CityViews: This Three-Step Plan Will Reopen the Door to Homeownership for NYC’s Middle Class

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Eric Bechtold

Homes in Bay Ridge

Homeownership is not an option for most New Yorkers. Home prices have increased 200 percent in the last 25 years while incomes have decreased 11 percent, when adjusted for inflation. Yet buying a home, whether it’s a house, condo, or co-op, is one of the most stable investments an individual can make — allowing one to build wealth over time and slowly escape the vicious grip of income inequality.

As elected officials, we must do more to make the dream of homeownership a reality for New Yorkers. For those New Yorkers that do own their homes, we must step up and ensure they are not at risk of losing their homes in an extremely competitive market.

We must take steps to promote affordable homeownership. Even with a stable high-wage job, substantial savings, and good credit, New York City’s housing marking is simply unaffordable to most.

Consider Bushwick and Bed-Stuy, where property values have doubled in recent years, reaching over $850,000 with no signs of stopping. This deprives New Yorkers from owning a home in the communities where they grew up. And as young New Yorkers look to start families and build a life, too many are leaving our City to other markets where owning a home is an affordable option for their future.

There are three sensible solutions we must employ.

First, we must empower residents by creating Community Land Trusts (CLTs), which allow community-controlled nonprofits to own blocks of land and rent or sell them solely to lower-income households. This locks in affordability for decades, protecting neighborhoods from speculation and gentrification. This sensible solution exists in Boston, Chicago, and San Francisco, giving community members control of their own neighborhoods.

Secondly, as first-time homeowners face impossibly high down payments, we must expand the HomeFirst Down Payment Assistance Program, which provides qualified first-time homebuyers with up to $25,000 towards a down payment or closing costs on a single-family home in New York City. This is a good first step, but limits on annual salary and the cost of home exclude many of the people it aims to help.

Finally, we must expand the ability for New Yorkers to convert certain properties from rent to own. Most important in this process is ensuring that the purchase price is affordable to the existing residents and that there is a cap on future resale prices. Successfully done, converting to affordable ownership provides a stabilizing force for communities, giving rental owners new reason to hope for a better market for their own properties.

Catalyzing new home ownership is tremendously important, but so is protecting current low- and middle-income homeowners and ensuring they are able to thrive.

There is an incredibly harmful legacy of denying people of color housing loans in New York City. Redlining has perpetuated segregation and poverty in our City since the 1930s, and though it is now illegal, its effects are still felt. Too many homeowners in formerly redlined neighborhoods live in deteriorating homes because for generations they had no access to loans or credit. We must augment access to grants and loans for these homeowners to repair or renovate their homes so that making simple repairs does not force one to go bankrupt.

We must also work to prevent foreclosures and scams. Last year, my office co-hosted a series of trainings about deed theft scams occurring throughout New York City. Too many unscrupulous actors are preying on elderly homeowners and exploiting loopholes in the law to steal property deeds. We must expand on these types of educational initiatives, and ensure that every homeowner has access to housing counseling and legal services to prevent predatory lending, foreclosure rescue scams, and deed theft scams.

As a trustee to the City’s largest pension fund, New York City Employees’ Retirement System (NYCERS), I have fought against the investment in firms like Lone Star that are known to engage in practices that lead to foreclosures.

Finally, we must remove low- and middle-income homeowners from the water lien sale. When a homeowner falls behind on their water bills, the City sells bonds backed by the debt to a private trust, which then charges daily, high-interest rates to the homeowner. While every homeowner has a responsibility to pay bills, the punishment for nonpayment should not be incredibly high fees that have forced families into foreclosure. Instead of penalizing these homeowners, we must establish new education and advocacy programs to inform homeowners of their rights and responsibilities, including the creation of a citywide Homeowner Advocate.

We must institute policies and programs to ensure that every New Yorker has access to affordable homeownership.

Homeownership is how we can revitalize the middle class in New York City. When we invest in our residents, we create a city whose prosperity knows no bounds.

Letitia James is the public advocate of New York City.

8 thoughts on “CityViews: This Three-Step Plan Will Reopen the Door to Homeownership for NYC’s Middle Class

  1. I am a retired City employee and have 30 years working for DAP.
    I agree with you on 90% of your suggestions and views, however, I disagree on your suggestion to remove ‘low-income’ homeowners from Water Lien sales.

    The bulk of millions in unpaid water debt that has been carried by the agency for years is in single and two-family home owners. 30 years with that agency has taught me that people who don’t pay their utility bills get shut off, therefore they pay their bills.

    Water is an essential service however providing that essential service costs money. Other cities with private water utilities shut water off for non-payment. I am a homeowner and I pay my bills. Do I want to be responsible for allowing Deadbeats to continue to own their homes, use the service and product and not pay their bills? No!

    If there is no penalty for non- for a provided service and product there is no incentive to pay, especially a city supported service.

    You can think of something better to do than give them all the free ride.

  2. NYC is an expensive place to build 1 & 2 family homes, Even here on SI the cheapest new 2-family home goes for near $900k. No one is building small 1-family homes, only large 1-family homes. And this is the borough with the lowest land prices.

  3. I think that conceptually the ideas sounds good. However. What about homeowners who already bought into affordable housing but was the recipient of poor shoddy construction. Those homeowners are part of the fabric of this great city. Those homeowners are first responders, city employees and work in the private industry. Do they count? Are they disposable or collateral damage? Their grievances have been documented and fallen on deaf ears in the political arena. So although I find the reason set forth to be meaningful and could be a game changer to the market place, the homeowners of waters edge condominium also want gutters that drain properly, roofs that are not leaking( roofs are less than 10 yr) and city government that is responsive to our grievances and not a tone deaf responsive. We hold these truths to be self evidence, that all men are created equal right? Are all zip codes created equal?

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  5. I’m very intrested on more details redressing historical systematic inequalities based on red-lining and current predatory lending companies. I like the Commuity Trust Idea I want to do more research on the data based on its effectiveness. These ideas are a good platform for some of the housing issues in NYC. Much respect and my support Ms. James!

  6. The discussion of affordable housing can’t be held without speaking of New York City Agency employees who service this City and can’t afford to purchase homes. The rank and file, salaries under $70,000.00 mainly people of color, who are being priced out of neighborhoods they grew up in. We’ve lived in New York City all of our lives and have serviced this City the majority of our lives, we deserve to own a piece of it!

    • It’s just extremely expensive to build anywhere in the 5 boroughs. SI has the lowest home prices and even here the cheapest new semi-attached 1-family home goes for close to $550k. A new fully attached 1-family goes for around $450k. There’s no more cheap land to build on.

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