Mayor Zohran Mamdani’s “Block by Block”plan to build 200,000 subsidized apartments entails a lot of handwaving, magical thinking and reliance on “responsible stewards” . . who have been failing to manage the real-estate portfolios they already have.
In Mamdaniland, the problem with housing is all the owners who stubbornly insist on trying to make a profit — or just break even.
If “community land trusts, nonprofits or even the tenants themselves” control the city’s housing stock, these miracle-workers will “expand New Yorkers’ access to safe, stable, and affordable homes.”
It’s the magic of socialism!
Problem is, programs that do all this are so old and tired that Mamdani’s Gen Z policy experts appear never to have heard of them, maybe because the experiments had already failed when they were building fantasy housing projects out of Legos.
A key element of Mamdani’s plan involves seizing properties from landlords whose buildings are in major disrepair — largely because they can’t legally raise the rents to meet their rising costs — and giving those buildings to nonprofit community organizations or tenant co-ops.
But Community Development Corporations, non-profit groups that own and manage “deeply affordable” apartments, have been around for decades, and are barely managing to keep themselves afloat as it is.
CDCs operate more than 200,000 subsidized city housing units, and face the same problems as private landlords: rising costs (especially insurance), unsustainable debt, deferred maintenance and nonpaying tenants.
Turns out that removing the “profit” line from a balance sheet by getting rid of private ownership doesn’t repeal the laws of math when costs run higher than income.
In the 1980s, many landlords walked away from buildings they couldn’t pay for anymore; the Koch administration helped tenants turn their apartment houses into co-ops that got major tax benefits in exchange for remaining forever affordable.
A significant number of these Housing Development Fund Corporation cooperatives are in perpetual crisis. They lack the finances to get bank loans, and the tenants often can’t afford to cover the costs of major capital improvements like a new boiler or roof.
So more than 20% of these HDFC co-ops are now at high risk for foreclosure.
Distressed buildings across New York City have major issues that won’t go away by shuffling the paperwork.
Socialism is only magic in theory, and magical thinking always leads to disaster.
The post Hey, Zohran: Your ‘new’ magic housing plan has been failing for decades appeared first on New York Post.
