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Median rent in Brooklyn climbed between two to six percent each month during the first half of 2019, reaching $2,914 by July, according to Bloomberg (Price 2019). As the map indicates, low-income housing tax credits (LIHTCs) tend to be clustered in the northeast section of the borough. Affordable housing is in short supply in the more westerly neighborhoods whose mixed-use library and housing projects are described in this issue: Brooklyn Heights, where average rent increased 53 percent from 1990 to 2010–2014, and Sunset Park, where average rent increased 24 percent during the same period (NYU 2016).
View the PDF version of this map for more detail and a key.
References:
NYU Furman Center. 2016. “State of New York City’s Housing and Neighborhoods in 2015.” New York: New York University. https://furmancenter.org/files/sotc/NYUFurmanCenter_SOCin2015_9JUNE2016.pdf.
Price, Sydney. 2019. “Brooklyn Beats Manhattan for NYC Apartment Rent Increases.” Bloomberg. July 11. https://www.bloomberg.com/news/articles/2019-07-11/brooklyn-beats-manhattan-for-new-york-apartmentrent-increases.
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Looking at the South African government’s map of “the social tapestry of Cape Town,” it’s not difficult to see the legacy of apartheid. The map shows many pockets of racial integration, but most nonwhite residents live in the Cape Flats, an expansive area southeast of downtown that extends far out to the urban fringes. This area includes the city’s infamous townships, built in the twentieth century to segregate black and mixed-race residents.
Whites, who make up only 15 percent of the population, occupy the northeastern and southwestern suburbs, the Atlantic shoreline, and much of the urban core, or City Bowl, so-named because it is surrounded by Devil’s Peak, Lion’s Head, and the iconic Table Mountain, the latter of which was voted one of the world’s New Seven Wonders of Nature.
The City Bowl is where Amazon recently moved into a new eight-story office building. Developers advertise newly built projects in the neighborhood like the 17-story Sentinel, “a super-modern glass and aluminum building offering the most contemporary architectural statement in the City Centre,” and the Onyx, an 11-story “jewel in the crown of Cape Town” featuring “hotel-style residents’ amenities in the form of a gym, outdoor cross-training track, a day spa with sauna, bar, and kitchen, as well as a sky terrace with dramatic harbour, city and mountain views.” Two of the Onyx’s penthouses came accessorized with a Jaguar SUV.
In Cape Town and the rest of South Africa, formal racial exclusion—enforced under centuries of colonial rule and sustained during the mid- to late-twentieth century by apartheid—has given way to economic segregation. Whites make up only a tenth of South Africa’s population, but nearly two thirds of its elite, according to the World Bank, which designates the country as the world’s most unequal. The top 10 percent of households possess more than 70 percent of the nation’s wealth.
Land is at the core of the problem, and one potential solution
After centuries of deep social divisions, Cape Town’s jobs, schools, and efficient transportation—sources of economic opportunity—are concentrated downtown and in affluent suburbs. Most residents can’t afford to live in those areas, and endure long commutes from townships and other far-flung neighborhoods, many lacking parks, hospitals, or, in some cases, basic infrastructure for water and sanitation.
Reversing such entrenched inequality will require a massive effort with many different solutions, but the city is poised to adopt a new policy that could help. Known as inclusionary housing or inclusionary zoning, the policy originated as a way to combat segregation in another nation with a history of racial oppression—the United States.
The mechanics of inclusionary housing are simple: owners of real estate projects are required to sell or rent some of the new homes or apartments to lower-income residents at prices they can afford. In some cases, property owners can provide the affordable housing at a nearby location or pay into a housing fund. Cities can specify how much affordable housing is required, and exactly how low the rent or sales prices need to be.
Inclusionary housing is a form of land value return, or land value capture, a type of policy that allows the public sector to tap the gains from rising property values that result from public sector actions—construction of a new road, for example—rather than those of the individual property owner, and use the value increase for the public’s benefit. One common source of property value increase is a change in the density of a neighborhood or individual property.
“Inclusionary housing is rooted in the understanding that much of land’s value is generated by actors other than the property owner,” said Enrique Silva, director of international initiatives for the Lincoln Institute of Land Policy.
Willard Matiashe, a researcher for the Development Action Group, a housing policy organization in Cape Town, described inclusionary housing as “one way of sharing the land value windfalls linked to additional development rights that the city gives to developers.”
Inclusionary can be a tool for spatial justice
Now used in more than 800 U.S. communities, inclusionary housing first gained traction in the 1970s, partly in response to a practice known as exclusionary zoning, by which cities used land-use regulations to prevent less affluent, often nonwhite renters or home buyers from moving to desirable neighborhoods. Common exclusionary measures include prohibitions of apartments or smaller homes.
South Africa enforced its segregation through more explicit land-use laws, most notoriously the Group Areas Act, which established different sections in cities for each race. Beginning in the 1960s under this law, Cape Town forcibly removed 60,000 nonwhite residents from an area near the city center known as District 6, bulldozed their homes, and relocated them to the urban fringes.
Cape Town under the Group Areas Act. Illustration by Myriam Houssay-Holzschuch, Olivier Ninot, and Emma Thébault
After the end of apartheid in 1994, the new democratically elected government immediately recognized the importance of land in addressing inequality. In an early white paper, the government committed to establishing “socially and economically integrated communities, situated in areas allowing convenient access to economic opportunities as well as health, educational, and social amenities.” Two years later, it enshrined these ideas in the new constitution.
