HPD is writing a Regulatory Agreement that will affect approximately thirty thousand residents of one the affordable housing in programs in New York: the HDFC cooperatives. The frame of the agreement is forceful: the threat of deleting the existing tax exemption (valid until 2029) will force into regulation.
Introduction to the issue
In a matter of months, many people who bought under a certain agreement and in certain conditions have to face a turnaround in the way they live. They were expecting stability until 2029, but now ten thousand individuals will have to change the way they live, out of the blue.
Radical changes in a short time will have a drastic effect on the lives of the people in HDFCs, with no time to assess the situation. Being HDFC buildings with residents who bought at different prices with different interest and incomes to reach a common decision in a year will not be only difficult but harmful and will result in displacement.
Preserving implies time and care, and this agreement is being rushed into place. This agreement is written from a negative perspective, starts by taking something away not by giving something. The frame of the agreement is forceful: the threat of deleting the existing tax exemption (valid until 2029) will force into regulation: sign or sale. The agreement is a form of “moving”. Which again begs the following questions: what is the goal of the agreement: “preserving” or “moving affordability?” Building homes or creating illusory homes? Is it the purpose of the agreement to regulate existing problems in HDFC or is it to respond to the demand for affordable housing in New York?
- The frame of the agreement is forceful.
The agreement is done under the threat of taking away a tax exemption that doesn´t expire until 2029. Taking the exemption away is a way to force into regulation. Within the frame of the agreement, the procedure is extremely forceful – but why?
It was only recently, at the previously mentioned teach-in (instructed by Mr. Bagget), that I learned that residents would have to sign the agreement to keep benefits that are in place now and that don’t expire until 2029 (such as tax exemptions; specifically, the DAMP Tax). And that normally the government grants give money and in exchange put regulation on you. And that there are no precedents for signing a regulation (giving you nothing) just to keep tax exemptions. In this case, the government takes something away from you and you have to sign a regulation just to get it back. There is something forceful about having to sign an agreement to keep what one has. This is an inversion of procedure: taking the exemption away is a way to force into regulation.
- What is the interest behind “forcing into regulation?”
Taking damp taxes out as a way to force people to sign the regulatory agreement is a clear way of forcing into law. This goal has also been explicit in the afore mentioned presentation Preserving At-Risk Affordable Home Ownership: HDFC Coops and Our Community. But what is the point of forcing into regulation? The agreement is done under the threat of taking away a tax exemption that doesn´t expire until 2029. Why the rush now, when there are thirteen years left? What is behind convincing to sell?
Perhaps these two questions are interrelated. HPD says that “preserving” affordability is what is behind. But perhaps it is not. Perhaps the goal of the agreement is “moving” affordability: to force shareholders into a regulation they don´t want – so they sell.
In any case, whether this forcing is done for political reasons (i.e., forcing the regulation with the expectation that the people sell, making apartments available in HDFCs. These new units will be counted as new “affordable housing units.” The “units” will change hands no new unit will be built.) or for other reasons (e.g., to help HDFC with distress or to preserve affordability) the effect is the same: in a very short time (out of the blue) the residents of HDFCs will have to change the way they live. No preservation campaign can be done on the rush and with force. (END)
Request: Introduce the agreement in the building from the positive point of view: offering it to those who want to join and granting at least a five year period so current HDFC residents can adapt to the new situation
- Within the frame of the agreement, the procedure is extremely forceful, but preservation is a slow process that requires care
Preserving is a serious word. It is about conservation, something that is in danger, but it is also a word that implies good actions, saving something. Preserving implies slow restoration that is done with care and without rush. As pointed out through the text, there is a lack of care put into understanding the implications of what the policies regulate. There is overregulation of some things and under regulation of others; there is a rush. Preservation is also something that is done without force, but a lot of this new agreement is forceful. One can conclude that, perhaps, what this agreement is going after is not “preserving.”
- “Preserving” affordability or “moving” affordability?
I learned from Mr. Baggett, as he mentioned in several presentations, that what the city is going after is “production.” How are these units going to be produced? By moving affordability. Forcing into regulation will push existing HDFCs owners to sell. By making these apartments available, these can be counted as new “units.” In the previously mentioned teach-in, Mr. Baggett gave a history class on the different majors in New York and the impact on the HDFCs regulation. There is a need for affordable units and not enough in the market right now. The de Blasio administration is trying to produce these units.
If I catch it correctly, what his theory is saying is that this agreement is not about “preserving” affordability but about “moving” affordability. I don’t think Mr. Bagget put the slogan “moving” affordability on it, but he lays down the basis to it.
Below are my observations on his theory:
- . The information is new, but there are no new houses created just the old counted as new. Are these units illusory?
There is a campaign from Mayor de Blasio on creating affordable housing that was one of the top sellers of his last campaign and the thing that every New Yorker wants to hear. A good slogan for a mayor to be reelected is “preserving affordability” in housing in New York. The reality can be different: “moving affordability:” forcing the regulation with the expectation that the people sell, making apartments available in HDFCs. These new units will be counted as new “affordable housing units.” These new units will go to the higher spectrum of the low-income people who consider themselves middle class (although they enter into the definition of low income since they are unable to find a house in the current housing market). This is the target group of de Blasio voters. The “units” will change hands but no new unit will be built.
There is no generation (no new homes for the low income are being built here) but only information (the old are counted as new the way that reality is counted and represented, houses are counted as available.)The theory of the informational reading of things means that efforts are put in the representation of information and not in the generation of goods. As a result, the efforts will not produce any outcome in the long run because there is no new goods; only the illusion of good that have counted differently.
- Moving things around gives the impression that new things are put into place, but it is fake, there is no generation
With the “there is movement, there is hope,” “all is moving, all goes well,” there is a known strategy used in the XXI. Those inside the movement get benefits from moving things around – things change hands, brokers get a percentage and the municipalities get congratulated and politicians get voted to run these cities. But it is fake – there is no generation.
- It is only generation when an economy gets value, not in things changing hands
It is the creation of art – the art is what increases the cultural patrimony of a country. It is in building new homes that increases the housing affordability of a city… and so on. This theory can be used for all – the strategy of moving things around to give the impression that new things are put into place. I learned this from economist Sergio Tombesi, when analyzing the art market in relation to the housing market and its crack. Tombesi’s argument was that the efforts were not put into generation but into the movement. However, it is only the generation (new houses), and not the movement (speculative sales), that really brings value to the people. Whether or not the movement of goods brings some benefit for those involved in the transactions is only residual; it is only in the generation of new assets (new houses built) that really generates value in the sense of increasing the patrimony of a city or a country.
- The risk of informational representation or of reducing reality to information
If the agreement is designed to push to sell and make available units that can be counted as affordable housing, it only creates the illusion that there are new homes by counting the old as new, instead of building new homes (generating), then it is only an informational maneuver and may bring the risks of the representational.
- The disaster of the last market crash was produced by informational representation
Mortgages were separated from the reference of their value of the home by breaking the mortgages into parts and reselling them as derivatives. Now, informational interpretation could be here again. This agreement might be just a political “artifact” that can create a crash in the communities with HDFC’s, because the buildings and residents shaken by shareholders’ turnover will have no reference to where they are coming and where they are going.