Transcription:
Jonathan Ballan (
Hi, I'm Jonathan Ballan, Partner, Public Finance and Infrastructure at Harris Beach. This is good to be here today. Happy Groundhog Day everyone. Okay, everybody's here. We'll start. It's a great pleasure being here again at the Annual Bond Buyer National Outlook Conference. It's, a great pleasure to see so many of you and I hope you do too even appreciate these gatherings even more post pandemic, although it's my fourth time introducing luncheon keynotes, it's my first time as a partner at Harris Beach and I'd like to say special thank you for welcome me to the beach guys, thank you. I haven't had such tremendous support, deep bipartisan support from so many talented people in such a large group in a long time. And thank you for attending and happy birthday and happy anniversary Adriana and Ed. So today I have the pleasure of introducing two senior people in the (1:25) administration, Elizabeth Fine, and RuthAnne Visnauskas. They both made it, both of whom I've had the professional privilege of working with in several capacities, both working on transactions as a bond lawyer and serving on governmental boards. We're lucky to have both of them here today, especially in this busy week where the governor's budget was just released yesterday. And I hope they both comment a little on that. But before I introduce each of them, I'm going to make a brief comment on the industry. We care so much about public finance, so there's no point in sugarcoating. It's a difficult period in municipal finance with volume down, interest rates up and headcounts have been cut in many places and marketing budgets slashed. So I guess Bond Buyer, you guys are lucky. They spent their marketing budgets here and hopefully they're enjoying it. But our value to the American people remains strong. The country needs to build better and more modern infrastructure and we remain the best way to finance those improvements. Unfortunately, despite approximately 4 trillion in federal funding from the 2021 and 22 American Rescue Plan, Infrastructure Investment and Jobs Act and Inflation Reduction Act and some other laws, the muni markets did not succeed in getting much new issuance from them. Let's be frank, only carbon capture and broadband for new issuances, although obviously there were other benefits in the bills. I'm speaking strictly for the narrow bond lawyer perspective and both of those are not being widely used. So I hope we as an industry approach the new Congress, the House, and the Senate with gusto. And I think we should use perhaps as a model, the American Recovery and Reinvestment Act of oh nine, which was not that long ago, but a law that was created toward the end of the Obama term to revitalize the economy and grow infrastructure. And it created new categories of tax exempt bonds and really did help revitalize the economy and the inner cities. So perhaps not the same programs, but that's a good recent example, at least recent to many of us. Maybe some of you were not in the industry yet, that how tax exempt bonds can solve help solve some of the economic and infrastructure problems we face in the US. We should engage the new house in the new Senate to consider increasing or eliminating volume caps for all categories and adding new categories of tax exempt private activity bonds to address today's environmental energy and inner city problems. We have the power of state and local government behind us, so let's use that advantage to help America. So now I have the pleasure of introducing Liz Fine Counsel to the governor. I'm going to introduce Liz. Then we're going to go sit down, talk a bit Q and A and just have a discussion. And then I'll introduce RuthAnne Visnauskas, Commissioner of New York State Homes and Community Renewal. And then depending on Liz's schedule, she can either stay or leave and I'll sit up here with RuthAnne. So it's indeed a great honor to be here with both Liz and RuthAnne. On August 23rd of 21, the new governor Kathy Hochul announced that Liz Fine would serve as counsel to the governor. It was one of the governor's first appointments of her new administration as it began to take shape. Liz Fine came from ESD Empire State Development where she had been the executive vice president and general counsel, a position to which she was appointed by former governor Andrew Cuomo in 2014 after a long career of government service. Liz is a true professional and I was privileged to work on a number of exciting transactions for her at ESD,LDC the Liberty Development Corp, and TDC Transportation Development Corp. And those two local development corpse are under the broad ESD umbrella. Her intellectual and dedication capacity are unsurpassed in state government. Prior to coming to New York State government, Liz served in Washington DC is council with the House Judiciary Committee and the Justice Department and in New York City as general counsel to New York City Speaker Christine Quinn, the state is truly lucky to have Liz in her current role. So I'm proud to introduce Liz and we'll come up and have a seat and do some Q & A. Liz Fine.
