The Housing Crisis Hits Home

Since the 1950’s, government subsidy programs have helped private developers build affordable rental housing in neighborhoods across New York City – housing that has improved conditions and stabilized communities.  All together these programs – including state and city Mitchell-Lama and federal project-based Section 8 housing – produced about 150,000 apartments by 1990.

But now we are losing this supply of affordable housing at a fast rate, thanks to soaring market rents.  In 2005 alone, the city lost a record 5,518 apartments as buildings were removed from the subsidy programs.  Nearly 80 percent of the losses hit Harlem (3,613 units) and the South Bronx (753 units). 

Since 1990, the city has lost close to 30,000 apartments, a quarter of the apartments created by the largest subsidy programs for low- and moderate-income families.  And thousands more units are in the process of being de-subsidized right now.

The biggest losses have been to Mitchell-Lama rentals.  In the past 15 years, over a third of Mitchell-Lama units have been lost.  Ten percent of the project-based Section 8 units are gone.

Low-Income Tenants

Who lives in this threatened housing?  Mostly low-income tenants and families of color.  Tenants in the federal developments – largely Section 8 housing - are 45 percent black and 33 percent Latino, with a median household income of $12,000 a year.  Mitchell-Lama tenants are 44 percent black and 20 percent Latino, with a median household income of $26,000 a year.  About 40 percent of Mitchell-Lama households have incomes below $20,000 a year. 

In Harlem, with over 3,200 Mitchell-Lama households, the average unregulated – market level – occupied apartment in the neighborhood rents for about $1,000 a month.  How could a household with a $20,000 yearly income, taking home about $16,000, pay rent of $1,000 a month - $12,000 a year?  These people cannot hope to survive in New York City without affordable housing.

The main reason for the loss of affordable apartments is the obvious one: private owners are exercising their option to leave subsidy programs, usually after 20 years, in search of higher market rents.  Most Mitchell-Lama losses in recent years happened this way, including three large Harlem developments: Riverside Park Community, Schomburg Towers, and Metro North.

Until last year, the loss of Mitchell-Lama housing was concentrated in higher-rent Manhattan areas south of Harlem, just as one would expect if high rents were providing the landlords the motive for removing buildings from subsidy programs.  In 2005, it appears, the market forces driving the loss of subsidized housing finally hit home in Harlem.

Owner Neglect

The other threat to subsidized housing is owner neglect or mismanagement, which can lead the federal government to cut off subsidies or even sell the property through foreclosure.  This tends to happen in neighborhoods where rents are low and the tenants are poor.  In the last 15 years, HUD foreclosed on 17 developments in New York City, mostly Section 8 housing, with 2,264 apartments – more than half in Harlem and Bedford-Stuyvesant. Thousands more are at risk for the same reasons.

Foreclosure isn’t always a bad thing – the outcome can be good if the new owner is committed to preserving affordability and maintaining decent conditions.  The Community Service Society played an important role in the nonprofit takeover of two foreclosed Section 8 housing projects of 13 buildings with 475 apartments in Bedford-Stuyvesant.

Losing affordable
housing fast

Last year, the city worked with a coalition of nonprofit tenant and housing groups to transfer three distressed buildings – two in Harlem and one in Bedford-Stuyvesant – to nonprofit ownership.  But more resources and cooperation are needed from the federal government to finance improvements and transfer buildings to a preserving owner.

Usually we think of exploding rents as affecting one group of neighborhoods and deterioration as affecting another.  But what’s happening to subsidized housing in Harlem today shows how both threats can converge on the same neighborhood.  There is reason to be concerned that more neighborhoods will soon find themselves squeezed from both sides – and low-income New Yorkers will be squeezed out.

Given soaring rents and the numbers of homeless, the city cannot tolerate further losses to these urgently needed housing resources.  There is a danger that Washington will withdraw further from the housing it helped develop at great public cost.  The city and state must continue to press Washington and also do what they can to fill the void.

From the New York Amsterdam News
March 23 - 29, 2006