Mayor Bloomberg has vowed to build 65,000 units of affordable housing by 2008, and as his commissioner of housing preservation and development since March, Shaun Donovan is spearheading that project. A former acting federal commissioner of housing, Mr. Donovan sat down with The New York Sun’s City Hall bureau chief, Dina Temple-Raston, to discuss the city’s progress in housing and the mayor’s emphasis on not only housing for the poor, but affordable housing for people with annual income of as much as $75,000.

Q: The mayor has been focused on building not just lower-income housing, but middle-income housing as well. Can you explain the rationale behind this?

A: My general perspective is that in most parts of the country, people who make an average income can find decent housing. And the real severe housing problems are really concentrated in the lowest-income families. There is broad support in Washington on both sides of the aisle for focusing federal housing resources on low-income people, and that generally means below 80% of median income. The average income for Section 8 [federal subsidy] families across the country is around $10,000 a year. We’re talking about the folks who need it the most.

But the New York housing market is very different. So what the mayor has done is that we have to complement those federal resources with other resources. We will help build new housing not just to the lowest-income families, but to those who make $50,000 to $75,000 a year, because keeping and attracting that workforce to New York is a real challenge. It is the teachers and the firefighters – all the people who make the city work. We’ve had concerns about jobs going to New Jersey – it is the back-office workers. It is folks who are making an average income. The redevelopment of downtown Brooklyn, Long Island City, is not just about office space, it is about how to make sure that we have affordable housing for those folks as well. We really see the federal resources as a sort of bedrock support for the low-income population, and we’re going to use our city resources targeted at income levels that the federal programs don’t reach.

The mayor plans to build or renovate 65,000 units of affordable housing by 2008. The sense among critics has always been that the mayor will never really get to that number but will end up fudging the counting a bit to get there. Do you have a system of counting that is true, or do things get double counted?

You would not believe the amount of time we spend making sure we are not double counting. Because there are units that we work on in combination with the Housing Development Corporation, there are units we are working on in combination with the Housing Authority. We’re fanatic about what we will count and not count.

So what is the number right now?

We met our target last year of 10,200 units. Our goal for this year is that we would do almost 16,000 units, and that would put us right on track for 40% of the five-year goal. We’ve had to really accelerate this year. We believe we are on track.

One of the best-kept secrets of housing is what has happened in this city. People tend to forget that a couple of decades ago we had over 100,000 apartments that the city took in tax foreclosure. And June 30th, the end of our fiscal year, we were down to 3,400. The steady state is that 200 to 250 buildings a year will continue to come through our tax lien sales. The whole Marketplace Plan is where the new pipeline will come from.

There is no silver bullet, there is no single answer to that question. The first thing is we’re continuing to look for publicly controlled sites wherever we can. We’re talking to the Department of Transportation, we’re talking to our sister agencies, about what they may have at this point. And we’re working with state partners and others as well.

The other thing we’re doing that I think is very important is that we’re working cooperatively with HUD. I have brought a new focus on that partnership with the agency. There are thousands of units that are in foreclosure by FHA, the Federal Housing Administration, both multi-family apartments and single-family houses, and what we’ve said to HUD is we want to be your partner on those. Let us take those properties and put them through the programs. It is almost as if we have put a machine together to fix the apartments and now the question is what is the raw material?

These HUD properties can be part of that raw material.

This seems like common sense. Why wasn’t this done before?

I think that HUD, more and more, is recognizing the limits to what it can and can’t do. In the past they operated through their local offices rather than working with the city. New York is in so many ways different, and I think they recognize they can’t make it work here without a local partner to help them. The challenge I see in terms in reshaping the agency around the New Marketplace Plan is we’re doing all these things to work with government partners to get either land or property that we can work with. At the same time we recognize the future is going to be working with private developers on sites that we don’t control, and we have to find new tools to be able to do that.

For example?

The New Ventures Incentive Program is to say that we have gone from where you couldn’t give away land in the South Bronx and East New York, to now lots are selling everywhere in the city for $50,000 to 100,000. Every sale is intensely competitive.

The problem, if you are an affordable-housing developer, is that you can’t go and say, “I’d love to buy your piece of land, give me an option and in two years I’ll have my resources together because I have to apply for this, I have to apply for that.” So what we have to do is find a way to help those partners be competitive in this marketplace. So what we are doing is saying, “Come to us and we’ll give you the early-stage financing so you can buy the property, hire your architect to do drawings, all the pre-development work.”

One of the other things you are doing is rezoning.

Every community has its own story on what it wants or doesn’t want. Greenpoint-Williamsburg has been vocally saying it wants more affordable housing. Most of the debate is on income levels. I think that the issue you hear more of is, we don’t want overdevelopment in our neighborhoods. The mayor has tried to be focused on what is right for the neighborhood. There are some places we’re down-zoning, like in Staten Island.

To me that’s why the mayor has focused on housing as one of his signature issues. I have yet to find a neighborhood where they think people who are making $30,000, $40,000, $50,000, ought to be able to buy a house.