Big developers flood politicians with cash
The New York Daily News
October 27, 2013
What has the lack of affordable housing got to do with campaign finance reform? Lots.
Both major candidates for mayor, Bill de Blasio and Joe Lhota, agree that an inadequate supply of affordable housing is a serious problem, and both have plans to create more. But what has not been discussed nearly enough is one of the major causes of the shortage: the way the real estate industry uses its massive campaign contributions to limit our affordable housing stock.
This year, after receiving tons of money from well-placed donors, the governor and members of the state Legislature quietly gave away millions of your tax dollars to developers of luxury towers. The deal was so bad that it is being looked at by the Moreland Commission to Investigate Public Corruption.
Affordable housing may be the biggest issue in the city. As a remedy, state government offers tax incentives to encourage developers to build projects with less expensive units that they might not otherwise build.
But developers of five Manhattan luxury towers wanted the subsidies without including affordable housing, and they got it — courtesy of language quietly inserted into a bill that coasted through the Legislature.
Thanks to Daily News reporting and the Met Council on Housing’s report, “Tax Breaks for Billionaires,” the public is now aware of this multi-million dollar giveaway.
The report found that four of the five developers used high contribution limits and loopholes to give more than $1.5 million to state elected officials, political parties and real estate PACs between 2008 and 2012, including at least $440,962 in 2012 alone. And Cuomo, who had to sign the legislation, was the biggest single recipient, pulling in $150,000 from the four developers in 2012.
The millions of dollars that the city has lost could have been used for real housing needs — like rent subsidies for the more than 50,000 people sleeping in homeless shelters or for the repair of dilapidated apartment buildings.
The 421-a real estate tax break program cost the city $755 million in lost real property tax revenue in 2010, according to the Pratt Center for Community Development. We won’t know how much in tax breaks those five luxury towers will get until they are finished, but just the two penthouses in one tower that have already sold for $90 million each will share $2.4 million in tax breaks.
A handful of real-estate developers winning such a huge giveaway at a time where there are more homeless people in New York City than ever before, and too many families paying too much of their income on housing, is a reflection of just how broken the current campaign finance system is.
The fix is not complicated. New York City has had a working public financing program for years that forces candidates to reach out to many voters and limits the influence of big donors.
It’s time for the state to implement the same kind of system. That means placing reasonable limits on the amount one donor can give, and giving a public match for small donations. The combination of those two would force candidates to seek lots of small donations from actual voters, while still leaving them able to raise enough to run a successful campaign.
Combine that with an effective watchdog to make sure the rules are followed, and you have a campaign finance system that encourages elected officials to do what’s best for all of us, not be beholden to a few big money donors.
How do we get that system? That Moreland Commission is charged with not just investigating corruption and the role of money in politics, but also coming up with recommendations for change by Dec. 1. So we need the commission to issue a strong report, showing why we need systemic change.
Then we need Cuomo to use his power to get those reforms passed now. We have an historic opportunity to restore trust in government. We can’t afford to delay campaign finance reform any longer. The time to get it done is now.
Benjamin is executive director of the Metropolitan Council on Housing.