Skip to main content

Beyond gentrification: the contributing factors to the housing crisis

Gentrification is one of several forces limiting the availability of affordable housing, as Brad Lander of the Pratt Center for Community Development explained at a discussion held in June 2006 on housing displacement, sponsored by the Center for the Study of Brooklyn. (The issue persists today, so his slides--some of which I've reproduced--and explanations remain pertinent.)

Lander cited several factors contributing to a "broad housing crisis": a "broad shift from a manufacturing economy to a service economy," along with "substantial immigration leading to rising population," all pressuring a constrained housing supply.

Polarized economy

After World War II, the city had more than one million manufacturing jobs, many of them unionized, but now fewer than 250,000, and a nonunion service economy. (In his 1993 book, The Assassination of New York, Robert Fitch argued that the shift from manufacturing to office space was not merely a result of national trends, but pushed by property owners seeking higher value for their land. Of course, in the last decade, the shift has been from manufacturing to housing.)

Over the last quarter-century, New York City has lost middle-class families but gained wealthy and poor families. The city gained more than a million people since 1980 and may gain another million, so supply can’t keep up with demand.

So land has been rezoned from manufacturing to residential—Lander cited the Williamsburg/Greenpoint waterfront and Atlantic Yards, though of course the latter was not a rezoning. Meanwhile, some neighborhoods in Brooklyn and Queens have fought overdevelopment with downzoning, essentially freezing density.

Worrying trends

From 2002 to 2005, tenant incomes went down, almost 6%, while median rents rose more than 8%, and the number of households paying more than 50% of their income for rent nearly doubled. The definition of affordability is 30%. “This matches the statistic that [academic] Lance [Freeman] mentioned that in those gentrifying neighborhoods, lower income households tend to pay something that is astronomical.” (I wrote about Freeman's work yesterday.)

Where are the people going? “So, some set of people are being displaced," Lander noted. "An enormous set of people are paying much more of their income for rent, which obviously has all kinds of consequences. People are crowding much more–-that, actually we don’t have stats here, but the crowding stats are up dramatically. Or, some kind of public policy is mitigating their need to move…."

Lander suggested that the statistics provide "really good evidence that rent regulation in New York City enables people in gentrifying neighborhoods to stay in those places.” He also cited the presence of public housing or subsidized housing like buildings in the Mitchell-Lama program.

Targeting neighborhoods

Government policies for affordable housing have typically addressed poor rather than gentrifying neighborhoods, but the advance of gentrification has led to new, now familiar tactics: “inclusionary zoning which lets people build more and more market rate housing if they include affordable housing, tax increment financing, tax incentive programs, and on specific projects, community benefits agreements which could bring in the inclusion of affordable housing and accountable development standards on those projects.”

It's arguable that the Atlantic Yards Community Benefits Agreement brought more housing--or a better development--than might have been achieved via a more public rezoning. Indeed, Lander acknowledged there are tradeoffs between market forces, issues of equity, and issues of livability.

During a February 2006 debate between Bertha Lewis of Atlantic Yards advocate ACORN and Candace Carponter of AY opponent Develop Don't Destroy Brooklyn, Lander observed that “equity advocates” accept more market-rate housing if it brings benefits, while “livability advocates” want less development because it inflicts less environmental harm.

"It sets up a painful and challenging conflict," he mused. “Maybe other land use procedures--ones that put planning earlier and up front wouldn’t lead to this dynamic, but we wind up in it an awful lot of the time."

What can be done

So, what's the answer? Lander in his presentation could only outline the tensions: “I’m not persuaded that stopping development will solve the problems we’re talking about today, honestly. I do really feel these tensions and on the one hand feel like we’ve got to try to have the market do more to benefit a wider range of people, and then on the other hand see all the places where if we don’t invest in more regulatory and preservation oriented strategies, our market leveraging strategies won’t be enough either.”

Indeed, as Jerilyn Perine of the Citizens Housing and Planning Council has pointed out there's been a significant dropoff in federal subsidies.

But there's more that the city could be doing, as critics from both the left and right argue, and I'll address that shortly.

Who loses?

The housing squeeze is significant, as shown in the State of New York City's Housing and Neighborhoods 2005 report, issued in June 2006 by New York University’s Furman Center for Real Estate and Urban Policy.

