Tag Archives: New York City

NYC’s (Affordable) Housing Crisis

Posted on by

The Citizen’s Budget Commission is releasing a series of Policy Briefs on affordable housing in New York City. They raise interesting questions. The first policy brief, The Affordable Housing Crisis: How Bad Is It in New York City, compares the affordable housing situation in 22 large American cities and finds that NYC is not the worst, notwithstanding how many New Yorker’s feel about it. Some of the particular findings included,

  • New York City relies more heavily on rental, as opposed to owned, housing than all other large cities; more than two of every three occupied housing units are rental.
  • The increase in housing supply since 2000 was slower in New York City than in every other large city with population growth.
  • New York City does not have the highest average rents. New York City median rent ranks sixth most expensive among the 22 cities, slightly worse than 2000, when it ranked seventh.
  • New York City is not the most unaffordable: New York City ranks ninth worst in rental affordability, defined as the percent of households spending more than 30 percent of income on gross rent. This is slightly better than its eighth worst ranking in 2000, although the share of renters with burdensome rent increased from 41 percent to 51 percent.(1)

For me, the real story is the second bullet point.  New York City had the fourth slowest growth in the number of housing units out of the 22 cities, notwithstanding the fact that it has always had a limited supply and compounded by the fact that its population has been growing significantly for quite some time. It is depressing to learn that “the number of housing units in New York City increased” only 5.8 percent between 2000 and 2012. (2) This leaves New York City with a vacancy rate of 3.6 percent in 2012, which means that we are a long way off from making a serious dent in the affordability problem. The de Blasio administration has made affordable housing a centerpiece of its agenda. This report reminds us that part of the solution to the affordable housing puzzle is just building more housing overall. We have lots of pent up demand, we just don’t have the supply. That is one reason the rent is too damn high!

Reiss on the Poor Door

Posted on by

Law360 quoted me in ‘Poor Door’ A Symptom Of Tough Balancing Act In Housing (behind a paywall). It opens,

Extell Development Co.’s so-called “poor door” — a separate entrance for affordable housing tenants at a development on Riverside Drive — made headlines last week after receiving official approval, but experts say the controversy clouds the reality of balancing private and public housing interests in a city like New York.

The building and its “poor door” first caught the world’s attention last year, when the developer released renderings for the project that showed separate doors for condominium buyers and affordable rental tenants.

It wasn’t the first setup of its kind, particularly not in New York City, but with news of growing inequality around the country and especially in large urban areas, many criticized the separate door as classist and suggested that affordable housing tenants were being treated as “second-class citizens.”

The controversy erupted again last week when the Department of Housing Preservation and Development confirmed that it had approved Extell’s application for the department’s inclusionary housing program, which gives the developer access to certain incentives in exchange for adding to the city’s affordable housing inventory.

Many have argued that the trade-off may not be worth it: If developers that qualify for such programs end up relegating lower-income tenants to a separate entrance, are those tenants benefiting fully from the city’s efforts to house them?

“One reason that the ‘poor door’ issue touches a nerve is that real estate and class are so closely linked in New York City,” said David Reiss, a professor at Brooklyn Law School who focuses on real estate finance and community development. “Affordable housing units are seen as a great equalizer. The notion that someone living in an affordable housing unit must be constantly reminded of their status is repugnant to many.”

This has led to headlines around the world proclaiming Extell’s design and the city’s approval a “disgrace.” But experts say the question of what to do about such practices is not that simple.

Inclusionary housing has been a major tenet of Mayor Bill de Blasio’s plan to add or maintain 200,000 affordable housing units over the next decade. In a city with such high land prices and rents, it has become clear that developers need some kind of incentive to include affordable housing in their projects, and the mayor and city council have made a series of adjustments and concessions to get such housing into projects like the new Domino Sugar Factory development and under-construction buildings at Hudson Yards.

But just how affordable and market-rate housing should be built together in these developments has not been as closely considered, and experts say the “poor door” controversy may just be the first of many unanticipated issues in need of creative solutions.