Elizabeth Fine (
Great. Thank you. I'll just say thank you John and Tom Gary for inviting me today. For me, it's like coming home. I think so fondly of my days at ESD and I've been to this wonderful conference and I want to thank the Bond Buyer and Michael Ballinger for doing such an amazing job bringing everybody together, raising these issues. And I think of this group as an extension of the government when we are undertaking important infrastructure projects. It's this group and this group of people in the private sector who help us get this done in so many key ways, raising private funds, being creative about how we can raise those funds and helping us fill important gaps in public funding. And there's so many projects that we can look around this state, and I know that many of you in this room count those as your important accomplishments. And I share the pride that you all feel for the important work that you've done, not just in New York State but around the country. And when you fly, I don't know how many of you flew into LaGuardia or JFK and can see the incredible work that's going on there. I don't know how many of you arrived through Moynihan Station and there are few projects that fill me with as much pride as that one. Actually I'll has an asterisk because it's privately funded in part, but it was funds raised through Tiffy alone. Maybe one day they'll convert that to the bond market. We'll see. But these are really great projects for New York. They keep New York as a leader in the whole world in terms of a destination and a business center and a place to live and visit. So we need all of your creative energy and thinking and imagination going forward. So I'll just say that as a little introduction.
Jonathan Ballan (
Well, Thank you Liz. Last week I was coming back from a business trip at LaGuardia Terminal B and I had to pause and just think back of some of our 2:00 AM conference calls as we were trying to do the financing for Terminal B.
Elizabeth Fine (
There were some crazy moments and some of you shared them, some cliff hangers.
Jonathan Ballan (
And it's beautiful today.
Elizabeth Fine (
It is a great project. Maybe those were people in this room involved in that project. Can you raise your hand if you were involved in that project? Yes, I salute you all because that was an important project. Thank you so much.
Jonathan Ballan (
Well it was an honor for all of us who worked on it. It's great. It's one of the great things about public finance as opposed to perhaps some other fields in finance when you can actually go to the places you finance and walk through them and use the facilities. But I thought it might be helpful because this audience has got the whole municipal bond industry covered and some of the folks might not know some of the inner workings of the New York State government in the roles of the various key people. Obviously council to the Governor is as important as it comes in the hierarchy of New York state government. But could you perhaps explain a few of the things you're working on, the role of the council as this administration sees it and what do you think of that?
Elizabeth Fine (
Absolutely. So as John said, I've spent a lot of time in government my whole career, basically with a few exceptions. Nothing could have prepared me for the challenges of this role. It's a challenging job. I'm going to say it's actually a job that's created in state law. The state law the executive law specifies two positions for the governor. One is the secretary of the Governor and one is counsel to the governor. And in the law it says the responsibility of the council is to advise the governor in regard to the constitutionality consistency and legal effect of bills presented by the presented to the governor for her approval and on matters involving the exercise of executive clemency and such other legal matters. As she may refer to the council, I would say the law says, but I'm changing it to she and we need to do a little updating there. So it's really soup to nuts and the council to the governor, we have about 20 lawyers in our office and they handle every area of the law that you can imagine. Transportation, education, healthcare, public safety, civil rights, voting rights, anything that you wake up in the morning and think about between when you wake up and when you go to sleep, we have a lawyer that handles it. Childcare, you have to deal with childcare, you have to go to the doctor, you've got to get on the subway. We have laws, we have people who handle that in our office and we handle all the legislation that comes through the Senate and the assembly In the past, I started on August 23rd, I think we have reviewed close to 2000 bills and we've either had the governor sign them as they were veto them or do something called chaptering them, which is to negotiate a amendment to the law. And I'd say about at least half the laws have been chaptered because the way they get passed by the legislature, they've passed them without negotiating them with us. Now that's a huge number of laws to review. I think that in a given year, I'm going to guess that Congress passes about 80 laws the city council maybe about a hundred laws, and we had close to over a thousand this year. So we review all the legislation and we have legislative proposals of our own and we also oversee all of the agencies in the executive branch. But what we've done this week, and you may want to ask about it, is we also have a big role to play in the budget.
Jonathan Ballan (
That was the next topic, next question. Okay. Good segue.
Elizabeth Fine (
All Right.
Jonathan Ballan (
Lemme frame it maybe. So as everybody should know by now and yesterday the governor released her executive budget, her first as a dually elected governor and it's no longer three men in a room negotiating this. You may want to comment on into that, but perhaps you can point out some of the governor's priorities and the significant aspects of the budget proposal you might want to bring to the attention of this group.
