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Cash Homebuyers Threaten Covid Recovery and Deepen Racial Wealth Gap


homes apartments buildings mortgages

Photo


An astonishing 11.3% of New York mortgage borrowers are behind on their mortgage, a 121% increase over the same time last year. That figure only hints at the economic pain being felt in New York and across the country, and pain that is being temporarily moderated by stopgap measures like forbearance plans and unemployment insurance, but threatens to bubble over into a full-blown housing crisis.

In just two months, the federal foreclosure moratorium will expire and the government still has not adopted measures for a post-COVID housing market, especially not for low-income and Black and brown communities. If we’ve learned anything from the Great Recession, cash wielding, predatory investors thrive amidst a disrupted housing market, taking advantage of dropping prices and foreclosure sales, which will further disadvantage aspiring homeowners.

In a recently released analysis, “The Outsized Power of Cash Buyers in New York City’s Housing Market,” the Center for NYC Neighborhoods found that over 40% of small home, co-op, and condo sales in the Big Apple have been to cash buyers over the past ten years, even though 80% of homebuyers take out a mortgage nationally. Investors are targeting the modestly priced co-ops and single-family homes in neighborhoods where working class families have traditionally been able to buy.

Competition from cash buyers was already a leading obstacle to homeownership in New York City and COVID-19 threatens to compound the problem. Even with interest rates low, widespread loss of income will make it difficult for renters to qualify for mortgages at the city’s high price points. Meanwhile, lenders are tightening access to mortgages by increasing down payment requirements and minimum credit scores, leading the Mortgage Bankers Association to drop its Credit Availability Index to its lowest point since 2014.

By definition, cash buyers don’t need mortgages, leaving them in prime position to take advantage of the post-COVID economy. When forbearance periods end, we anticipate a surge of homeowner distress that will yield thousands of foreclosures. Cash buyers will be ready to target these properties with expertise built after the Great Recession and pockets full from investors looking to move their money out of COVID-gutted industries like restaurants and airlines and into the relative safety of New York City real estate.

A replay of the Great Recession would not only shrink the city’s already small homeownership landscape but deepen the racial wealth gap that is driven by uneven access to homeownership for Black and Latino households. In an early June survey, the Census Bureau found that while 11% of white homeowners had not been able to make their previous month’s mortgage payment, that was true for 17% of Latino homeowners and 35% of Black homeowners in New York. Factoring in racial disparities in access to mortgage refinancing, it’s hard not to conclude that COVID threatens to devastate the assets of families of color at a time when the need for racial justice has never been more glaring.

Local governments can take important steps to ensure that speculative cash buyers aren't the only player in the post-COVID housing market. A tenant opportunity to purchase, like the laws in Washington DC and San Francisco, would empower renters to buy their buildings off of bankrupt landlords, creating new ownership where it would otherwise be neglected. A reform of the inequitable Mortgage Recording Tax and a boost to City and State down-payment assistance – a key plank of many reparations proposals – would help elevate first-time homebuyers over the competition coming from predatory investors.  And the State can go further by preventing distress in the first place: funding foreclosure prevention services and rent relief – absolute necessities given the coming demand.

The cost of inaction is, to put it simply, devastating to our neighborhoods and to the New York state economy.  We have been here before so we have no excuse to be caught off-guard by cash buyers and distressed property investors. State government must stop stalling on addressing homeownership protections post-COVID and press forward with bold measures to keep families in their homes as they try to get back on their feet during what looks like a long recovery ahead.

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Leo Goldberg is Policy Manager at Center for NYC Neighborhoods. On Twitter @CNYCN.

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New York Got Federal Money to Address Extreme Heat; Now’s The Time To Use It


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Summer heat has arrived (photo: governor's office)


The sudden spread of COVID-19 caught governments around the world off-guard, setting off one of the deadliest public health crises in generations. We are learning many lessons from this pandemic, including the importance of preparing for emergencies early and taking decisive action when they strike, especially in New York State, the epicenter of the crisis, where there are over 380,000 confirmed cases and more than 24,000 deaths.

With summer officially beginning on June 20, another public health crisis is hiding in plain sight: extreme heat. It is our duty to sound the alarm when our constituents are facing danger, and that moment is now.

Extreme heat is the deadliest of all natural disasters in our state, killing an average of 130 people every year in New York City alone. With climate change fueling hotter, longer heatwaves, and COVID-19 forcing New Yorkers to spend more time in their homes and apartments, this year is poised to be much more dangerous.

At highest risk are our Black and brown communities – the same ones that have already suffered the most from the novel coronavirus, and which continue to experience tragic police brutality, rampant discrimination, and the many other effects of systemic racism. All of these issues have one thing in common: the stakes are literally life and death.

In these communities that are already hurting so badly, thousands of families don’t have an air conditioner. Many more can’t afford to run the one they have. As unemployment skyrockets, New Yorkers across the state will be forced into the completely unacceptable choice between putting food on the table and switching on the A/C unit that could save their lives.

We cannot allow that to happen.