To get around the issue of affordable units having different entrances or looking different and having different amenities from market-rate units, some have suggested making the units indistinguishable, but Reiss warns that this might cause additional problems.

“For instance, given a particular amount of funding for affordable housing, is it better to build fewer units of affordable housing that are indistinguishable from market-rate units in a Manhattan building, or is it better to build more units of affordable housing in an outer-borough — and therefore cheaper — building?” he said. “There is no right answer to that question. Each reflects a policy preference. But it is most important to realize that a trade-off between cost and number of units exists.”

NYC’s Abandoned Public Housing

Posted on by

The Community Service Society issued an important report, Strengthening New York City’s Public Housing. Public housing has a terrible reputation in much of the country, but the New York City Housing Authority traditionally had the reputation, notwithstanding its real flaws, as the best large public housing system in the nation. This report makes a strong case that many of its current flaws are the result of systemic disinvestment at the federal, state and local levels in recent years. The report concludes,

the analysis confirms the reality of the appalling living conditions in NYCHA apartments reported by residents and the media for several years. But the Authority’s reputation or its competence should not be at issue; it performed relatively well until its resource base fell apart in the period following 2001. Government defunding was and is the root cause of the accelerating deterioration over the last decade. The state and city were major contributors to that decline, often at levels equivalent to the federal disinvestment. They should be open to a major role in restoring NYCHA.

Moreover, existing institutional arrangements that make NYCHA opaque to public scrutiny need to be changed—those that mask the Authority’s financial condition and its failures to comply with local housing and building codes—because they cloak the real consequences of government defunding and, as a result, deprive residents, advocates, concerned elected officials, and the interested public of the information they could use as ammunition to press for needed resources. The NYCHA Board also needs to be freer to act as a leading advocate for the Authority. Its governance structure should be reconsidered to assure the Board the independent voice it needs to better make the case for itself and its residents. (27)

The de Blasio Administration has made affordable housing a centerpiece of its agenda, so there is reason to think that this report will get its attention. Let us hope so — there is a lot of solid infrastructure which just needs its deferred maintenance issues addressed. But the report also highlights various operational changes that can lead to real improvements in the lives of NYCHA residents.  These reforms could provide many low-income households with decent homes.

A Resilient NYC

Posted on by

NYU’s Furman Center released a report, The Price of Resilience: Can Multifamily Housing Afford to Adapt? It explains that storm-proofing New York City

poses several special challenges not shared by all coastal areas. First, New York City is largely built out, with much of its building stock long predating current flood-resistant design standards. Resilience in New York, then, primarily means retrofitting older buildings, not just strengthening building codes for new construction. Second, much of the official guidance about how to retrofit residential properties to reduce risk and lower insurance premiums is geared toward 1-4 family buildings, reflecting the national housing stock. In New York City, though, only one-third of the buildings thought to be vulnerable to flooding are1-4 family, detached homes. A much larger number of housing units vulnerable to future storms are located in roughly 4,500 multifamily buildings with five or more rental units. Finding ways to cost effectively retrofit these types of buildings to protect residents and reduce insurance premiums for owners needs to be central to New York City’s storm-preparedness efforts.

Finally, the extreme shortage of affordable housing in New York may make the direct and indirect costs of retrofitting particularly hard to bear. Based on current federal policy, increased flood risk requires for many buildings either investment in physical improvements or payment of higher insurance premiums. Without external funding or other relief, there is no clear avenue to enact these resilience improvements while maintaining affordability. Eliminating all units below the predicted flood level, for example, could result in the loss of thousands of indispensable housing units. Even if units are not lost, property owners may pass on the costs of retrofitting buildings to residents through a rent increase, reducing the supply of affordable units in New York City’s coastal areas. For buildings that are constrained in their ability to raise rents and raise funds for improvements, like many of the rent stabilized and subsidized buildings in the city, the financial burden of making costly retrofits might be overwhelming, leading to the conversion of those buildings to market rate (when permitted), unsustainable operating budgets that may require a bail-out, or a large number of buildings left unprepared for future storms. The costs of not retrofitting, however, may be even more burdensome: building owners may face skyrocketing flood insurance premiums if they do not retrofit their buildings.

