Politico

De Blasio’s development agenda was already faltering. Then Covid-19 struck.


NEW YORK — A motley crew of New York City real estate executives with big plans for the Queens waterfront were frustrated but resolute.

After Amazon canceled a deal to build a campus on the site last year, the development team drew up a blueprint for housing, retail, schools and open space on a sprawling parcel in one of the trendiest areas of the city.

Negotiations with Mayor Bill de Blasio’s team were inching along and the developers had hoped to begin a public review process after the summer. But tensions flared when City Hall demanded the group cover a spate of additional costs and talks ultimately fell apart earlier this month.

Now, the fate of one of the city’s most desirable swaths of undeveloped land is as uncertain as it was after Amazon’s dramatic departure.

Even in the high-octane world of real estate, where egos and money often clash with public policy, the episode surprised participants and underscored a shift in de Blasio’s attitude toward growth as he winds down his mayoralty.

De Blasio took office in 2014 promising to deliver a record amount of affordable housing and ensure that America’s largest city would no longer be a playground for the rich. He poured billions of dollars into his plan to create and preserve 200,000 income-restricted homes across the city, and changed zoning rules to open up neighborhoods for more development — a boon for the real estate industry, despite the new mandates attached to the opportunity.

But after six years pushing pro-development initiatives, de Blasio had been quietly receding from that agenda even before the coronavirus pandemic bulldozed projects across the city.

“It’s pretty clear to me that the administration has not prioritized development of their affordable, mixed-income housing or projects in neighborhoods that are about building a diverse, inclusive economy,” said Alicia Glen, de Blasio’s previous deputy mayor for housing and economic development, in a recent interview. “And that’s a shame, because if you want to be the most inclusive and progressive city in the country, you need to be growing and actually building into that vision.”

“Status quo means going backwards,” she added.


The mayor’s disinterest in development comes as the city grows increasingly desperate for jobs and tax revenue lost to the coronavirus pandemic that flattened the tourism sector and sent some wealthier New Yorkers packing.

In addition to his reticence on Long Island City, which is ground zero for an anti-development political movement, the mayor has slowed his own plans to support private housing on land owned by the cash-strapped New York City Housing Authority. He has yet to begin a rezoning process for the Gowanus section of Brooklyn — an idea that has been bandied about since 2014 — to enable some 8,000 new apartments. And last week he basically acknowledged his 2016 pledge to support the creation of a streetcar connecting Brooklyn and Queens would not come together on his watch.

It was against this backdrop that de Blasio slashed capital funding for affordable housing projects, halted the city’s public land use process and redirected his economic development agency to work on medical supply procurement when Covid-19 hit the city in March and threatened the city’s booming finances.

In more than 20 interviews with politicians, builders and administration officials, a picture emerged of a mayor worn down by community opposition to development, gun-shy from the Amazon debacle and preoccupied with the enormous crisis facing the city. Meetings are postponed; calls go unreturned; direction from city agencies is confusing, they say. A few people pointed out de Blasio is not running for office, further limiting his face time with real estate executives who funded his prior campaigns.

“It seems like the mayor’s office has decided not to weigh in on major economic development projects and has backed away from the original intent of rezoning multiple neighborhoods throughout the city,” said David Greenfield, the City Council land use chair during de Blasio’s first term, in a recent interview. “It’s both unfortunate and surprising because he’s really given up the ability to shape what the future of the city will physically look like for the next generation.”

The administration cut its housing capital budget by more than $583 million this year, according to an analysis by the New York Housing Conference, an advocacy organization. The city, which had been spending more than $1 billion a year on affordable housing, is relying on alternate methods to underwrite the mayor’s goal of building and preserving 200,000 homes by 2022.

As he looked to limit in-person government functions, the mayor issued an executive order suspending the city’s public land use process on March 16, delaying the timeline for every project that needs government approval to move forward. The process is resuming later this month.

