Pathways to Social Housing in New York: Part B

Financial Resources for Housing Justice

We cannot shy away from the fact that producing, operating and preserving social housing costs money: it requires large amounts of labor and materials, and, in many cases, it is sited on land that has become inordinately expensive for the very fact that someone else could be making a lot of money by building luxury housing on top of it. There are, of course, ways to reduce these costs. Policies aimed at cooling speculative land markets, many of which are detailed in Parts 3 and 4 of this report, can bring down acquisition prices. Upfront capital investments can drive down operating costs, by minimizing debt long-term. .

Permanent affordability built into social housing models preserves public subsidy over time. It does not require periodic payouts to owners to encourage them to renew their regulatory agreements, or, worse yet, to accept the eventual loss of affordable housing to private actors. However, committing to a large-scale social housing program means devoting substantial public resources on an ongoing basis, particularly in a state like New York, where the largest city contains some of the most expensive land on earth.

At the same time, we already spend a tremendous amount on sustaining the inequitable status quo in housing. On the federal level, the single most expensive housing program is the roughly $25 billion mortgage interest tax deduction, which disproportionately benefits the wealthy and does nothing for renters or homeless people. (The 2017 Trump tax overhaul reduced the program from $70 billion, but also made it less useful for lower-income homeowners.) On the state level, our budget shows that we are most committed to the production of mostly luxury housing through the 421-a tax break, a State program which cost New York City $1.7 billion in fiscal year 2021 alone. Similarly, the 485-a tax break costs upstate municipalities millions while requiring nothing in terms of affordable housing. Meanwhile, city, state and federal governments also spend billions of dollars on shelters to temporarily house people who are homeless as a result of our unaffordable housing system. The number of homeless people — and therefore the cost of the shelter system — would be much smaller if public spending on housing was reoriented toward social ownership and permanent affordability.

We are already spending a tremendous amount of money on private, for-profit housing and the homelessness crisis it produces. It's time to shift the priority to funding social housing instead.

See here for an introduction to Pathways to Social Housing

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