A 6/16/06 Times article headlined Housing Tighter for New Yorkers of Moderate Pay reported that the number of apartments affordable to some 40% of New Yorkers, households earning about $32,000 a year, or 80 percent of the city’s median household income, dropped by 205,000, or 17 percent between 2002 and 2005. The median rent for unsubsidized apartments went up 20 percent while household income declined.

"The market will work through this, but there are people who really lose," said Chris Mayer, director of the Paul Milstein Center for Real Estate at the Columbia Business School.

The article echoed some of the issues Lander raised as contributing to the rise in rents: a growing population that outstrips new construction; construction geared to higher-income households; and an influx of higher-income residents.

Much of that construction has been fueled by the 421-a tax break that subsidizes market-rate construction and only belatedly has been up for reform. (We're still waiting for a revision to be put before Gov. Eliot Spitzer.)

The pressure continues

The most recent Furman Center report, issued April 11, the State of New York City’s Housing and Neighborhoods 2006, showed that the median home sales price in New York City rose by 68 percent from 2000 to 2005, adjusting for inflation, but that fewer than 5 percent of home sales in 2005 were affordable to New Yorkers earning the City’s median income ($43,434). That’s a significant drop from 11 percent in 2000.

The report painted a picture of a city deeply divided, but some press coverage focused on the positive news it included. In a 5/27/07 article headlined In a City Known for Its Renters, a Record Number Now Own Their Homes, the Times reported that one in three households now own their dwellings. Only well down in the article did the newspaper discuss the growing rate of foreclosures and the fact that only a tiny fraction of homes are affordable to average households.

In an upbeat 4/15/07 Real Estate section article headlined A Most Exclusive Club, the Times praised “the unsung heroes of the effervescent Manhattan real estate market.”

Lower in the article, the Times shifted gears and cited the Furman Center report, noting, “But unfortunately, not all New Yorkers can contribute to this high end of the real estate market.” Those New Yorkers, it's safe to say, are not looking for housing in the Sunday New York Times.

Comments

Popular posts from this blog

Barclays Center/Levy Restaurants hit with suit charging discrimination on disability, race; supervisors said to use vicious slurs, pursue retaliation

The Daily News has an article today, Barclays Center hit with $5M suit claiming discrimination against disabled, while the New York Post headlined its article Barclays Center sued over taunting disabled employees.

While that's part of the lawsuit, more prominent are claims of racial discrimination and retaliation, with black employees claiming repeated abuse by white supervisors, preferential treatment toward Hispanic colleagues, and retaliation in response to complaints.

Two individual supervisors, for example, are charged with  referring to black employees as “black motherfucker,” “dumb black bitch,” “black monkey,” “piece of shit” and “nigger.”

Two have referred to an employee blind in one eye as “cyclops,” and “the one-eyed guy,” and an employee with a nose disorder as “the nose guy.”

There's been no official response yet though arena spokesman Barry Baum told the Daily News they, but take “allegations of this kind very seriously” and have "a zero tolerance policy for…

Behind the "empty railyards": 40 years of ATURA, Baruch's plan, and the city's diffidence

To supporters of Forest City Ratner's Atlantic Yards project, it's a long-awaited plan for long-overlooked land. "The Atlantic Yards area has been available for any developer in America for over 100 years,” declared Borough President Marty Markowitz at a 5/26/05 City Council hearing.

Charles Gargano, chairman of the Empire State Development Corporation, mused on 11/15/05 to WNYC's Brian Lehrer, “Isn’t it interesting that these railyards have sat for decades and decades and decades, and no one has done a thing about them.” Forest City Ratner spokesman Joe DePlasco, in a 12/19/04 New York Times article ("In a War of Words, One Has the Power to Wound") described the railyards as "an empty scar dividing the community."

But why exactly has the Metropolitan Transportation Authority’s Vanderbilt Yard never been developed? Do public officials have some responsibility?

At a hearing yesterday of the Brooklyn Borough Board Atlantic Yards Committee, Kate Suisma…

No, security guards can't ban photos. Questions remain about visibility of ID/sticker system.

The bi-monthly Atlantic Yards/Pacific Park Community Update meeting June 14, held at 55 Hanson Place, addressed multiple issues, including delays in the project, a new detente with project neighbors,concerns about traffic congestion, upcoming sewer work and demolitions, and an explanation of how high winds caused debris to fly off the under-construction 38 Sixth Avenue building. I'll have more coverage.
Security issues came up several times at the meeting.
Wayne Bailey, a resident who regularly takes photos and videos (that I often use) of construction/operations issues that impact residents, asked representatives of Tishman Construction if the security guard at the sites they're building works for them.
After Tishman Senior VP Eric Reid said yes, Bailey asked why a guard told him not to shoot video of the site, even though he was on a public street.

