News from STATE SENATOR

Liz Krueger

New York State Senate, 26th District

 

COMMUNITY BULLETIN – October 2005

 

Message from Liz . . .

In last month’s community bulletin I began a series of discussions on the need to address the fact that the gap between the poorest and richest New Yorkers has grown dramatically over the last 25 years, and that the middle class is also declining in the city.  It is critical that we identify why this is happening, and attempt to identify policies that can address this growing inequality.  A vibrant middle class and opportunities for social mobility are essential to both the political and social health of the city.   We must find ways to stop the fragmentation of our city along class lines – and race lines, since the reality is that class and race are usually linked in New York.  The only way to do this is to ensure that our City and State adopt policies that provide economic opportunities to those on the bottom of the economic ladder, and provide the infrastructure to support an affordable city for all New Yorkers.

 

This month I will focus on the issue of affordable housing.  The lack of affordable housing is one of the major factors in both the decline of the middle class, and the growth in disparities between rich and poor in New York City.  As both home rental and homeownership costs have dramatically outpaced inflation and wage increases in recent years, housing affordability has become a principal concern for all but the wealthiest New Yorkers.  Nearly a quarter of all NYC renters pay more than 50 percent of their incomes for housing, more than 128,000 families are on the New York City Housing Authority’s waiting list for public housing, and there are record numbers of homeless families NYC’s shelters each night.  City and State policy has contributed to the declining availability of affordable housing in the City, primarily by weakening rent protections that helped keep apartments affordable.  New York City has lost at least 100,000 units of rent-regulated apartments through luxury and vacancy decontrol since New York City first instituted vacancy decontrol in 1993.  It is also worth noting that since rent regulation laws do not apply to any new construction, unless the developer chooses to join rent regulation in exchange for tax benefits, it does not discourage new development, as is sometimes argued by critics of rent regulation.

 

While reversing unwise policies that weaken rent regulation is one important part of any strategy to address affordable housing needs, it is only a part of the solution.   Strengthening tenant protections can help preserve existing affordable housing, but it will not encourage the construction of additional housing.  Doing this will require both the State and the City to step up to the plate with policies that address New York City’s housing needs, particularly since the federal government has been almost entirely absent from affordable housing development since 1980.  The federal government’s housing policies are further exacerbating the affordable housing shortage in New York City.  Since 1980, the U.S. Department of Housing and Urban Development has experienced budget cuts totaling fifty percent of its budget in constant dollars, which have substantially reduced access to section 8 vouchers for low income New Yorkers, and have reduced funding for construction and maintenance of existing affordable housing.

 

New York State’s role in addressing the affordable housing crisis should be primarily in funding construction.  New York State has not had a comprehensive affordable housing development plan since the Mitchell Lama program, which created more than 150,000 new units and came to an end in the early 1970s.  Last year the State allocated less than $100 million dollars for housing capital programs, with about half the funding slated to go to New York City.  This was a $25 million increase, and the first significant increase in funding since 1985.  This level of funding is wholly inadequate to meet the construction needs of the city.  One simple step the State could take would be to provide targeted housing funding to renew the New York/New York Agreement, which could create an additional 9,000 units of supportive housing for homeless individuals and families.  In addition to this targeted program, the State must explore options for funding large-scale construction of affordable housing.  The Mitchell Lama program could well serve as a model for a new program, with the caveat that all units must remain permanently affordable.

 

While New York City’s affordable housing production programs are far from perfect, the City has done a better job of funding affordable housing than the State, and has recently allocated $1.2 billion over the next three years for the construction of affordable housing.  In addition, the city recently agreed to fulfill its commitment to spend $130 million in surplus from the Battery Park City Authority for the construction of affordable housing.  But the city can also take additional steps that will not cost it any money.  The most significant of these steps would be to adopt inclusionary zoning requirements whenever the city agrees to upzone land to encourage larger scale development.  Upzoning significantly increases the value of real estate, and it is reasonable to expect that developers should give back to the community for this increased value.  Inclusionary zoning requirements should be written in such a way to encourage the construction of both low and middle income housing, in order to encourage the development of mixed income neighborhoods, and fight the growing problem of economic segregation in New York City.

 

These are just a few of the steps we should be considering to addressing the affordable housing crisis in our city, which will also help counteract the growing income polarization we face.  I welcome additional ideas you may have for dealing with these serious issues.

