NEW YORK CITY Mayor Michael Bloomberg has a bold insight: If you fight for decent, affordable housing, not only do you create stronger cities, but you also win votes in elections.

In the month before Bloomberg was re-elected mayor in a landslide this November, the city issued a flurry of housing announcements, including a new, $200 million loan fund, a revived and expanded supportive-housing strategy for the recently homeless, and the latest phase in the city’s inclusionary housing program, among other new plans.

It began to seem a little like “The Twelve Days of Christmas” to local housing advocates. The announcements came in a steady drumbeat, about one each week.

Almost any of Bloomberg’s recently announced programs would make New York City an affordable housing leader. For example, the city’s newly capitalized housing trust fund, announced in the spring, will have an average of about $33 million a year to invest over the next four years in loans and grants. In contrast, New York state had only slightly more tax credit authority than that in 2005: a total of $34.5 million.

But at the end of October, Bloomberg added to his housing credentials again. Speaking to a packed audience of housing advocates and television news cameras at the Mandarin Oriental Hotel high above Central Park, Bloomberg more than doubled the city’s overall affordable housing plan. He extended the New Housing Marketplace plan by another five years and 100,000 units, for a total of 168,000 units over 10 years.

The original five-year, $3 billion initiative committed to create or preserve 68,000 units of affordable housing by 2008. That plan is already nearing the end of its second full year. Nearly 29,000 units have been completed or have closed their financing, according to Shaun Donovan, commissioner of the Department of Housing Preservation and Development (HPD). Donovan gave an update of the city’s progress during his keynote address at AHF Live: The 2005 Tax Credit Developers’ Summit, held in Chicago in October.

The city’s expanded plan caught many housing experts by surprise. Housing First!, a coalition of local affordable housing advocates and investors, has been pushing for a strategy this big since 2001, but they never expected to get their wish so soon.

“I don’t think anyone imagined it,” said Hilary Botein, coordinator of Housing First!, after the announcement. “In 2001, who would have thought?”

Bloomberg’s plan was also very similar in scale to the housing plan proposed by the Democratic challenger for the mayor’s office, Fernando Ferrer, who proposed creating or preserving roughly 167,000 units of housing. So in some senses the mayor was anteing up. However, the fact that a bidding war over housing could break out in a major election bodes well for the industry.

Huge turnaround

The specifics of the Bloomberg plan reveal a great deal about the city’s housing markets and how they have changed. In the late 1970s and early 1980s, the city lost hundreds of thousands of units of housing to abandonment as people fled the city.

But in the 1990s, the city began to recover and the city’s population grew by 700,000 people. “That’s more people than live in Boston or Baltimore,” Bloomberg said. “The construction of new housing did not keep pace … The challenge we face today is not abandonment. It’s affordability.”

New York City’s real estate market has roared back to life in many neighborhoods, like Harlem, that were once its most blighted. Officials expected to issue more than 30,000 new building permits in 2005, the highest level since 1972. Bloomberg called it “the biggest private sector boom our city has seen in generations.”

The city hopes to help keep this boom going by simplifying its convoluted building code; it has already changed the zoning on hundreds of pieces of land to invite new development, finding room for more than 30,000 new units of housing on the sites of old factories and decaying piers.

“By continuing to create the conditions for more housing to be built, we will take vital steps toward relieving pressure on rents and housing prices across the city,” Bloomberg said.

The city will also harness its own real estate boom with “the most aggressive inclusionary zoning program in the nation,” Bloomberg said. Inclusionary zoning offers developers the ability to build more market-rate housing if they also commit to including more affordable units.

In the years ahead, officials expect to see more than 8,500 new affordable units built in Greenpoint-Williamsburg, West Chelsea, and the Far West Side, “most of them through inclusionary zoning,” Bloomberg said.

Inclusionary zoning is just one of the solutions officials have found to create new sites for affordable housing, which has become increasingly difficult to develop as the real estate market revived and the city’s abandoned housing was repaired.

Loan fund for land

The city also created a new $200 million loan fund to help affordable builders compete for land. The fund will make short-term, low-interest loans through conventional banks to local, nonprofit affordable housing developers.

At the heart of the loan fund is $40 million put up by several foundations. The goal is for this money never to be spent: It covers the bank loans to the affordable housing developers in case of a default. Because of this guarantee, the banks can make loans to affordable developers that will cover up to 115% of the cost of a piece of property at a very low interest rate, so that a developer can hold onto land while applying for subsidies.

“This is one of my proudest days in my years of public service,” Donovan said at the announcement of the loan-guarantee program.

Officials have also announced an agreement with the Department of Housing and Urban Development (HUD) to rehabilitate hundreds of bankrupt HUD properties in the city. The city will also work to preserve tens of thousands of aging affordable housing properties built under the state Mitchell-Lama program and recapitalize almost 5,000 older Sec. 202 properties for low-income seniors.

Bloomberg also spoke of “a new Mitchell-Lama program for the 21st century.” The exact outlines of this new plan are still unclear, but Bloomberg said it would lower the cost of the housing produced through it by 25%, allowing its projects to serve households earning $50,000 to $100,000 a year. To lower the cost of financing, the city will create “a new public-private entity” to issue tax-exempt bonds and oversee development, he said. A new partnership with labor will also help lower construction costs.

“Finally, we will make hundreds of millions of dollars in city capital available,” Bloomberg said. “My goal is to jump-start the construction of large-scale, middle-class rental housing.”

The city will help pay for these new developments with tools like its affordable housing trust fund and guaranteed-loan fund. It will also leverage its own strong real estate market with ideas like a $200 million expansion of the city’s 421-A certificate program, in which market-rate developers purchase from affordable housing developers a local tax credit that will lower their New York City tax bill. The city also raises money by selling property, such as a portion of the Studio City site in Manhattan, which recently sold for $50 million.

“It’s going to be a wonderful next few years for New York City,” Bloomberg promised.n