It’s obvious New York has a housing crisis. What’s not obvious is what to do about it. There’s no shortage of conflicting proposals, finger pointing at Albany and Washington, and legislative efforts to regulate, de-regulate, incentivize and punish developers. But there’s near consensus that building more affordable housing is a critical part of the solution.
Because Mayor Mamdani does not control all the pieces on the chess board, it’s imperative that he focus on what he controls: fixing inefficient processes that not only fail to address the housing crisis, but exacerbate it. One of the clearest examples: the time it takes the city to get “heads in beds” when affordable units are available.
NYC Housing Connect is the city’s online portal to apply for city-regulated affordable rental and homeownership units. When I was deputy mayor, we built Housing Connect in response to complaints about the clunky process that preceded it. The use of a centralized system was supposed to make it easier and fairer for tenants and landlords to lease units. But after 10 years, it’s not delivering: it now takes almost 14 months to fill a new affordable housing building.
Here’s a real-life example: last April, 281 affordable units were posted to Housing Connect at the Miramar in Inwood, a new, 698-unit building built by my firm MSquared along with our partners. These units are available to low-income families earning between 40-80% of area median income.
When the building opened in August, we had 70,000 applicants for those apartments. Yet today, seven months later and almost a year after posting the units to Housing Connect, only 168 are occupied. The building is walking distance to two subway lines and major employment centers, and offers free top-notch amenities to all residents, including a fitness center, outdoor spaces, golf simulators, and more. So how can it be that more than 40% of these affordable homes are sitting vacant?
The failure of Housing Connect is only adding to the housing crisis: in real estate, time is money. For every month that an apartment sits empty, interest accrues on the construction loan, the ability to refinance (with less expensive debt) decreases, and rental income can’t keep up with building expenses like utilities and insurance. Property managers, who should be focused on customer service, spend time navigating the city’s bureaucracy. Why would people even want to build more affordable housing?
We know there are better ways to do this. As a national investment firm focusing on mixed-income new construction, MSquared has a 50% affordable project near Seattle and leased its 100 affordable units in seven months. Similarly, when we completed our project in Fort Wayne, Ind., the 59 affordable units were leased within six months.
One of the key differences is that these cities do not rely on a centralized lottery system. Of the country’s 10 most populous cities, New York is the only one with such a system. Everywhere else, developers largely manage their own affordable leasing.
New York must adapt, and incorporate what’s working elsewhere. It’s within the mayor’s control to fix what’s broken in Housing Connect. Whether that involves streamlining the existing process, allowing self-certification, or hiring staff to manage waitlists and certify compliance (or all the above) is up to him. He should do so quickly and transparently — announcing his goal, setting a timeframe to achieve that goal, publicly reporting on the progress monthly, and iterating where necessary.
Let’s get New Yorkers into apartments.
Glen, former deputy mayor for housing and economic development under Mayor de Blasio, is founder and managing principal at MSquared, a real estate investment and development company.