By Pete Tomao
Over the past decade in New York City, a housing shortage, increased investor activity and quickly rising home prices have exacerbated the affordable housing crisis. Today, there are almost no apartments with a monthly rent below $1,500 in the city. Housing advocates and policymakers have been pushing the city to invest in different housing models that prioritize affordability over profit.
Citywide, homeownership declined from 33.6% to 31.9% from 2009 to 2019, and during the same time frame, the median sales price of a home nearly doubled to $790,000. Rents have also sharply risen since 2010, increasing faster in the outer boroughs. Rents rose the most in Queens, climbing 30%, followed by 19% in the Bronx. And just last month, the average rent in Manhattan crossed $5,000 a month.
“We’re seeing rents at unbelievable new heights. There’s just obviously such a massive horrifying housing crisis that it’s clear we need to create a different type of system,” said Elise Goldin, community land trust campaign organizer at the New Economy Project. “I think everyone knows that it’s past the moment to be taking land and housing off of the speculative market.”
That’s an idea that’s gaining momentum. On Aug. 11, New York City Council Member Lincoln Restler introduced a bill that would give nonprofits and community land trusts first dibs on developing publicly owned land. It would be a step toward fostering housing that prioritizes affordability and limits profits – models like community land trusts and limited-equity co-operatives. Housing advocates believe these ideas can be part of the city’s future because they present a way to maintain affordability and prioritize housing as a home, instead of as an investment.
Speculation in the Bronx
The Bronx exemplifies many of the struggles facing New York’s housing system. Cash investors are competing with families to purchase homes, and there are continually rising rents paired with entrenched inequality.
Today, 18.9% of Bronxites own a home. The borough is also home to the highest share of low-income renters in the city, making residents more vulnerable to price increases.
“From the beginning of the pandemic, the Bronx has been the hardest hit in terms of unemployment numbers,” said Ivy Perez, policy and research manager at the Center for New York City Neighborhoods. “This is also happening in the context of really aggressive speculation.”
A 2020 report from the Center for New York City Neighborhoods found that nearly 40% of New York City home, condo and co-op purchases were cash sales. And the Bronx saw the largest increase in cash activity during the previous decade. Since the Bronx is home to a large portion of the city’s remaining lower priced properties, it can be particularly vulnerable to speculation and investors.
“That takes the form of a lot of cash buyers entering the home space and especially a lot of flippers,” Perez said. “So we see really aggressive, high-frequency flipping, where they buy low, sell high. And in recent years, we’ve seen that accelerating in the Bronx specifically.”
New York City Council Member Pierina Sanchez has seen the fallout from speculative home deals firsthand. Sanchez’s Bronx district is home to many rent-stabilized buildings, but other properties – where tenants have fewer legal protections – are vulnerable to flips.
“That one example where you come across a building that is not rent regulated. For some reason, there you have a private equity company coming in purchasing and pushing tenants out. It’s like clockwork, right?” said Sanchez, who also serves as the chair of the New York City Council Housing and Buildings Committee.
Sanchez said long-term solutions for New York’s housing system should involve increasing support for programs that create permanent affordability.
“Focusing on what we have the power to do and do as a city here. What are models that remove speculation from the equation, that remove that profit? And again we always end up thinking about homeownership opportunities,” Sanchez said.
One piece of the solution to New York’s housing woes can be found right in the Bronx’s backyard. The borough is home to Sydney House, Habitat for Humanity’s largest multifamily development.
The 56-unit, 77,000-square-foot co-operative offers permanently affordable homeownership to middle-class families. Apartments in the building cannot appreciate by more than 2% per year. When residents sell their unit, buyers must meet income restrictions and the sales price adheres to a predetermined formula.
The building, which opened in 2021, was the first development to receive funding from the Open Door Program, a New York City initiative designed to boost homeownership among low- to middle-income households. Sales prices at Sydney House ranged from $188,823 to $326,099, depending on size of the unit.
“There can be no affordable housing policy that is equitable without opportunities for people to build equity,” said Matt Dunbar, chief strategy officer and executive vice president of Habitat for Humanity New York City and Westchester County. “And that is both personal equity and family equity, but also community equity. And cooperative ownership with long-term affordability is the ultimate community equity.”
Dunbar said the project represented a shift in priorities for the city, pivoting from building affordable rentals to providing more affordable homeownership.
Goldin, from the New Economy Project, stressed that community land trusts were not the sole answer to the affordability crisis, but they were a powerful way to buttress affordability. Land trusts differ from the co-ops in that they own land and set affordability requirements for co-ops that own and operate buildings.
“(It) is an incredible tool for communities to have a say in the development in their neighborhood and to (ensure) that land is being used for the benefit of the community and (is) affordable in perpetuity,” Goldin said.
Goldin estimated there are about 15 community land trusts throughout New York City – and three of them currently have land: Cooper Square Community Land Trust (the oldest one in New York City), Interboro Community Land Trust and East Harlem El Barrio Community Land Trust.
Goldin and other advocates are supporting initiatives to help the trusts acquire land, including Restler’s bill to give them the first crack at the development of public land. Another piece of legislation is the city Community Opportunity to Purchase Act, which would give the trusts and other nonprofits the first right to purchase multifamily buildings when landlords sell.
Habitat for Humanity’s Dunbar also emphasized tenant opportunities to purchase programs as an important policy tool.
“A strategy to create new home ownership in the Bronx would be to work with landlords and tenants to sell their buildings to their tenants and create home ownership where people are already living,” Dunbar said.
Where are we now?
This summer, Adams announced a major new housing plan to turn New York into a “city of yes.” The plan supported a host of items, including increased homeownership and community land trusts, but it was criticized as being vague on measuring success.
Sanchez, who was a professional urban planner before being elected, said supporting alternative housing models from the city takes investing in technical assistance for nonprofits or community land trusts, increasing access to land acquisition and new financing through New York City’s capital program.
“We’re certainly at the council … looking at how we can support more on the technical side, how we (can) get more properties into this kind of ownership, and how we (can) make sure that what we’re doing is sustainable,” Sanchez said.
Ultimately, Sanchez said the fight for more community housing was an important part of keeping New York a vibrant city. She pointed to New York’s past successes with Co-op City and the Mitchell-Lama program as inspiration.
“Land trusts and limited equity models come into the conversation because we have seen, in some cases, wild success of limited equity models,” Sanchez said. “But we haven’t prioritized them as we build our arsenal of tools to approach the affordable housing crisis in New York City.”