 

 

 

SENIOR/HEALTH CARE COMMUNITY FORUM:

“PRESCRIPTION DRUG BENEFITS FOR SENIORS”

Featuring a Discussion of the 2006 Medicare Part D Benefit

 

Date:  Thursday, November 3

Time: 2pm –4pm                

Place: Temple Shaaray Tefila

          250 East 79th Street @ 2nd Avenue

         

 Call (212) 490-9535 for further information

 

 

 

Community Spotlight

 

Vote Yes on Proposition #2 – Transportation Bond Act

 

It is crucial that New Yorkers vote yes on Proposition #2 on November 8th.  The funds raised by the Transportation Bond Act will be critical in moving forward on the long-overdue Second Avenue subway line, as well as other necessary mass transit projects. Eighty-five years after the blueprints for the Second Avenue subway line were first drawn up, and sixty-five years after the last significant additions were made to the subway system, we simply can't afford to pass up a chance to make the Second Avenue subway a reality.  The Second Avenue subway line will relieve dangerous congestion, serve residents who currently endure long walks to the subway, and promote economic growth along the entire East Side, from Harlem to Lower Manhattan."

 

If approved, the Transportation Bond Act would authorize the state to borrow $2.9 billion for transportation and road projects.  That money would be evenly split between the Metropolitan Transportation Authority (MTA) for improvements to mass transit and the State Department of Transportation for road and highway projects.  Of the MTA's $1.45 billion share, $1 billion would be allocated for expansion projects:  $450 million for the Second Avenue subway, $450 million for East Side Access to link the Long Island Railroad to Grand Central Station, and $100 million for a rail link from the Lower East Side to JFK International Airport.

 

While the act has been criticized for increasing the state's debt burden, the fact is that these MTA projects are a critical investment in the future.  The Second Avenue subway alone would ultimately create up to 156,000 jobs and generate $1.26 billion a year in economic activity.  The proper purpose for state borrowing is for large capital projects, with public participation. This is a prime example of positive government investment.

 

Additionally, failure to pass the Transportation Bond Act would jeopardize $4 billion in federal funds for MTA projects.  Missing out on federal funds would be a grave mistake.  The need for a new subway line won't go away.  The Lexington Avenue line is already the most overcrowded in the nation, and with massive development projects on the East Side bringing tens of thousands of workers to the area, congestion will only get worse.

 

We must also support the Transportation Bond Act because it includes provisions that address environmental protections as the city's infrastructure expands.  Along with funds for subway construction, the proposal would allot $90 million for the city to purchase new local and express buses, with all the express buses being clean-fuel powered. 

 

Passage of Proposition #2 is supported by a wide array of public officials including Governor George Pataki, Attorney General Eliot Spitzer, Mayor Michael Bloomberg, Mayoral Candidate Fernando Ferrer, Senate Majority Leader Joseph Bruno, Senate Minority David Paterson, Assembly Speaker Sheldon Silver and State Comptroller Alan Hevesi.  Among the many labor, environmental, business and civic organizations supporting the Transportation Bond Act are the AFL-CIO, the National Resources Defense Council, the New York Building Congress and the Regional Planning Association.

 

It's not often that I get to agree with Majority Leader Bruno, Mayor Bloomberg and Governor Pataki on an issue that will benefit underserved New Yorkers, grow the economy and protect the environment.  I am pleased that we all see the wisdom in supporting this issue.

 
 
Opposing Efforts to Close the Veterans Affairs Hospital in Manhattan:

Last month, I testified at a hearing on the proposed closure of the Veterans Affairs (VA) Hospital in Manhattan, located at 23rd Street and First Avenue.  I am strongly opposed to the closure of this facility, which is regarded as one of the best VA Hospitals in the country.  In addition, this location has allowed the VA Hospital to develop strong professional and academic relationships with surrounding institutions, particularly NYU Medical Center and Bellevue Hospital Center and their physicians to the benefit of VA patients.  We allocate billions of dollars to the war effort, distribute reams of yellow ribbons and then hide the goal of hoping to realize millions of dollars from real-estate deals involving the closing of the Manhattan VA Hospital behind the veil of consolidating services for veterans. The veterans who have served our country and the enlisted men and women currently risking their lives in the Middle East deserve an honestly constructed plan to provide easily accessible, consistently high quality medical care—close to 500 of these recently wounded presently receive care at the Manhattan VA Hospital, with more expected each month. Returning wounded soldiers deserve the best health care we can provide.  I will continue to work against this ill-conceived plan.

