Interboro CLT

3 Anti-Market Victories for NYC Affordable Housing in 2017

Tenants and advocates had real success this year (ANHD)

Tenants and advocates had real success this year (ANHD)

For affordable housing advocates in New York City, 2017 was a sum-of-all-fears kind of year. The affordable housing crisis continues to touch all corners of the city (and America) leading to a shocking increase in homelessness, foreclosures, and rent burdens. The election of Donald Trump and the placement of Dr. Ben Carson at HUD have expedited the federal retreat from housing aid and removed the possibility of national solutions for affordable housing (and for helping NYCHA.) Finally, the squabbling of Mayor de Blasio and Governor Cuomo has nearly paralyzed efforts for reform and relief at the state level.

But it hasn’t been all doom and gloom. Largely through the tireless efforts of local tenants and advocates, the cause has seen several key victories at the city-level. 

Further more, these three victories show that even modest tweaks to the existing political and legal framework can lay the foundation for the type of profound change that we need to address the crisis at a structural level. Namely, we need to reject the market ideology that has caused the crisis and continues to exploit it.

1. Community Land Trusts have arrived as a powerful affordability tool

Any reader of this blog knows how important homeBody thinks community land trusts are to ensuring permanent affordable housing in the city. CLTs separate the value of the land from the value of the structure on it by placing the property in a trust, permanently removing it from speculation. After many years of organizing by NYCCLI and New Economy Project, it finally seems that NYC gets it too.

In July, the Department of Housing and Preservation announced a request for information on CLTs for the first time and has partnered with Enterprise Community Partners NYC to offer $1.65 million for the formation of three new CLTs in the city: Interboro CLT, El Barrio, and a brand new coalition CLT through NYCCLI.

Just last week, the City Council passed a law recognizing CLTs in the city’s administrative code, which opens them up to working with city agencies on a more formal basis.

These are modest steps, but incredibly important ones in helping the model take off in the city. The fact that it has taken almost a decade for these measures to happen, shows what a slog it has been. But it also shows how quickly things are starting to happen.

Building off of Cooper Union (the first and longest tenured CLT in the city), the newest CLTs have a long way to go to grow, but the necessary roadmap, administrative tools, and advocacy groups now in place will help to do so.

The hope now is that other community organizations will become aware of the model and have the tools to go forward with their own CLT. I also hope that the city beings to think seriously about turning over city-owned land to CLTs or even forming a municipal land trust as quasi-public housing.

Either way, introducing a model that removes speculation on land values in the city is a major win for affordable housing and sustainable communities.

2. Right-to-Counsel will prevent evictions and reshape housing court

In August, the city radically reshaped its housing court structure by becoming the first city in the US to guarantee legal representation for low-income tenants in eviction fights. For a relatively modest $155 million over 5 years in legal aid, tenants that were previously outgunned in housing court now have a greater chance of avoiding eviction altogether. As of 2015, 90% of landlords had legal representation, while only 10% of tenants did. This rebalancing will have a profound impact on the cost to families facing homelessness.

With the homeless population now exceeding 60,000 people in NYC, keeping families in their current homes also becomes the most important homeless policy tool for the city. Right-to-counsel will reduce the cost of providing homeless services by an estimated $320 million and will hopefully alleviate some of the political pressure associated with homeless shelters and clustering that is crippling the city’s ability to meet the sadly growing homeless population. Keeping families in homes is the key.

The larger hope with this move is to alleviate the equally crippling pressure on the housing court division. There were over 350,00 filings last year for only 50 judges. This backlog locks thousands of landlords and tenants in slow proceedings that ultimately undermine the ability for the city to ensure transparency and accountability. The rule of law is only as good as a government’s ability to enforce it and creating more balance on the tenant side will hopefully recalibrate this dynamic for the better.

3. No Harassment Certification is a small step towards decommodifying housing

The other big development on enforcement occurred at the end of November, when the City Council passed the Certificate of No Harassment (CONH) legislation, largely through the efforts of ANHD. This law, along with the larger Stand for Tenant Safety package also passed this year, aims to stop the common and pernicious practice of landlords harassing rent-regulated tenants out of their units in order to increase profits.

