Housing First!'s Cost-Effective, Fiscally-Responsible Strategy for Economic Growth in NYS

NEW YORK, NY (08/25/2009)(readMedia)-- At a rally for hundreds of housing advocates hosted by Assembly Housing Committee Chair Vito Lopez on the steps of New York City Hall last week, Housing First! unveiled a cost-effective, fiscally-responsible strategy for economic growth that can create thousands of jobs, leverage billions of dollars in new private investment, and help thousands of New Yorkers find apartments and homes they can afford.

The centerpiece of this strategy is a proposal to add $500 million in funding for affordable and supportive housing to the State's FY2010-2011 budget.

Advocates from across the state reached a consensus on the proposal earlier this month. A Briefing Paper from Housing First! released today spells out how it can benefit New Yorkers.

The advocates propose that $391 million be allocated among the State's primary capital programs -- Housing Trust Fund, Affordable Housing Corporation, Homes for Working Families, Homeless Housing Assistance Program, and Mitchell-Lama Preservation & All Affordable Housing.

Another $99 million would be used for capital programs targeted to Public Housing Modernization, Home Repairs to the Elderly/RESTORE, Rural Area Revitalization, Urban Initiatives, Main Street revitalization, Access to Home for persons with disabilities, and Infrastructure Development.

The final $10 million would fund non-capital programs that are necessary to make the capital programs work in many parts of the state, namely Neighborhood and Rural Preservation companies and Rural Rental Assistance.

NEARLY 16,000 UNITS OF AFFORDABLE AND SUPPORTIVE HOUSING WOULD BE PRODUCED OR PRESERVED AS A RESULT OF THE NEW FUNDING according to Housing First!'s Briefing Paper. They would include 9,300 new or rehabilitated apartments in multi-family buildings, 625 new or rehabilitated single-family homes, and 5,900 homes that are renovated, repaired, or made accessible for persons with a disability.

During the construction period, Housing First! estimates that the new funding would:

? INITIATE $2.4 BILLION IN TOTAL DEVELOPMENT STATEWIDE

? LEVERAGE $1.9 BILLION FROM OTHER SOURCES

? CREATE 16,800 LOCAL JOBS (of which 8,700 would be in construction)

? GENERATE $877 MILLION IN LOCAL WAGES AND BUSINESS INCOME

? PRODUCE $79 MILLION IN TAXES AND REVENUE FOR THE STATE

The immediate cost of these benefits to the State would not be $500 million because the funds would be bonded. The State's immediate cost is estimated to be:

? $33.5 MILLION IN DEBT SERVICE DURING CONSTRUCTION

? AN INCREDIBLY COST-EFFECTIVE $5,980 PER JOB for the 16,800 jobs during construction

? LESS THAN HALF OF THE ESTIMATED $79 MILLION IN TAXES AND REVENUE THE STATE COULD RECEIVE DURING CONSTRUCTION

The cost estimate assumes, for the sake of simplicity, that one self-amortizing bond could be issued for $500 million at 5.35% for thirty years requiring debt service of $33.5 million a year.

Even the full $1 billion cost of debt service over thirty years would be cost-effective in creating jobs and offset by substantial revenues and cost-savings for the State.

At the full $1 billion in debt service, Housing First! estimates the costs per job-created would be:

? $59,500 per job for the 16,800 jobs created during the construction period (which still compares very favorably to the cost per job on conventional infrastructure projects)

? $5,950 per job for the cumulative total of 16,800 jobs created during construction plus the 151,000 local jobs sustained by consumer spending by residents of the units during the years of their units' financing

And, the full $1 billion in debt service would be offset by:

? nearly $1.4 billion in estimated taxes and revenues the State could receive -- a total of $79 million during construction plus $34 million per year from residents of the units during the years of their units' financing

? the State's share of the per-unit, per-year cost-savings on services for homeless people who obtain supportive housing (including Medicaid, crisis, emergency, substance abuse and other services)

? the State's share of the per-person, per-year cost-savings on nursing home expenses for senior citizens and persons with a disability who are able to leave, or avoid, nursing home placements and return to, or remain in, their homes due to improvements and adaptations through Access to Home, RESTORE, and other renovation efforts

The Briefing Paper's estimates demonstrate a more-than-reasonable probability that the bonding pays for itself (and perhaps more) from the revenues and cost-savings the State could receive each year.

Consequently, the proposed addition of $500 million for affordable and supportive housing preservation and development in the State FY2010-2011 budget is fiscally responsible. It should not be dismissed reflexively because of the State's immediate budget distress.

Housing First! asks budget- and decision-makers to keep an open mind, to seek their own and other estimates, and to allocate scarce state resources so as to optimize job and housing creation, potential revenues and cost-savings.

No less of an effort should be undertaken, the Briefing Paper concludes, given the state's losing 235,900 private sector jobs since 2008 ... the state's unemployment rate nearing 9% ... unemployed state residents numbering more than 850,000 ... homeless families reaching record numbers .... millions paying more than half their incomes for housing ... and, the still persistent demand for affordable and supportive units.

With these givens, it is incumbent on budget- and decision-makers to find a way to make the additional $500 million the centerpiece of an economic growth strategy to save and create jobs and homes for New Yorkers.

A copy of the Housing First! Briefing Paper may be obtained by downloading the attachment to this release or by emailing a request to housingfirst@aol.com.

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