DeBlasio's affordable housing claims are overstated

From the Independent Budget Office:

Over the past decade, near-bankruptcy and efforts to deregulate rent-stabilized apartments at Stuyvesant Town-Peter Cooper Village have left many tenants of the twin complexes uneasy. When the mostly middle-income developments with more than 11,000 apartments were about to be sold in 2015, the de Blasio Administration negotiated a deal it said would keep 5,000 units affordable for 20 years—apartments that the Mayor’s office contended would otherwise have become market rate housing—in exchange for $220 million in city subsidies.

While the de Blasio Administration counts all 5,000 apartments towards its goal of preserving 180,000 affordable units through 2026, to estimate the true effect of the deal the benefits provided to tenants must be weighed against what would have happened without it. The duration of benefits must also be taken into account, particularly because not every apartment will receive the same protections for the same amount of time under the agreement. Accordingly, we examined the agreement in terms of “apartment-years;” the de Blasio Administration’s contention that 5,000 units would be preserved as affordable for 20 years translates into 100,000 apartment-years of affordability. Among our findings:

• IBO estimates that 64,000 of the apartment-years of affordability the de Blasio Administration attributes to the agreement would have remained rent stabilized even without the deal. In other words, the deal can be credited with 36,000 apartment-years of additional affordability—not 100,000.
• Only about 3 percent of the 100,000 apartment-years covered by the agreement will be reserved for low-income households. Twenty-seven percent of the 100,000 apartment-years will be targeted to middle-income households. The remaining 6 percent of apartment-years of affordability consists of units that will remain rent-stabilized longer than they would have absent the agreement. These units will not become income-tested because they never turn over tenancy during the regulatory period.
• The agreement includes an intricate set of rules but has limited oversight and reporting requirements for Blackstone Property Advisors and Ivanhoé Cambridge, the new owners of the complexes.

The October 2015 agreement was the single largest housing preservation deal done by the city. In addition to the $220 million in tax breaks and loans that do not have to be repaid, the de Blasio Administration agreed to support the transfer of air rights from Stuyvesant Town-Peter Cooper Village to other properties. While not a cost to the city, from the perspective of the complexes’ owners, sales of air rights could become the most lucrative part of the deal.