But breaking the cycle of segregation has proven difficult. In response to an urgent need for basic housing, the post-apartheid government has built millions of homes for low-income South Africans, but they are located mostly at the urban periphery where land is cheap. These homes provide shelter but little access to opportunity.
“South Africa has acknowledged in law that they need to have a strategy for desegregation and they’re in search of practical tools to achieve that goal,” said Rick Jacobus, who has studied inclusionary housing and recently traveled to South Africa on behalf of the Lincoln Institute to learn and advise public officials.
Momentum behind inclusionary housing in South Africa is building
South Africa’s policy makers first put inclusionary housing on the agenda in 2004 as part of a national housing plan, and in 2007 the Department of Housing produced a framework for national legislation. However, these efforts fizzled in the face of opposition from the real estate industry, a downturn in the housing market, and technical concerns.
In the absence of a coherent national policy, cities have experimented with their own policies. The country’s largest city, Johannesburg, adopted the country’s first municipal inclusionary housing policy in 2008 for high-priority transportation corridors, although the policy was rarely used. Johannesburg recently adopted a new citywide policy, but it allows developers to meet the requirements simply by building market-rate homes or apartments of a smaller size—an indirect way to reduce the rent or sale price.
These initial efforts have been relatively modest, but there is now a stronger legal foundation for inclusionary housing in South Africa, thanks to another piece of legislation enacted a few years ago. In 2013, South Africa’s parliament enacted the Spatial Planning and Land Use Management Act (SPLUMA), which established spatial justice as one of the core development principles that should guide local land use, stating that “past spatial and other development imbalances must be redressed.” Now advocates in Cape Town are relying on that law to push for more aggressive affordable housing policies.
In Cape Town, momentum behind inclusionary housing has been fueled by a real estate boom that began in the early 2010s. Home prices have increased faster in Cape Town than elsewhere in the country, in part because of a strong luxury market and demand from foreign buyers, who are drawn to the dramatic landscape and Mediterranean-style climate. The market has cooled recently amid a national economic slump and a 2018 water crisis, but prices in some neighborhoods are still double what they were just five years ago. Only a fraction of Cape Town’s households can afford the average-priced house in the city.
The central business district in Cape Town. Photo by Amy Cotter.
Building on the legal foundation of SPLUMA, an activist group called Ndifuna Ukwazi (“Dare to Know” in the regional Xhosa language) began in 2017 to file objections against real estate projects for which developers sought changes in the regulations—to build above the allowable height, for example. These challenges have led some developers to voluntarily add affordable housing to their projects, but the process has been ad-hoc, often with weak enforcement.
Last month, Ndifuna Ukwazi escalated its campaign with a lawsuit against the city over its approval of a proposed mixed-use tower called The Vogue, which would become one of Cape Town’s tallest buildings and promises to be “iconic in both form and function,” with “undulating balconies and roof gardens” and “top-level penthouse apartments which will all enjoy panoramic views over the Atlantic Seaboard.”
Among the handful of Capetonians who could afford an apartment in the development, nearly half are white, Ndifuna Ukwazi said in its lawsuit, even though whites make up only a sixth of the city’s population.
“Every new exclusive development that is approved by the city without affordable housing entrenches a system of racial segregation and unequal access to services,” the group said in a statement.
Developers are at the table
Such pressure has made developers more open to an inclusionary housing policy. Last year, developers sat down with advocates, experts, and city officials in a series of dialogues, hosted by the Development Action Group and the Lincoln Institute. Developers said they would prefer the certainty of a citywide policy if it could eliminate the risk of challenges to individual projects, which can create costly delays.
“Developers in the room were saying, ‘give us the number so we can factor that into our proposals,’” said Matiashe of the Development Action Group.
Nigel Burls, a Cape Town planning consultant who works on behalf of developers but did not participate in the dialogues, said developers might support an inclusionary housing policy if it doesn’t make projects infeasible.
“If it seems to be addressing a problem and it’s not seen to be penalizing developers, the developers will jump on the bandwagon,” Burls said. “It has to be carefully structured and it has to be carefully thought through. It has to be done in a manner that it doesn’t kill development.”
The city is making efforts to enact such an inclusionary housing policy. In a concept document released last year, Cape Town proposed to tie inclusionary housing to zoning change or additional development rights that increase property values. A draft policy is expected sometime in 2020.
“If we can get a policy together that speaks to more equitable ownership and benefit from the land and land value, it’s an incredibly important moment,” said Gail Eddy, a research officer for the city of Cape Town who is helping to craft the new policy.
By itself, inclusionary housing would not solve Cape Town’s problems of segregation and unaffordable housing. The policy would only work in neighborhoods that can attract market-rate development, which excludes large swaths of the city where infrastructure is poor. It would not produce nearly enough homes and apartments to meet the needs of the poorest residents.
Nevertheless, an inclusionary housing policy would establish the principle that the whole community has a claim on land and its value, and that the city can use land to redress its inequalities.
