On March 2, after a month of unexpected delays, the Senate confirmed Ben Carson’s nomination to Secretary of the Department of Housing and Urban Development in a party-line 58-41 vote. The lightly contested vote followed unanimous confirmation in committee, as Senate Democrats signaled that Carson’s nomination simply isn’t the hill they are willing to die on. With Carson now in the driver’s seat at HUD, what in the world could the soft-spoken neurosurgeon mean for U.S. cities?
As many have pointed out, Carson’s hearing testimony was vague, and his background in housing policy is sparse. Yet in Carson’s prepared testimony and at recent events, he has consistently stressed the problem of housing affordability and the need for land-use liberalization at the local level. In this regard, Ben Carson joins a cross-ideological, bipartisan consensus ranging from the progressive left to the conservative right on the urgent need for land use reform and new development in America’s cities. While HUD’s power over local land use regulation and housing is limited, here are three low-cost reforms HUD could pursue under Carson.
First, Carson could direct HUD officials to craft and disseminate model zoning reform legislation to the states. As urban history geeks may know, conventional “Euclidian” zoning began in 1924, when a committee of planning proponents drafted the Standard Zoning Enabling Act. The act provided state policymakers with readymade zoning legislation, and within a decade, most states had adopted some form of the legislation, and thousands of cities had adopted zoning ordinances.
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Sheldon Silver, the New York State Assembly’s speaker for the past 21 years, was indicted last month for taking millions in kickbacks from the real-estate lobby, among other special interests. These allegations, if true, reveal a dark truth for Democratic voters — and not just that they have been supporting a crook: Silver, whose district resides at the southern tip of Manhattan and contains neighborhoods both rich and poor, repaid his constituents for two decades of reelection by corrupting the NYC real-estate market with unnecessary tax subsidies.
According to the federal complaint against Silver, he is accused of taking approximately $4 million in kickbacks, most of it from real-estate interests, in exchange for granting favors via the assembly’s role in two development programs — 421-a and 80/20. 421-a provides substantial tax exemptions for developers that create new residential buildings and reserve 20 percent of the units for affordable housing, or that, in lieu of creating affordable housing on-site, create it elsewhere or buy “certificates” from other developers that do. The 80/20 program similarly offers tax-exempt financing and credits to new residential developments that make available 20 percent of the on-site units at an affordable rent for a negotiated period of time.
These programs began in the 1960s and 1970s and at first may have seemed like a typical progressive plan to help the poor. But recently, they have mainly done the opposite. Today, the programs do encourage some affordable-housing growth in the city’s outer boroughs, but they do so at the cost of spurring the growth of high-income housing in the areas where rents — and the threat of gentrification — are already highest. This pushes the poor and middle class out of their homes, a problem that has been especially pronounced with 421-a.
As the New York City population — and thus the demand for housing — skyrocketed over the past decade or so, developers began using the credits to subsidize their luxury buildings with credits from elsewhere. According to the New York Observer, “outer-borough builders earn four or five certificates for each unit of affordable housing they produce, and then sell the paper for $12,000 to $20,000 each to Manhattan developers to qualify for 10-year tax abatements on market-rate condos and rentals.” Consequently, government-subsidized condominiums popped up in Manhattan and Brooklyn — at a time when rents in New York were rising much faster than rents in the rest of the country.
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