Industry City Foe Carlos Menchaca Talks Zoning and Housing Policy

He pushed instead for the city to fund affordable housing in Sunset Park as part of the rezoning deal, but the de Blasio administration, strapped for cash because of the coronavirus pandemic, had no interest in getting involved. The city’s refusal to provide additional funding ultimately drove his opposition to the project. Menchaca’s decision alienated him from both local activists, who felt he should have rejected the long-in-the-works rezoning from the outset, and Industry City’s owners.

One of seven children, Menchaca grew up in El Paso, Texas, and attended the University of San Francisco before moving to New York City in 2004. He worked for then-Brooklyn borough president Marty Markowitz and then-City Council speaker Christine Quinn for several years, as a policy coordinator and a liasion to the LGBTQ community. He was elected to the City Council in 2013, defeating 12-year incumbent Sara Gonzalez. He bills himself as the first openly gay elected officeholder in Brooklyn and the first Mexican-American elected in New York State.

Using Industry City and his seven years on the City Council as a jumping-off point, the 40-year-old Menchaca announced his candidacy for mayor last October. However, his campaign struggled, raising only $87,000 over the last six months and failing to meet the $250,000 threshold for the city’s public-matching campaign funds program. He suspended his campaign on March 24, citing a lack of campaign support and desire to focus on the remainder of his council term; however, anybody who cares about New York City politics, particularly areas of land use, would be wise to hear what he has to say. He hopes to run for public office again, because he’s term-limited out of the council.

The following interview, which Commercial Observer conducted with Menchaca in February, is edited for clarity and length.

Commercial Observer: So how would you say your [ideal] housing platform differs from Mayor de Blasio’s housing strategy?

Carlos Menchaca: Well, Mayor de Blasio’s strategy really hinged on a strong presence of private industry, real estate energy, and investment, through [mandatory inclusionary housing], which I think we all saw as a great possibility that just has not panned out — the affordable housing that we’ve all wanted.

And, so, what I want to do is actually make the investments ourselves as the City of New York, to get as close as we can, in every project, to 100 percent affordable. That means that we’re gonna have to bring in massive amounts of city capital, in partnership with private, where we can. But we’re just gonna have to invest in using public funds for public good, and that’s the affordable housing piece. So, that’s one.

Two, I think that I also want to invest in [the New York City Housing Authority], and fully funding NYCHA at the city level. And with the $32 billion worth of deferred maintenance, we could actually make a big, big leap into this by bringing capital from the City of New York. And that is also part of this investment for affordable housing. Now, I know it’s a lot, and it’s true. But the state and the federal government will never meet us anywhere unless the city makes this first step. And I want to make that now in this next budget and, in June, I want to bring that to the table for the council to take leadership and put that into the budget.

And, so, it’s a very different strategy. It’s public funds for the public good around affordable housing, period.

Now, the other piece is, I think, I want to create some public financing mechanisms that I think some of the candidates are talking about now, which is a public bank, and allowing for a public bank to actually, potentially, finance these projects that developers want to make happen in the City of New York. And that way, we keep the profits in the City of New York. You know, I learned a lot from Industry City, but a lot of these financial tools come from foreign banks. Let’s make that city investment through a public bank. And I think we can get better rates and keep those profits here in the city.

I see. So, how would you create the tax revenue necessary to fund truly affordable, low-income housing; housing for the formerly homeless; and money for NYCHA?

So, a couple things. One is, if you look at the budget now, we are in a moment where we are building out a different framework of how to fund things like the [New York Police Department]. And what I’m also proposing is a $3 billion cut to the incredibly bloated NYPD, so we get revenue from savings, savings at the NYPD level. We have lawsuits that we pay for that we shouldn’t pay for, for officers that are involved in disciplinary issues, and some of them are breaking laws — all of that we shouldn’t be paying for. And what I’ve also seen, just in the work that I’ve done in the council as a public safety committee member, is that the actual NYPD budget, you look at it all, the whole thing is probably larger than $6 billion. It could be up to $10 [or] $11 billion. So, there’s a lot more work that we have to do this year in the City Council to actually see what we can actually remove.

And, as we get closer to demilitarizing, and then also potentially decreasing headcount, we can get a lot of savings. And that’s just the NYPD. We haven’t even talked about the consultant budget for the Department of Education. So, a lot of this is in savings.

And, then, the dollars for the construction. Because we talked about [fully funding NYCHA], like we talked about how this is over the course of four years, by the way, so this is multi-year. And, then, bringing more dollars into affordable units, and potentially even putting capital reconstruction for hotels, micro-units on hotels, and commercial space. All of that is bonded through the capital budget, so you’re not paying for the full thing. You bond it over time. And that debt service is a smaller percentage that we can add to the expense budget that gets balanced every year. So, we’re not paying for $32 billion in one year. We’re spreading it over the bond’s time, which gives us the opportunity to just spend a lower percentage of that now.

What neighborhoods would you reserve rezone, if any?

Well, first we have to kind of look at the rezoning process itself. And, already that question, I think, ignites the sense of defense. As someone who has been fighting on the ground with Sunset Park and Red Hook, that’s not the way through. It’s not like the mayor’s gonna decide where we should rezone. I think this is an opportunity for neighborhoods to say, ‘OK, where can we bring the growth?’

