In the 1938 Constitutional Convention, an amendment was added to our state constitution saying that “the aid, care, and support of the needy” was the responsibility of the government.
In the 1970s, advocates for the homeless argued successfully that this clause in our constitution meant that New York City had to provide shelter to anyone who needed it, as it is one of the fundamental elements of human survival. Anything that is necessary for survival should not be considered an optional “social service,” they argued, but a “basic human right.” It was through the ensuing legal battle that the Callahan Decree was signed by Mayor Ed Koch in 1981, declaring that it is the duty of the City to shelter the homeless.1 The Callahan Consent Decree: Establishing a Legal Right to Shelter for Homeless Individuals in New York City
The reaction to this law was to expand our shelter system, which has left us with a very expensive and temporary solution that is becoming untenable. These shelters are filled with families who simply couldn’t make rent for a few months, or who are being priced out of their once-affordable homes. An August 2016 count estimated that there were 61,471 homeless people in New York and only 661 shelters. (Three-quarters of the sheltered population are families, including nearly 23,000 children.)2 Breaking the Chains: New York Needs Home Rule With these shelters filled to capacity every night, it’s not uncommon for the Department of Homeless Services to scramble to find empty hotel rooms in the city to hold the remaining homeless.
The amount of homeless people in New York City is the highest it has been since the Great Depression.3 Basic Facts About Homelessness: New York City
If NYC could take control of its rising rents and ensure that ballooning costs are not simply lining the pockets of the wealthy at the expense of hard-working families, we could get the homeless out of shelters and back into apartments, reducing the crushing burden on our taxpayer-funded shelter system. We can also keep rents affordable, protecting people from becoming homeless in the first place and stopping NYC from becoming a home for only the wealthy and privileged.
Landlords are raking in the dough at the expense of their tenants, thanks to two disturbing legislative mistakes:
- The 421-a tax break: The incentive is that if developers get a tax break — which this year, will be an estimated $1.4 billion, up from $73 million in 1986 — that in return, they’ll stabilize their rent in accordance with the City of New York Rent Guidelines Board4 Rent Guidelines Board Apartment Orders #1 through #48 (1969 to 2017) and set aside a certain number of units per year to be priced below market value. In order to qualify for 421-a, you have to file an application and receive a certificate of approval. However, ProPublica found in an exposé last year that two-thirds of the luxury landlords getting that billion-dollar tax break had never had their applications approved, and did not have any sort of certificate on hand, as is required.5 Thousands of NYC Landlords Who Ignored Rent Caps Got Tax Breaks They Didn’t Qualify For
Mayor Bill DeBlasio has offered reforms that would require that owners have a certificate of approval on file before they can start receiving the tax break, as well as increasing the number of below-market-priced units in each building. But, surprise — our legislators in Albany refuse to take up the cause.
Not to mention, with the housing crisis in NYC causing such a burden on our social services, we should be able to regulate rising rents simply because it’s necessary for our city’s survival, and not have to offer tax breaks to the super-wealthy in order to do it.
- The “LLC Loophole,”6 Closing New York’s LLC Loophole which allows LLCs to be considered individuals as opposed to corporations. Corporations in New York have very strict limits on how much they can contribute to political campaigns, whereas individuals have far higher limits. This means LLCs — or worse, people who own multiple LLCs (with each LLC counting as its own individual) — can donate in secret to political campaigns without corporate donation limits or disclosure requirements.
Housing developers in NYC contribute huge amounts to upstate and Long Island Republican lawmakers, who will ensure that their giant tax break doesn’t get touched. In addition, New York City’s rent stabilization laws — which determine how much our rent can increase each year — are controlled by our State legislature.
How do we fix this?
- Clarify the “care for the needy” clause in our Constitution, so that it does not simply mean that the government must provide free housing, but means that the government can take action to keep rent affordable* to minimize the number of homeless people in the first place.
*We can define “affordable rent” with a mathematical formula, using the Area Median Income (AMI)7 What Is Affordable Housing? – NYC Housing Preservation & Development statistics in each neighborhood. We already utilize AMI to determine how landlords must price their below-market apartments to get those aforementioned tax breaks. Why not apply it to all of our rent stabilization laws?
- We must strengthen Home Rule in NYC. Under our current constitution, localities are granted Home Rule, or the right to make their own legislative decisions relating to “property, affairs, or government” (NY State Constitution, Article IX, section 2c). The State legislature is not allowed to interfere in this without a formal request from the locality. However, there are a few ways for the State to get around this, mostly centering on a court decision made in 1929 (30 years before the current 1963 Home Rule clause was even put in our constitution), in which the Chief Justice said that the State can legislate on a local matter if it has “substantial State concern.”
NOTE: This is a very nuanced and complicated issue that we’re attempting to water down for consumption here. But if you want to read all the nitty-gritty details, give this Pace Law Review report a read.
That 1963 revision of the Home Rule law was intended to give local governments (such as New York City) more power to govern themselves. However, due to all the loopholes and workarounds, this hasn’t happened. We need to rethink and revise our Home Rule clause to ensure it has its intended effect, and give NYC the power to fix its most pressing problems. With sufficient Home Rule, we can have the power to create our own rent laws and even build or acquire exclusively city-run properties to keep New Yorkers off the streets.
- We can clarify that human beings are people, not corporations, LLCs, or any other business entity. Therefore, people who own LLCs can no longer get away with skirting the corporate campaign donation limits. We can close the LLC loophole and take away the tax breaks that do nothing but make the rich richer.
- Breaking the Chains: New York Needs Home Rule – Metropolitan Council on Housing
- Why Developers of Manhattan Luxury Towers Give Millions to Upstate Candidates – ProPublica
- Tenants Under Siege: Inside New York City’s Housing Crisis – The New York Review of Books
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