Introduction

Three years into the pandemic, rents in New York City have reached new heights. A quarter of low income tenants owe back rent and the state struggles to fill a massive shortfall in its COVID rent relief fund. One of the root causes for this crisis is that for decades, landlords of New York State’s private rental housing stock have placed heavy financial bets on both deferred maintenance and rising rents. As a result, rental housing is vulnerable to shocks like the COVID-19 pandemic. Without a major intervention, our current housing and lending policies create an environment for further waves of gentrification and displacement.

This report outlines an alternative future, sketching out 20 policies that directly address this vulnerability. These policies would work in tandem to shield our housing from the worst aspects of speculative investment and put New York on a path to social housing transformation.

With this report, we add to the growing discussion about challenging real estate power, decommodifying the housing system, and expanding social housing in New York State. We focus on existing private rental conversions, in particular distressed housing where landlords have been the most predatory or neglectful, as opposed to new social housing development, a topic covered by The People’s Policy Project, People’s Action, and others. Practically, a social housing conversion strategy is crucial in cities where developable lots are scarce. Further, the connected crises against which the organized housing movement takes aim — unaffordability, displacement, discrimination, evictions, homelessness, and substandard living conditions — are rooted in our existing rental stock. Fighting for social ownership in privately-owned rental housing, then, not only presents another avenue to directly challenge real estate’s monopoly over the ownership and control of housing, but also challenges that power where it is felt by most people: in the exorbitant rent they pay each month, in the egregious conditions they must put up with, or in the threat of displacement hanging over their heads.

The link between outsized landlord profits and crises for tenants has never been clearer. According to a report by JP Morgan Chase, while tenant households suffered unprecedented burdens and struggled to make rent during the pandemic, landlords actually made money, primarily through deferred maintenance of their buildings. The fact that landlords profited even in the depths of a generational crisis demonstrates why the housing movement in New York State must present an alternative vision of how housing should be owned and operated. To get there, we need a wide-ranging set of policies: frequent transfers of land and housing to social ownership, expansive financial resources, and robust tenants rights. We also need a long-term commitment to organizing, first to win these policies, then to operate social housing democratically, and finally to grow public and political support for a social housing transformation in New York State and around the country. We hope this report is a step in that direction, kindling the imagination and providing concrete resources for a move toward more equitable and sustainable housing models for New York.

The 20 policies below are divided into four subsections, which can be grouped into two different types of policy interventions. Sections A and B of the report focus on the need to develop and sustain social housing models and tenant organizing during and after conversions. Sections C and D outline policies that make the most abusive landlord practices economically unworkable, forcing bad landlords to either act more responsibly or exit the business and creating a pipeline for social housing conversions. Each policy description includes:

  • A brief summary of what it is, and how it would work;
  • The responsible jurisdiction (local, state or federal);
  • The budget type (capital, operating, or neutral);
  • The legal process (legislative, administrative, or judicial);
  • Connections to other policies in this report;
  • And the potential impact.

Finally, each policy within Pathways to Social Housing aims to be relevant for localities across New York State. Though New York contains a wide range of housing markets — from long-disinvested areas to over-capitalized ones — each policy outlined here is broadly applicable. Further, recent housing movement victories have demonstrated the power of statewide organizing by tenants and people experiencing homelessness across the ‘downstate’ and ‘upstate’.

We encourage readers to move freely between the sections, to draw connections we did not ourselves highlight, and to offer more policies and programs that would be useful in reasserting the public role in land and housing.

This report builds on previous Community Service Society (CSS) research on the importance and viability of social housing in New York. In 2020, Oksana Mironova and Thomas Waters produced a two-part series, Social Housing in the U.S. and How Social Is That Housing?, which laid out the definition summarized above and showed how well (and how poorly) various existing New York housing models aligned with those values. In 2015, Waters and Victor Bach produced a landmark study entitled Reinventing the Mitchell-Lama Housing Program, which demonstrated what a new version of this widely popular New York social housing program might look like in the 21st century. In 1996, Sarah Hovde and John Krinsky released a pair of comprehensive reports on the experience of Community Land Trusts and Mutual Housing Associations in New York City and nine other US cities, entitled Hands-On Housing and Balancing Acts. In the late 1980s, CSS launched its Ownership Transfer Program to facilitate social housing conversions in at-risk buildings in New York City, led by Howard Banker and Linda Cohen. In short, CSS has a long history of research, advocacy and practice in social housing conversions, and we hope this Pathways to Social Housing report contributes to that important body of work. (For more historical resources on social housing in New York, see conclusion.)

What is Social Housing?

Social housing is “housing in the public domain,” to borrow a Metropolitan Council on Housing slogan from the 1970s. It is usually operated through a combination of government, nonprofit and resident ownership, regulation and management. The term has been quite common around the world for over a century. It is becoming a rallying cry in the United States because of the limitations of our existing affordable housing programs and the perils of the dominant corporate real estate model.

