Council’s plan won’t boost affordable housing
Creating affordable housing in the city of Albany isn’t easy. But in the nine years since I took office, we’ve worked cooperatively with developers to build or renovate more than 1,500 affordable-housing units in the city. And right now, there are more than 1,100 new and 400 renovated units in the
▶ Kathy Sheehan is mayor of Albany. pipeline.
When the city received $81 million from the American Rescue Plan Act, the Common Council and I worked together to award millions to projects that will create even more affordable homeownership opportunities for more than 100 Albany families. Together, we also created a provision in the city’s United Sustainable Development Ordinance (USDO) that requires developers to rent or sell at least 5 percent of the units in projects with more than 50 units at rates that are affordable to people with income of no more than 100 percent of the city’s area median income, which is approximately $52,000 per year. As of July of last year, the USDO requirement created 88 affordable-housing units for those that qualify.
We couldn’t have done any of this without the cooperative partnerships the city has with the developers who want to create new housing opportunities in Albany. Together, we’re growing our tax base and creating housing to support our population growth. Our rents are more than 11 percent below the national average. Albany is the number one place to live in the state, according to U.S. News and World Report. And livability puts us at 50th nationwide.
With all of this going for us, I’m not sure why the Common Council wants to step on the brakes and make it more difficult for our development partners to create more housing. The council’s ordinance, 4.21.22, creates insurmountable barriers to further development because it forces developers to create more units while charging less rent.
Under the Common Council’s scheme, the number of projects, the percentage of units, and the affordability threshold for any future development in Albany
would increase. It also would reduce the number of people eligible to rent new units. It is financially untenable to ask developers to charge lower rents for more units without any subsidy to offset the lost revenue. Our analysis finds that virtually none of the projects in our current development pipeline would be commercially viable for our development partners. Quite simply, they will go somewhere else to build.
Development is a competitive business in good economic times. Profit margins become even smaller when the economy experiences high inflation, rising interest rates and concerns of a possible recession. 4.21.22 ties the hands of our development partners — it does not, as the council purports, increase affordable housing.
Why would developers build in Albany when they could go to a neighboring city or town where their options aren’t punitive? Why would developers build in Albany when the risk is too high and the reward too low?
Furthermore, our analysis shows this ordinance would undermine our efforts to end the decades-long concentration of affordable housing in our historically disadvantaged neighborhoods, reinforcing the redlining that has defined housing in Albany for far too long. Developers, if they decide to build here, would be forced to seek low-income tax credits to offset the increased costs of the bill. This means subsidized housing, which adds almost nothing to our tax base, would continue to be built while market-rate projects that do add to our tax base would be built outside the city’s limits.
I have vetoed 4.21.22. It is about the math and the economics of attracting development, growth and diverse housing options for our city.
Our housing policies implemented over the past nine years are working: Affordable housing and market-rate housing are being built at record rates. Gentrification has not displaced residents in our city the way it has in other places across the country. While I understand the desire to create affordable housing in every neighborhood in Albany, all this ordinance does is make marketrate development unaffordable to build.
It makes no sense for us to use a stick approach to development when what we currently are doing is working. Ordinance 4.21.22 is a solution in search of a problem that does not exist in Albany; it will lead to less mixed-income housing, hurt our tax base and result in Albany missing out on some of the most substantial growth our region has seen in decades. This will push development to the suburbs, and residents in our formerly redlined neighborhoods will continue to bear the burden of concentrated poverty.