Elizabeth Fine (
So since you're mentioning three men in Room, let me just take a step back for one second. And this is a very incredible Governor that we have. Kathy Hochul, how many of you are from New York State? All right, so we have a lot of New Yorkers here, and some of this may be in the weeds for you, but this is the first woman governor of New York, and it's a very different experience working for a woman governor. I have worked for very powerful women in my career. I worked for Attorney General, Janet Reno, who was a pioneer at the Justice Department. She led the Justice Department, unlike any prior attorney general. She used to call me Liz. I have tickets to the Easter egg roll. Would any of your kids like to go, not a call you would get from your typical attorney general? She had that touch. She had somebody called me. He said, I got called to the attorney general's office and I was so worried. What was she going to take my head off for? She wanted to tell me how sorry she was that she heard my grandfather had died. She was that kind of a God Yeah. And I also worked for Christine Quinn, who was the speaker of the city council, the first woman speaker of the city council, and it was like a big family. So I'm not unusual to work for a woman, but Kathy Hochul is definitely bringing a new approach to governing in New York state. Many people are familiar with Andrew Cuomo and I think that he had so much to be proud of in terms of his work and the infrastructure arena. And a lot of the projects that I worked on were a tribute to his dogged commitment to getting these projects up and running and done and closing the funding gaps and overcoming delays. Kathy Hochul, I believe, is going to be equally effective on the infrastructure front and in achieving her other goals. But she's taking a different approach and she's taking approach of collegiality and she has surrounded herself with very strong women and men and it's quite an interesting experience because so often I'm in a room with RuthAnne and mostly women the secretary of the governor, Karen Percy Kelly Keo is a woman, the director of state operations, Catherine Garcia, who many of you may remember from her amazing service to the city. She's in the room. Our director of communications is a woman, our chief of staff is a woman. And our deputy executive secretary is a woman, key women in so many agencies. And it's quite feels normal is what I'm going to say. It feels normal to be in a room with women. And that's not how I felt when I was, that was not my experience when I was on the house judiciary committee many years ago. I was often the only woman in the room. So it's come a long way. And I see around the room here too that this industry has come a long way. So I congratulate you all, but going back to the budget.
Jonathan Ballan (
We're a trailblazer and we appreciate that. Do the budget and then, where it connects with infrastructure perhaps?
Elizabeth Fine (
All right. Well, the governor announces her budget every January, or this in rare occasion gets pushed back to February 1st. And the budget for New York State is not just a numbers document. It's not just a numbers proposal. The way it works in New York is that when the governor presents her budget, she's really presenting her policy agenda. And so the governor's goal really is to have a more livable, more affordable and safe New York. She wants New Yorkers to be able to afford to live here to feel safe. And she wants our cities and communities to be livable. And that is what the whole budget and policy agenda is about. And when we do a budget, it's actually a combination of here's the appropriations, the money that we're putting into different funds and purposes, but it's also legislative proposals. So when she announced this yesterday, I can tell you that it includes legislative proposals on public safety. So she has talked quite a bit about public safety and she would like a balanced approach to public safety, and I think she is, was very conscious of the concerns that New Yorkers have about the increase in crime. And she addressed that in the proposal by in the budget with both a proposal to eliminate the lease, restrictive means for bail. I don't know how many of you follow these issues and also provide funding for alternatives to incarceration, job programs, youth initiatives. We have to do both in steer people away from crime, but we have to restore the public's confidence in the system. Mental health is another issue that she really has focused on. We're putting a lot of resources into beds and equalizing the provision of mental health and other kinds of care, education, historic investments and into education. And also a proposal to allow zombie charter schools to open so that there's not a deflated cap on charter schools. Lots of investments in the climate, historic investments in healthcare, economic development has always been a key agenda priority for the governor. And I don't know how many of you followed what happened upstate, but Micron, the company, the microchip company is the semiconductor company is in making historic investments in the Syracuse area and she really wants to build on that.
Jonathan Ballan (
What are the anticipated jobs from Micron?
Elizabeth Fine (
Oh my goodness. I'm going to say 50,000.
Jonathan Ballan (
Yeah, it's massive win for New York.
Elizabeth Fine (
And then we have infrastructure and the MTA and that's where all of you come in.