Many of the places that New Yorkers traditionally visit to beat the heat—such as pools, movie theaters, and cooling centers—could be closed for large parts of the summer. For this reason, we need to bring a fresh approach to keeping New Yorkers safe and cool by focusing on homes and apartments.

New York City Mayor Bill de Blasio recently took a necessary step by dedicating $55 million to provide air conditioning units to 74,000 elderly and low-income New Yorkers.

Now it’s time for Governor Andrew Cuomo to do his part to help New Yorkers stay cool in New York City and across the state.

Currently, New York State allocates just $6 million per year for in-home cooling assistance though the Home Energy Assistance Program, or HEAP.

HEAP funds are disbursed on a first-come-first-serve basis, meaning that many households that need help will get turned away if available funding doesn’t meet the scope of the need.

But importantly, as part of the federal CARES Act, Congress recently allocated $28.8 million to New York State in additional HEAP funding. These funds should immediately be allocated to address cooling support this summer for our vulnerable residents.

Governor Cuomo should simultaneously reform the state’s HEAP program, managed by the Office of Temporary and Disability Assistance (OTDA), to ensure this desperately needed financial aid reaches those who need it most.

First, the Governor should expand program eligibility to include NYCHA and Section 8 residents, historically barred from the program. He should also simplify medical documentation requirements to ease the burden on our health-care system. Finally, he should expand HEAP to go beyond providing A/C units by authorizing cash grants to help households pay their higher summertime electricity bills.

These important reforms can all be accomplished by executive order. The time to act is now – lives depend on it.

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State Senator Gustavo Rivera represents parts of the Bronx. Assemblymember Andrew Hevesi represents parts of Queens. On Twitter @NYSenatorRivera & @AndrewHevesi.

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Deconstructing the #DefundNYPD Clash with City Council Members of Color


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Council Member Cumbo (photo: John McCarten/City Council)


Defending her vote in support of a new city budget that did not cut NYPD funding by at least $1 billion (as New York City faces a $10 billion COVID-19-related revenue shortfall) Brooklyn City Council Member Laurie Cumbo told protesters criticizing the plan: "Work under the existing leadership of the communities that are already there."

Cumbo compared the development of the #DefundNYPD movement to "colonization" and said, "this movement is not being led by the Black community."

She and several other Council members of color made it sound like protests against state violence and inequality in city resource allocation had come out of nowhere from parts unknown. Did the few Black and Latino Council members who voted against the budget over lack of NYPD cuts blindly follow a movement of outsiders? Cumbo’s former chief of operations quickly rejected Cumbo’s narrative.

In a late-night tweetstorm Crystal Hudson listed 10 leading Black organizers, whose groups are among the over 170 organizations pushing to #DefundNYPD that Cumbo and other members have no doubt encountered during their time in the Council. The movement against state violence has been and is today led by marginalized peoples, Black women, Latino, Asian, immigrant, and LGBTQ.

Yes, there are many new people engaging in local politics, some are new residents in communities facing gentrification, and some of them eyeing elected seats in districts they recently moved to (an article for another day). But the vast majority of #DefundNYPD activists are simply people fighting to divest from policing and incarceration and to reinvest that money in those who most need it. And though Council members resent being the subjects of criticism and desperate pleas to do more, as the old saying goes, “It’s not about you.”

Many New York City Council members of color say that in their communities people aren't screaming for police defunding or abolition. One wonders, did they just close their windows each time a #BlackLivesMatter protest marched by their house? It is true that this year’s #BlackLivesMatter protests have engaged far more white people than they did when Eric Garner was killed, but in response to those protests the Council voted through a budget that added 1,300 new police officers. What Black or Latino Council member can honestly say their communities were screaming “Build new jails!“ when they approved billions to do just that in 2019? (None.)

Though to Cumbo’s point, when Council members of color and NYPD Commissioner Dermot Shea claim the community is asking for more police, there is truth there. The question is, which community are they referring to? Common community venues politicians and police leaders tell protesters to get involved in include local meetings of Community Boards and Precinct Community Councils. While community boards are not uniform -- multiple CBs passed resolutions in support of #DefundNYPD, including East Harlem's CB11 calling to #DefundNYPD by at least $1B in FY21 -- they’re generally more police-friendly organizations than the broader neighborhoods they are part of.

Community Boards are appointed by the local Borough President and City Council member. Local electeds don't often choose a bunch of people who think far differently than they do. There’s no public reason given as to why one is or is not chosen to a community board and many appointees have existing relationships with local electeds. Members are often removed from community board committees or not reappointed to CBs for rocking the political boat. As all-volunteer entities chosen by politicos where dissenting voices are not always welcome, community boards are not often viewed as a functional space where meaningful change can happen or be pursued. Because New York City has a dearth of local civics education, most don’t even know that it is the first rung of city government, a feeder for elected office (several sitting Council members, including the Speaker, are former community board chairs and more are former CB members).  

If you’ve ever gone to a community board meeting in a Black or Latino neighborhood you might feel like you stepped into a world where #BlackLivesMatter never happened. There isn’t a lot of reimagining public safety outside of police. Fear of returning to the "bad old days" of the 1970s and ‘80s reigns.

