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

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.