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Citizens Union

Subsidized Housing

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.

But now we are losing this supply of affordable housing at a fast rate, because, on the one hand, a soaring housing market has more and more landlords opting out of the subsidy programs, and, on the other hand, the federal government is cutting off the subsidies to landlords accused of poor management and neglect. Since 1990, the city has lost close to 30,000 apartments, a quarter of the apartments created by the largest subsidy programs for families of low and moderate income. And thousands more units are in the process of being de-subsidized right now.

Housing For The Poor And Families Of Color

Who lives in this threatened housing? The answer is mostly low-income tenants and families of color. Last year, New York City lost a record 5,518 apartments, as landlords removed their buildings from subsidy programs: Nearly 80 percent of the losses were in Harlem and the South Bronx.

Tenants in federally-funded housing developments (mostly "section 8" housing) are 45 percent black and 33 percent Latino, with a median household income of $12,000 a year. Tenants of Mitchell-Lama housing (a program established by the state in 1955 to encourage low- and moderate-income housing by offering developers low-interest mortgages and tax abatements) are 44 percent black and 20 percent Latino. Though Mitchell-Lama is often thought of as a middle-income program, about 40 percent of its households have incomes below $20,000 a year. Another 30 percent of households earn less than $40,000 a year. The median annual household income is just $26,000.

Priced Out Of Harlem, And The Bronx

These people cannot hope to survive in New York City without affordable housing. 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 $12,000 of that in rent?

The cost of housing is rising fast even in many traditionally lower income communities like Bushwick and Williamsburg. In the latest Community Service Society survey, we found that housing was a major concern for low-income residents, topping safety issues such as crime or fear of a terrorist attack.

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. But the market forces driving the loss of subsidized housing finally hit home in Harlem, with the landlords of three large developments opting out of the program -- Riverside Park Community, Schomburg Towers, and Metro North. And now it appears to be hitting the Bronx, where eight more Mitchell-Lama buy-outs are currently pending.

Owner Neglect Or Mismanagement

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, the Department of Housing and Urban Development foreclosed on 17 developments in New York City, 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. 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.

Squeezed From Both Sides

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 and the Bronx 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.

A partial response to the threat of severe rent increases is Local Law 79, passed by the City Council over the mayor’s veto. It allows tenants to buy their buildings if landlords decide to take them out of subsidized programs. Landlords sued to stop the law from taking effect. The case is still in court.

The mayor has proposed that all Mitchell-Lama rentals in the city be placed under rent stabilization. This would help, but only action by the state Legislature can make it happen.

David R. Jones is president of the Community Service Society of New York, a social services organization that deals with the problems of poverty.  

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