Jonathan Ballan (
Well, there's so much in infrastructure and we're limited in time. Why don't we do go to MTA because it's near and dear to my heart as a former board member, and I think the governor should be lauded. One of the things that struck me when I was on the board, and that wasn't that long ago, really right before covid hit, is we in New York, were proud of a high percentage of the revenue that came from the fairs and the customers. And when that all disappeared because of covid, we got burned. So it's one of those things where no good deed unpunished. So, we were so proud of the high percentage relative to the rest of the country, but even to Europe. And then we got decimated because of that and had the deficit problems that fortunately the federal government came in and helped with. But now there's still a lingering problem. And the governor made some proposals just yesterday. You want to touch on that, please?
Elizabeth Fine (
Sure, so COVID just really took a toll on the MTA major. And when I arrived here, I was overhearing somebody talk about how they're going into work Tuesday and Wednesday. The reality is that these great flexible policies, the post covid flexibility that everybody has about when they returned to work is killing the MTA. Their revenue from riders has not returned anywhere close to what it was in 2019 prior to covid. I don't know how many of you in this room even ride the MTA. Personally, I'm a big fan. I like it and I like being underground and I love not having cell phone reception.
Jonathan Ballan (
Even that's changing. I'm sure more people use the MTA than they just admitted.
Elizabeth Fine (
Well, I think I've been back at work five days a week since June of 2020. I loved it when I had the MTA to myself, I had the whole car. No, I feel like I should have a lifetime guaranteed seat on the MTA from those days, but that's not happening. Luckily, I thought that it was a great day when I got back on the MTA and there were no seats. I said, okay.
Jonathan Ballan (
Liz, maybe we can discuss a business arrangement. You can buy a seat and kick in the money too.
Elizabeth Fine (
They should. Yeah. Well, we should suggest.
Jonathan Ballan (
That naming rights.
Elizabeth Fine (
Yeah, maybe we suggest that. I don't know that that would go over so well in Mexico and other places. I'm sure you've worked on these kinds of projects where you have and in the US where you have the fast lane in the highway and you pay a little extra toll for that lane you could have that on the MTA, a guaranteed seat and you pay a double fare.
Jonathan Ballan (
All right, we're not really, bomb by don't write that down.
Elizabeth Fine (
Yeah, don't quote me on that. All right. So here's what happened. The MTA lost so much ridership. I don't have the numbers in front of me, but they did get funding from the federal government and it helped, but now they're facing a fiscal clip because that money is drying up and we all need the MTA to succeed. For New York to succeed, people have to be able to get to work. So many people rely on the MTA to get to work and we have to close the gap with them and without reducing service. Because if we reduce service, people will abandon the MTA. And we need the MTA to be safe and affordable so that people will come to work. And then we need people to come to work so that places like this can thrive. People will have jobs. People in the central area of New York City, the restaurants and the stores will have customers. So New York, the MTA is so essential to New York's success and we have to worry now about an immediate 1.3 billion gap. And we have thought creatively about how to fill that gap. This year we have a proposal that will involve a small increase in the payroll mobility tax. It will involve an increase in the city's contribution of 500 million to the MTA budget there. They will take on full responsibility for paratransit funding and for the student fairs. And we have a state contribution of 300 million and a 400 million efficiency saving from the MTA where that will take us through the next year. In the future, what we are going to do and what we're proposing to do to close the gap for the MTA is to leverage the casino licensing and revenue fee. And the law that we passed last year allowed three additional casinos in the state. And we're doing an RFP right now for the location of those. And we will take the revenue and licensing fees, 80% of that revenue from wherever those are, and we will designate that for the MTA and New York City. Did I lose my New York City contribute 20%, their 20% share, which otherwise goes to the locality. So, hopefully that will help with the MTA. We're also contributing funds and adding funds for safety because people have read too much and experienced too much. In terms of problems on the MTA, I could tell you we talked about what I do as counsel to the governor. One night I got awry, I had Janna Lieber, who's a good friend of mine who runs the MTA, pick me up at 11:45. We picked up my colleague Karen Percy Kelly Keo at her house. She lives a few blocks from me. And we went to the end of the line at Coney Island, the end of the F train. And we were met there by MTA staff and by Brendan McGuire, who's a good friend and is counsel to the mayor. And we spent a few hours till about three in the morning there. And at the end of the e line in Queens, just seeing how the end of line operation works because you have homeless people who are living on the subways. Many have mental health issues and a whole operation that goes on every night to try to bring these people off the train and put them into, get them mental health services. Health services and shelter. And it's involves an army of people and army of experts. And we saw how difficult it is to succeed with one person, let alone every train that rolls in has half a dozen or a dozen people on it, and they have five, 10 minutes to try to get those people off the train. You have the NYPD, you have mental health people. It's a huge undertaking. It's an intractable problem. But when I think about the variety of things that my job entails, that's what I love about it is that was one of them. And it was so impactful, and I'm going to say impactful, even though I'm not sure that's a real word. It was so impactful for us that Brendan McGuire came back and really did some thinking and a few days later you had a big announcement by the mayor about how he was going to deal with mental illness and mental health. And it's really that one visit really highlights the challenges and you have to make policy decisions based on real facts. You can't just sit in a room and not that with two minutes of or one evening out at the subway are going to become experts. We are not, but we certainly are going to meet the experts and see things firsthand.