"I will address it with principals for that security firm," Reid said.
Forest City Ratner executive Ashley Cotton, the …

Atlantic Yards/Pacific Park graphic: what's built/what might be coming + FAQ (post-dated pinned post)

This graphic, posted in February 2018, is post-dated to stay at the top of the blog. It will be updated as announced configurations change and buildings launch. Note the unbuilt B1 and the proposed--but not yet approved--shift in bulk to the unbuilt Site 5.

The August 2014 tentative configurations proposed by developer Greenland Forest City Partners will change. The project is already well behind that tentative timetable.

How many people are expected?

Atlantic Yards/Pacific Park has a projected 6,430 apartments housing 2.1 persons per unit (as per Chapter 4 of the 2006 Final Environmental Impact Statement), which would mean 13,503 new residents, with 1,890 among them in low-income affordable rentals, and 2,835 in moderate- and middle-income affordable rentals.

That leaves 8,778 people in market-rate rentals and condos, though let's call it 8,358 after subtracting 420 who may live in 200 promised below-market condos. So that's 5,145 in below-market units, though many of them won…

The passing of David Sheets, Dean Street renter, former Freddy's bartender, eminent domain plaintiff, and singular personality

David Sheets, longtime Dean Street renter, Freddy's bartender, eminent domain plaintiff, and singular personality, died 1/17/18 in HCA Greenview Hospital in Bowling Green, KY. He was 56.

There are obituary notices in the Bowling Green Daily News and the Wichita Eagle, which state:
He was born in Wichita, KS where he attended public Schools and Wichita State University. He lived for many years in Brooklyn, NY, and was employed as a legal assistant. David's hobby was cartography and had an avid interest in Mass Transit Systems of the world. David was predeceased by his father, Kenneth E. Sheets. He is survived by his mother, Wilma Smith, step-brother, Billy Ray Smith and his wife, Jane all of Bowling Green; step-sister, Ellen Smith Alexander and her husband, Jerry of Bella Vista, AR; several cousins and step-nieces and step-nephews also survive. Memorial Services will be on Monday, January 22, 2018 at 1:00 pm with visitation from 10:00 am to 1:00 pm Monday at Johnson-Vaughn-Phe…

Some skepticism on Belmont hockey deal: lease value seems far below Aqueduct racino; unclear (but large?) cost for LIRR service

As I wrote for The Bridge 12/20/1, The Islanders Say Bye to Brooklyn, But Where Next?, the press conference announcing a new arena at Belmont Park for the New York Islanders was "long on pomp... but short on specifics."

Notably, a lease valued at $40 million "upfront to lease up to 43 acres over 49 years... seems like a good deal on rent for the state-controlled property." Also, the Long Island Rail Road will expand service to Belmont.

That indicates public support for an arena widely described as "privately financed," but how much? We don't know yet, but some more details--or at least questions--have emerged.

An Aqueduct comparable?

Well, we don't know what the other bid was, and there aren't exactly parcels that large offering direct comparables.

But consider: Genting New York LLC in September 2010 was granted a franchise to operate a video lottery terminal under a 30 year lease on 67 acres at Aqueduct Park (as noted by Gov. Andrew Cuomo).

As…

Barclays Center event June 11 to protest plans to expand Israeli draft; questions about logistics

At right is a photo of a poster spotted in Hasidic Williamsburg right. Clearly there's an event scheduled at the Barclays Center aimed at the Haredi Jewish community (strict Orthodox Jews who reject secular culture), but the lack of English text makes it cryptic.

The website Matzav.com explains, Protest Against Israeli Draft of Bnei Yeshiva Rescheduled for Barclays Center:
A large asifa to protest the drafting of bnei yeshiva in Eretz Yisroel into the Israeli army that had been set to take place this month will instead be held on Sunday, 17 Sivan/June 11, at the Barclays Center in Downtown Brooklyn, NY. So attendees at a big gathering will protest an apparent change of policy that will make it much more difficult for traditional Orthodox Jewish students--both Hasidic (who follow a rebbe) and non-Hasidic (who don't)--to get deferments from the draft. Comments on the Yeshiva World website explain some of the debate.

The logistical questions

What's unclear is how large the ev…