Committee
on Technology in Government
Bruce Lai, Policy
Donna DeCostanzo, Legal
Steve Hamill, Press
Carl Thelemaque, Finance
Committee on Housing and Buildings
Sara Marks, Policy
Terzah Nasser, Legal
Sarah Mikutel, Press
David Pechefsky, Finance
THE COUNCIL OF THE CITY OF NEW YORK
BRIEFING PAPER OF
THE INFRASTRUCTURE DIVISION
Marcel Van Ooyen, Deputy Chief of Staff
Committee on Technology in Government
Hon. Gale A. Brewer, Chair
Committee on Housing and Buildings
Hon. Madeline Provenzano, Chair
January 28, 2004
Oversight: The
Feasibility of Wiring New Affordable Housing Development For Broadband
Res. No. 669
By Council Members Brewer, Boyland, Comrie, Gennaro, James, Liu, Martinez, Nelson, Palma, Rivera, Sanders, Serrano, Vann, Weprin and Jackson
Title
Resolution calling upon all relevant City agencies to use their funding and regulatory power to support and encourage the provision of affordable high-speed Internet service and computer purchases for the benefit of residents of affordable housing.
Introduction
On Monday, November 22, 2004 at 1:00 PM in the 14th Floor Hearing Room at 250 Broadway, the Committee on Technology in Government, chaired by Council Member Gale A. Brewer, jointly with the Committee on Housing and Buildings, chaired by Council Member Madeline Provenzano, will hold an oversight hearing on the topic of the feasibility of wiring new affordable housing developments for broadband. Res. No. 669 will also be discussed at this hearing. Res. No. 669 calls “upon all relevant City agencies to use their funding and regulatory power to support and encourage the provision of affordable high-speed Internet service and computer purchases for the benefit of residents of affordable housing.” Those expected to testify include:
· Harold Shultz, Special Counsel, New York City Department of Housing, Preservation and Development;
· Mark Levine, Vice President, Program Services, One Economy Corporation;
· Shaun Belle, President and Chief Executive Officer, Mount Hope Housing Company;
· Kevin Donovan, Vice President, Barnes Wentworth;
· Andrew Reicher, Executive Director, Urban Homesteading Assistance Board;
· Jordi Reyes-Montblanc, HDFC Council;
· Jennifer Sly, Community Technology Center (CTC) Coordinator, Jacob Riis Settlement House; and,
· Dustin Goodwin, Director of Community Programs, NYCwireless.
Background
The Importance of Information Technology and the Internet
Being knowledgeable in the use of the Internet and other information technologies is important for anyone seeking economic opportunity. Secretary of State Colin Powell writes:
“We hear much today about the
‘digital divide’ -- the gap between those who have access to the wonders of
digital technology and the Internet and those who do not. When I address this
issue I use an even stronger term: digital apartheid. What is at stake is
today's technology ‘have-nots’ – especially the young – and whether they may
find themselves marginalized for life because they lack the skills and tools to
participate in our globalized, knowledge-based economy. This is true in America
and in the rest of the world. If digital apartheid persists, we all lose. The
digital have-nots will be poorer, more resentful of progress than ever and will
not be able to become the skilled workers or potential customers that are
needed to sustain the growth of the Internet economy.”[1]
Because “the Internet is becoming a primary source for everything from finding a local health clinic, to applying for student loans, to finding a job or registering to vote,”[2] those who do not have access to the Internet, particularly high-speed access to the Internet (i.e., broadband[3]) will potentially live less productive lives. With broadband access, low-income families can access resources such as government services, online banking, and educational and job opportunities on-line “instead of standing in line for services.”[4] Mark Cooper of the Consumer Federation of America writes:
“The ability of a household to
participate and prosper in the new economy will be severely restricted if a
household is cut off from technology. The convergence of commerce and
communications gives this technology a special transformative power. The Internet is not just a communications
tool, a means of commerce, or an entertainment medium. It is also a technological
revolution that promises to enhance productivity in many aspects of life and
increase the standard-of-living for all those who use it.”[5]
Internet access is particularly
important in the education of children:
“Several
studies have found that students with access both at home and at school do
better academically than their counterparts with only school access. For example, a Michigan State University
study found that after low-income children were given home Internet access,
their overall grade point averages and, in many cases, reading test scores,
improved. Those who spent more time
online saw greater improvements, which researchers attribute to the increased
reading that Web use entails.”[6]
The Digital Divide Still Exists
The following are some statistics that illustrate the “digital divide” still exists. Specifically, poor households have less access to the Internet and other information technologies than households with average and above-average incomes.