Jonathan Ballan (
So that's fascinating. And I can share some similar stories from my tenure on the board. And you also do that at Grand Central. So, in the last minute here, I'm trying to switch to economic development. There's so much to talk about. I think we'll have to cut it a little short. So, there's Gateway, there's Penn Station, excuse me. There's all the MTA projects and the capital plan. There's projects in the Port Authority capital plan, and there's the environmental bonds that were approved by referendum in the fall. Why don't you pick one or two of them and just comment freely on either the project or the financing or history of it, but we're down to the last minute.
Elizabeth Fine (
Too fast. Sorry, that's really what you came here to hear and it's going to be condensed into 60 seconds. Sorry about that. So the president was here this week to announce a federal grant for the Gateway Tunnel, and that's a 16 billion project that we're doing with New Jersey and Amtrak. And it's going to add a new tunnel from New Jersey to New York, and it's going to be funded really in shared costs between New York, New Jersey, Amtrak, and the federal government. And I think that's probably something that isn't so great for all of you to hear because the federal government has made a lot of funds available through these grants and loans and it doesn't really at this point involve the bond market.
Jonathan Ballan (
Yeah, we know.
Elizabeth Fine (
So I'm sorry about that and I wish there was a way to involve you in this project, but I think hopefully for now, we have a commitment on funding. So this important project can move forward quickly. It's long overdue. It's going to contribute greatly to the work in economic development and developing the whole region's economy. Now the next part of that project is going to involve the redevelopment and expansion of Penn Station, and that is a project that is still in formation but that is going to involve more of the private sector in the development of that project. And when I was at E S D, we did a lot of work where we leveraged private finance, not through the bond market, but through the payment of payment in lieu of taxes and leasing space and selling air rights. And that that same approach will be central to the improvements at Penn Station. It will be a project with New Jersey. It will allow more tracks so that New Jersey Transit will be able to expand their tracks. And it's, I hope, going to move forward quickly as a parallel to the gateway Project Gateway really has to be firmly on in progress for that expansion to begin.
Jonathan Ballan (
All right. Any we want to wrap up?
Elizabeth Fine (
Well I'm going to say that the MTA has great projects and a very, very key initiative that the governor has is to undertake this housing compact, which I haven't mentioned because RuthAnne is going to give you a very full and thorough presentation on that. And it is a top priority for the governor.
Jonathan Ballan (
Oh, that's just great. I'd say so thank you very much, Liz. Fine. As you can see my warm introductory words were well deserved and warranted. And thank you for participating. Hey Michael, could we get some lunch for Liz? Maybe if she can eat?
Elizabeth Fine (
Don't worry about lunch. Okay. Thank you. Thank you all. Pleasure to be here.
Jonathan Ballan (
So we're trying a different format as you can see this year, and we're splitting it in two to ease the burden on the time and of these top public officials. So now I have the distinct pleasure of introducing RuthAnne Visnauskas Commissioner and CEO of New York State Homes and Community renewal. So former Governor Cuomo appointed RuthAnne Commissioner in early 2017 and she was appointed as the president and CEO of the New York State Housing Finance Agency, the state of New York Mortgage Agency, commonly known as Sunny Mae and the New York State Affordable Housing Corporation. So those are the state agencies that New York State Homes and Community Renewal. RuthAnne previously was Executive Deputy Commissioner of Housing Development and she's also spent time at very senior positions in the New York City Department of Housing Preservation and Development. And she was on the housing advisory board for the Robinhood Foundation. So in short, RuthAnne is an expert in housing and runs the New York City housing agencies. Amazingly perfect match. Who would think the government would figure that out, but they did. And from a personal perspective, excuse me, I served on the Sunny May Board with RuthAnne for several years until relatively recently last fall. And I've had the opportunity to work with her on many initiatives and projects, some of which were easy and some had complications requiring executive sessions that we still can't talk about. But we'll now hear RuthAnne describe some hot issues in the York State housing arena, a top priority O of the governor, followed by a discussion with me in some Q and A if time permits. So RuthAnne, you want to do a PowerPoint? Yeah, thank you. So this is RuthAnne Visnauskas.
