Understanding Affordable Housing

Even a quick glance through the Directory will make readers ask: Why so many programs? We do not attempt to evaluate the need for or success of each program, and thus cannot answer that question directly. But, we do identify core elements of each program, as well as commonalities among them, to allow readers to consider why programs are created or modified. This Introduction also provides a skeletal historical context so that readers can begin to see the needs that the programs were designed to address, as well as to provide some context (when known) for the evolution of programs from their predecessors. 

We hope this Directory will be helpful on a very practical level. Practitioners new to affordable housing work can find the acronyms daunting. Even longstanding experts in the field come across program names that are unfamiliar. Tenants may not understand what it means to live in an “80/20” or an “NRP” building. It is difficult to find aggregated lists of housing programs across government agencies that are designed to address a similar need. For example, we have not been able to locate a list of all the programs used in New York City to provide housing to formerly homeless households. There are lists of service providers, government agencies, and names of individual building locations, but to our knowledge there is no easily accessible website or document describing government programs currently or formerly available to provide housing for homeless families and individuals. By searching key phrases in this Directory, those involved in mitigating homelessness in New York City have a starting point to locate potential program models.

Scope

The Directory includes only those affordable housing programs used within the five counties (coterminous with boroughs) of the City of New York. We also limited the entries in the Directory to programs sponsored by the four active government housing agencies: the U.S. Department of Housing and Urban Development (HUD) at the federal level; the Division of Homes and Community Renewal at the state level; and the New York City Department of Housing Preservation and Development and Housing Development Corporation at the municipal level. Because the largest source of housing subsidies in New York City is the Internal Revenue Service, we have included those programs through deductions, credits, and abatements, as well as affordable housing-related state and city tax relief programs administered by the New York City Department of Finance. However, many other government agencies and private sector organizations also sponsor affordable housing programs, from the U.S. Veterans Administration to labor unions and private corporations. Those programs are not yet included in the Directory, although we hope to include them in future editions. 

Despite receiving generous assistance from many experts, there are still programs for which information was incomplete, inconsistent, or unavailable. We also limited the amount of information provided for each program in many cases in order to emphasize common characteristics and differences among programs. As a result, the Directory is not intended to be a “how-to” instruction manual for would-be developers or residents, but rather a compass that guides users towards further inquiry. Moreover, it is well beyond the scope of this project to provide an entire history and typology of the housing programs listed here.

Authors’ Preliminary Observations

In reviewing the plethora of housing programs used in New York City, some initial observations emerge. The value of New York City’s experience is not limited to the confines of the City’s five boroughs (although the myth of New York City’s uniqueness, perpetuated by New Yorkers and non-New Yorkers alike, is powerful). Indeed, many of the housing programs profiled were based on programs from other cities, such as the mortgage assistance program (Pennsylvania) or mutual housing associations (Scandinavia and Germany). Others have been replicated both domestically and internationally, such as New York’s robust supportive housing programs. 

Nor is government the sole progenitor of housing programs. Many programs developed as a result of advocacy by residents (Sweat Equity Program), financial institutions (New Homes Program), or city unions (NYPD Home). Entities as diverse as the construction industry, wealthy philanthropists, newspaper editorial boards, and homeless squatters each have had an influential role in shaping housing programs and policies over the years. Regardless of the original inspiration, each affordable housing program has usually involved an active partnership among public, private, and non-profit sectors along with the residents of the communities affected by the housing market. 

Designing a housing program that has clear goals, under the appropriate legal authority, with sufficient financing, and using a design that effectively and efficiently achieves those goals is not an easy task. A number of programs begin as experiments or demonstrations, evolve to increase scale, and change yet again in response to further evaluation or external political, social, or market conditions.   

Housing has a long life cycle: most of New York City’s residential buildings date from before World War II. As a result, affordable housing programs require thoughtful design to address the capacity of the owner/developer to build and manage the property, the adequacy of capital and operating reserves, and the capacity of government to enforce income, use and occupancy restrictions. In addition, changing economic and social conditions may challenge the assumptions underlying housing programs and undermine their operation. As New York City divested itself of land and buildings that it had acquired through tax foreclosure during the fiscal crisis, it repopulated and strengthened neighborhoods, but also lost a source of supply for new (reclaimed) housing. When the private real estate market gained steam during the construction boom of the 1990s and early 2000s, program design shifted to tools such as inclusionary housing in order to take advantage of the strong private market and wean the city from its previous dependence on city-owned land and buildings for affordable housing production. The housing crisis and recession of 2008 made these market-driven programs in turn less productive, and so the structure of affordable housing programs is changing yet again.