·
According to
recent data (2004) from Nielsen/Netratings[7]
and the Pew Internet and American Life Project[8]:
o “Over
four-fifths of all households that lack Internet access at home have incomes below $50,000.”[9]
o “Half of all households with incomes above
$75,000 have high speed Internet at home.
About half of all households with incomes below $30,000 do not have any
Internet at home. The penetration of
high-speed Internet in this group [those with incomes below $30,000] is around
10 percent.”[10]
·
According to
data collected by United States Department of Education in 2001:
o “While 75% of children from families earning
over $75,000 a year have gone online, less than half (49%) of those from
families earning $20-$35,000 and only 7% of those earning under $20,000 a year
have gone online.”[11]
o
“While half
(51.7%) of all children with family incomes of $75,000 or above have Internet
access at home, just 15% of those with incomes between $20-25,000 do.”[12]
Expanding Digital Opportunity: What Is Needed
In order for low-income families to fully take advantage of the Internet and other information technologies, the following things are necessary:
· High-speed access to the Internet (i.e., broadband) and a computer in the home. The reason why broadband is so crucial is because “as broadband rolls out and becomes the focal point of commercial activity, the design of services and applications changes to capture the characteristics of broadband.”[13] “Offerings that are explicitly tailored for broadband may not work or certainly do not work very well over narrowband connections [i.e., a dialup connection]. Being locked into the narrowband Internet means falling farther behind.”[14] Internet access at home is key because:
o “Most personal business is conducted from the home. Searching for information, looking for a job, and learning about local events – all frequent uses of the Internet – typically take place in the privacy of the residence.”[15]
· Computer literacy training. Beyond the fact that computer literacy training is necessary to fully take advantage of the Internet and other information technologies, computer literacy also expands economic opportunity, particularly for young people. “According to the Children’s Partnership[16], 8 out of 10 of the fastest-growing occupations are computer-related, and workers who use computers earn roughly 20% more than those who don’t.”[17]
· Affordable costs. An inexpensive computer and a cheap broadband connection are the biggest obstacles to low-income households from being connected.
o “Costs play a tremendous part in Internet access patterns,” said Kenneth Cassar, director of strategic analysis, Nielsen ratings. “While broadband has become much less expensive over the past few years, it’s still a significant cost compared to narrowband. Couple high-speed access with other utility expenses, and households with tighter budgets simple would not be able to afford the luxury of having broadband.”[18]
· Good content. Finally, “to realize the social and economic benefits of technology, [people] need the skills, content and applications that can help them learn and succeed.”[19] The Children’s Partnership studied the information needs of low-income, low-literacy and other disadvantaged users and found that “the greatest needs are for local job listings, housing information, and health and education services, at accessible literacy levels and in languages other than English.” One example of a service that attempts to meet these needs is the Beehive.
- The Beehive (http://www.thebeehive.org/) tries to addresses the needs of low-income people by providing culturally-specific content, at a 6th grade literacy level, in many languages (including English, Spanish, Haitian Creole, Russian, and Urdu) and in the following five areas: money, health, jobs, school and family. To see a local New York City version of the Beehive, go to the following link: http://www.thebeehive.org/bronx.
Expanding Digital Equity by Wiring Affordable
Housing
Currently, a significant proportion of the low-income people
in the United States live in housing that is regulated or subsidized by
government in order to be affordable.
“About 12 million people live in 5.5 million
units of government-supported affordable housing across the US, and about 15 million
people live in non-government supported affordable housing.”[20] In New York City,
455,000 (22.5% of all renters) households had incomes below the poverty level.[21] It is likely that
a significant proportion of these renter households live in either subsidized
affordable housing or public housing.
Wiring New Affordable Housing to Expand Digital
Equity
One way to expand digital equity is to wire all new affordable housing for broadband. At the time of development, wiring new housing for broadband is relatively inexpensive, about $300 per unit.[22] Since the cost to build one unit of government-subsidized affordable housing in New York City can be anywhere from $100,000 to $200,000, the cost per unit to install the capacity for high-speed Internet access is only 0.1% to 0.2% of the cost to build one unit of affordable housing.[23] To promote the building of data networks into all new affordable housing, many states[24] are encouraging or requiring developers to build broadband connectivity into developments that take advantage of low-income housing tax credits[25] (LIHTC). So far, 17 states have changed their LIHTC rules to encourage broadband connectivity.[26] Most of these states, including California, encourage developers by awarding them extra points in their application to develop new affordable housing using LIHTC. Other states, most notably Kentucky, have made broadband connectivity a requirement for all new affordable housing. Specifically, the state of Kentucky requires “high-speed Internet access in the living areas of every single-family or multifamily unit is [and is] now a Universal Design Standard for bond-financed and tax-credit-financed housing developed in the state.”[27] One possible way for the New York City Department of Housing Preservation and Development to promote the building of high-speed Internet access into new affordable housing developing is by awarding developers points, as laid out in their Qualified Allocation Plan[28], for making high-speed Internet access and/or computers available in every unit.