“Inclusionary housing is a statement that land should be used for the benefit of the public—in the case of Cape Town and South Africa, to help reverse longstanding patterns of exclusion,” said Silva of the Lincoln Institute.
Will Jason is associate director of communications at the Lincoln Institute of Land Policy.
Photograph: Cape Town, South Africa, with Table Mountain as the backdrop. Credit: kavram/iStock via Getty Images.
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A city in the generally take-it-slow Midwest may seem like an unlikely place for the start of a revolution. But Minneapolis has passed some of the most progressive housing policies and zoning reforms in the country, and other cities—including those on the coasts struggling to overcome an affordability crisis—are taking notice.
Minneapolis first attracted attention by banning single-family-only zoning in an effort to usher in more multi-family housing in all neighborhoods. The city also legalized accessory dwelling units, eliminated minimum parking requirements, and dramatically up-zoned for more height and density along transit corridors and around employment centers.
Perhaps most important, Minneapolis tied all up-zoning with increased affordability requirements for new development—based on the idea that changing zoning to allow more housing creates measurable value for private landowners and developers.
It was a singular moment when a political coalition came together to focus on equity, says Minneapolis City Council President Lisa Bender, one of the leaders of the effort and a rising star in local politics. She made time for the Land Matters podcast recently on a trip to Vancouver, Canada, where she was a speaker at Rail-Volution, an annual summit promoting transit and transit-oriented development.
Vancouver—full of residential high-rises and well served by transit, but known as the most expensive city in North America—was a fitting place for the 41-year-old Bender, who has a master’s degree in city and regional planning from the University of California Berkeley and served for a time in San Francisco’s planning department, to reflect on her experiences. Nobody wants a city, she says, that can only be enjoyed by the wealthy.
You can listen to the interview and subscribe to Land Matters on Apple Podcasts, Google Play, Spotify, Stitcher, or wherever you listen to podcasts.
Learn More
Backyard Brouhaha
Inclusionary Housing: Creating and Maintaining Equitable Communities
Land Value Capture: Tools to Finance Our Urban Future
Photograph Credit: Kubrak78/GettyImages
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“Wish I didn’t know now what I didn’t know then.”
It was a throwaway line in Bob Seger’s 1980 ballad “Against the Wind,” a reflection on innocence and regret. Although he felt the line sounded odd and thought it was grammatically incorrect, Seger kept it in because the people around him liked it. The line has since inspired other artists to offer their own interpretations. It inspires me as an invitation to learn, providing a frame for reflection on unintended consequences and letting us imagine how we might have done things differently. It’s particularly apt in the context of our current national affordable housing crisis.
For four decades I directed and studied the use of public, private, and philanthropic funding to produce affordable housing and provide decent shelter for low-income families since the Great Depression. Lots of big ideas were discussed, many of them implemented. Most of those implemented did not deliver the expected results, but they all delivered unintended consequences. What can we learn from these 20th-century missteps—and more to the point, what are we willing to learn?
The federal government has struggled for more than eight decades to meet the basic commitments it made in the U.S. Housing Acts of 1937 and 1949: “a decent home and a suitable living environment for all Americans.” The acts committed significant subsidies to build new public housing and eradicate slums. They promised new jobs, modernized cities, and better housing for those who needed it. Because the Housing Acts proposed to benefit all Americans, they attracted broad public support.
When implementation time came, most public housing authorities aimed to provide housing for those in the lower half of the income distribution—a politically popular decision. To maintain the new housing stock, rents were set to cover buildings’ operating expenses. But as the buildings aged, operating expenses increased, and rents increased along with them. By the late 1960s, lower income tenants were getting priced out—paying upwards of 60 percent of their income to keep a roof over their heads.
Senator Edward Brooke (R-MA) remedied the situation by sponsoring an amendment to the Housing Acts in 1969, which capped rents at 25 percent of tenants’ incomes. The federal government covered operating shortfalls with subsidies. For reduced rents to be set, tenants had to disclose their incomes. It soon became apparent that public housing was not serving the poorest families with the greatest housing needs. In 1981, Congress acted again, reserving public housing for families earning half of the median income and reserving 40 percent of the units for families earning less than 30 percent of the median.
The deterioration of the buildings was accelerating. This was because federal operating subsidies did not cover capital expenses and major systems (heating, lighting, elevators) began to fail. The federal fiscal austerity of the 1980s compounded problems by reducing operating subsidies. By the end of the decade the only reasonable response to the national crisis in public housing was widespread demolition.
As the subsidies declined and our aging housing stock failed, a counternarrative emerged through which the residents themselves were blamed. The “culture of poverty” and “learned helplessness” became dominant memes. Poverty was viewed as a communicable disease rather than a symptom. The poor became convenient scapegoats bearing responsibility for the failure of their own shelter, as if any renters, poor or not, are expected to take responsibility for maintenance of their buildings. By concentrating the poor in public housing, we reinforced bad habits and transmitted values that perpetuated poverty across generations. This was supported by another dominant meme of the 1980s—the perils of big government. Big government was sloppy and inefficient, this narrative went (and still goes); the decline of public housing was the government’s fault.
