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Resilience Special Assessments for Housing Security: a Model for Mitigating Climate and Environmental Gentrification in New York City

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Resilience Special Assessments for Housing Security: a Model for Mitigating Climate and Environmental Gentrification in New York City Resilience Special Assessments for Housing Security: A Model for Mitigating Climate and Environmental Gentrification in New York City by Stephen Migliore Erdman B.A. Urban Studies and Visual Arts Fordham University, 2013 SUBMITTED TO THE DEPARTMENT OF URBAN STUDIES AND PLANNING IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER IN CITY PLANNING AT THE MASSACHUSETTS INSTITUTE OF TECHNOLOGY MAY 2020 ©2020 Stephen Migliore Erdman. All rights reserved. The author hereby grants to MIT permission to reproduce and to distribute publicly paper and electronic copies of this thesis document in whole or in part in any medium now known or hereafter created. Signature of Author:____________________________________________________________ Department of Urban Studies and Planning May 20, 2020 Certified by:___________________________________________________________________ Devin Michelle Bunten Assistant Professor of Urban Economics and Housing Thesis Supervisor Accepted by:__________________________________________________________________ Ceasar McDowell Professor of the Practice Chair, MCP Committee Resilience Special Assessments for Housing Security: A Model for Mitigating Climate and Environmental Gentrification in New York City By Stephen Erdman Submitted to the Department of Urban Studies and Planning on May 20, 2020 in Partial Fulfillment of the Requirements for the Degree of Master in City Planning Abstract Government spending will need to exceed billions of dollars in the coming years to protect New York City’s shores from climate-related storm surges and sea level rise. Calls for these resources to advance social justice alongside climate resilience have grown in recent policy dialogues as climate change threatens to worsen racial and economic exclusion in a city that is already severely stratified. Yet investing in adaptation in expensive neighborhoods with transit access, job opportunities, and high-performing schools may further exclude low-income people and people of color by preserving or exacerbating high housing rents. Likewise, similar investments in currently affordable neighborhoods risk triggering environmental gentrification and displacement. Given these constraints of a market-based property regime, how can cities protect communities from climate risk while ensuring that all people have access to high opportunity, resilient neighborhoods? This paper argues that special assessments, a value capture tool, could extract resources from private property owners benefiting from public investments in climate adaptation to pay for an expanded supply of permanently affordable housing that will facilitate low-income residents’ long-term occupancy of climate-fortified areas. The paper provides a legal justification for this approach and a framework for how such special assessments in New York could be administered and calculated. Preliminary estimates based on these calculations suggest that special assessments could generate substantial new resources for the mass production of affordable housing. Such a prospect is reason for policymakers to explore implementing special assessments or using them as leverage when seeking to affirmatively further fair housing in communities historically resistant to such efforts. Likewise, this framework could amplify the movement for property tax reform in New York City, or otherwise support efforts to garner the resources and political will needed for bold climate and housing justice action. Thesis Supervisor: Devin Michelle Bunten, PhD Title: Assistant Professor of Urban Economics and Housing 2 Acknowledgements I would like to thank Devin Michelle Bunten, my thesis adviser, for her wisdom, patience, and sense of humor, all of which was crucial as I reworked the arguments, calculations, and drafts that went into this final product. I am also grateful for the thoughtful feedback that Jesse Keenan and Zachary Lamb, my thesis readers, provided both at the early stages of my research process, and as this paper took its final form. Likewise, I owe thanks to Lawrence Vale and Justin Steil for their helpful input as I developed the initial ideas for this paper. Thesis Readers Jesse Keenan, Ph.D., J.D., LL.M. Zachary Lamb, Ph.D., MArch ​ Associate Professor of Real Estate Lecturer in Urban Studies and Planning Tulane University Massachusetts Institute of Technology 3 Table of Contents Abstract 2 Acknowledgements 3 List of Acronyms 5 Introduction 7 New York City and the Climate Crisis at Hand 10 The Dual Threat of Environmental and Climate Gentrification 14 NYC Policy Responses to Environmental and Climate Gentrification 18 