Between last fall, when a preliminary 10-year capital plan was unveiled, and May, when a revised plan was announced, the budget for housing fell by 30 percent—or $1 billion—compared with 18 percent—$237 million—for economic development. As the city’s Independent Budget Office noted in its analysis of the mayor’s budget, funding for housing showed one of the largest decreases of any category.
This raises a host of questions about Mayor Bloomberg’s $7.5 billion affordable-housing plan, for which he once pledged to build 92,000 new low- and middle-income units and preserve 73,000 over 10 years. As the economy collapsed and the plan was already struggling to meet its new construction goals, 10 years became 11, and now with less money and a host of other factors hurting the affordable-housing industry, it’s difficult to see a scenario where the plan meets its revised goals, a priority for a mayor focused on numbers.
Mr. Lieber acknowledged that it would be difficult, and said that the city may need to shift the numbers some and put more emphasis on preservation than new construction.
“We still remain committed to the housing plan,” he said. “I think it’s going to be more difficult to achieve that same target.”
Overall, the capital budget did not undergo as large a decrease as once foreseen. Back in January, in an effort to cut back on high debt costs, the mayor proposed scaling back the 10-year plan by 30 percent. In recent years, the plan had reached tremendous spending levels, as the administration had poured about $10 billion annually into infrastructure such as new schools, water projects and economic development efforts (both mega-projects and smaller projects).
But most capital money is borrowed, and the city’s debt has reached noticeably high levels—the city has about $62 billion in outstanding debt and other obligations, an amount that is rapidly growing—at the very time that revenues are contracting, thus inspiring the cutback.
The powerful construction industry, which is now heavily reliant on public spending, pushed back against the initial cuts, as did the City Council. The end result: a decrease of about 15 percent.