Report: Amid Housing Crisis, NY Must Rethink How Land is Owned

A new report released Thursday takes a wide look at the nation’s housing system and calls for a shift to alternative models that “reconceptualiz[e] housing as something beyond a source of profit.”
 
The report, entitled “Communities Over Commodities: People-Driven Solutions to an Unjust Housing System,” can be viewed here.  Authored by the Right to The City Alliance, a national coalition of social-justice organizations concerned about displacement, as part of the organization’s Homes for All Campaign, it presents four alternative housing models from the United States and elsewhere “where communities have taken charge of housing needs through cooperative and collective arrangements.”
 
Its release comes as a variety of New York City groups, including Right to the City Alliance members Picture the Homeless and CAAAV Organizing Asian Communities, have embarked on efforts to grow community land trusts, one of the four alternative housing models presented in the report. The de Blasio administration has lent financial support to the land-trust model, but some advocates would like to see the administration go farther by facilitating a major transfer of resources and land to community land trusts.
 
“Here we are fighting landlord after landlord after landlord … and so what are we doing to think more forward, and solutions-oriented, to resolve the crisis that we’re experiencing with our tenants?” said Cathy Dang, executive director at CAAAV, at a press conference at the Picture the Homeless headquarters in Harlem on Thursday.  The report, she said, “lists real solutions for how we move forward.”
 
Arvernetta Henry of Picture the Homeless heralded examples of community land trusts that she’d visited on the Lower East Side and in Boston and argued that housing would be better managed when owned by residents: “Because it’s theirs, they’re going to make sure it’s well kept,” she said.

Both report writer Gianpaolo Baiocchi and Marina Ortiz, a board member of the up-and-coming East Harlem/El Barrio Community Land Trust, referred to the rezoning of nearby East Harlem, which granted developers greater density in exchange for making a portion of housing income-targeted, with Baiocchi noting to the tax breaks that will likely be taken by developers building in the area. “We demand … that these resources go to the kind of housing that we want,” he said.
 
From for-profit to cooperative ownership
 
According to the report, currently 96.3 percent of the nation’s housing stock is owned by private, for-profit actors or homeowners, and mainstream policy discussions assume that the solutions to solve housing problems “should not interfere with the ability of owners and investors to profit from ownership of land and housing.” 
 
The report argues that with almost half of all renters nationwide considered rent-burdened and Black people still 75 percent more likely than White people to live near environmental hazards, among other problems, the current system in which property owners seek to maximize their investments “has been a failure, and tinkering at its margins has not and will not succeed in providing secure, decent and affordable housing for all.”
 
To the common argument that the nation’s rising housing costs are the result of insufficient housing production, the report counters that “this theory has not played out in practice. Most of the new supply has been at the higher end of the market. These are unlikely to be made affordable, and in recent years they have been matched by permanent losses at the low end of the market.”
 
Specifically, the report argues that a just housing system must achieve five principles: community control (the housing and land is locally owned and controlled through local democratic processes) affordability, permanence, inclusivity (of all marginalized populations), and health and sustainability. The report then presents four alternative housing models that it says do a better job of meeting five principles. 
 
One is the limited equity cooperative (take the Bronx’s Co-Op City) in which shareholders jointly own a building by purchasing shares in the corporation, elect a board of directors that manage its affairs, and agree to restricted resale values in the event that a shareholder wants to sell their share.
 
The second is the community land trust, in which the ownership of housing is separate from the ownership of land, with the land governed by residents and community members who ensure the permanent affordability of the structures on the land.
 
The report also includes models less familiar to New Yorkers, including Germany’s tenement syndicate, in which there are multiple buildings called “house-projects,” with each house project jointly owned by its tenants and a larger structure called the Syndicate. The Syndicate, which is itself controlled by members and tenants of the house-projects, helps to ensure the continued affordability of the existing house-projects and aids in the creation of new ones. 

Last but not least is Uruguay’s Mutual Aid Housing Cooperative, in which all land and housing is collectively owned, and members are expected to participate in the management of the land and the construction of housing, with a significant amount of effort dedicated to training and education.

