A new Community Service Society (CSS) report argues that absent proactive, pro-tenant policies at the city and state level to deepen affordability and expand rental assistance programs, New York City will experience a decline in its privately-held subsidized housing stock putting many low and moderate income New Yorkers at a disadvantage finding housing in the private rental market.
Closing the Door: Subsidized Housing at a Time of Federal Instability, assesses the state of the city’s subsidized housing stock conditions against the backdrop of federal cuts to subsidy programs that support low and moderate-income housing.
“The combination of Draconian tax policies and reductions in housing subsidies, poses an active threat to the city’s housing stock. City and state government needs to do more to counter the Trump Administration’s assault on housing supports for low and moderate-income families with policies that provide relief for households struggling with high rent burdens before they face eviction or homelessness,” said David R. Jones, President and CEO of the Community Service Society.
This report is the latest in a series which has tracked the loss of subsidized units since 2006. The de Blasio administration’s Housing New York plan focuses on affordable housing preservation. For a full picture of the city’s affordable housing landscape, we need to take into account both the number of units lost, as well as the future potential for affordability loss, especially as the plan continues to unfold.
The report found that between 1990 and 2017, New York City had lost just over one third of its 119,000 apartments in the Mitchell-Lama rental and Project-based Section 8 programs. (Mitchell-Lama is a state and city program designed to accommodate the housing needs of low and moderate-income families. Project-based Section 8 is a federally-funded program for low-income people.) While the loss of Mitchell-Lama and federal Housing and Urban Development (HUD) assisted units has slowed compared to the 2005-2006 peak, a few developments continue to lose their subsidies each year. Since 2014, owners of five Project-based Section 8 developments (229 units) terminated their contracts. Four Mitchell Lama rental developments (1,880 units) have left the program; three entered into new, albeit weaker, regulatory agreements.
At the same time the report forecast new, looming threats. Major losses may be in store for low-income housing tax credit (LIHTC) supported developments, which make up more over half of subsidized apartments in the city. For example, between 2020 and 2025, approximately 15,000 LIHTC units (15 percent of the total) will become eligible to exit from affordability restrictions. LIHTC properties in gentrifying neighborhoods and those without additional restrictions tied to other affordability programs will be the most vulnerable.
In his proposed FY2018-19 budget released last month, President Trump called for $6.8 billion in spending cuts to HUD, including the defunding of 20,200 Housing Choice Vouchers in New York State alone. These measures will fall heaviest on cities like New York which relies on rental assistance programs to alleviate high rent burdens among its low-income population. Of equal concern is the effect the 2017 tax overhaul will have on low-income housing development. Housing advocates warn that it could undermine the construction and repairing of affordable units by weakening incentives for developers to take on projects.
Given the current political climate, the responsibility for supporting and expanding subsidized housing in New York City increasingly falls on the city and state. Beyond immediate preservation needs, the deeply entrenched affordability crisis requires bold, pro-tenant policy solutions, including:
• New York State Rental Assistance Program, to immediately alleviate high rent burdens and provide stability to households before they face eviction or homelessness. The program should work in tandem with the State’s rent laws, to prevent rent inflation.
• New York State Operating Subsidies to Existing Subsidized Housing, to complement capital subsidy programs that produce and preserve affordable housing. The program would help bridge the existing subsidy gap to serve low-income New Yorkers.
•LIHTC Task Force, which would bring together the multiple public and private parties in New York State that have a stake in the long-term affordability of LIHTC properties. Public regulatory agencies and syndicators should work together with tenants and tenant advocates to expand regulation of LIHTC properties beyond year thirty.
• Tenant Engagement and Education in LIHTC Properties, to ensure that each tenant residing in a LIHTC-supported apartment has access to information about the program and their rights. This could include a centralized office, hotline, and website; a standardized lease addendum that outlines the tenant’s rights and responsibilities under LIHTC; and, a uniform notification process for informing tenants of their rights when a building’s LIHTC contract expires.
• Stronger Rent Laws, because there are multiple ties between subsidized and rent regulated housing. The State should eliminate the vacancy bonus, reform the preferential rent provision, and end high-rent vacancy deregulation.
Closing the Door: Subsidized Housing at a Time of Federal Instability was written by Oksana Mironova, CSS Housing Policy Analyst. Her report is available online at www.cssny.org