Yet before the budget cuts even took effect, housing production fell 28 percent: 6,503 new units were financed in the fiscal year that ended on June 30, compared to 9,141 the year before. At the same time, the city reported an increase in the number of affordable homes it paid to preserve, with about two-thirds of that progress stemming from a single deal in the Bronx.

Glen, who tangled with unions, activists and politicians during her tenure, criticized the lack of progress on plans to raise $2 billion for the public housing authority by leasing its undeveloped land to private developers. She and de Blasio rolled out that proposal in December of 2018 as part of a $24 billion turnaround strategy for the agency.

Vicki Been, Glen’s successor as deputy mayor, had hoped to move quickly on a plan to demolish and rebuild two dilapidated public housing buildings in Manhattan by monetizing the property’s unused land. But de Blasio hit the brakes last fall and convened a working group of residents and skeptical politicians to mollify community opposition.

Nearly a year later, Been said she is awaiting a report from the group.

In an hourlong interview, the deputy mayor disputed that the administration’s housing agenda has been held back by anything other than Covid-19.

“The pandemic certainly slowed us down for a few months, but we used that time to really think about, what should the priorities be? How should we respond to the inequities that were laid bare by Covid, the inequities and injustices that were highlighted by the Black Lives Matter protests?” Been said.

Every agency under her purview underwent “an intense prioritization exercise” for de Blasio’s remaining 16 months in office, she said. “It’s pedal to the metal for all of my agencies, but the priorities have shifted,” Been said.

She said the administration is still on track to reach its overall affordable housing goal, but acknowledged it would require “a push with the months that we missed.”

June is typically a popular month for the housing agency to close on its projects, but this year it sealed the deal on just 22 small projects, Been said.

The delays include Bronx Point, a mixed-use project that includes more than 500 rent-restricted apartments and a home for the Universal Hip-Hop Museum, and a small facility in Corona, Queens, for low-income seniors and people in a nearby drug treatment facility.

The 30-unit housing facility delayed its plans when the city put off releasing a $1.2 million interest-free loan.

“It was terribly, terribly disappointing,” MaryBeth McNerney Matta, a consultant who worked on the project, said in a recent interview. Corona was among the hardest-hit neighborhoods in the city.

“When this first happened I just thought to myself, this is all going to be okay because people have to be housed,” she said. “It took me weeks to get my arms around the shock of it, that housing — permanent housing — would not be at the absolutely very top of the list of things that needed to be tended to.”

The city’s Economic Development Corporation also faced budget cuts and top staffers were redeployed to respond to the pandemic. The city shifted nearly $1.3 billion from the agency’s capital budget into the years after de Blasio leaves office — a move Council Member Brad Lander warned would lead to job losses at a time of soaring unemployment.

“Even before Covid, we weren’t seeing a real strategic vision for the city’s economic development in a way that matches our goals for a more equal, more affordable and inclusively thriving city,” Lander, who is running for city comptroller, said in an interview. “Those issues have changed dramatically in the last few months, but they’ve been urgent for quite some time and I have not seen a strategic vision large enough to rise to the moment.”

As for the recent Long Island City dispute, Been said the developers were not willing to cover some $500 million to fortify the surrounding area for a massive influx of people and activity.

The developers insisted the city was attempting to offload public costs onto them.

“It’s just a sideshow,” Been said. “You can’t have three private developers coming in and asking for a huge, huge project and not paying their own way, and I made that clear from day one.”

The development team, which includes the chief of staff to former mayor Rudy Giuliani, the powerhouse builder behind the Barclays arena and a family-owned plastics packaging company, declined to respond.

Hal Fetner, who runs a Manhattan-based development firm, spoke about the administration’s development agenda in a recent housing-focused webinar.

“I don’t know if there’s been another administration that has been more proactive and more pro-affordable housing,” he said. “So I don’t think that they’re planning on shutting the doors and saying we’re not going to do any more affordable housing, but at the same time, we are going to run out of time.”

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