In the “HOPE” programs that followed—Homeownership and Opportunity for People Everywhere—many public housing projects were replaced with low-rise, mixed-income developments, typically replacing one affordable unit for three that were demolished. To stimulate additional rental housing production, the federal government created the low-income housing tax credit (LIHTC) in 1986. The program offered private investors a decade’s worth of tax credits in exchange for upfront equity investments—typically the hardest money to find—for housing production. States had authority over how to allocate the credits, and regulations mandated long-term affordability of the housing.
Importantly, the LIHTC program promised to overcome the two biggest failings of public housing. By attracting private investment, the efficiencies of the private sector would overcome dependence on inefficient big government. Second, location decisions could be delegated to state and local governments who could ensure that the housing production did not concentrate poverty. Moreover, competition for the tax credits would reduce their cost to taxpayers and eventually, the private sector would produce affordable housing without the need for subsidies.
Some pundits consider the LIHTC program extraordinarily successful. Over three decades, more than 2.5 million units of housing were built. But through that period, we lost more affordable units from the national housing stock than we produced. Moreover, the promised private sector cost efficiencies never materialized. Depending on the year and the market, production of LIHTC units was estimated to cost 20 to 50 percent more than similar unsubsidized units. This does not even count the estimated $100 million spent annually to administer the program.
Tax credits for equity from private investors came at credit card rates to taxpayers. And the costs went up when public capital was cheapest. During the Great Recession, tax credits were yielding average after-tax returns of 12 to 14 percent to investors when the federal funds rate was near zero and the 10-year Treasury yield was around 2 percent. The private sector never was weaned from subsidy dependence. Today, virtually no affordable rental production happens without tax credits. Finally, disappointingly, it is universally accepted that the production of tax credit housing exacerbated the concentration of poverty.
How can the largest housing production program in the history of the nation, with broad bipartisan support, produce such disappointment? There are a lot of things I wish I didn’t know now that I (and we) didn’t know then—in 1999, in 1979, even in 1949.
I wish I didn’t know that as good as we are at identifying big challenges and announcing ambitious responses, our commitment rarely survives economic challenges. We know now that simply building affordable housing is not sufficient for providing a decent home and a suitable living environment. One needs a sustainable model that maintains the buildings and preserves their affordability over time and builds where we need to—close to good jobs and schools.
I wish I didn’t know that political support is evanescent, and memories are short. Ensuring that scarce subsidy reaches those who need it most is reasonable, but only if the subsidy is protected. The neediest are politically weak and not likely to marshal support to defend their entitlements. And when they try, they are easy to scapegoat.
I wish I didn’t know that we spent tens of millions of dollars evaluating housing programs, but we haven’t learned very much. We counted units, acting as if the number produced is the only important measure of impact. Twenty years ago, one in four families who qualified for housing assistance received it. Today, it is one in five families. While the general wisdom says housing costs that exceed 30 percent of income are unsustainable for families, about half of renters pay more than 30 percent of their pretax income for rent, with 20 percent handing over more than half of their income.
When do we take an honest reckoning of eight decades of effort to shelter our people? The complexity of housing challenges makes it impossible to learn anything from program evaluations. To learn, we need to reveal and commit to our intended outcomes, share the logic guiding our actions, and reconcile what we actually accomplish with our intentions. This is a learning model that we’ve embraced at the Lincoln Institute and I hope it can be applied more broadly to policy analysis in housing, community development, and philanthropy.
Providing affordable housing for all is no easy task. The painful truths of eight decades of work are offered not as an indictment, but as an invitation to learn, and to think and act differently. We need to try new things and learn from them. That innovation might take the form of building apartments above public libraries, a trend we explore in this issue. It might mean forging unexpected partnerships, as public utilities and housing advocates are doing in Seattle. It might mean auctioning development rights or otherwise leveraging land value.
We should aspire to the same ambition of the confident policymakers of 1949, committing to provide “a decent home and a suitable living environment for all Americans.” But we’ll need to try a lot of new things and learn from our mistakes. And if we commit to “searching for shelter again and again,” as Seger sings later in the same song, we just might get it done.
Have your own example of “wish I didn’t know now what I didn’t know then”? A policy or program we could have, or should have, learned from? We hope to spotlight a few in an upcoming issue—send yours to publications@lincolninst.edu.
George W. McCarthy is the President and CEO of the Lincoln Institute of Land Policy.
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In early 2019, the town of Cornelius, Oregon, celebrated the opening of a new mixed-use development called Cornelius Place. Situated on the town’s main thoroughfare, the building features a 13,650-square-foot public library that replaces one at City Hall that was only one-quarter that size. It also includes a café, a courtyard that will host concerts and a farmers’ market, and a 2,900-square-foot YMCA recreation and fitness center. “Our town didn’t have a senior, youth, or community center, so our library is a lot more than a repository for books—it’s a multi-purpose community space as well,” says Library Director Karen Hill, who shepherded the project.
Cornelius Place offers something else for the community: above the library are 45 apartments intended to be affordable for seniors with household incomes of up to 60 percent of area median income (AMI). Eleven apartments are part of the Section 8 program, making them more deeply affordable by requiring households to pay no more than 30 percent of their income in rent.
Cornelius, a city of 12,400 in metro Portland, anticipates growing by more than one-third in the next five years. Cornelius Place is its first three-story building, first mixed-use building, and an anchor for a new walkable-downtown master plan, says Ryan Wells, community development director. Combining a new public library with affordable senior housing made both projects possible. “There is cost sharing to construction when you mix those uses,” says Wells. “We could not have built the library on its own.”