RuthAnne Visnauskas (
I'm going to time myself so I don't talk too long. I just told John. Hi, good afternoon. Thank you John. And thank you to the Bond Buyer. Certainly one of the privileges of my job is having actually great people on my board like John and others who I otherwise wouldn't get to work with so closely. Okay for those of you don't know me, as John had said I oversee New York State homes and community renewal, which is actually sort of an umbrella agency where we have the state of New York Mortgage Agency where John sat on the board that issues bonds for first time home buyers. We also have this state of New York Housing Finance Agency HFA, which issues our multifamily bonds together. And the last five years we are operating under a housing plan. We issued a little over 11 billion in bonds for both our single family and multifamily together. And our mission is really to build and preserve and protect affordable housing and increase home ownership across the state. So we do that both through our bond programs. We also run a series of federal programs like the Home program and CDBG and weatherization and a series of funds that we get from the feds section eight among others. And we also oversee and enforce the state's rent laws. So, there's a little under a million rent stabilized units here in New York City in the surrounding counties. And so we oversee that as well. So it's a really broad agency and it's really exciting. We have to talk about affordable housing that we really touch lots of pieces of that. And as many of, there's a very large housing shortage in New York that puts a lot of pressure on the market and it's a big issue. It's a crisis that the governor talks about a lot in the last couple months leading up into the announcement earlier in January and also yesterday. I'm just going to run through some slides. I may skip some of them if I go a little long or if people start nodding off to talk about, just cause there's slides and it can be a little wonky, but to talk about what the governor talked about yesterday, if I can make this work. So the housing crisis is not something that just popped up yesterday. This is a really result of over the last decade. We look at these two stats where there's about 1.2 million jobs created in the state, only 400,000 units of housing. We understand there's not sort of one, we don't need one house for every job, but there are increasingly smaller actually household formation in this country and in New York particularly. And so it's creating a real disconnect between housing and jobs. Now, when we look at ourselves compared to other people, New York City is that yellow line down at the bottom? This is our per capita housing production. So we are way behind Austin, Seattle, Denver, Atlanta, Miami, the whole list of cities that we call our peer cities, we're it out just above Detroit, Chicago, Philadelphia, not we're New York City really thinks of itself in the spectrum of world-class cities, but it's not just the city, it's also the suburbs. As you can see New York City, lower Hudson, Long Island down there, we're at 13 seven per capita. Our suburbs in the state produce far less per capita than suburbs in Massachusetts, in New Jersey in Pennsylvania, and North Virginia over the last decade. So it's both our cities and our suburbs. And these are just sort of some pricing slides. You can see New York metro on the left and the rest of the state on the right home prices rent up 30, 40, 50%. If anyone has tried to rent an apartment or buy a house in the last five or 10 years, you have experienced this directly. And this is really a direct result of a lack of supply. The impact of that, certainly in New York City we talk a lot about renters. So this is households that pay more than 30% of their income on rent, which is how we define affordable. And certainly as you go down the income spectrum, when you start paying 40 and 50% of your income and your income hovers around 30 or $40,000, there's really very little leftover for medical clothes children. But this is really not just a New York City issue, this is just really showing that there's really rent burden renters across the state.
(
Jonathan Ballan (
Thank you. That was great. Let's have a seat.
RuthAnne Visnauskas (
The fastest I've done.
Jonathan Ballan (
Hey, I used to it. Is this working? I your left to your right.
RuthAnne Visnauskas (
What's your best, what's your better side, John?
Jonathan Ballan (
I'll give my new partners a chance to see my other side, but All right. That was a joke. People in the back do you want to discuss, I feel like some of that, there's a lot of information, it's fascinating and so much of it has relevance to the people in this room. You want to start with TOD and add to that a little more and maybe touch on financing.
RuthAnne Visnauskas (
Yeah, absolutely.
Jonathan Ballan (
Because we can there's several other topics and we have limited time.