With the skyrocketing value of property across every borough, there is large incentive for speculators to buy a building and force out rent-regulated tenants. The goal in many cases is to either demolish a building or increase the rent-roll in order to flip it. This practice has been difficult for tenants and the city to prevent.

The CONH is intended to disincentivize this speculation by putting the pressure on landlords to prove that they are not harassing tenants. Buildings that fall into certain categories of risk (related to speculation) must receive this certificate if they are to begin construction projects or otherwise impact the quality of life of existing tenants.

It is ultimately still just a speed bump rather than a roadblock against speculation, but it shows that tenants and advocates fighting back against more powerful financial interests can win. Removing the worst actors from the housing market by raising the risk and cost of harassment is a necessary first step in radically reforming the property landscape in NYC.

 

I don’t want to suggest that these three events were the only “victories.” There are other events this year that I could have spoken about, such as Mayor de Blasio’s Housing 2.0 plan for his second term, or Governor Cuomo’s new housing budget.

However, I chose them because these three items speak to the larger hope that we can reduce the suppressive power that “the market” has over our housing discussions. Market solutions have their place in any affordable housing policy discussion but only after we reposition the basic premise of housing as a basic right.

Speculation destroys cities by devouring neighborhoods and dehumanizing housing. It really is that simple. Treating housing as an asset-first policy has led us to the affordable housing crisis and has scarred many communities in NYC, perhaps permanently.

If enough people force the discussion on housing to return it to shelter-first, we absolutely can find practical and lasting solutions to the affordable housing crisis. As many tenants and advocates have shown this year, it is also absolutely possible.

4 Reasons To Be Excited for Community Land Trusts in NYC

Cooper Square CLT shows they already work in NYC (urbanomnibus)

Cooper Square CLT shows they already work in NYC (urbanomnibus)

This past week marked an exciting development in affordable housing policy in NYC.  HPD has announced that it will give $1.65m through a grant program from Enterprise Community Partners to four groups to develop or expand community land trusts around the city.  Though it is a small amount of money, it is a giant step for the city and could serve as a larger evolutionary step in housing policy.  What happens next with these groups will be important, but undeniably a new policy tool has entered into the housing debate.  There are many reasons to celebrate this and I’ll outline four today.

A Community Land Trust is an alternative form of ownership that separates the value of land from the value of the shelter on it. It does this by placing the land in a community-controlled trust that removes it from the private market permanently.  This separation removes the speculative nature of real estate from the cost of shelter, maintaining a consistent level of affordability. 

CLTs have been around, notably in Burlington, Vermont, for decades, but have had limited support and awareness in NYC.  One of the groups receiving funding is Cooper Square, the only current CLT in the city.  Its success over several decades has played a considerable role in getting the city to believe in the model.

Along with Cooper Square, the other three groups are Interboro CLT, a new partnership of organizations, East Harlem/El Barrio, a brand new tenant CLT, and the NYC Community Land Initiative, the long-running regional group dedicated to helping groups form CLTs.  These groups, along with the New Economy Project, have been working on getting to this point for years.

I’ve always believed CLTs could work in NYC (and worked with NEP back in 2012 on a CLT project) because there are so many opportunities with the right combination for success: organized community groups and lots and lots of small, existing properties.  Given how the Mayor has put such a priority on affordable housing and has tried to frame it as a vehicle for community control and inclusive growth, community land trusts are a no brainer. Let’s turn to why.

1. They are Really Cheap

As an affordable housing tool, CLTs are really inexpensive because they rely on existing housing stock (but can still create new development), which is always going to be cheaper than new construction.   The basic model would include a single, upfront subsidy provided through an agency like HPD, or potentially a non-profit like ECP, to purchase a parcel or parcels of land to turn over to a CLT.  After that contribution, CLTs are effectively self-sustaining. (There are legitimate questions about how much subsidy is needed in addition to land costs to make individual units even more affordable, but these are best left to individual cases.)

