NYC's Crony-Capitalist Affordable Housing Industry: Jim Epstein in the New York Daily News

I have an op-ed in today's New York Daily News about the Big Apple's affordable housing industry.

Here's an excerpt:

Mayor Bloomberg cuts the ribbon at the Via Verde affordable housing development.|||Enid Alvarez/New York Daily NewsEnid Alvarez/New York Daily News

Affordable housing developers aren’t simply do-gooders or risk-taking Silicon Valley entrepreneurs; they’re expert crony capitalists. If they’re not going to make a lot of money, they’re not going to build. It’s that simple.

Staffed with an army of expert budget nerds with deep knowledge of the city’s red tape and its wide array of local and federal subsidy programs, the developers won’t under any circumstances be squeezed.

Over the years, and perhaps especially these past 12 years, New York City’s affordable housing industry has done a terrific job at earning itself boatloads of money while producing a relatively small number of cheap housing units.

Take Via Verde, an affordable housing development that opened last year in the South Bronx. The project, which was mostly financed by federal taxpayers, cost about $98 million and yielded just 220 below-market-rate apartments, translating to about $445,000 per unit. Next time, can we just give families $445,000 and let them buy buildings in the South Bronx?

Read the whole thing.

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  • sarcasmic||

  • Mainer2||

    "How can Maine taxpayers be expected to help pay for $314,000 'low-income' apartments when the median single-family home sells for $159,000?" Poliquin wrote.
    ...
    But Bunker said the comparison doesn't take into account the reality of the state and federal policies and "belies a lack of understanding of tax-credit projects and historic tax-credit projects....housing costs make up only a percentage of the total price tag.

    I don't know all the politics that might be behind this. But once again we see that there's always a sophisticated answer to a simple question. Once it is patiently explained why an apartment costs twice as much as a house...that makes it all OK, doesn't it.

  • Aresen||

    New York City’s affordable housing industry has done a terrific job at earning itself boatloads of money

    I don't think "earning" is the right word here. "Grafting" or "stealing" fits better.

  • Paul.||

    Is it stealing when the government unloads dumptrucks of money onto a warehouse floor and tells everyone to come and get it if they're willing to learn the rules of WhackBat?

  • Aresen||

    If it is not the government's money in the first place, it is either stealing or receiving stolen goods.

  • Caleb Turberville||

    OT, but related to crony capitalism: I'm an admirer of Peyton Manning, but calling Lucas Oil Stadium, the "House that Peyton Built", as ESPN likes to do, sounds incredibly pretentious in light of the taxes and subsidies used to finance it.

  • Swiss Servator, O Luzern!||

    "The House that Indiana Taxpayers Built and Peyton Manning Made Lots of Money performing In" is too long for common usage?

  • Caleb Turberville||

    That's the pretension of it. Peyton Manning didn't build that goddamn stadium. True, he works his ass off to be a great quarterback. But he gets compensated by $100 million contracts. On the other hand, the taxpayers have to buy the expensive tickets to sit in a stadium that they have already payed for through their taxes.

  • Aresen||

    They are welcome to buy the expensive tickets.

    They are not welcome to tax anyone for the money required to build the stadium to line the owners' and Mr. Manning's pockets.

  • creech||

    We need more analysis like this, but progs and the media will still cry a river about some poor kid who has to live in a roach-infested slum because the cruel libertarians wouldn't let government build his mom a new $445,000 apartment.

  • ||

    Every "industry" in New York City is pretty much based on graft, corruption, and connections. That's just the way it works. As Rodney said in Back to School:

    "First of all you're going to have to grease the local politicians for the sudden zoning problems that always come up. Then there's the kickbacks to the carpenters, and if you plan on using any cement in this building I'm sure the teamsters would like to have a little chat with ya, and that'll cost ya. Oh and don't forget a little something for the building inspectors. Then there's long term costs such as waste disposal. I don't know if you're familiar with who runs that business, but I assure you it's not the boy scouts."

  • Paul.||

    but I assure you it's not the boy scouts."

    No, it's the New York City Department of Public Works.

  • ||

    One morning, when I still parked on the street because I was young and stupid, I came down to get into my car and drive to work. To my chagrin, I found that someone had hit my car and damaged one of the front quarterpanels. The damage was in the unmistakable shape of the front bumper of a NYC garbage truck.

    I realized that I would never, ever, get compensation for it, so I shrugged, got in the car (because it was still functional at least), and went on with my day.

  • l0b0t||

    IDK, Epi. The city is usually pretty quick to hand out checks for shit like that. We lost a tire to a pothole recently and found, to our pleasant surprise, that if the pothole has been reported to DOT already the city will pay for damages. Two weeks after our call to 311, we received a check for $185.

  • l0b0t||

    We don't have a Department of Public Works in NYC, we have the Department of Sanitation (DSNY). Also, the city only picks up residential trash; businesses must contract with private garbage carting firms. /pedantry

  • VG Zaytsev||

    OT

    Some progressive idiot called the Limbaugh show and said that Obamacare is constitutionally mandated by the general welfare clause (in the preamble) and it is just a form of eminent domain.

    ZOD please, please let this be their new talking point.

  • Caleb Turberville||

    Apparently, the Constitution's wording is open to continual reinterpretation, so you can make pretty much use it to justify just anything.

  • Swiss Servator, O Luzern!||

    Looks like we found where Tony was today...

  • Scruffy Nerfherder||

    it is just a form of eminent domain

    Somebody better tell John Roberts.

  • The Original Jason||

    He/she probably views the US as a body with the government as the head...

  • Juice||

    Wait, isn't it the heart?

  • Aresen||

    ZOD please, please let this be their new talking point.

    I believe that has been the essense of their argument for the last 150 years: Anything is justified by "the General Welfare."

  • VG Zaytsev||

    I meant using eminent domain to control of our bodies.

  • Aresen||

    They may not phrase it in those terms, but every time I've argued with a pro-WoD person, they invariably say something like "But you aren't just harming yourself, you are hurting others because they love you and depend on you..."

    IOW, they (and everyone else) owns you.

  • Hyperion||

    Every time I hear a story about tax payer subsidized housing, this is what first comes to mind:

    Pruitt-Igoe

  • ||

    Would you build in that red tape laden shithole if you weren't guaranteed to make an assload of money?

  • Aresen||

    Since I am not one of the priviledged members of the boss class who knows whose palm to grease for how much, I wouldn't build in NYC for any reason.

  • Tim||

    In fairness, the right has changed "provide for the common defense" into a global spying and war machine

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