- Capital New York reports another study which finds that non-whites are at a disadvantage when it comes to securing a home loan, this is more pronounced in the conventional loan market (less so for FHA loans). Includes an interactive chart which breaks down the stats by borough.
- Harvard’s Joint Center for Housing Studies’ Annual State of the Nation’s Housing 2015 reveals historic lows in homeownership rates, and a corresponding “rental boom,” a shortage in supply for single family dwellings, and an increasingly severe rental affordability problem.
- National Association of Realtors’ release of Existing Home Sales statistics for May reveal a strong rebound over April, in fact sales are strongest they have been in 6 years, with first time homebuyers making up the biggest portion of buyers.
- NYU Furman Center’s new working paper – Utility Allowances in Federally Subsidized Multifamily Housing – advocates four policy changes which would help HUD increase energy efficiency in the properties it subsidizes. These include, 1. Incentivizing owners to switch to individually metered units; 2. Incentivizing owners to make energy saving upgrades; 3. Provision of utility allowances that are affordable but make recipients bear the cost of consumption; 4. Provide information about relative utility costs to increase tenant purchasing power.
Tag Archives: affordable housing
Friday’s Government Reports Roundup
- The National Low Income Housing Coalition (NLIHC) releases report on differences between the National Housing Trust Fund (NHTF) and HOME Investment Partnerships Program. It found that the NHTF is more targeted to low-income renter households than HOME.
- The US Department of the Treasury’s Community Development Financial Institutions Fund (CDFI) evaluated New Markets Tax Credit (NMTC), which “enables economically distressed communities to leverage private investment capital by providing investors with a federal tax credit.”
- The Center for Housing Policy at the National Housing Conference released report, Affordable Housing’s Place in Medicaid Reform: Opportunities Created by the Affordable Care Act and Medicaid Reform.
- The Center for Housing Policy and Children’s HealthWatch released report, The Timing and Duration Effects of Homelessness on Children’s Health.
- The Offices of the Inspector General released report, Coordination of Responsibilities Among the Consumer Financial Protection Bureau and the Prudential Regulators—Limited Scope Review.
- HUD released a report making changes to the Rental Assistance Demonstration (RAD).
Thursday’s Advocacy & Think Tank Round-Up
- On June 23, at 2pm the Urban Land Institute, John D. and Catherine T. MacArthur Foundation, and Hart Research are hosting a Virtual Conversation entitled: Housing, Communities, & Messaging that Resonates: Results from Three New Polls (RSVP Here).
- Americans’ housing and community preferences in this rapidly changing landscape,
- where and how Millennials want to live,
- overall satisfaction with government’s prioritization of housing affordability, and
- the most persuasive messaging about affordable housing.
- Corelogic’s Equity Report finds that 245,000 properties regained equity in the first quarter of 2015 – over 90% of properties have positive equity and the percentage of “underwater” mortgages decreased by over 19% year-over year.
NYC’s 421-Abyss
New York City’s 421-a tax exemption has lapsed as of yesterday because of disagreements at the state level (NYS has a lot of control over NYC’s laws and policies, for those of you who don’t follow the topic closely). 421-a subsidizes a range of residential development from affordable to luxury. In the main, though, it subsidizes market-rate units.
This subsidy for residential development is heavily supported by the real estate industry. Many others think that the program provides an inefficient tax subsidy for residential development, particularly affordable housing development.
I fall into the latter camp. I would note, however, that NYC’s dysfunctional property tax system is highly inequitable because it taxes different types of housing units (single family, coop and condo, rental) so very differently.
With that in mind, let me turn to a policy brief from the Community Service Society, Why We Need to End New York City’s Most Expensive Housing Program. The reports key conclusions are,
At $1.07 billion a year, 421-a is the largest single housing expenditure that the city undertakes, larger than the city’s annual contribution of funds for Mayor de Blasio’s Housing New York plan.
The annual cost of 421-a to the city exploded during the recent housing boom as a result of market changes, not because of any intentional policy decision to increase the amount of tax incentives for housing construction.
Half of the total 421-a expenditure is devoted to Manhattan.
The 421-a tax exemption is a general investment subsidy that has been only superficially modified to contribute to affordability goals.
The 421-a tax exemption is extremely inefficient as an affordable housing program, costing the city well over a million dollars per affordable housing unit created.
The reforms made to 421-a in 2006 and 2007 have not resulted in a significant improvement of 421-a’s efficiency as an affordable housing program.
A large share of buildings that receive 421-a and include affordable housing also receive other subsidies, such as tax-exempt bond financing. Affordable units in these buildings cannot be credited entirely to the 421-a program.
The great majority of the tax revenue forgone through 421-a is subsidizing buildings that would have been developed without the tax exemption. (3-4)
The brief argues that 421-a should be allowed to expire and be replaced “with a targeted tax credit or other new incentive that is structured to provide benefits only in proportion with a building’s contribution to the affordable housing supply.” (4)
I don’t have any real disagreement with the thrust of this brief. I would just add that the fight over 421-should be expanded to include an overhaul of the City’s property tax regime. It is unclear, of course, whether Governor Cuomo and NYS legislators have the stomach for a battle so large.
Thursday’s Advocacy & Think Tank Round-Up
- The MacArthur Foundation’s report on the findings of its, How Housing Matters Survey – reveals a lasting perception that the Housing Crisis persists.
