Bill De Blasio's Affordable Housing Shakedown
The latest economic nonsense from the mayor of New York City.
The price of getting a new private school building built in Manhattan these days apparently includes a payoff of $50 million for "affordable" housing.
And that $50 million number, reportedly reached after an extensive negotiation between Collegiate School and New York City's Department of Housing, Preservation, and Development, turns out to be just a starting point for an additional shakedown.
In a letter issued earlier this month, the Manhattan community board with jurisdiction over the construction site expressed "strong concerns" about the $50 million payoff.
In a sane world, those concerns would have had to do with the injustice of arbitrarily extorting, as a condition for building, a payment of any size for a cause totally unrelated to the school's educational mission.
Alas, this isn't a sane world; it's Mayor Bill de Blasio's New York City. And the "strong concerns" turned out to be…well, the board asked for even more money. "We would be amenable to the $50 million as a form of down payment to start this process," the board wrote. "However, the provision of this money is only a first step." If building 55 "units" of affordable housing costs more, "then Collegiate must be held responsible for providing the balance of the funding required." (Though if the housing comes in for less than $50 million, there's no refund to Collegiate.)
The longer it takes to build the "affordable" apartments, and the farther away they are from the site of the new school building, the more money, in addition to $50 million, that the community board—a city government body—demands.
Just to put this in context, the Collegiate School's entire endowment, according to its website, is $77 million. On a percentage of endowment basis, that's as if Columbia University came to the city asking to expand its campus, and the city asked the university for $6 billion to fund city courthouses, libraries, playgrounds, and prisons as "a first step."
Even as a percentage of the overall Collegiate building project, the $50 million affordable housing contribution is staggering. The school sold its old site for $97 million, and the new building, on West 62nd St., will cost about $118 million, according to a report in the Daily News.
Another way to look at it is that each of the Collegiate School's 653 students (or their parents) will now have to pay an affordable housing fee of $76,570 in addition to tuition. That's $50 million divided by 653. If the Community Board's warning that $50 million is just a "down payment" holds true, the Collegiate families could be on the hook for untold more.
It's not as if the independent school isn't already providing a service to the city. Its teachers and other employees pay taxes, as do its parents and alumni. By educating the students at private expense, Collegiate is relieving the city's public schools, and the taxpayers, of a cost of more than $10 million a year.
It's not that "affordable" housing isn't a worthy cause. But why not pursue it by some more logical means? Consider, say, eliminating the rent stabilization and control laws that keep elderly widows and widowers hanging on to cheap three-bedroom apartments. What about reviewing the landmark historic district laws that restrict new construction in vast swathes of the city? Or how about reconsidering obsolete building codes and comparable-wage laws that drive up the cost of construction? Holding up new projects with unreasonable demands on an ad hoc basis is no way to add affordable housing to the city, unless the point is to render New York so hostile to private institutions that anyone who cares about them, or about a rule of law, is driven elsewhere, making New York housing affordable in the style of contemporary Detroit.
If you think I am exaggerating, consider that the framework of "exit, voice and loyalty" outlined by the economist Albert Hirschman—and much in the news lately in the context of European Jewry—isn't exactly new to Collegiate, which was founded centuries ago by Dutch Protestants who left the Netherlands by ship for New Amsterdam, which became New York, and eventually part of a new country, the United States of America.
For $50 million, one could reprise the journey by endowing a high-speed water-ferry service to a Collegiate campus outside of Mayor de Blasio's jurisdiction. Collegiate is the sort of durable institution that makes people loyal to New York and deters them from taking the "exit" option of packing their bags and going somewhere else. But even loyalty has its limits, a point that city officials just might want to remember as they go about trying to wring ever more dollars from Collegiate and the backers of other institutions trying to build in New York.