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How Affordable is Affordable Housing?

| October 2, 2013 3:15 PMvideo


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.”

 

  • DanM

    Most of the discussion of affordable housing presumes that someone can afford to provide it at any given price point. The New York City Rent Guidelines Board’s latest data show that post-1946 rent stabilized housing in Manhattan costs an average of $649 per unit per month in city property taxes alone… about 29% of average Manhattan stabilized rents. It is widely reported that new construction can anticipate paying 33% of rents in property taxes. This is more than triple the typical tax burden on apartments in other large cities and five times the burden nationally. Affordability has two sides. New York City has focused on subsidizing the end user and pretty much piled on to the cost side of the equation with taxes, zoning limits, and unique labor rules among other policies.

    • karenyoung

      Dan, I guess then we need to raise taxes on the wealthy, who can afford it. Do you support that? Because state income taxes here are basically flat and fall heaviest on the poor and middle class – who also pay NYC tax (most cities don’t have an extra income tax).

  • cubanflowers

    nyc rents are out of control!.

    I have 2 apartments 1.. 3 bedroom and 1… 1 bedroom…

    and almost always i have had trouble with tenants who were NOT on some sort of program. .

    i.e,. just relying on their paycheck to pay me my rent!!!..

    i don’t need that kind of stress in my life when the first of the month comes in!.. just give me my money !..

    so now i only rent to those who have section 8 and working!.

    NO PROBLEMS. … i am guaranteed my money…

    my tenants are nice… clean and most importantly they pay their portion on time!!.. 1 tenant has already paid up for the year his rent..

    it’s unfortunate that in order for many to have shelter in this country…. they must have some sort of subsidy assistance…

    so much for the… first world ….super power .. .world leader.. rhetoric…

    be blessed..

    • lili

      How can someone on public assistance be able to afford paying his share one full year upfront. He should not be on public assistance and take money away from someone else who really needs it. Scamming and nepotism are out of control in this city.

      • cubanflowers

        sweetie he is with a JOB!…

        as i stated i will not rent to people who are not with seccion 8 and a JOB….

        only exception would be for a section 8 tenant who is an elder…. they do not have to be employed…

        his portion isn’t some astronomical amount that he would have difficulty paying…

        what would cause him hardship is if he had to pay the entire amount my husband and i charge for rent…

        so therefore he is one of the people here in nyc who needs and receives rental assistance!…

        be blessed

  • karenyoung

    What most discussions of “affordable housing” leave out is that building new housing is meaningless. We have millions of current renters who aren’t touched by such programs. We need more rent control and rent stabilization, including small landlords. Which means government has to be able and willing to take on the landlords and developers. There is no real reason rents in NYC have to be so high – so much higher than ALL other cities except San Francisco. Local residents are competing with foreign one percenters who push up the rents and demand for “luxury” housing, which is all that is really getting built. No reason that landlords and developers here couldn’t make a profit on prices more comparable to other cities’. They charge so much more because they can. I’ve lived in other major cities and housing there is much better.

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