While I am not so sure that storm-proofing will be what pushes New York City’s housing stock into the unaffordable column (I think the relentless increases in demand might just to the job for units that are not rent regulated), the Furman Center report reminds us that we have a lot to do to protect New York from the next big storm. The Bloomberg Administration did a lot in a short time to identify what the City can do to increase the City’s resiliency. Given the quality of his housing and economic development team, there is reason to hope that the de Blasio Administration will continue to tackle the threat of climate change in a productive way.

The Furman Center report provides three concrete recommendations to ensure that NYC’s large stock of multi-family housing in flood zones is protected from future storm events:

  1. The Federal Emergency Management Agency (FEMA) should modify the guidelines for its National Flood Insurance Program for coverage of existing multifamily buildings;
  2. New York City should expand its Flood Resilience Zoning Text Amendment to cover buildings in the 500-year floodplain; and
  3. The city should revisit its existing rehabilitation programs to ensure that resilience measures can be readily funded; and it should require that buildings in the 100-year and 500-year floodplains that receive city assistance have adequate emergency and resilience plans.

These all seem like reasonable policies that should be implemented asap.

Urban Reviewer: NYC’s Neighborhood Plans

Posted on by

NYC land use geeks will want to check out the Urban Reviewer. From its website,

The City of New York has adopted over 150 master plans for our neighborhoods. You can see which areas have been affected and what those grand plans were here.

Neighborhood master plans – often called “urban renewal plans” – were adopted to get federal funding for acquiring land, relocating the people living there, demolishing the structures and making way for new public and private development. Plan adoptions started in 1949 and many plans remain active today. Development in the plan areas sometimes happened, like Lincoln Center, and sometimes didn’t, like many still-vacant lots in East New York and Bushwick. Areas were selected for renewal because they were considered blighted or obsolete. The “blight” designation always came from outside the communities that got that label – from inspectors working for the mayor’s Committee on Slum Clearance in the early period and Housing Preservation and Development (HPD) employees in the later period.

This is one of those resources that seem pretty obviously useful once someone has gone to the trouble (and great trouble I am sure it was) to construct it. One can imagine urban historians and planners making good use of it as well as community activists. It also provides a great model for other communities to follow.

Kudos to 596 Acres, Partner & Partners and SmartSign for building this resource.

Rent Regulation and Housing Affordability

Posted on by

NYU’s Furman Center issued a fact brief, Profile of Rent-Stabilized Units and Tenants in New York City, that provides context for the deliberations of the Rent Guidelines Board as it considers a rent freeze for NYC apartments subject to rent stabilization.

Rent regulated (rent stabilized and rent controlled) apartments clearly serve households that have lower incomes than households in market rate apartments. Median household income (fifty percent are below and fifty percent are above this number) is $37,600 for rent regulated and $52,260 for market rate households.Thus, market rate households have median incomes that are nearly 40% higher than rent regulated ones.

The median rent is $1,155 for rent regulated and $1,510 for market rate households.Thus, median rents are about 30% higher for market rate tenants.

Despite these differences, the number of households that are rent burdened (where rent is greater than 30% of income) is similar for the two groups: 58% for rent regulated and about 56% for market rate households. (4, Table D)

The Furman Center brief provides a useful context in which to consider NYC’s rental housing stock as well as the households that live in it. Given the nature of NYC households, however, I would have wished for a more finely detailed presentation of household incomes and rents.

NYC’s distribution of income is skewed toward the extremes — more low-income and high-income households and therefore fewer middle-income ones than the rest of the nation. Given this, it would have been helpful to have seen the range and distribution of incomes and rents, perhaps by deciles. The Furman Center brief indicates that updated data will be available next year, so that may provide an opportunity to give a more granular sense of dynamics of the NYC rental market.

Mayor de Blasio’s housing plan outlines his commitment to preserving affordable housing. One element of that commitment is to preserve rent regulated housing. Understanding that market sector and the households it serves is essential to meeting that commitment.