Finally, this Directory details an extraordinary public investment in housing and households that dates nearly a century. Over time, regulatory agreements expire and market conditions change. Whether this cumulative housing investment has been a boon to families, communities, and entire neighborhoods, or whether it has been a fragmented and inefficient use of public and private resources, is a debate that can be informed by greater study of the housing built under the programs contained in this Directory. In any case, this substantial investment has become a key part of the urban fabric for many New Yorkers, as well as a model for other cities. We hope this Directory will be a useful platform for those wishing to learn how to maintain or expand affordable housing resources for cities, neighborhoods, and families for future generations.

Acknowledgements

We would like to acknowledge the many people who have contributed to the arduous task of compiling detailed descriptions of more than 175 different programs.  The primary authors of this Directory are Sarah Gerecke and Matthew Murphy.  We would like to thank the faculty, staff, and students at the Furman Center for Real Estate and Urban Policy for their concentrated, thoughtful, and old-fashioned hard work on this project. In particular, faculty co-directors Vicki Been and Ingrid Gould Ellen gave important direction and insight at every step. Without their active involvement, their patience in reading numerous drafts, and their keen insights, this project would not be possible. Vincent Reina and the entire Subsidized Housing Information Project (SHIP) project team embraced this project. The following students and staff of the Furman Center also made invaluable contributions:  Jaclene Begley, Caroline Bhalla, Caitlyn Brazill, Anindya Kundu, Jon McGrath, Meghan Lewit, Bethany O’Neill, Tina Park, Max Weselcouch, Mike Williams, and Mark Willis.

We must thank the Furman Center SHIP research team. While analyzing the affordability requirements associated with hundreds of thousands of units of subsidized housing in SHIP, our researchers began to compile a directory of commonly-used programs for internal use. Their diligent work, along with the support of government and private partners, resulted in the Directory of New York City Affordable Housing Programs.

We would like to thank the following outside readers for sharing their valuable expertise with us off-the-clock in order to contribute to this Directory. We owe a special shout out to the intrepid reviewers who went beyond the assignment and read most entries, sometimes more than once:  Charles Brass, Jerilyn Perine, Jerry Salama, Deborah VanAmerongen, Robin Weinstein and Rubin Wolf.  Many other outside reviewers assisted us, including (in addition to those listed here) some who wished to remain anonymous: William Carbine, Arlo Chase, David Deitrich, Chris Ekhardt, Rachel Fee, Sydelle Knepper, Annie Koo, Kathryn Matheny, John McIlwain, Jerilyn Perine, Ilene Popkin, Larry Raccioppo, Alexa Sewell, and Michael Skrebutenas.

Both Michael Bierman and Derek Hogue provided design and web development assistance. Of course, any errors of commission or omission are the authors’; it is our hope that readers will assist in identifying them by using the feedback box so that we can correct errors and update as programs change.

Last, but not least, we would like to thank the thousands of public servants, private developers, scholars, bankers, architects, journalists, lawyers, teachers, builders, elected officials, and community residents (categories that are not mutually exclusive) who improve the housing conditions of New Yorkers. To misquote the epitaph of Sir Christopher Wren, “Reader:  If you seek the fruit of their works, look around you.”

In preparing the Directory, we identified three primary goals that affordable housing programs appear designed to achieve:

1. Sheltering Households. Perhaps the most obvious goal is to provide, in the words of Title II of the Housing Act of 1949, “a decent home and suitable living environment for every American family.” Housing confers benefits directly to families and individuals residing in the housing itself.  Those benefits include:
   • Basic shelter;
   • A minimum standard of housing quality to protect the health and safety of residents and neighbors (which has evolved from the days of outdoor plumbing and cold-water flats to lead-based paint remediation and building standards appropriate for modern building density and technology); 
   • Predictable, affordable housing costs so that residual household income is available for food, medicine, transportation, and other non-housing essentials;
   • Improvement of family well-being through access to employment and schools; and
   • Development of secure social networks.

 

2. Community Development. Some affordable housing programs seek to promote a second goal, covered by the broad term “community development.” In the first half of the twentieth century, entire communities were designed as an antidote to the crowded and unhealthy conditions of inner-city tenements. In the latter half of the twentieth century, housing programs with a community development or neighborhood revitalization goal were used to rebuild and repopulate neighborhoods affected by abandonment and disinvestment. For those programs, affordable housing was created in order to generate positive spillover effects, increasing demand for local jobs and businesses, raising property values, reducing crime and making more efficient use of existing public infrastructure. Some housing programs even aimed to change the demographic composition of neighborhoods by increasing economic and racial diversity, for example.