- NYU Furhman Center released the third in a five part series of policy briefs on affordable housing. The Challenge of Rising Rents: Exploring Whether a New Tax Benefit Could Help Keep Unsibsidized Rental Units Affordable offers a policy option to maintain a stock of unsubsidized affordable apartments in New York City.
- The Urban Center released: Headship and Home-ownership: What Does the Future Hold in which it explores the desire and ability of young Americans to become homeowners of the future; it also discusses whether the average home-ownership rate will go up or down in coming decades.
Facts and Myths About Rent Regulation
Few topics are more fraught in NYC than rent regulation and stances about it are typically set by where people are financially and ideologically. It is always useful when someone tries to add some good old-fashioned facts to the debate in order to help craft good policies. That is particularly true now, given that NYC’s rent laws are supposed to expire on June 15th.
The Citizens Budget Commission has issued a report, 5 Myths About Rent Regulation in New York City. The CBC is hoping that that this report will inform the New York State legislature’s debates over the renewal of New York City’s rent laws (for those who don’t follow this carefully, NYS has jurisdiction over NYC’s rent regulation). Unfortunately, the report is ideologically skewed, which limits its usefulness for those trying to get their hands around this topic.
Here are the CBC’s five “Myths” and “Facts:”
Myth 1: A majority of tenant households in New York City are rent burdened.
Fact 1: 38 percent of tenant households in New York City are rent burdened.
Myth 2: Market-rate units in New York City are not affordable to most tenants.
Fact 2: In market-rate units, 54 percent of tenants have affordable rent.
Myth 3: A rent-regulated housing unit is an affordable unit.
Fact 3: Among tenants in rent-regulated units, 44 percent are rent-burdened.
Myth 4: Middle-income households cannot find affordable housing in New York City.
Fact 4: Outside of Manhattan, 96 percent of middle-income tenant households are not rent burdened.
Myth 5: The number of rent-regulated units is rapidly declining.
Fact 5: The number of rent-regulations is stabilizing.
The CBC claims that public officials and housing advocates are using “problematic” figures and characterizations. That is most certainly true in many cases, and par for the course for advocates. But the CBC does much the same, which should not be par for the course for a nonpartisan civic organization.
The second “Fact” is particularly laughable because CBC is doing exactly what it accuses advocates of doing — some form of rhetorical bait and switch. The second “Myth” is about tenants overall, while the second “Fact” is just about tenants who are currently in market-rate apartments. This is an apples to oranges comparison. Once you see the bait and switch, you see that CBC’s figures actually support the truth of this supposed second “Myth.” There are more problems contained in this document, but I leave it to you to find them for yourself.
I have no problem with CBC trying to make the debate over rent regulation more fact-based. But CBC should follow the wise advice of Polonius: “This above all: to thine own self be true.”
Picture: "Polonius" by https://www.oregonlink.com/elsinore/poveyglass/polonius.html.
Equitable Transit-Oriented Development
Enterprise Community Partners has issued a white paper, Promoting Opportunity Through Equitable Transit-Oriented Development (eTOD): Making the Case. The Executive Summary opens,
Investments in transportation infrastructure can catalyze regional growth and improve mobility. Given limited public funds, public officials and transportation planners have increasingly recognized the benefit of coordinating transportation investments with land use, housing and economic development investments and policies. In particular, there has been a specific emphasis on facilitating transit-oriented development (TOD) – a growth model characterized by compact development, a mix of land uses, and multi-modal transportation connectivity. When properly planned, such development can support transit ridership and revenues, boost property values and enhance economic competitiveness.
While TOD can take many forms, for a variety of reasons there has been increased demand for transit-oriented neighborhoods with a critical mass of population, neighborhood-serving retail establishments, employment opportunities and/or economic activity. Some prefer these transit-oriented, amenity-rich neighborhoods based on lifestyle preferences. However, for others – particularly people with lower incomes or for whom driving is difficult or impossible – the accessibility that TOD offers is crucial to reaching jobs and life’s other necessities in an efficient and economical manner.
Unfortunately, a number of factors – most notably the prevalence of zoning codes that separate residential from commercial and retail uses – have limited the number of compact, mixed-use, multi-modal neighborhoods. To the extent that demand for housing in such neighborhoods – as a result of either choice and/or necessity – remains strong, scarcity of housing in these neighborhoods can increase property values. Significant price increases can lead to additional cost burdens, potential displacement and/or barriers to entry for low- and moderateincome households. If these households are displaced it can also reduce likely riders’ access to transit and limit employees’ and customers’ access to businesses.
One solution to these challenges is equitable TOD (eTOD), which is well-planned and implemented development near transit that accounts for the needs of low and moderate-income people, largely through the preservation and creation of affordable housing. eTOD can expand mobility options, lower commuting expenses and enhance access to employment, child care, schools, stores and critical services. This development model also conveys ancillary benefits to the broader community, the economy, the environment and the transportation system. (5-6)
This is all to the good, but the report does not struggle with a fundamental problem: local governments do not want to build housing for low- and moderate-income households because they tend to be a net drain on municipal budgets a opposed to the typical household living in a single-family home. Even local politicians who are sympathetic to eTOD will face many roadblocks from their constituents if they try to make it happen. Enterprise promises a second report that will address barriers to eTOD. Hopefully, it will address this issue head on.