Three key features of social housing are: deep affordability (or promoting social equality); decommodification (or insulating housing from market forces); and democratic management (or enabling residents to exercise control over their housing). When social housing is newly built, it typically requires public land and financing so that tenant, labor or community groups can afford the cost of construction and keep rents low. The government can also facilitate the conversion of for-profit buildings to social housing, transferring them to a group of tenants or a nonprofit, who agree to repair and operate the housing under strict regulatory agreements. New York City and New York State already support a plethora of social housing models, including rentals (public housing, Mutual Housing Associations, Mitchell Lama rentals), limited- equity cooperatives (HDFC coops, Mitchell-Lama coops, Resident Owned Communities) and alternative forms of land tenure (Community Land Trusts). There are concrete differences between for-profit and social housing building operations. A private landlord seeking quick and lucrative profits will generally maximize debt leverage, minimize expenses, and attempt to increase rental income at every opportunity. A social housing operator aims to only take on debt when necessary, reinvest revenues back into the building to ensure good housing quality, and keep rents within the bounds of affordability agreements. Whereas our status quo model of housing has produced deep racial inequality, persistent homelessness and widespread precarity, social housing models aim to achieve exactly the opposite: racial equity, abundant affordability and self- determination.

Despite these distinctions, existing social housing models are far from perfect; there have been significant challenges in keeping this housing permanently affordable and in operating the properties in line with the ideals laid out above. Any serious social housing strategy must acknowledge those failures on their own terms, while recognizing the effect of the past several decades of fiscal austerity. As in so many other arenas, local, state, and federal austerity set social housing up for failure, leading to both its physical degradation and a hollowing of the expertise and democratic institutions required to successfully create and operate it.

Austerity also winnowed the public’s faith in the government as a reliably positive actor in the provision of housing. And while public funding for social housing has been slashed over the preceding decades, public subsidies and support for countless models of for-profit housing have proliferated, from state tax breaks for luxury construction (like 421-a and 485-a) to federal subsidies for single-family home mortgages (like the home mortgage interest deduction, or Freddie Mac and Fannie Mae backed financing). For most of the 20th century, our city, state and federal governments supported suburban homeowners and urban landlords, while claiming poverty when it came to funding public and social housing alternatives.

Meanwhile, the federal government – along with banks, conservative think tanks, and other aligned organizations
– periodically presented private homeownership (and sometimes landlording) to low-income people of color living in cities as the primary pathway to economic growth and stability. These positive outcomes, however, were never guaranteed. In fact, programs that promised entry into private homeownership for low-income people
– and for African American first-time homeowners in particular – often relied on households taking on unsustainable debts or accessing poor quality homes, subjecting them first to dangerous conditions and then to foreclosure. Historian Keeanga-Yamahtta Taylor calls this process “predatory inclusion” for the ways it weaponized homeownership into yet another tool of racial discrimination.

The challenge for social housing advocates, then, is to buck these historical trends of austerity and predation and offer instead models of housing that not only promise but deliver on the ideals of decommodification, deep affordability, and democracy. This is a tall order, and one that will be achieved through a host of policies, actions and approaches. Thus, we present here a set of pathways rather than a single silver bullet.

How do tenant protections and code enforcement create Pathways to Social Housing?

In this report, we frame a range of existing housing movement priorities, including the expansion of tenant rights and stronger code enforcement, as pathways to social housing. These policies are not only important demands on their own, but also serve as crucial predicates to the possibility of conversions. For instance, when the government expands protections against unjust rent increases to a new sector of the housing market, tenants directly benefit, while the potential income that drives rising prices and outsized profits is restricted, causing speculative investors to lose interest in that sector. A similar reaction is likely when the government improves housing code standards and enforcement, as tenants’ living standards improve while neglectful landlords are forced to reinvest more rental income back into their buildings, thus limiting outsized profits based on minimal maintenance expenses. Furthermore, the organizations developed through organizing campaigns, such as tenant associations and unions, can be transformed into the permanent democratic institutions needed to successfully own and operate social housing.

The fact that our housing system is set up to produce profit for landlords and investors is one of the principal obstacles to the expansion of the social housing sector, because it drives the hyper-valuation of land. In cities with high property values, social housing conversions reliant on market transactions often require prohibitive levels of public funding. Conversely, in areas with low property values, aggressive speculative investment (the driver of gentrification) marginalizes potential social housing entities. Expanding tenant rights and strengthening code enforcement can bring housing operations — and by extension, property values — back in line with what it actually takes to run decent and affordable rental housing. Altering these dynamics creates an opportunity for social housing conversions, and thus acts as a “pathway to social housing.”

For in depth context on how NYC’s housing market became what it is today, please read Corporate Windfalls or Social Housing Conversions.

At the same time, while tenant protections and code enforcement laws pave the way for social housing, social housing models also help to permanently enshrine those rights for all tenants. As housing investment becomes central to our financial system, rising property values and rent extraction become key methods for passive wealth building. Housing policies that limit the speculative potential of a property, like rent regulation or expanded code enforcement, come under threat from organized landlords and investors who skirt rent regulations, whittle down the power of public agencies to enforce housing codes, or withhold investment and even keep units vacant to force policies more favorable to them. A meaningful expansion of the social housing sector would limit the political and economic power of organized landlords and investors to undercut hard-won tenant protections and standards of habitability.

Perhaps most importantly, though, many of the policies in the sections on tenant protections and code enforcement are pathways to social housing because they make tenant organizing more attainable and more transformative. The right to a renewal lease, for instance, ensures that landlords cannot retaliate against tenant leaders involved in building-level organizing. Similarly, expanded eviction protections and powerful legal tools to challenge predatory landlords make possible bold organizing and campaign strategies. Policies which lay the groundwork for organizing are necessary because social housing must be driven by committed groups of tenants seeking to wrest control of housing from landlords who profit too much and provide too little. A social housing conversion program can only exist when tenant organizing is strong and widespread. Indeed, such a program aims to make permanent the gains from housing struggles that prioritize people over profit.

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