Compare this model with our current reliance on market-based solutions that cost hundreds of thousands of dollars per unit.  As I mentioned in last week’s blog, the mayor’s plan relies on tax incentives that make each new “affordable housing unit” come in at between $400,000-$600,000.  Spending billions of dollars on building new units at that cost just doesn’t make sense and will never produce the number of units the city needs.

So much focus has been put on new development and the need to create more density that we forget that preserving existing units in many neighborhoods accomplishes the same affordability goals for a lot less money and in a shorter time frame.  It’s estimated that over the next few years, 100,000 affordable housing units will be lost to deregulation and vacancy decontrol.  Think of what a difference putting those units into CLTs would make for overall affordability and think about how quickly and cheaply that could be accomplished. It is stunning.

2. They Prevent Displacement

Another complimentary feature of CLTs in NYC is that they are likely going to be most effective in neighborhoods that are on the brink of gentrification but haven’t seen new development or upzoning yet.  The land will still be affordable in most cases, keeping the subsidy cost low.

More importantly, establishing a CLT will allow existing residents to remain in their communities.  The logistics of converting a market-rate, or even rent-stabilized building, into a CLT is seamless and doesn’t involve tenants moving. 

New construction generally means displacement when an old building is torn down, with very little likelihood of those tenants returning. New construction also begets more new construction, which drives the speculative nature of real estate into new neighborhoods. Very few existing residents benefit under this dynamic (although its complicated.) Even building on empty lots under the current model makes it difficult for existing tenants to have access to new “affordable” units. 

By allowing existing residents to remain in their homes, especially renters who don’t have the benefit of equity gains as neighborhoods gentrify, even low-income residents have the opportunity to benefit from the positive aspects of growth and new development.  Rather than continue with a generally zero-sum development pattern, CLTs allow neighborhoods to have more inclusive growth.

3. They Provide Community Control

Along those lines, CLTs are the ultimate tool for community control.  They allow residents to have a larger say in their neighborhoods through the voice of the CLT.  Renters in particular are generally underrepresented as stakeholders in an area, but as members of a CLT, they become more powerful advocates.

To be clear, I don’t see this as a NIMBY/YIMBY issue.  Community control doesn’t mean community resistance to change.  The dynamic now, and why so many neighborhood groups do resist any change (although with limited success in reality), is that development doesn’t help existing residents.  Who would want to allow massive disruption in their neighborhood that will probably result in having to move at the end of it?

When long-term residents have the ability to be part of the long-term change in their neighborhood, when they can rightfully envision their futures’ there, then it becomes less about resisting and more about shaping.  The end result is a more economically, socially, and politically dynamic neighborhood which is what the whole city should look like.

4. They Compliment Private Development

A big point of supporting CLTs that I want to make clear is that they are a complimentary piece in a larger policy toolkit.  I don’t think they are a panacea or even appropriate in every instance.  But having them as a pillar or at least an option creates more space in housing policy for community control and non-market solutions.  This can eventually allow more resources to go into new construction of private or public housing with government assistance.  It’s all connected.

If we can create a policy frame work for CLTs that allows a significant number of units to be preserved at a very low cost, that leaves more room and potentially more money to drive new development in more targeted ways.

I’d rather see some of those billions of dollars the Mayor has allotted to subsidize private development used to improve the subways and buses.  A better transportation network extends the housing options for all New Yorkers.  I’d rather see it go towards supporting NYCHA, which houses over 400,000 New Yorkers. Pubic housing has been a vastly successful government program that should continue to be a priority. Finally, I’d rather see our public funds going towards building working class and middle-class housing where it is needed rather than subsidizing luxury construction in glitzy parts of Manhattan.

The total amount is modest and the details of how the model could work in NYC still need time to develop, but trying community land trusts in NYC should excite everyone concerned about affordable housing and the future of NYC.  Provided with the right support and deployed in the right areas, CLTs could be a major evolutionary step for the city as it struggles to solve the affordability and homelessness crises.