RuthAnne Visnauskas (
I mean certainly in, I think there's about 398 or something rail stops in the whole, maybe people in this room might not actually know that better in the whole system. And so there's a lot of capacity. Some of them are already rezoned and built out but many are not. And so we really see again, sort of in this incremental way of having localities each individually rezone and they have flexibility rezone in a way that makes sense for them and what density, if they want it more to the north or more to the south, farther away sort of allowing them the flexibility to rezone in a way that makes sense for their locality. But really making sure that there is residential density as the train stops the system is great. The timing is great. I think there's now wifi to Liz's point about not having a phone but you know having a phone and wifi when you're on the LIRR, you can really get a lot of work done. So really making sure there are opportunities for people to live along those rail stops where they can have close access into jobs that are in New York City or really even jobs that are growing along the corridor in Long Island is really central to unlocking housing growth as part of the strategy.
Jonathan Ballan (
The housing growth will lead to population and will lead to families. There may even be an impact on the schools. And any thoughts go into those issues?
RuthAnne Visnauskas (
Yeah, it's interesting. We've been out on the road a lot in the last couple weeks talking to people. And one of the interesting things we hear when we go out into the suburbs is people saying it feels like we need a modernization of the suburbs. There are lots of young people who want to live in the suburbs. Not everybody wants to live in Brooklyn, Queens, Manhattan and the Bronx. People like to live in Long Island, they want to live in Westchester, Hudson Valley. But there are not a lot of housing options. There's either not good quality housing options or it's not sized appropriately. There are a lot of young people who are looking for smaller apartments or newer apartments. And so we really think this is an opportunity for what is now a really high tight housing market. When you go up into Westchester up into the Hudson Valley, it's very hard for people to find young people who are getting attracted to all these new companies and all of these new jobs to find places to live. So we think it's really going to be sort of a tremendous opportunity for those places. Not to be urbanized, but really to sort of update their housing. Stockdale provides housing across the spectrum of needs that we know is needed in the state. So we're excited about that. We have not actually seen, a lot of folks have done studies about schools and oftentimes find that the impact on school seats is actually much smaller than people imagine it to be. But we have put funding in the budget. So where there are needs for localities they can apply to us for funding to assist them with really any, whether it's water or sewer. I'm sure many people have worked on structured parking facilities. There's not often funding for structured parking. But where locality might have two surface lots and know they can take one and develop it as housing and then put structured parking in the other, that would be something we'd be willing to help finance with the grant dollars for infrastructure that are in the budget. So I think there'll be, we're excited to see a lot of development along the rail corridor.
Jonathan Ballan (
Okay. Thank you for that. So here's a quick one and then I have one more that might be the final. We'll see how it goes. I think when you talk to people who don't know much about it we have some out-of-town folks here and some non-housing folks, many housing folks. So you have New York City, HPD and HBC and you have New York State HFA and Sunny May. How, how's the relationship between those two and how do you work together?
RuthAnne Visnauskas (
So we work great. Always have, even when sometimes even when the principals don't get along, the people at the staff level get along just fine and work together. We work statewide. Really only a portion of what we're doing is obviously in New York City. And so we really work closely with the city, as really we do with any city around the state on what their priorities are for housing. So obviously HDC and HFA kind of share volume cap the overall volume cap that the state gets, we get about, we got a little increase because the IRS did the inflation adjustment. So this year I think we're going to get about two, three, 2 billion, 370 in private activity bonds for housing. That's the state as the state. Yes. And then HTC and HFA are the primary utilizers of that volume cap. So we work really closely with them and coordinate on projects to make sure we're doing the right projects in the city that support their overall goals the same way we do in our upstate cities.
Jonathan Ballan (
Well you mentioned volume cap and that's an interesting issue. And that's where there's a tension between housing and non-housing and even within housing, a tension between 80 twenties and what we'll call for purposes of this question is purely affordable at the various levels of affordable, particularly in New York City, but all throughout New York State. What do you think of? I mean the tax code, I mean I was just starting out in bonds when they implemented these volume caps and they were so large that they were just out there when there was no concept that we would ever get there. And I remember these old timers saying, don't worry if you stay with us, this is going to have an effect. That's why we fought so hard to keep them out. And long and behold, I guess I'm still around and thankfully and I enjoy it. And here we, the volume caps are killing projects outside of housing. Inside of housing. What should we do? I mean, it's not fair that housing gets everything, is it? What about the other worthy projects and infrastructure or not?