Despite predictions that they would die in the digital age, public libraries in many U.S. communities are in fact busier and more loved than ever. Increasingly viewed as community hubs, the nation’s 16,568 public libraries are places where visitors peruse the stacks, focus on laptops, upgrade job skills, study English, try out “maker” equipment, connect with social workers on staff, and more. But many libraries are struggling to meet this demand with facilities that are small, outdated, and in need of repair—or in need of major upgrades to offer the collaborative areas, flexible workspaces, and cutting-edge technology that patrons increasingly expect.
As public libraries look to rebuild, however, they often face financial challenges. Land values and construction costs in many cities are on the rise, making such projects increasingly costly and frequently requiring special tax levies or capital campaigns. Meanwhile, cities seeking new solutions to the affordable housing crisis are eyeing some desirable real estate: the air space above those typically low-lying public libraries. Joining forces makes it possible to invest public dollars in—and leverage additional funds for—projects that serve the community in multiple ways.
“The evolution of public libraries in U.S. cities generally has followed the evolution of community needs, and in a growing number of cities, that now means combining new libraries with affordable housing,” says Loida Garcia-Febo, a library consultant and 2018–2019 president of the American Library Association. “Most libraries see their value in how they integrate and respond to the community, and it’s clear that in tight real estate markets, libraries can leverage their physical assets to increase the value they provide to the community.”
Living at the Library
Combining libraries with apartments is “part of a trend away from single-use zoning and back to mixed uses,” says Robin Hacke, executive director of the Center for Community Investment at the Lincoln Institute, which helps disadvantaged communities harness investment to achieve their economic, social, and environmental priorities. Hacke added that the trend also reflects a recognition of the importance of libraries as “third places for civic engagement and social cohesion.”
One of the nation’s first examples of a library and affordable housing sharing space took shape in San Francisco in 2006. As part of the 50-acre Mission Bay redevelopment, the city partnered with Catellus Development Corporation and Mercy Housing, a nonprofit affordable housing developer, to add a 7,500-square-foot branch library as a civic anchor. The building that houses the library includes a community meeting hall, an adult day health center, a coffee shop, and Mission Creek Senior Housing, with 140 apartments for low-income seniors.
Though it has been successful, this project so far has been a one-off for the city. At least one public official has asked the city’s acting librarian to explore whether future library renovations might be combined with affordable housing. “We are in an affordability crisis and we need to maximize our existing public land for 100 percent affordable housing,” wrote Sandra Lee Fewer, a member of the city’s Board of Supervisors, in an email response to Next City (Brey 2018). “It would be a missed opportunity to not pursue adding affordable housing above newly renovated public resources like our libraries.”
Although San Francisco has been slow to replicate the Mission Bay model, other cities have taken up the idea, including Chicago. Under Mayor Rahm Emanuel’s leadership from 2011 to 2019, the city made more than $300 million in new investments to renovate or build 30 public libraries in the city’s network of 80 libraries, which serves 10 million visitors annually. The “Branching Out: Building Libraries, Building Communities” initiative has focused on investing in libraries as community anchors with high-quality civic architecture and programming.
Since 2011, six new libraries have been built, and 14 branches have seen significant updates. By the end of 2019, construction of five additional libraries will be finished, with four existing libraries renovated.
Three of the new libraries are co-located with housing in world-class examples of modern architecture. In 2016, the city announced a partnership between the Chicago Public Library (CPL) and Chicago Housing Authority (CHA) that would cut costs, increase library patrons, and invest in attractive, sustainable buildings that provide the kinds of services the city needs. A city-run competition attracted submissions from 32 architecture firms, and three award-winning, Chicago-based firms were selected to design the projects:
Besides traditional library programs, such as book clubs for seniors and intergenerational educational and cultural programming, each branch offers early-learning playspaces and facilities for teens to explore digital design, music, and recording technology with help from skilled mentors. They also provide high-tech programming such as 3D printing, virtual reality, and robotics, as well as dedicated workforce development support and technology tutors.
In West Ridge and Irving Park, “these projects enabled CHA to deliver new housing units and expand affordable housing opportunities in two communities where CHA had not previously had much of a presence,” says Molly Sullivan, CHA senior director of communications. “This helped meet a demand for affordable senior housing in those communities.” The library system also had been seeking ways to bring modern facilities and services to these communities, says Sullivan, so combining housing with libraries made sense.
“Co-locating libraries with affordable housing provides housing and learning centers where they are needed—and makes communities more resilient and sustainable,” says Sullivan. “We know that housing is vital to our neighborhoods, but strong, healthy communities also require anchors that provide resources for lifelong learning.”
Critiquing the three projects in The New York Times, architecture critic Michael Kimmelman characterized the libraries as “just plain good urban planning.” He praised Emanuel for promoting the idea that “distinguished civic buildings in underserved neighborhoods constituted their own brand of equity” (Kimmelman 2019).
In June, Smart Growth America named the Taylor Street library its Project of the Year. “We knew when we embarked on this unique project and partnership that we were building more than a new building,” said former Chicago Housing Authority CEO Eugene E. Jones, Jr., when the award was announced. “We were creating a community anchor and asset that will have a lasting impact on residents and this neighborhood” (CHA 2019).
