Housing First! A Con View
Solving the Housing Problem in NYC
By George Locker

After years in obscurity, New York City’s housing crisis--the massive and growing shortage of housing units, the deteriorated state of existing housing, and the high cost of renting--has finally emerged as a subject for serious political discussion.

Central to the problem, but rarely discussed, is the city’s huge cumulative housing shortage. After decades of not building, the city now needs some 560,000 more housing units (new and rehabilitated) than it has.

This cumulative housing deficit would include 264,000 rental units classified in the US Census as "physically poor," with significant structural or maintenance defects; an estimated 100,000 illegal dwellings, including basements, garages, and subdivided rooms; 100,000 households thought to be improperly doubled up in the city’s public housing; 75,000 private households defined in the Census as "severely overcrowded"; and 27,000 in homeless shelters.

Moreover, New York’s cumulative housing shortage is increased by substantial annual losses from the housing stock and demand generated by an expanding population. Each year, 15,000 units of housing are lost from the inventory and population growth adds 3,500 new renters. The city thus needs to build some 18,500 new units yearly just to stay in place.

Considering the cumulative housing deficit, the annual loss rate and population growth, a program to eliminate the city’s housing shortage would require construction of about 52,000 units a year (the rate in the mid-‘60s), for 15 years.

In the 1990s--the boom years for finance and real estate--the average rate of new construction was down to 7,000 units a year, mostly luxury, and the housing supply shrank. The failure of the thriving private sector to build and maintain decent affordable housing for ordinary New Yorkers in these best of times has, appropriately, refocused attention on the role of government in the production of housing.

Housing First! is a curious alliance of groups--those whose members suffer from the housing shortage, decay, and sky-high rents, and the financial and real-estate sector, whose members benefit.

It has launched a campaign for a 10-year program to be funded with $10 billion in public money--including city capital funds, revenues from Battery Park City and the World Trade Center and redirected Federal aid. As I read the 34-page proposal of Housing First!, little of this public money would go directly to the construction of new housing, from the ground up, that would be owned by the public.

With the exception of 3,300 units a year of Nehemiah-type housing and 1,500 units a year of city-owned housing, Housing First! does not specify how the public’s financial investment will be translated into actual housing units. How many units will be newly built and at what cost? Who will own these units? How much of the $10 billion is allocated to rent subsidies for units now in the private sector?

It is certainly not in the interest of tenants to support a program that will have little or no impact on the overall size of the housing shortage, but which will subsidize and inflate the rent levels of existing apartments using city money.

Even if Housing First! proposes to build 100,000 units of new publicly-owned housing (which I hope is the case), 10 years from now the city will have a greater housing shortage, higher rents, and a deeper and more divisive crisis than we have today.

Further, there are over 3 million existing code violations of record, including tens of thousands of the most serious classification. There are 850,000 apartments of tenement-era design and construction, 40% of the multiple-dwelling units in the city.

Because of their age and inadequacy of initial structural design, the physical condition of Old- and many New-Law tenement structures and the units in them are issues of concern. The public-health consequences of so much obsolete and deteriorated housing have only begun to be explored. Housing First! is silent on the subject of code enforcement. Yet it is the lack of code enforcement by the city and the absence of owner/lender accountability that permits rents to be collected and mortgages to be paid while buildings are neglected to the point of abandonment.

A housing program unwilling to adopt programs to prevent widespread decay, but eager to invest public funds to remediate it, is antithetical to the needs of tenants and the city.

Housing First! is silent on the subject of rent regulations. Does Housing First! advocate the use of public funds to construct and rehabilitate housing that will be free from rent controls? Building or rehabilitating thousands of unregulated apartments at public expense may work out well for real-estate investors and moneylenders, but it is not a good deal for tenants and taxpayers.

Rent regulations have their origin in scarcity and price controls. Given the enormous shortages, the declining housing supply, the unaffordable rents, and the demand for apartments in New York City, rent regulations were never more necessary than today.

Witness rent deregulation at Stuyvesant Town and Peter Cooper Village, Mitchell-Lama buyouts, the expiration of Section 8 housing assistance, and even market-rate sales of union-built cooperative apartments. All of these regressive steps underscore the need to build housing that is permanently rent-regulated.

New York is at its own crossroads. Progressives have not worked so hard for a chance to rebuild the city to squander the opportunity on failed and costly policies that increase the market value of residential real estate but not the amount or quality of housing.

We have long known that the best and cheapest way to build and manage decent, affordable, attractive multi-class communities is to do so on public lands, from progressive tax revenues, through a city or state housing authority, by itself or in partnership with private developers. The land issues alone--cost and assembly--would require a public entity with power of eminent domain, not a scattering of private initiatives.

A civic renewal project of this size would review zoning regulations, assemble public lands and brownfield sites, extend mass-transit lines, employ advanced construction techniques with innovative architecture, and reflect humane planning.

There is growing recognition that building housing in the public domain that is affordable and available to ordinary folks would rejuvenate the city, bring rent levels down and generate many good jobs in the process. Housing First! is not such a program.

Tenants, activists, and community leaders should be united in their call for large-scale housing construction under public ownership, strict code enforcement, and expanded rent regulation.

George Locker is a tenants’ attorney and a member of the Five Borough Institute.