“The suburbs need to do their part in providing housing. But relying on the same old market tactics that created this crisis in the first place won’t solve the problem we face.”

Kevin P. Coughlin / Office of the Governor)

Homes in Yonkers, NY

Gov. Kathy Hochul’s Housing Compact has been a hot topic since the governor’s Executive Plan launched in January. Hochul plans to “address the housing crisis” by building 800,000 units of housing statewide over 10 years, a goal she argues will be achieved through transit oriented development, forcing downstate municipalities to increase housing stock by 3 percent in three years, and forcing upstate municipalities to increase housing stock by 1 percent in three years.

Hochul has specifically cited the importance of building in New York City’s suburbs, noting that Westchester, Suffolk, and Nassau counties have been particularly slow in producing new housing. Pushing suburban municipalities to build denser housing by transit stations and generally increase housing units overall, she argues, can facilitate the development of new affordable housing using supply-side interventions.

I grew up in Hastings on Hudson, an increasingly tony suburb on the Hudson River in Westchester County that has become popular amongst ex-hipsters looking to move their families from the bohemian enclaves of Manhattan, Brooklyn, and Queens. As the suburb has become more desirable, housing prices have skyrocketed. Based on Zillow data, the home value index of homes in Hastings skyrocketed from $704,999 in 2015 to $904,151 in 2022, an increase of more than 28 percent. Like most suburbs in the New York City region, the high cost of housing in Hastings has made it exclusionary; based on data from the 2021 American Community Survey, the village has a median income of $171,719 and is 80.9 percent white.

More concerning, the trends of my hometown of Hastings are not unique across New York State’s three major suburban counties, Westchester, Nassau, and Suffolk, due to nearly a century of racialized housing policies encouraging suburban development. During the New Deal, the U.S. government began to heavily insure mortgages, which were only available to white Americans outside of urban areas.

These government subsidies, along with increased production of single family homes in many suburbs, allowed many more white families to purchase homes throughout the mid-20th century, while people of color, and, to a lesser extent, the white working class, were left behind. Practices like housing discrimination, redlining, and single family zoning worsened the gap between the white upper and middle classes and the rest of America, shifting public investment and capital from working class cities to tonier suburbs in a clear example of what geographer Neil Smith has defined as “uneven development.” 

For many, these concerning trends are adequate reason to support Hochul’s Housing Compact, as many have noted that some of the harshest opponents of increased suburban housing production are suburban residents who are concerned about property values. But Hochul’s housing program fails to address two key issues: the financialization of the housing market and deep affordability.

I remain unconvinced that Hochul’s supply-side program will address the financialization of the housing market, a root cause of our modern housing crisis from the suburbs to the core of New York City. Financialization, or the process by which financial markets and institutions become more dominant within an industry, has had a devastating impact on housing in New York State and beyond. As housing has become financialized, the popular conception of a home has shifted from a place where a family lives to an asset that can be bought and sold for profit.

As speculators and private equity firms like Blackstone continue to buy up multifamily housing in cities like New York, this process has come to impact housing prices, inflating rents and empowering the real estate and finance industries. Financialization has also impacted the suburbs: the financialization of mortgage markets not only led to the financial crisis of the late 2000s but also decreased the affordability of housing in the years following the Recession.

A market-based, 100 percent supply-side housing strategy like Gov. Hochul’s Housing Compact is likely to reinforce the influence of both real estate and finance in our housing markets. I am extremely sympathetic to those who object to housing plans like this on the basis that it gives developers and the real estate industry far too much power, profit and influence. It certainly does. But this should not be weaponized as an excuse for refusing to provide our neighbors with deeply and permanently affordable housing.

There is a way to address the affordability crisis in New York, while also combating the harms of suburbanization and financialization: developing social housing in the suburbs. Social housing—housing that is controlled by residents, is permanently affordable, and is not susceptible to the pressures of the real estate market—has become an increasingly popular proposal to address unaffordability in cities like New York.

Community land trusts (CLTS), where locally controlled groups own land and use that land to create permanently affordable housing and community spaces controlled by residents, have popped up in a range of New York City neighborhoods like East New York, the South Bronx, and the East Village. Limited equity co-ops, buildings that are collectively owned by “shareholders” and have regulations on how much units can be resold for, have also created opportunities for affordable homeownership since the early 20th century in cities like New York. Both of these interventions have great potential to provide more affordable housing in the suburbs, independent of the pressures of financialization.

There are many pathways suburbs can take to develop social housing, one of which could be using a municipal land bank in concert with a community land trust to acquire vacant, underutilized, or abandoned properties and convert them into deeply, permanently affordable homes. Both Nassau and Suffolk Counties already have land banks, and Westchester could pass legislation to authorize one with state approval.

Municipal land banks are based on the concept that vacant or abandoned land and property can actually be an asset for communities when redeveloped, but on Long Island, land banking has been primarily focused on economic development. However, many academics, policy makers, and organizers have noted that land banks could be used to generate social housing by working actively with locally-operated community land trusts.

The process is simple: properties controlled by land banks could be placed on a CLT, which would then support new homeowners with finding low-cost financing and performing repairs. This process would work for both single family homes and multi-family apartment buildings—families living in CLT apartment units could either cooperatively own their buildings or the community land trust could step in as a responsible steward to manage operations.

In terms of expanding access to limited-equity co-operative housing in the suburbs, there are two ways this can and should be done. First, tenants in suburban counties should be given opportunities to purchase their building and run it as a limited equity coop. The Tenant Opportunity to Purchase Act (TOPA), a bill in the New York State legislature sponsored by State Sen. Zellnor Myrie and Assembly Member Marcela Mitaynes, would do exactly this, an idea that would help prevent displacement and keep people housed.

Under TOPA, landlords who want to sell a building in their portfolio would be required to provide tenants with a Notice of Intent to sell before putting the building on the market. Landlords would then have to offer tenants the right of first refusal, or the ability to make an offer to purchase their building, before they could sell to a private buyer. Tenants would have 90 days to acquire financing to purchase the building, something advocates have argued the state should actively support. This would create opportunities for affordable, social homeownership in some of New York’s most expensive zip codes, a reality that currently does not exist for many working class families.

However, just converting existing housing units in the city’s suburbs into social housing is not enough to address the housing crisis our state faces. The suburbs also must be pushed to build new social housing, to actively address the problematic legacy of suburbanization in the U.S. and the unfair distribution of resources in our state.

In the New York State Senate’s one-house budget bill, a $500 million fund is proposed to reward municipalities that meet housing development goals. Instead, this money could be used to finance social housing construction, including permanently affordable limited equity coops, in suburban, urban, and rural municipalities across the state, which would do much more to serve people who need housing the most.

The suburbs need to do their part in providing housing. But relying on the same old market tactics that created this crisis in the first place won’t solve the problem we face. Instead, we need social housing for the suburbs.

Katelin Penner is an urban planning Master’s student at Hunter College. She lives in Brooklyn.