A Branch Grows in Brooklyn
Brooklyn is also leveraging opportunities to improve library infrastructure with housing, using aging branches as sites for redevelopment projects that combine new libraries with affordable apartments, or, in one case, sleek new tower architecture with market-rate luxury condominiums.
The Brooklyn Public Library (BPL) is an independent library system that serves the 2.5 million residents of the borough. BPL is the fifth-largest library system in the U.S., with 59 neighborhood libraries and 7.9 million annual visits. That might sound like a lot of capacity, but many of the system’s buildings are crowded, worn, and inadequate for modern use. In total, New York City libraries have some $1.1 billion in unfunded capital needs, mostly repairs, with $271 million needed just in Brooklyn, according to a 2014 report by the Center for an Urban Future, an independent nonprofit research and policy organization (Giles 2014). The report recommends ways to bolster libraries as community centers, including incorporating affordable housing.
“We see libraries performing a much bigger role in New York,” says Eli Dvorkin, editorial and policy director for the Center. “We have never relied on libraries as we do today.” He says libraries “are the single resource of first resort for immigrants, teenagers, seniors. They are the 21st-century settlement house, building the social infrastructure of our cities, but we haven’t invested in their infrastructure.”
That is changing with projects like Brooklyn’s Sunset Park Public Library redevelopment. Built in the 1970s, the popular Sunset Park branch was too small to meet the needs of a community whose population increased 34 percent between 1990 and 2014, double the citywide growth rate. During the same period, housing became more expensive, with median rents increasing 63 percent, far outpacing Brooklyn’s median income growth of 25 percent. In 2017, the city issued a competitive RFP and selected the Fifth Avenue Committee (FAC), a Brooklyn-based nonprofit affordable housing developer and social justice organization, as a partner in revamping the library. FAC proposed a 21,000-square-foot library—double the original size—with 49 units of permanently affordable housing on top.
Located on the first two floors of the eight-story building, the library will be outfitted with collections, technology, and flexible space. Above that, the apartments are slated for low- and middle-income households ranging from formerly homeless residents with no income to those earning between 30 and 80 percent of AMI. Apartments in the building, which is expected to open in 2020, will rent for well below the current market rents in the neighborhood.
“The City of New York isn’t creating more land, but our population is growing, and resources are in demand for both libraries and affordable housing,” says Michelle de la Uz, executive director of FAC and a New York City planning commissioner. The city has a long history of combining civic uses with other development, she noted, but those projects haven’t included 100 percent affordable housing. “We wanted to create the model so it can be replicated and we can have more of these win-win-win situations for libraries, for people who need affordable housing, and for taxpayers” to achieve the greatest benefit possible from public land.
The Sunset Park branch is one of several library-housing hybrids in New York. The three-story, 26,000-square-foot Inwood Public Library in Upper Manhattan, now under construction, anchors a 14-story mixed-use building called the Eliza, which has 175 deeply affordable apartments, universal pre-K classrooms, a social services delivery center, and amenities including a children’s playroom, gym, and roof garden.
The Inwood site was rezoned to allow for a sizeable increase in height and density, notes de la Uz, while “at Sunset Park, we built as-of-right and didn’t have to rezone—the height was allowed.” She agrees with a recommendation from the Center for an Urban Future that rezoning, where appropriate, would make many more of these projects feasible (see sidebar). “We’ve done many projects in partnership with government, and giving land at a reduced rate is how you make affordable housing happen,” she says. “The project has to be a certain size” to support the cost of construction, she notes, and rezoning and revaluing the land on which libraries sit to allow for higher buildings and greater density “would allow for many more affordable units above libraries and greater public benefit to be realized.”
Not Always Affordable
Not all of the city’s library-housing projects offer affordable housing, and some have inspired controversy. The 28,000-square-foot 53rd Street Library across from the Museum of Modern Art in Midtown Manhattan, which opened in 2016, provides a three-story base for the 50-story luxury Bacarat hotel and apartment tower. And a rebuild of BPL’s Brooklyn Heights branch saw the original 1962 building demolished and the site reenvisioned as One Clinton, a mixed-used, 38-story condominium tower with a new library, STEM learning center, and retail space at its base. Due to be completed in 2020, the tower’s 133 market-rate condominiums are listed for between $1 million and $6.4 million.
The Brooklyn Heights branch would have required over $9 million for renovations and upgrades. Instead, Hudson Companies paid $52 million for the old branch library site. That money is providing funding for BPL’s capital needs, including $12 million to fit out the new One Clinton library—and $10 million for the Sunset Park branch.
Critics of One Clinton have been outspoken about the dangers of “privatizing” public land and property, the plan to scrap the old library rather than renovating it, and the new project’s lack of on-site affordable housing. As part of the deal, Hudson Companies is building 114 units of permanently affordable workforce apartments nearby, at no cost to the city. Off-site development of affordable housing within the same community district is allowed under the city’s mandatory inclusionary housing program. The apartments are intended for households earning from 60 to 125 percent of AMI, with half reserved for local residents.
