Testimony: Housing Priorities and the FY23 Preliminary Budget

Thank you to the New York City Council’s Committee on Housing and Buildings for holding a hearing on the FY23 Preliminary Budget. My name is Oksana Mironova and I am a housing policy analyst at the Community Service Society of New York (CSS). We are a leading nonprofit that promotes economic opportunity for New Yorkers. We use research, advocacy, and direct services to champion a more equitable city and state.

We have been closely tracking New York’s housing landscape for decades. According to CSS’s 2021 Unheard Third survey—the longest running scientific survey of low-income communities in the nation—the pandemic exacerbated pre-existing racial and class inequalities in our city. We have found that:

• 41 percent of low-income respondents lost employment income in their household during the pandemic, compared to 29 percent of those with moderate to higher incomes.
   
• More than one in four low-income tenants were behind on their rent during the pandemic, with Black and Latinx tenants – and particularly women – at greatest risk for long term consequences as a result of rent debt.
   
• In the past year, rents increased for 43 percent of tenants below the federal poverty line.
   
• Rents rose at a higher rate for low-income tenants of color than for low-income white tenants: 49 percent of Asian tenants and 41 percent of Black and Latinx tenants experienced rent increases, compared to 32 percent of white tenants.
   
• More than one third of low-income tenants reported that they were worried they would be evicted or forced out as result of the eviction moratorium ending.

As New York City continues its recovery process, we provide the following recommendations to stabilize the lives of low-income New Yorkers:

An Equitable and Integrated Housing Plan

With the end of the eviction moratorium and skyrocketing rents, it is important for the city to outline its housing and eviction prevention agenda for the next four years, and to fully fund its housing and homelessness services this year. The labor of HPD and DOB staffers plays a central role in keeping New Yorkers housed. New York City should not undermine its own ability to manage housing programs by introducing austerity into the agencies that implement them.

Further, we call on the city to create and implement an Integrated Housing Plan that brings together all the agencies involved in housing, building, and planning to create one coordinated strategy focused on ending homelessness and promoting racial equity. Homeless services, affordable housing development, and the preservation of New York’s largest source of permanent and deeply affordable housing—the New York City Housing Authority (NYCHA)—should not be siloed from each other. The Integrated Housing Plan must focus on providing permanent, deeply affordable housing for those who need it most and preserving public housing without privatization.

Further, the city’s future housing plan should prioritize mission-driven nonprofit developers and non-speculative housing models, like community land trusts. The Association for Neighborhood & Housing Development (ANHD) has shown that non-profit entities were the primary developers under Mayor Koch and Mayor Dinkins. Under Giuliani, the city began working to attract and prioritize for-profit developers, a trend that continued under Mayor de Blasio administration.

In their analysis of Mayor de Blasio’s housing plan in 2019, ANHD found that for-profit developers accounted for 79 percent of new construction units, while non-profits accounted for 21 percent. Similarly, for-profits accounting for 67 percent of preservation units while non-profit developers accounted for only 33 percent.

Nonprofits preserve the value of public investment much more effectively than for-profits. ANHD has showed that non-profits consistently reached deeper levels of affordability than for-profits, despite having access to the same subsidy programs, responding to the same Requests for Proposals (RFPs), often with much smaller budgets.

The U.S. Department of Housing and Urban Development’s (HUD) Office of Policy Development and Research conducted a nationwide study of expiring Low Income Housing Tax Credit (LIHTC) properties (LIHTC is the largest federal program for new affordable housing construction). It showed that “nonprofit owners usually continue to operate properties as affordable housing beyond the term of any regulatory requirements,” while for-profits were much more likely to remove their properties from subsidy agreements and raise rents, especially in gentrifying neighborhoods.

Right to Counsel

New York was the first city in the country to implement a Right to Counsel (RTC) law. Between 2017, and 2019 evictions in zip codes where Right to Counsel was implemented declined by 29 percent, compared to a 16 percent decline in zip codes with similar eviction, poverty, and rental rates.

Following the implementation of RTC, we worked closely with the Right to Counsel Coalition to advocate for Local Law 53, which requires the City to work with tenant organizers to educate tenants about RTC. It was supposed to go into effect in November 2021, but Local Law 53 was not implemented. The city is now out of compliance and the law needs to be implemented immediately. Right to Counsel is extremely effective at keeping people housed, but it does not work if tenants do not know to take advantage of it. Trusted, neighborhood-based groups are the key to getting information to tenants facing eviction.