Towards Transformative Climate Adaptation Policy: From Design to Housing 24 Case Studies: Adaptation Investments and the Question of Housing 27 Asbury Park, New Jersey 27 Coney Island, Brooklyn 30 Value Capture and Adaptation Investments 34 Resilience Infrastructure Special Assessments for Affordable Housing (RISAHs) 38 How Might RISAHs Be Implemented in New York? 41 Defining the Assessment District 41 Establishing the Assessment District 41 Calculating the Property Value Increase Associated with Adaptation Investments 43 Levying the Assessment: 180 Water Street 45 Justifying the Assessment Levied 52 Spending Assessment Revenues on Housing 54 Operationalizing RISAHs: Additional Considerations and the Role of Design 56 Designing for Density 56 Spatial Considerations of RISAH Districts 58 Replicability and Wisdom of Special Assessments 59 Conclusion: What about Property Taxes? 61 References 63 4 List of Acronyms BID Business Improvement District CEQR City Environmental Quality Review CLT Community Land Trust DOF New York City Department of Finance EDC New York City Economic Development Corporation FEMA Federal Emergency Management Agency FONSI Finding of No Significant Impact HNY Housing New York: A Five Borough, 10-year Plan HPD New York City Department of Housing Preservation and Development LIHTC Low Income Housing Tax Credit MIH Mandatory Inclusionary Housing NFIP National Flood Insurance Program NPV Net Present Value NYC-EJA New York City Environmental Justice Alliance RISAH Resilience Infrastructure Special Assessment for Affordable Housing RPA Regional Plan Association SAD Special Assessment District SEQRA State Environmental Quality Review Act USACE U.S. Army Corps of Engineers ZQA Zoning for Quality and Affordability 5 1 A beautifully sustainable city that is the playground of the rich doesn’t work for us. —New York City Mayor Bill de Blasio, 2015 ​ Whenever any environmental amenities actually do get put in our communities, they 2 are being put in there because we are being displaced... —UPROSE Executive Director Elizabeth Yeampierre, 2015 ​ 1 Flegenheimer, M. (2015, April 21). New York City’s environment program will focus on income ​ ​ inequality. The New York Times. ​ ​ ​ 2 Environmental Justice Alliance says de Blasio’s OneNYC plan falls short in combating climate change. ​ ​ (2016, April 5). WPIX. 6 Introduction Unabated warming has made inevitable billions of dollars of spending to protect New York City's shores from the worst effects of climate-related sea level rise and storm surge inundation. The city has already pledged $28 billion towards climate adaptation 3 projects, and another $2 billion annually is expected to be necessary to fortify its infrastructure alone (Leroy and Wiles, 2020). Preliminary analyses suggest $36 billion or more might be needed to more fully prevent the many communities within the New 4 York Harbor region from being washed away. Concerns that all of this money is spent well – that it advances social justice alongside climate resilience – have grown as climate change threatens to worsen racial and economic exclusion in a city that is already severely stratified. Regional planning organizations have called for outer-borough communities to receive as much protection as wealthy Manhattan 5 neighborhoods, elected officials have demanded that adaptation resources correct for 6 chronic disinvestment in communities of color, and grassroots environmental groups have urged that ‘no neighborhood be left behind’ as the city’s resilience agenda 7 advances. Yet simply investing in adaptation in lower income communities risks gentrifying them. Since the early 2000s, urban scholars have theorized that park upgrades have begotten an influx of wealthy, white residents in Harlem, western Brooklyn, and other historically low-income communities of color in New York (Checker, 2011; Pearsall 2012). Fears that environmental remediation and investments in sustainability have constituted a “green growth machine” that primarily serves the real estate interests of the ultra-wealthy (Gould and Lewis, 2018) have been substantiated by empirical evidence tying green development to the displacement of the poor (Rigolon and Nemeth, 2018). Seawalls, landscaped berms, flood gates, and other forms of climate adaptation and resilience infrastructure pose similar risks, as the rich may increasingly flock to areas protected by these investments (Keenan, Hill, and Gumber, 2018). Immense expenditures on adaptation might result in a “fortress urbanism” (Davis, 1990) that excludes low income people and people of color from “ecologically secure premium enclaves” (Hodson and Marvin, 2010). Given the constraints of a 3 According to the NYC Hazard Mitigation Tool webpage. ​ ​ 4 New York-New Jersey harbor and tributaries coastal storm risk management interim report. (2019). US ​ ​ Army Corps of Engineers. 5 Equitable adaptation: Building climate change adaptation capacity
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