How Affordable is Affordable Housing?
Average monthly rental rates in New York City recently topped the $3,000 mark, according to the Wall Street Journal, and affordable housing has been a hot topic on the campaign trail this election season. What does the phrase really mean – and what can politicians do about it?
“There isn’t one definition of affordable housing and it’s actually been quite controversial over the last few years,” said Becky Koepnick, director of the Moelis Institute for Affordable Housing Policy at New York University’s Furman Center for Real Estate and Urban Policy.
“The federal government, which sets the standard for affordable housing, says that for a family that makes about $77,000 a year for a family of three in New York City, they should be able to afford an apartment that costs about $1,900 a month. Now that’s the federal standard, but in New York actually most people make around $50,000 a year and can only really afford about $1,200 a month in rent.”
This translates to an affordability standard of 30% of monthly income being paid in rent, but Koepnick noted that “…almost 3/4 of low-income New Yorkers are paying more than half their monthly income towards rent,” indicating that the perennial problem is worse than ever before.
She also said that rent affordability is not a uniquely New York issue – other large cities have the same problem on a similar scale. The Bloomberg administration is on track to meet its goal of creating or preserving 165,000 units of affordable housing – the most ambitious such plan in the nation – through innovative means of financing and incentives, “But at the same time the market’s been so hot in New York over the last 10 years, they’ve barely kept pace with the number of affordable units we’re losing each year,” said Koepnick.
Both New York City mayoral candidates Joe Lhota and Bill de Blasio have said that, if elected, they would construct and preserve more units of affordable housing than Mayor Bloomberg has, and de Blasio has also said he will give more attention to even lower income city residents. “But the reality is the next mayor is going to have to do more with less,” said Koepnick. “The federal government is pulling back on its commitment to affordable housing, the real estate market in New York is really hot so there’s a lot of competition for land, the city doesn’t own as much land as it used to. So the next mayor is really going to have to figure out how to get the resources to fulfill these ambitious visions they have.”