Why Are Wealthy NYers Living In Taxpayer-Subsidized Affordable Apartments?
(Alliance for Tenant Power)
The dearth of affordable housing in this city is no joke, and with millionaires reportedly taking up a chunk of the few existing rent-stabilized apartments, it’s all the more difficult for New Yorkers making small incomes to find homes. So what fun, then, to discover that some high-earners are worming their way into taxpayer-subsidized affordable apartments, thanks to a stipulation that prohibits the housing programs from removing tenants whose income goes up after they qualify. Enjoy your kitchen bathtubs, plebians.
Indeed, last week NYS Comptroller Thomas DiNapoli released an audit report that found that 160 tenants who lived in the city’s affordable housing units reported incomes of more than $100K, which far exceeds the income limit that would render a tenant eligible for low-income housing (for reference, in 2016 the income eligibility limit was $45,300 for a family of four). Eight of those tenants earned over $200K.
The problem, of course, is that because tenants can’t be kicked out if their income increases once they qualify, people who end up earning out of the program and stay in their apartments render those limited units off the market for low earners who would otherwise benefit. On top of that, if developers offer a small portion of low-income units to tenants earning below 40 percent of the area median income ($38,160 for a family of four, $26,720 for an individual) they don’t have to rent the next available market rate unit to another low-income tenant. This keeps new units from being made available for other low earners. And the units are tax-subsidized, so, essentially the rest of us are paying for people earning twice our income (or more) to score $800/month apartments.
Today the Daily News reported on the particularly infuriating tale about one David Sans, who managed to snag a $722/month unit in a Chelsea development built under the 421-a program, which awards significant tax breaks to developments that set aside a certain percentage of affordable housing units. According to the News, when Sans initially applied for the apartment in 2012, he provided a copy of a 2011 tax form showing a $24K salary, and not an official IRS transcript; he also claimed two dependents, a teenage niece and nephew, and filed as “single.”
The following year, though, Sans’s tax form reportedly showed a salary of $238,000; he also filed jointly with a wife. In 2013, Sans reported an income of $456,502. And though it’s certainly possible that in that timeframe Sans simply procured better work and got married, in 2014 the state began investigating Sans’s housing application, finding that when he filed his initial application he was a registered stockbroker with the oversight Financial Industry Regulatory Authority (FINRA). Investigators also allegedly found that the Social Security numbers Sans provided for his aforementioned dependent niece and nephew appeared to be fraudulent.
Sans reportedly handed the state a sworn statement claiming his niece moved out shortly after he procured the apartment, and his nephew never lived in the unit. He also told investigators he and his wife had been separated when he applied. The state moved him to a smaller apartment, but he was still allowed to stay in a unit with a rent break. And while Sans told the News he had been unemployed when he applied for the apartment, according to records from FINRA he worked consecutively from 2007 to 2013. It appears neither the state nor the management company at Sans’s building checked FINRA’s records when he applied for the unit.
“The system works this way,” Sans, who insists he was unemployed when he got the apartment, told the News. “The system doesn t say when you make more money, you have to leave. It doesn t. It s not designed like that. It s designed to help people that don t make money. So if I don t make money within a period of time what am I going to do when I do make money? Just leave?”
Sans, who did not respond to an email request for comment, is just one of a number of high-earners in affordable apartments, and DiNapoli says the Housing Finance Agency, which oversees the 80/20 affordable housing program that allots these limited low-income units, should do more to keep the units out of affluent hands. “The agency can and should do more to ensure that New York’s desperately needed affordable apartments are going to those who deserve them,” he said in a statement.
Meanwhile, though the controversial 421-a program expired a few years ago, Governor Cuomo passed a new version of the program as part of the 2018 fiscal year budget, one some tenants called “a giveaway to billionaires” and argued would accelerate gentrification.