The report acknowledges that the models have at times fallen short, with some limited-equity cooperatives jointly agreeing to privatize in order to sell shares at market rates, and that not all the models have been equally inclusive of different marginalized groups. It also acknowledges the need for more research about things like the conditions in cooperatively owned housing.
 
Yet it argues that the models are proof that cooperative forms of housing can be brought to scale: In Uruguay, more than three percent of the population lives in mutual aid housing cooperatives and that model can now be found in at least 15 other countries in Latin America and the Caribbean.  The report also argues that a new approach to housing is “deeply connected” to the pursuit of social justice for women, people of color, indigenous people and to climate justice.
 
Switching to the new model, however, will still entail facing one of the main problems of the old system: government’s unwillingness to invest in housing. The report demands significant funding for housing models that meet the report’s principles, new taxes on the real-estate industry and corporations to generate revenue, and policies that transfer land to such alternative housing developments. It also calls for strengthened tenant protections as an immediate solution to the rent crisis.

As for public housing, the report says existing units should be fully funded, but it also faults some public housing authorities for excluding undocumented immigrants and formerly incarcerated people. At the press conference, Mo George of Picture the Homeless said she thought NYCHA would be better managed if it were jointly owned by a community land trust, giving residents more control.

Developers, policy experts critique conclusions

Mark Willis, a senior policy fellow at the Furman Center, said he sympathized with the report’s goals, but wasn’t sure limited equity cooperatives and community land trusts were necessarily “a magic bullet” since some have had their own problems.
 
While “no one is going to argue that capitalism is perfect,” he says, leaving much of housing to the market still has benefits because the drive for profit does cause people to innovate and develop more supply (which, he contends, is crucial to addressing the affordability crisis). And, he explained in an e-mail, “without private sector investment, the government typically has to pay the full price of any needed subsidy, which the public-housing experience has shown is risky.”
 
Ron Moelis, CEO of the for-profit affordable housing development firm L+M Development Partners, says he believed that in many ways, the housing he builds does meet the group’s five criteria. While he understands his buildings aren’t governed by community members—and he questioned how exactly “community” was to be defined—he said in an e-mail that “we work to incorporate community input into many of our projects.” Furthermore, he says most of his projects are affordable, and some that have higher-income units capable of cross-subsidizing the lower-income units are also permanently affordable. Inclusivity and health and sustainability are also principles that his company embraces.
 
He added that building and managing housing is difficult and can benefit from sound business practices. “Unless properties are run with a thoughtful economic approach … they are likely to suffer dramatically from disinvestment, thereby negatively impacting their residents,” he said in an e-mail. “In many cases, including a number of our projects, nonprofit/for profit partnerships can bring about great, sustainable solutions. We all have meaningful roles to play.” 
 
Instead of focusing on “non-profit” verses “for-profit” verses “cooperative” ownership, he says it would be more productive to think about owners’ business models and behaviors.  “What should be encouraged are good practices and when we’re doing something that’s not good practice, organizations should be called out for it,” whether it’s a for or non-profit, he said.
 
Meanwhile, the Department of Housing Preservation and Development contended that affordability and community engagement were important components of the mayor’s affordable housing plan. Specifically, the agency noted its efforts to revise program term sheets to reach lower incomes, its mandatory inclusionary housing policy, its new remainder interest policy that ensures that when a developer builds on public land, the city has the option to retake ownership of the property when the term of the subsidy is up, and its efforts to support community land trusts.
 
Right to the City members acknowledged the city’s efforts and also that building successful, accountable cooperative forms of housing is challenging work. They further said in an e-mail that while “they do not disagree that private developers can play a role in being part of the solution,” 100 percent affordable housing developed by private for-profit companies “cannot generate wealth for the community in the way a community-owned land trust or cooperative can.” And they said that while there will need to be change in federal and state policy to realize their vision, “cities can play a roll, and lead by example.”