RuthAnne Visnauskas (
I know the answer. Ask that question too. We try to use as much of the private activity volume cap as we can because the demand for affordable housing in this state is through the roof. We and New York City have development projects in our queues that could take us out at least 12, 18, 24, probably 36 months. There's lots of large developments and there's also lots of small infill projects that we could just really we could use double or triple the volume cap we have. It used to be that not all states had that issue, but increasingly more and more states are running up against their volume cap as well, which has helped us federally advocate for changes. As you mentioned there this past year, additional were added which as from my parochial housing perspective, we don't like to see additional housing added to the list of uses. But really what we actually want is some technical changes if should there be a tax bill somewhere where we could change how much volume cap we actually have to use per project, which would help us make the volume cap go farther and reach more projects.
Jonathan Ballan (
That's a really smart and sophisticated way to do it. Other ways to do it would be, I don't know if you were here for my introductory remarks because I know you had a jam day and thanks again for squeezing this in. But I think it's time to either do away with a lot of the volume caps or increase the volume caps nationwide. Because we have different problems today and the volume caps are impeding the ability to undertake affordable projects. And it's something the federal government, I think, and maybe I shouldn't editorialize so much, I'm sorry. I think the federal government should step up. We're not asking for cash, we're just asking for the ability to use tax exempt bonds. Would you think you'd help with that effort if anybody can get anybody interested?
RuthAnne Visnauskas (
This year the governor of California jointly wrote a letter to the administration saying, would we really need, and the changes I think could be broad, right? There's been conversations about could be exempt affordable housing from the cap. Could we take what's called the 50% test for, which means we have to use at least 50% of the cost of the project has to be bond funded. Could we take that 50% test and drop it to 25% so that we could then have sort of double? So there are strategies for excluding it, for changing it and there's more and more support I think as more and more states hit up against the cap for that. But as with everything federally, it's a struggle.
Jonathan Ballan (
That concept was introduced in other areas that use the cap and maybe that's the winning formula, but hopefully we can do something in 23 with that.
RuthAnne Visnauskas (
Yeah we keep advocating.
Jonathan Ballan (
That is great. Thank you. In closing, is there any, we have one or two minutes left before the Bond Buyer pulls a hook out and we do anything you'd like to touch on in the housing arena?
RuthAnne Visnauskas (
I mean certainly to echo things that Liz said would sort of thank everyone in this room as the we, I think HDC and us sort of fight for number one housing bond issuer in the country and we couldn't do all that work without all the professionals that get those deals done. And they have gotten more complicated and more complicated and time has gone on in good ways because complexity sometimes means we're doing even more creative, even more interesting. It used to be like, let's just build a building and now we're going to build it and we're going to have a health center and a grocery store and we're going to, it's on a Brownfield site and we're going to add those tax credits and there might be a historic church next door that, so in a good way, I think sometimes we use housing projects to achieve a lot of policy goals, which makes the projects more complex. But it's certainly exciting, I think it's an exciting time to be doing this as we look at just nationally, more housing growth in general I think will just sort of be a buzz to the overall internal.
Jonathan Ballan (
Well, there's this clear nexus you touched on between housing and economic development. Yep. You want to close with any one or two projects like Vital Brooklyn or anything you want to bring to the attention of the audience, then I think we have to wrap it up.
RuthAnne Visnauskas (
Vital Brooklyn is a great one. I'm happy to put a plugin for that. And it sort of goes into the complexity a while back, looked at central Brooklyn being a real health desert and also when you look at all the sort of chart of horribles, high asthma rates and high all high emergency room usage and really went in there and tried to create an infrastructure of building out small community-based medical centers, taking underutilized parking lots of the hospitals and building housing that has emergent care on the ground floor. I think in one community there was not even a primary care doctor within a half an hour sort of radius. So I think it's really exciting to see projects like that look comprehensively at communities. In that case it was Brooklyn, but you really could run that example anywhere to say, how do we solve lots of problems, lots of structural issues with housing developments, with infrastructure, with commercial investments that really over time are going to take all those metrics that nobody wants to see, whether it's school or health, and get them from the red to the yellow to the green to make New York a better place.
Jonathan Ballan (
Well, thank you and you have a lot of talent at New York Homes and hope you miss me and about it. So thank you. Thank you RuthAnne Visnauskas. Thank you Liz Fine. Thank you Bond Buyer. Thank you Harris Beach and John Ballan signing off.