Milwaukee is also combining a mix of market-rate and affordable housing with libraries. Milwaukee Public Library (MPL) has partnered with developers to build four new mixed-use branches that cost the library system a total of $18 million. They include the Mitchell Street Branch Library and Alexander Lofts, which opened in 2017 in the South Side historic commercial district. With 23,000 square feet on two floors that feature a large community room, recording studio, makerspace with kitchen, and a reading area with a fireplace, Mitchell Street is now the city’s largest branch library. The $21 million project—$6 million for the library and $15 million for market-rate housing—involved the restoration of a historic building that once housed a department store. The new development has 52 market-rate apartments and eight adjacent townhouses.
The housing for these four projects varies from affordable to market-rate, a decision left to the developer, says Sam McGovern-Rowen, MPL project manager. “The library board and the city have expressed a preference for mixed-use housing developments, but we do not dictate the affordability aspect,” he says. “The developers propose projects through our RFP process, and we have selected projects that cover the full spectrum of affordability.”
Co-locating libraries with at least some market-rate housing “means that the library can play a role in community economic development,” McGovern-Rowen points out. “We take formerly untaxed property and put it on the tax rolls, generating hundreds of thousands of dollars in tax base so far.” The libraries have also been “a shot in the arm to the neighborhoods and business districts where we build these projects,” he says, as thousands of library visitors and new residents patronize local businesses.
Unlocking the Value of Land
Co-locating libraries and affordable housing “seems to fit into a broader trend of unlocking the value of land,” says Rick Jacobus, principal of Street Level Advisors in Oakland, California, and author of a Lincoln Institute report, Inclusionary Housing: Creating and Maintaining Equitable Communities (Jacobus 2015). “Libraries also are an obvious and synergistic pairing with affordable housing, which needs a ground-floor activation that is not housing.”
“A common challenge in mixed-use buildings, especially with developers of affordable housing, is they run into difficulty locating the right institution or organization to partner with for ground-floor development, and banks then have trouble financing the projects,” confirmed Hacke of the Center for Community Investment. Incorporating a library, Hacke says, “can contribute to financial viability for a building, but also to the well-being of people who live in the building. When you can bake that into the design of the project, it serves the financials as well as the residents.”
Are co-located libraries and affordable housing any more difficult to finance than separate projects? Yes and no. Generally a city’s public library division pays for the library, and the housing developer, whether it’s the local housing authority, a nonprofit, or a private for-profit developer, works separately to secure financing. The affordable housing component, and often the library, typically have to seek multiple funding partners. But co-location can provide a core and shell for the library building, some shared space, and a catalyst for additional funding. “Mixed-use development and shared costs make the building of new libraries affordable,” says ALA’s Garcia-Febo.
The $20 million Cornelius Place project in Oregon, developed by the national nonprofit BRIDGE Housing with local service provider Bienestar, was 12 years in the planning and required more than a dozen financial partners. After a library levy failed to pass, the library conceived of introducing senior housing as a feasibility step. The library cobbled together its $5.8 million share of construction costs from sources such as local businesses, individuals, and county, state, and federal funds, including a $500,000 grant from the National Endowment for the Humanities. The city owns the land, and the building is owned by BRIDGE Housing, with the library paying a nominal leasing fee for its space.
Mixed-use projects, especially those with an affordable housing component, can also offset construction costs by taking advantage of low-income housing tax credits or state tax credits. In 2009, the Miami-Dade Public Library System joined forces with the county’s Homeless Trust and Carrfour Supportive Housing to build the Hispanic Branch Library and, above it, the Villa Aurora Apartments. The project included 76 units of permanently affordable housing: 39 for formerly homeless families and 37 for low-income families. The new 12,000-square-foot branch library quickly became a community destination. Carrfour, a nonprofit affordable housing provider, built the complex on the site of a former Salvation Army shelter and leases the first-floor space to the library system. Funding sources for the $29 million project included the Enterprise Social Investment Corporation’s tax credit equity, an incentive loan from the Florida Housing Finance Corporation, deferred developer fees, and city, county, and federal funds. The cost to the library system was $3 million.
The City of Chicago worked to persuade federal officials that public libraries could be co-located with public housing without putting federal housing subsidies at risk, noted Kimmelman in The New York Times. The three Chicago projects had different funding packages. Financing for the Little Italy branch, for example, included U.S. Department of Housing and Urban Development (HUD) funds, federal tax credits, revenue from two tax-increment financing districts, and another housing fund. By adding the housing component to the library, the project qualified for federal tax credits and government housing funds, including from HUD, that provided almost half the needed funds. Thus, the construction of the building was underwritten significantly by co-location.
In Brooklyn, FAC is leveraging eight sources to finance the $35.8 million Sunset Park library, which breaks down to $7.8 million for the “core and shell” of the library and $28 million for the residential portion. Funding sources include over $10 million in state and federal affordable housing tax credits and $8.75 million from the New York City Department of Housing Preservation and Development. The developer is constructing the building at no cost to BPL, which will fit out the new library for $10 million—half the cost of demolishing the library and building a new one—derived from the sale of air rights to the old Brooklyn Heights library site. The city turned the property over to FAC during development, but when construction is completed, the city will own the library in perpetuity, with both its portion and the housing units treated as condominiums. FAC will own and manage the apartments.