 

3. Other Goals Not Directly Related to Housing. Affordable housing programs may have goals not directly related to the well-being of the residents living in subsidized housing or in the immediate neighborhood —programs where the provision or preservation of housing may not be the primary goal. Several major federal housing programs have had the explicit objective of providing construction jobs and permanent employment, while the housing was a byproduct of the program rather than its primary goal. Other housing programs are explicitly designed to increase population and thus purchasing power and tax revenues for the city as a whole, without regard to the location or community-based impacts of the housing itself.

• 1930s and 1940s: The Great Depression resulted in a wave of mortgage defaults and foreclosures; new federal programs and the institution of rent controls were introduced to stabilize the housing markets. The New York City Housing Authority was created in 1934, and the first public housing project in the nation, First Houses, was dedicated by Eleanor Roosevelt and Mayor Fiorello LaGuardia in 1935. Federal employment and slum clearance programs, often under the aegis of Robert Moses, led government to create urban renewal plans and major infrastructure projects that removed tenement housing and built new housing in all five boroughs. 
• 1950s and 1960s: Post-war demand for housing exploded, resulting in Federal Housing Administration (FHA) and Department of Veterans Affairs (VA) homeownership programs, as well as state and city programs like Mitchell-Lama housing. These programs drew residents away from older neighborhoods, such as the Lower East Side, Harlem, the South Bronx, and central Brooklyn. Depopulation of New York City employment base also began, leading to a declining tax base. Secondary effects of highway building, relocation, and slum clearance resulted in vacancy and blight conditions in inner-city neighborhoods. Civic activist movements and War on Poverty programs of the 1960s led to the birth of community development corporations, as well as the new cabinet-level Department of Housing and Urban Development in 1965.
• 1970s: Deteriorating socioeconomic conditions pushed businesses to relocate out of New York City, and the loss of tax revenues coincided with reductions in municipal services. Double-digit oil prices combined with rent regulation and lack of demand led to widespread abandonment of multi-family housing; the Bronx and other neighborhoods were burned by arsonists, and poor neighborhoods throughout the city were looted during the blackout of 1977. Lacking the revenue to pay current expenses, the City’s ability to borrow came to a halt, prompting the Fiscal Crisis of 1977. Federal housing program design evolved from the Great Society categorical grant programs to revenue sharing and block grants under the Nixon Administration.
• 1980s: In an effort to increase public revenues, New York City initiated and enforced tax foreclosures on properties that were one year or more in tax arrears (labeled “in rem,” a Latin term meaning “against the thing,” to reflect the legal process used to foreclose). As a result, by the mid-1980s New York City became the largest landowner in the city (and third largest in the country behind the Federal Government and the New York City Housing Authority), with title to more than 100,000 vacant and partly occupied apartments. Homelessness reached record levels, forcing the city to use private “welfare hotels” to house homeless families and individuals. Mayor Koch and the State Municipal Assistance Corporation/Financial Control Board stabilized the city budget; Mayor Koch then committed $4.2 billion (later increased to $5.1 billion) in city and federal funds to rebuild entire neighborhoods during the first Ten-Year Plan for Affordable Housing (1986 – 1996). The Federal Government expanded the availability and use of Section 8 Housing Choice Vouchers in a Reagan-era shift from supply-side to demand-side housing program strategies, and also introduced the Low-Income Housing Tax Credit program. 
• 1990s: Federal, state, and city resources were used extensively to address vacant and abandoned properties and housing needs of New York City. Private investment in affordable housing expanded in response to market demand, the sale of in rem properties for $1, the availability of subsidies, and regulatory changes under the Community Reinvestment Act that promoted private lending and investment in low-income housing and neighborhoods. Both the Dinkins and Guiliani administrations extended the City’s commitment to affordable housing, while simultaneously cutting off any significant further additions to the supply of City-owned housing by selling property tax liens to private companies rather than taking ownership directly through the tax foreclosure process. City housing programs were designed, tested, and tweaked to respond to various needs and to the capacity of the public, private, and not-for-profit sectors to implement the programs. Non-profits specializing in housing development and management grew in number and size, as did private developers working in affordable housing. Affordability restrictions for federal, state, and city programs launched decades earlier began to expire.
• 2000s: Mayor Bloomberg announced a commitment to create or preserve an additional 165,000 units of housing. City ownership of vacant and occupied housing stock fell to fewer than 1,000 units. Government initiatives adapted to the boom, and then to the bust, market conditions of the decade, first by designing programs to leverage private market development with incentives to include affordable housing, and then by designing programs to address the consequences of default and foreclosure in the private housing market. More properties opted or failed out of federal, state, and city housing programs with affordability restrictions, although the rate of loss diminished with the recession of 2007-8 and the development of new preservation strategies.

The changing economic, social, and political trends over the decades resulted in different housing needs ranging from post-war housing shortages to homelessness to abandonment. In each era, government designed and employed different tools to achieve different housing objectives.