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We often hear that New York City has a uniquely hot real estate-market, along with some of the best tools—from the nation’s largest stock of public housing to a robust inventory of rent-stabilized units—to ensure low-income renters can live here.
But when we’re looking globally, New York City is only the 64th least affordable city in the world—in much better stead than places like Hong Kong, Sydney and a bunch of California’s most lux communities. And both globally and nationally, we’re certainly among a number of cities experimenting with new anti-displacement strategies.
There are opportunities for learning from other cities, however. Take New York City’s new mandatory inclusionary housing, which the de Blasio administration has touted as the nation’s most aggressive. It’s worth noting that Los Angeles managed to pass a policy this November with some provisions that ours doesn’t have. Developers who receive density bonuses are not only required to provide a portion of low-income units, but also to hire locally and at prevailing wages. All buildings are required to include five percent of units for extremely low income households (a bracket left out of New York City’s policy), though in some cases the total number of affordable units will not be as high as in New York’s.
And in other parts of the country, mandatory inclusionary zoning requirements vary by neighborhood, reflecting the fact that developers in the hottest markets can afford to give back more.
And that’s just one lesson we could learn by looking beyond the five boroughs. Here are a few cities with some anti-displacement strategies worth highlighting.
Portland assesses its past
In neighborhoods targeted for a rezoning like Jerome Avenue, advocates have called on the de Blasio administration to evaluate how a potential rezoning might affect the racial composition of a neighborhood, as well as how the unintended consequences of city actions have affected neighborhoods of color in the past. Such analysis, they say, might yield important information about how it’s possible to revitalize a neighborhood without triggering displacement. Currently, only the Department of Health is known for pushing a rigorous racial equity program including implicit bias training for staff and an explicit commitment to racial justice.
The city of Portland is taking the lead on acknowledging its role in perpetuating systemic racism. In 2015, the city adopted goals to end racial disparities in public contracting, government hiring and social outcomes across a range of fields, from economic opportunity to housing. Government departments are now required to analyze how their programs and policies perpetuate or combat racial inequity.
Portland’s Racial Equity Toolkit, created by the city’s Office of Equity and Human Rights, advises departments that are crafting new policies to collect data that is disaggregated by race and to understand the historical context for each of their policies. “You should be able to understand: what actions has your organization has taken in the past that disproportionally harmed communities of color,” the toolkit advises. Portland also commissioned a study that determined displacement risk by census tract for the entire city, a tool intended to guide future planning decisions.
Oakland removes properties from the market
There’s been much buzz in the last few weeks about the potential for community land trusts—community-governed nonprofits that take land off the speculative market, dampening the value of neighboring properties and ensuring that the uses of that land serve a community over time. In Oakland we find an example of a rapidly gentrifying city that, working with community land trusts and other partners, is beginning to invest in taking properties off the market.
Oakland was hit hard during the foreclosure crisis, according to Kalima Rose at PolicyLink. At that time, non-profit affordable housing developers accessed federal Neighborhood Stabilization funds to purchase foreclosed homes, rehabilitate them and resell them to low-income families. The city also used $5 million in federal funds to launch the Oakland Community Land Trust, which also purchased foreclosed homes.
Now that Oakland is the Bay Area’s hottest housing market, tenants are facing a new kind of displacement pressure. This November, city residents passed a ballot measure to issue government-backed bonds, which the city plans to use to help affordable housing organizations acquire properties in less-expensive neighborhoods. Some of the properties in question may owe taxes to the city, in which case the city has special leverage; in other cases, community group may try to convince landlords of dilapidated buildings to sell to a mission-driven nonprofit, Rose said.
Boston mayor presses for right to counsel, tax credits, non-profit ownership
Many cities face the challenge of taming the housing market when regulatory powers lay vested in state government. Boston Mayor Martin Walsh is not letting that stop him. In January, he introduced a package of anti-displacement bills to the state legislature. One bill would fund the right to counsel for all tenants in housing court, while another would create a $1,500 per unit tax credit for small-building landlords who keep rents below market-rate—a promise cheered by some real estate spokespeople and jeered as insufficient by others.
A third bill would give tenants the right of first refusal for any housing on sale due to foreclosure. That means the owner would have to give the tenants and nonprofits the first right to buy their building at a fair market price before selling to a third party—a measure that will help ensure fewer homes end up in the hands of private equity investors. Last but not least, the package includes measures to improve the city’s mandatory inclusionary housing policy and restrict the conditions under which a landlord can evict a tenant.
In addition, last year Walsh created the Acquisition Opportunity Program, through which the city pre-qualifies affordable housing developers, both non-profit and for-profit, for loans to purchase properties in exchange for ensuring the rent levels of 40 percent of tenants are kept affordable for a minimum of 50 years. The program helps mission-driven organizations compete with private investors when properties come up for sale on the open market.
Vancouver clamps down on stash pads
In recent years there’s been a proliferation of foreign investors using New York City condominiums as “stash pads” to grow their money, depressing the total supply of housing and unnaturally inflating housing costs. At least two surveys have suggested that about a third of condo sales in NYC luxury buildings may be going to international buyers. Yet among global cities, New York City is hardly alone in facing this problem—and many other global cities have taken action to curb foreign investment, or at least make a profit from it.
In September, Vancouver, the third least affordable city in the world, instituted a 15 percent tax on foreign buyers. Immediately after, home prices dropped 16.7 percent, and in December residential sale volume decreased 39.4 percent from a year earlier. In addition, the city’s councilors also passed a one percent “empty home tax” to combat stash pads and compel landlords to rent out their properties. Landlords can be fined up to $10,000 per day for falsely claiming their properties are occupied. Net revenues generated from the tax are reinvested in affordable housing.
Elsewhere, governments have used a host of other regulations to curb foreign investment in the housing market. For instance, foreign buyers in Sydney must pay a surcharge on top of the existing “stamp duty tax,” which applies to all properties over a certain value. Fiji restricts where in the country foreign investors can buy homes, forbids foreigners who own houses in Fiji from selling to other non-residents, and fines foreigners who own land but have not built a house within two years. India and Vietnam forbid foreign purchases, with certain exceptions.
Critics say that such taxes, however, can be interpreted by foreign nationals as racist. Inarguably, foreigners are an easier target to go after than a city’s own rich buyers and landlords. For an example of cities taking on a fight with their own landlords, we can turn to Palo Alto and Berkeley, which just passed a ballot this November more than doubling the tax on gross receipts from rent, with some exceptions.