For the Common Good
Smart rezonings could allow dozens more libraries to be upgraded and more co-located library and affordable housing projects to be built. The Center for an Urban Future worked with the architecture firm Marble Fairbanks to identify at least 25 libraries in New York City with surplus development rights that they could leverage for affordable housing or other uses, depending on the community’s needs.
“Cities are trying to lean more heavily into the production of affordable housing, and what’s relevant here is the land,” says Jacobus. “If you have an asset like urban land, you might as well use it to its fullest potential. This could happen in many cities with one- or two-story libraries in places that could be denser. By building a building that is denser, they’re able to unlock the value of the land to subsidize affordable housing, and that extra value is a public asset.”
Even projects with market-rate rather than affordable housing can provide significant public value, says Jacobus. The One Clinton project in Brooklyn Heights, for example, provides the library, housing to ease a tight market, and a fair amount of capital to underwrite improvements to other new libraries, while the developer also provides affordable housing nearby. “They were able to use the value of an asset to leverage affordable housing,” Jacobus says. “It’s a smart move and there’s a trend there that seems promising.”
Pairing libraries and affordable housing helps cities meet other goals such as financial management and neighborhood development, he notes. “The bigger issue is that you get obvious public benefit out of the project, which helps with public acceptance of affordable housing,” often a target for community opposition. While Jacobus doesn’t see mixed-use housing and library projects as a widespread trend—in part because libraries still require additional public funding to build and operate—he does see cities becoming more entrepreneurial and using all the resources they can to create more affordable housing.
Garcia-Febo of the ALA is more optimistic. As a wise use of public land that provides value to the community, co-location of libraries with housing “is a great new opportunity to distribute services across neighborhoods, and I think we’ll see many more of them,” she said. “It’s difficult to equate the value of libraries with the land or air space they occupy, but for many library leaders, this is an opportunity to reinforce the value of libraries for access, education, lifelong learning, and the civic commons.”
Co-location Considerations
For a mixed-use library and housing project to succeed, planners must consider many factors, including the following:
Zoning. Zoning should allow for mixed uses combining residential with public institutions (and perhaps other uses), and for the height and density required to build a critical mass of housing over library space. A 2018 neighborhood rezoning decision by the New York City Council allowed for mixed uses and additional building height to achieve goals such as developing affordable apartments and encouraging economic development that benefits the local community. The decision paved the way for the 14-story Eliza building, which combines the new Inwood Library with 175 affordable apartments.
Air Rights. Development rights generally refer to the maximum amount of floor area permissible on a lot. When the actual built floor area is less than the maximum permitted floor area, the difference is referred to as “unused development rights,” or “air rights.” The value of air rights, which can be sold to adjacent property owners or others, can vary by location and can depend on factors such as zoning restrictions, the height and density of adjacent buildings, and proximity to public transit and services.
Financing. Libraries generally are funded by a city’s capital budget or by special tax levies. Market-rate housing generally is financed privately or through commercial banks. Private developers of affordable housing can take advantage of low-income housing tax credits. Municipal housing authorities can access funds from local, state, and federal sources to develop subsidized public housing for low-income households. Depending on the needs of the community and developers’ plans, co-location can include a mix of publicly subsidized, affordable, and market-rate housing; the latter can help underwrite development of the more affordable units.
Tax Implications. Market-rate housing that shares space with libraries is almost always taxable, so these projects can help expand a community’s tax base. In contrast, affordable housing is usually tax-exempt, at least when it is owned by a housing authority or land trust. The best housing option depends on a community’s needs—fiscally stressed cities may prioritize their tax base, while hot-market cities prioritize affordable housing. In general, reducing costs for the construction of libraries and public housing will benefit taxpayers.
Kathleen McCormick, principal of Fountainhead Communications in Boulder, Colorado, is a contributing editor for Land Lines. She writes frequently about sustainable, healthy, and resilient communities.
Photograph: Cornelius Place, a mixed-use development in Cornelius, Oregon, combines a ground-floor library with affordable senior housing that is walkable to the downtown area. Credit: Scott | Edwards Architecture, photo by Pete Eckert.
References
Brey, Jared. 2018. “How Library Systems Can Help Address Affordable Housing Crises.” Next City. June 18, 2018. https://nextcity.org/daily/entry/how-library-systems-can-help-address-affordable-housing-crises.
CHA (Chicago Housing Authority). 2019. “Taylor Street Apartments and Little Italy Branch Library Garner National Award.” Press release. June 24. https://www.thecha.org/news-media/news/taylor-street-apartments-and-little-italy-branch-library-garner-national-award.
Giles, David, Jeanette Estima, and Noelle Francois. 2014. Re-envisioning New York’s Branch Libraries. New York, NY: Center for an Urban Future. September. https://nycfuture.org/pdf/Re-Envisioning-New-Yorks-Branch-Libraries.pdf.
Jacobus, Rick. 2015. Inclusionary Housing: Creating and Maintaining Equitable Communities. Policy Focus Report. Cambridge, MA: Lincoln Institute of Land Policy. https://www.lincolninst.edu/publications/policy-focus-reports/inclusionary-housing.
Kimmelman, Michael. 2019. “Chicago Finds a Way to Improve Public Housing: Libraries.” The New York Times. May 15. https://www.nytimes.com/2019/05/15/arts/design/chicago-public-housing.html.