 

Financial Justice Hotline Addresses Discriminatory Banking and Credit Practices:

The Neighborhood Economic Development Advocacy Project has established a New York City Financial Justice Hotline to assist consumers with discriminatory banking and credit practices.  Among the issues they can address are discriminatory practices in credit reporting and repair; unfair debt collection; rent-to-own contracts; payday loans; tax refund loans; “courtesy overdraft” protection; Electronic Benefit Transfers (EBT); and access to bank accounts.  To receive assistance, call the hotline at 212-925-4929.  The hotline is staffed on Tuesdays from 4-6PM and Wendesdays from 11-1PM, and you can leave a message at other times.

 

Verizon LifeLine Phone Service Customers Must Recertify:
Under a new federal rule, Verizon is now required to annually recertify the eligibility of customers who receive Verizon’s LifeLine service.  Lifeline is a discounted telephone service for customers who receive or are income-eligible to receive Medicaid, Food Stamps, Family Assistance or other specified government benefit programs.  If you are a LifeLine customer, you should have received an eligibility form from Verizon.  If you have not returned this form along with proof of eligibility, you should do so soon, or risk losing your eligibility for LifeLine.  If you have any questions regarding the recertification process, please call Verizon’s toll-free hotline at 1-888-617-0200.  If you are not receiving Lifeline service and think you may be eligible, you can call Verizon at (212) 8901550 to get information on applying.

 

 

Spotlight on Policy

 

Oil and Gas Prices

 

Last month, the Senate had a special session, ostensibly to deal with energy costs.  While there were a couple of decent measures passed to encourage energy conservation, for the most part the action taken by the Senate did not address the real causes of our energy crisis.  Since energy policy is largely determined at the national level, States have extremely limited power to address issues of cost or supply.  For this reason, I cosponsored a Senate resolution calling upon the federal government to address the growing energy crisis, which has resulted in swelling gas prices and fears of a costly winter heating season.  The resolution, which passed unanimously, called on the Federal government to: substantially increase investment in the research and development of alternative sources of energy, including wind, solar, geothermal and biomass power; create a federal renewable portfolio standard that requires electricity providers to include a minimum level of clean energy resources in the electricity mix they deliver to consumers; expand the renewable-energy production credit to make renewable energy cost-competitive for consumers; introduce greater energy efficiency standards for appliances, heating equipment and electrical transformers; and end tax breaks and subsidies for non-renewable energy resources.

 

The immediate crisis in the wake of Hurricane Katrina and Rita only highlights a long list of facts that illustrate the complete lack of regulation of the energy industry:

 

  • Oil prices more than tripled since late 2001 even before Hurricane Katrina struck the Gulf coast.
  • Each day Americans are spending $288 million more on fuel than they did last year at this time, and $1 billion more than they did 3 years ago.
  • Between 1999 and 2003 average household expenditures on gasoline, heating oil and natural gas increased more than 35%.  Industry costs, however, did not increase during this period, leading to record profits for the petroleum industry.
  • The price of heating oil has increased 30% since last year.
  • If gas prices remain at their current average of $3.25 a gallon, NY drivers will pay $7.2 billion more than they did last year on gasoline.
  • The highly concentrated nature of the oil and gas markets enables oil companies to keep prices high by withholding supply, thus prohibiting a fair market to develop.

 

The recently signed federal Energy Policy Act of 2005 only makes matters worse.  The legislation provided tens of billions of dollars in subsidies and tax breaks to the oil, gas, coal, and nuclear industries, while weakening environmental and consumer protections. Most importantly it failed to reduce the country’s dependence on oil, failed to make any significant new investments in clean energy, and failed to protect consumers from the escalating cost of fuel.

 

Meanwhile, this year New York State was forced to stop accepting applications in May from low-income residents for assistance from the Low Income Energy Assistance Program (LIHEAP) due to lack of sufficient federal funding, leaving tens of thousands of families and senior citizens to have to choose whether to purchase prescription drugs and food or to pay energy bills.

 

The fact is that rapidly escalating oil prices have drained billions of dollars from New York’s economy, in a massive transfer of wealth from working New Yorkers to big oil companies.  If the cost of oil and gas remain at these incredibly high levels, the costs of almost all consumer products and all sectors of our state’s economy will be negatively impacted.  While Hurricane Katrina did highlight the energy crisis for all Americans, we must take a very serious look at long-term proposals that seek to solve the ongoing problems that we face.