And I think there’s a lot of neighborhoods that, if we just make the call and say, ‘Hey, we need to build, we need to grow. Where can we do it?’, then we can get the community [and] the community leaders of neighborhoods, and do a comprehensive review of where to grow and how to do it. And, I think when it comes from the mayor’s position of power, it loses its ability to be grassroots-led and community-led, so I would not have that approach.

The question is: Do you think that there is a way to make rezonings more palatable to most neighborhoods? Or, do you think that people will oppose them regardless?

No, I think the nature of rezonings and how we ask communities — and it’s everything from thinking about how we protect manufacturing in our neighborhoods, and those are the jobs for the local communities — what they need to be able to protect people who are being displaced. So, when you start there, you look at protections, and then we say, ‘OK, well, how do we grow? How do we protect the current, project-based, Section 8 housing that’s in, like, a Sunset Park, for example; how do we do that?’

And, then, we start where the communities are. And, then, from that, you bring the larger conversations about possible rezonings and down zonings in some neighborhoods. And think through how communities have just been silenced over the last 20-some years. So, it’s different.

I think, again, what we’ve learned during the Industry City conversations is, what we want to do is actually bring unions, the construction industry that also wants to grow, in partnership with communities, so that communities can get to know them before they end up seeing each other at a ULURP hearing. All of a sudden, there’s like the carpenters and painters and whatever. All the unions just kind of show up in force. That should be happening a lot sooner before any ULURP gets constructed.

And, so, this is more of a community organizing effort. To the question, how do we grow? Where do we grow? Well, what do we need to protect the community first? And then, how … once people are protected from any displacement pressures, can we grow?

And how would you change the mandatory inclusionary housing [MIH] policy?

I think that needs a whole rethink, and part of that is the percentages are just too low. We’re trying to get to a point in a project that’s about — you should actually hear this [land use] hearing [on Feb. 23]. The address is 737 Fourth Avenue. And this is an MIH project. I’m going to be listening to community voices on this issue. But MIH was not adequate to get us to the affordability that we needed, and it still leaves a lot of market-rate apartments. So, I would deepen the affordability.

But I would also create programs at the city level with [the Department for Housing Preservation and Development] to bring more investment for the apartments with a deeper affordability — 30 percent of [the area median income], which we just don’t get with some of the MIH options. (Note: Menchaca announced his support for 737 Fourth Avenue in Sunset Park last week.)

And would you push to reform the city’s property tax system, which has long been considered inequitable and outdated by both owners and tenants?

The City Council has been trying to do this without the support of the mayor. So, yes, I will. This has to be the first thing that we do. There are so many homeowners that are being overtaxed that shouldn’t be. And, so, absolutely, we need to reform that. And that’s something I get that the council has done, we’ve done a lot of review on it; I think we have some good stuff to start from, we’re not starting from scratch.

But places like Staten Island, for example, are paying really high property taxes. And there’s some other properties that need to just start paying a lot more; and we’re talking about some of those luxury spaces in Manhattan. So, yes … that will be a big priority of mine.

What steps would you take to address the city’s homelessness crisis? How would you grapple with the current shortage of shelter beds, and many neighborhoods’ resistance to shelter construction and conversions?

Yes. So, this is my experience as a council member for neighborhoods like Sunset Park and Red Hook, which have, in a very open-minded way, welcomed shelters with open arms. And what we’ve seen is that the shelters are really more warehouses for people. There’s no sense of permanent housing in these empty spaces, or supportive programs. What I would do is take $3 billion of funding, which is a mix of federal and state and city, and reorient that to conversions of micro-units, for people to have permanent housing and supportive housing now — and, then, also move dollars toward rental assistance at market rate, so that people can actually stay in their homes and not have to leave their apartment.

That’s a lot cheaper over time, and less impact trauma for a family. And we know that more and more families are entering the shelter system. So that’s the reorientation, that’s what the advocates are asking for. And that’s what I’m supporting.

OK. And do you have a position on the citywide hotel special permit, which many in the real estate industry believe will be a death knell for new hotel construction in New York City?

I am in support of the special permit. That gives us an opportunity as local communities to have those kinds of discussions with developers and bring good jobs. And I think we’ve seen that in Sunset Park; we have a lot of manufacturing property. And these conversations are not only real, but I think they can actually have a not only positive impact, it can really ensure that we have quality hotel industries here in the city. This is all about bringing power back to our neighborhoods, to have a discussion with the council member, so we can review these as of right.

Here’s a non-policy-oriented question. Where was your first New York City apartment, and what was it like?

It was in East Harlem on 118th and Pleasant. And it was my first, you know, my first entry into the city back in the summer of 2004. And it was a five-story walk-up in East Harlem. Yeah, it was intense. But we loved it. I loved it. I got to walk down 116th Street, which had a lot of Latino food and Mexican food. Taco Mix was my favorite stop to and from the subway. And there was a community garden next door.

So, it just, I mean, anywhere in New York, you put your finger down and there’s community. And I saw that, and I felt that, and I fell in love with that. And so, that’s my experience. And I came in to be part of this Coro Fellows Program, which is a public policy fellowship for a year. And I only lived there for a year, and then I moved to Brooklyn; but just, yeah, it was a perfect place, East Harlem.