Eviction Case Backlog

Eviction cases are often complex and require both time and nuance. Unfortunately, New York City’s housing courts are struggling with a backlog of eviction filings, creating a dangerous environment for tenants. In the Bronx, judges used to hear one case every 30 minutes in their Right to Counsel intake part; now they hear two cases every 15 minutes. This is an impossible position for legal services organizations, leading to inadequate attention for tenants.

In the coming months, housing court should only move the cases for tenants with legal representation, and adjourn all others, until legal services organizations have more capacity. Under the Housing Stability and Tenant Protection Act (HSTPA), housing court judges have the flexibility to adjourn cases. Similar adjournments happen in parallel court systems, like Family Court.

Rental Assistance

Rental assistance can act as a key mechanism for both keep renters facing eviction housed and to help homeless New Yorkers find homes. There are many federal and state rental assistance programs, the largest of which is the Section 8 voucher program. CityFHEPS is the rental assistance program that the city has the most direct control over. Unfortunately, there are a number of administrative and enforcement obstacles for using CityFHEPS for eviction prevention. Most crucially, New Yorkers must stay in a shelter for ninety days before becoming eligible and are faced with systemic source of income discrimination from landlords. Further, undocumented New Yorkers are not eligible for CityFHEPS.

In 2019, only 20% of New Yorkers who received CityFHEPS were able to secure housing, and the average shelter stay was 450 days. According to a recent report by Neighbors Together and Unlock NYC, An Illusion of Choice: How Source of Income Discrimination and Voucher Policies Perpetuate Housing Inequality, tenants who gain access to vouchers are forced into lower quality units with higher rates of HPD violations, compared to non-voucher holders.

The city should work to expand eligibility to CityFHEPS to effectively prevent evictions and ramp up enforcement of housing code and source of income discrimination laws, to prevent voucher holders from facing homelessness.

Abolishing & Replacing the Tax Lien Sale

The authorization for the city’s tax lien sale has come to end. This harmful, Giuliani-era policy:

• Accelerates the loss of equity in low-income communities of color,
   
• fuels speculation in the housing market,
   
• lessens the city’s leverage over delinquent landlords and subjects their tenants to harmful conditions,
   
• squanders opportunities to create affordable housing and community facilities,
   
• and, privatizes core aspects of city government.

For low-income tenants, having a building in the tax lien sale results in months or years of instability and physical decline. Often, financially distressed buildings are purchased by speculative investors who both withdraw services and hike up rents, resulting in terrible living conditions and eventual displacement. In gentrifying neighborhoods, unscrupulous investors in distressed properties often try to evict long-term Black and Latinx tenants, and bring in higher-income white tenants.

The city must end this harmful program. It must replace it with an alternative tax collection system that stabilizes rental buildings facing tax foreclosure by turning them into social housing.

Community Opportunity to Purchase Act

The city’s eviction crisis may have another downstream effect: if rent arrears persist, many landlords will likely be unable to meet their mortgage payments, setting off another foreclosure crisis. The Community Opportunity to Purchase Act (COPA), introduced by Councilmember Rivera in the last session, gives nonprofit organizations and community land trusts a right of first refusal for the purchase of rental buildings in New York City. Tenants in Washington, D.C. have had this right for over 30 years. San Francisco recently passed similar legislation and the neighboring municipalities of Berkeley and Oakland are not far behind.

Right of first refusal laws are built on several interconnected pillars: neighborhood stabilization, permanent affordability, community wealth, and resident control. New York City should pass a similar law, giving tenants more power during their building’s sale, because ownership changes make tenants vulnerable to eviction and displacement. When tenants can intervene in the building sale, they gain power to negotiate for better conditions, reasonable rents, or even to bring in a responsible landlord.

Funding for Community Land Trusts

We support the call for $3 million in City Council discretionary funding to develop CLTs and permanently-affordable housing, commercial and community space. Launched in FY2020, the citywide CLT Initiative has catalyzed CLT organizing in the South and Northwest Bronx, East Harlem, Richmond Hill, Brownsville, East New York and beyond. CLTs are community-controlled nonprofits that own land and ensure that it is used to provide permanently-affordable housing and other community needs. CLTs are flexible and can support permanently-affordable rental housing, limited-equity cooperatives, and 1-4 family homes at risk of foreclosure, as well as commercial and cultural spaces, community gardens, community-owned solar, microgrids and other infrastructure. Today, CLTs across the city are organizing in Black, Latinx, Asian, and immigrant neighborhoods to stabilize housing, combat speculation, and ensure a just recovery from the pandemic.

Thank you for the opportunity to testify. If you have any questions about my testimony or CSS’s research, please contact me at omironova@cssny.org.

Issues Covered

Affordable Housing