on his watch homelessness has soared. In January, the shelter census topped 50,000, a record high that includes 21,000 children. This represents a 61 percent increase since Bloomberg took office in 2002.

As he typically does when his policies or performance are questioned, the mayor has tried to shift the blame to others. He blames the homeless advocacy community, the courts and, most of all, those selfish New Yorkers who insist on being homeless.

In 2004, Bloomberg announced a goal of cutting homelessness by two-thirds over five years. Instead, in the intervening years, it increased by almost as much. The explanation doesn't lie with "voluntary homelessness," but with the fact that the Bloomberg administration has never had an interest in developing affordable housing and has simultaneously pursued policies that have been devastating for working families and the unemployed.

Under Bloomberg, two subsidy programs were introduced, one providing a rent subsidy for the formerly homeless that diminished by 20 percent each year before disappearing after the fifth year. A successor program offered a flat subsidy for two years. Neither program provided an incentive to create new housing for poor and working class families, and--in the absence of an adequate supply of living-wage jobs--both were unsuccessful in keeping participating families from re-entering the shelter system in large numbers.

Bloomberg's plan to increase the supply of affordable housing was also a sham. The New Housing Marketplace program unveiled in 2003 was intended to offer loans and tax abatements to create 165,000 new "affordable" housing units at a public cost of $8.4 billion, giving the developers a subsidy of more than $50,000 per unit.

But the administration defined "affordable" so broadly that many of the new units are affordable to those with a household income of more than $100,000. In some cases, the availability of cheap loans to renovate existing apartments created an incentive to displace low-income tenants so they could be replaced with higher-income households after the renovations.

Typically, the units created were unaffordable for the majority of families in the community in which they were located. Few units were large enough for families. To the extent that truly affordable units were created, this will be temporary. Despite having received massive subsidies, developers will not have to maintain the affordability limitations beyond 15 years, and beginning in 2017, the program will lose approximately 11,000 units per year.

Meanwhile, more than half a million affordable units were lost between 2000 and 2007. Some were deregulated because rents crept above the threshold for "luxury decontrol," meaning that the landlord no longer had to adhere to the city's rent-stabilization system. Others were lost because subsidies expired or were eliminated. Still others were replaced by new construction or renovated as luxury housing, in part because of city policy.

While the city has been reluctant to invest in affordable housing, it has used tax abatements to massively subsidize "market-rate" housing, including luxury co-ops and condos. The price tag for the tax abatement program, known as J-51, increased by about 50 percent between 2001 and 2011, even though the number of apartments covered increased by only about 7 percent.

In 2011, the city's investment in J-51 was two-and-a-half times its contribution to public housing. J-51 makes up only a small portion of the giveaways to developers, however, which have included billions in tax breaks, direct subsidies and land grabs for stadiums for the Yankees, Mets, Nets and Islanders.

THE GAP between what most people can afford to pay based on household income and the actual rent they are forced to pay has grown throughout the Bloomberg years. During the housing boom, median rents shot up considerably faster than median household incomes. The always-tight housing market meant that during the recession, rents continued to rise even as incomes stagnated or fell.

Bloomberg has been no more concerned about the need for fair wages than he has been about the need for affordable housing. He opposed a mild "living wage" bill for city contracts, calling it USSR-style economic management. When the City Council passed it anyway--after watering it down so that it would benefit less than 1 percent of workers in the city--Bloomberg first vetoed it and then sued to prevent it from being implemented.

Bloomberg has increased the economic burden on working families by eliminating childcare for thousands of children, laying off thousands of city workers and trying to break public- and private-sector unions. Given the mayor's attacks on working families and the poor, it should not be a surprise that he has pushed the shelter population to new heights.

Bloomberg's response to the spike in homelessness has been typical. First, in order to move families out of the shelter system, homeless families were given priority for public housing. This aggravated another problem, however, because moving more very low-income families into public housing lowers the revenue available for maintenance and capital improvement, because rents are based on household income. That can only make an already serious gap worse. A policy was needed to bring revenue into public housing.

The Bloomberg administration's solution to the problems of public housing, as one might expect, involves leasing parcels of land intended for the use of the residents to private developers for market-rate development of housing and commercial space.

In Michael Bloomberg's New York, there is no problem that can't be remedied by one more giveaway to the city's economic elite--so long as they can resist the temptation to bed down in a homeless shelter.