Example: Mount Hope Housing Company, Bronx, NY
“Residents of Mount Hope Housing Company, Inc.’s 1,250 low-income units will be beneficiaries of a soup-to-nuts technology initiative that will wire all Mount Hope Housing units for high speed Internet access – and ultimately, digital cable and phone services – for a modest fee considerably below market price. A second goal [of this project] is to provide residents with the opportunity to buy vastly discounted new computers. Free training programs will teach residents how to use their new computers and to navigate the Internet. Extended software and hardware training will be offered to residents who would, in turn, use their skills to help Mount Hope residents with technical problems as on-site technicians.”[29] To learn more, go to: http://www.mounthopehousing.org/.
Argument Against Wiring New Affordable Housing for Broadband
The main argument against requiring or encouraging affordable housing developers to wire their new developments with high-speed Internet access is that the money used to build the technical infrastructure for broadband may be better spent to provide more units of affordable housing. The need for more affordable housing is particularly pressing now with 11,458 households in New York City living in buildings that are considered dilapidated, 225,062 households (11.1% of all renters) being overcrowded, and 854,000 households (46% of all renters) paying more than 30% of gross income in rent.[30]
Analysis of Res. No. 669
The first part of Res. No. 669 explains the importance of information technology, states that affordable housing is home to a significant proportion of the low-income population of New York City, and that access to the Internet requires a high-speed connection, a computer, training, technical support and affordable costs.
Thus, Res. No. 669 resolves:
· That all future publicly financed or subsidized housing properties for residents earning less than 80% of the median area income should provide a high-speed Internet connection in the living area of every unit to residents for free or at a cost of less than $10 per month;
· That the development of programs that benefit of low income residents’ utilization of technology, such as the affordable purchase of computers, should be encouraged; and,
· That all relevant City agencies to use their funding and regulatory power to support and encourage the provision of affordable high-speed Internet service and computer purchases for the benefit of residents of affordable housing.
Update
On Friday, January 28, 2005, the Committee adopted this legislation by a vote of four in the affirmative, zero in the negative and no abstentions.
Accordingly, the Committee recommends its adoption.
Res. No. 669
Resolution calling upon all relevant City agencies to use their funding and regulatory power to support and encourage the provision of affordable high-speed Internet service and computer purchases for the benefit of residents of affordable housing.
By Council Members Brewer, Boyland, Comrie, Gennaro, James, Liu, Martinez, Nelson, Palma, Rivera, Sanders, Serrano, Vann, Weprin and Jackson
Whereas, We now live in a digital age, a time when information technology is pervasive in most of our lives; and
Whereas, Those who lack meaningful access to technology experience a new form of poverty and new barriers to success; and
Whereas, A healthy economy and community maximizes the potential of technology to deliver information, products, and services to accelerate the entry of low income people into the economic mainstream; and
Whereas, In today’s society, a computer and Internet access in the home is the key to connecting all residents to opportunity in the most efficient manner; and
Whereas, Publicly funded affordable housing is home to a significant portion of New York’s low-income population; and
Whereas, Effective use of Internet access in affordable housing units requires high-speed Internet access, a computer, available training and technical support, and affordable costs; and
Whereas, That the Council of the City of New York deems it as essential that assistance to residents goes beyond access to the Internet but also includes education about online resources that help residents join the economic mainstream, access City services, complete on-line financial transactions, and participate in democratic processes; now, therefore, be it
Resolved, That all future publicly financed or subsidized housing properties for residents earning less than 80% of the median area income should provide a high-speed Internet connection in the living area of every unit to residents for free or at a cost of less than $10 per month; and be it further
Resolved, That the development of programs that benefit of low income residents’ utilization of technology, such as the affordable purchase of computers, should be encouraged; and be it further
Resolved, That all relevant City agencies to use their funding and regulatory power to support and encourage the provision of affordable high-speed Internet service and computer purchases for the benefit of residents of affordable housing.