A return to the “bad old days” is the ultimate political boogeyman in New York City politics. It can quickly undermine substantive policy arguments in almost any public safety conversation. Of course, crime and cops not responding, were just part of planned disinvestment of the past. Many community board members in communities of color are old enough to have lived the last crisis even close to the one New York City now faces. They are reminded of the crime and divestment as they walk by firehouses and schools that have remained closed since their childhood or those recently converted to luxury developments.

Community boards trend older and more conservative. Property owners are overly represented, renters and the homeless under-represented. Black and Latino CB members often live in neighborhoods that face more police violence and gun violence than their white counterparts. Local police are accessible to and regularly engage with many community boards. When calls to reform or cut police come, community board members often think of the last shooting or the working relationships they have with officers who report to the community board and work community events.

At Precinct Community Council meetings in Black and Latino neighborhoods, you won't find many people who have been abused by or lost family members to police, virtually no one actively calling for reinvestment of NYPD funds into social services, and few immigrants. Why? Precinct Community Council meetings are held with many cops and most often in police precincts. Most of the agenda is dominated by Black and brown people literally begging the police to “deal with” homelessness, “deal with” substance abuse, “deal with” guys hanging out on the corner, and “deal with” the seven major crimes (murder, burglary, assault, car theft, and so on).

One can be from and "do the work" in Black and Latino neighborhoods in New York City and not spend a minute in politician- or cop-dominated/funded spaces (some would call this self-care).

Tons of longtime residents who do mutual aid, community, and anti-violence work -- who fight health disparities, hunger, gentrification, racism, homelessness, and deportations -- avoid Community Board and Precinct Community Council meetings like the plague.

#DefundNYPD was coming from all over Black and Latino neighborhoods in New York City. From non-profits getting their budgets cut, individuals losing their jobs, people facing eviction when the moratorium ends, the hungry, the homeless, families of those killed by police violence, and others.

This new city budget was always going to be lose-lose chaos. City Council members got the ball after Trump and the Feds refused to reimburse cities and states for COVID-19-caused revenue deficits. Cuomo cut Medicaid and wouldn't allow New York City to borrow money to fill the tax revenue gaps. Trump, Cuomo, and de Blasio all refused to raise taxes on the wealthy. De Blasio offered a tale of two cities budget that slashed education and hospitals while protecting police and the wealthiest.

Disparaging #DefundNYPD and using budgetary tricks to act like the city got far closer to (or over) $1 billion in NYPD cuts didn't fool a single person paying attention. People can read budgets (though no public copy of the full Fiscal Year 2021 budget was available before the Council vote) and see through the funny math the mayor and Council presented. To pretend NYPD cuts are more than reality just handed talking points to the right wing, who will now claim, as Trump and Staten Island Council Member Joseph Borelli already have, that crime is rising because of $1 billion or more in NYPD ‘cuts.’

Expecting that the NYPD face a substantial budget cut like virtually every other city agency during a depression is not "abolition." A substantial cut to the NYPD’s almost $6 billion budget was not radical. It should have been inevitable. It's what happens when tax revenue dips $10 billion, and no one can say how much deeper it will drop, or when or what recovery looks like.

The difficulty in making NYPD cuts comes not only from strong police unions, their military and surveillance capabilities, but the deep faith in policing that is still shared across the political aisle. For all of the social services the NYPD is involved in; there are people in and out of city government who for many years have called for cops to get more involved with them. People still call cops to "deal with" fireworks, kids smoking weed, and loud music. On an individual and structural level, we call cops like genies in a bottle then wonder why we can't hold police accountable or their budget in check, why police “reform” never gets at the root.

Investing in jails and police while cutting education and public health has never made our communities safer. As Ruth Wilson Gilmore explained when talking with the New York Times last year, abolition of police is not the absence of "safety.” Abolition is not just closing prisons and dismantling the police; it is creating and maintaining vital systems of support many of our communities lack.

At a local level, New Yorkers have stepped up for each other through the most heartbreaking of challenges. But at federal, state, and municipal levels we have not addressed the root causes of any of our compounding pandemics or their impact on mental health (see New Orleans after Katrina [1] [2]). Crime will almost certainly continue to rise in the coming months, and that is because of the existing racial and socioeconomic inequality COVID-19 has only exacerbated -- pre-existing conditions many elected officials still see as “fake” or too "unrealistic" to prioritize.

If those calling for defunding and abolition cannot effectively address the reasons people feel the need to call the police and cannot offer alternatives to calling police viewed as viable by those most impacted by non-police violence, then people will keep calling the cops, long past the next election.

If politicos in New York City’s Black and Latino neighborhoods don't open themselves to conversations on "public safety" not dominated by them or police and continue to dismiss calls to divest and abolish as stuff only people on Twitter and new residents to their districts who don't "do the work” care about, then they are making the political miscalculation of their lives.

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Andrew J. Padilla, an award-winning artist and educator born and raised in East Harlem, has lectured on urban politics across the country, from Hostos to Harvard, and is a proud member of Manhattan Community Board 11. On Twitter @apadillafilm6.

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