ANALYSIS: ‘Social Housing’ Bills Expose Ideological Rift Among Housing Providers

The saga of The Windermere, though unique in many respects, is emblematic of why the city’s need for deeply affordable housing and the interests of many for-profit owners and developers will never fully align.

On the corner of Ninth Avenue and 57th Street, just blocks from some of the priciest real estate in the city, sits The Windermere. It’s a landmarked building constructed in the 1880s as one of New York’s first large apartment complexes. Despite its prime location and city landmarks designation, The Windermere has been vacant since 2007.

Initially developed as apartments for the secretaries and shop workers then known as the “New Women,” and later, as the area morphed into Hell’s Kitchen, the Windermere became home to artists and actors like Steve McQueen. But the building’s past also includes some of the worst instances of tenant harassment in the city, actions that led to the building’s decay and ultimately a vacate order from city officials. Both the building manager and superintendent went to jail and the owner paid $1 million in fines.

The saga of The Windermere, though unique in many respects, is emblematic of why the city’s need for deeply affordable housing and the interests of many for-profit owners and developers will never fully align. And why—despite billions of dollars of public investment that relies primarily on the for-profit real-estate sector to preserve and create affordable housing—the city’s housing crisis has persisted for decades. It’s also why many organizations and advocates have promoted greater use of social housing programs, and the City Council is considering a set of bills that would strengthen and enlarge these initiatives.

“In the midst of an affordable housing crisis, this city needs a paradigm shift in our approach to housing, one that promotes construction and preservation of affordable homes for working families and the most vulnerable New Yorkers,” Councilmember Pierina Sanchez, chair of the Council’s housing committee, said in an email statement. “The need for an additional approach to housing is why these bills are exciting, as it is just as crucial that these projects are undertaken by non-profit entities and organizations that are committed to housing and empowering vulnerable New Yorkers.”

The for-profit real estate industry has shown limited interest in serving the lowest income New Yorkers. For-profit developers built nearly 80 percent of the newly created apartments under city housing programs in the years 2014-2018, according to a 2021 Community Service Society* report. Just 18 percent of those apartments were affordable to extremely low-income households. Among the apartments created by nonprofit developers, nearly double that share was for extremely low-income tenants.

While prioritizing housing for some of the lowest income New Yorkers is a key element of the bills, they would also promote a different dynamic between housing and the public good. Among other things, the bills would give certain nonprofit community organizations the first right to bid on a building if an owner puts it up for sale, prioritize the transfer of city-owned land and buildings for the broad public good, and mandate the creation of a land bank that would take control of tax delinquent or vacant properties, with the aim of putting them to public use.

Underlying each bill are some core principles, the elements that put the “social” in social housing: that the housing that’s preserved or created should be deeply affordable, that it shouldn’t be a commodity with the goal of maximizing profit, and that it be democratically controlled by its residents. As Samuel Stein and Oksana Mironova, housing policy analysts at the Community Service Society put it in their report Pathways to Social Housing in New York, it’s an approach “that puts more stock into housing’s value as a home and less in its value as real estate.”

Not surprisingly, this is not a viewpoint that cheers many of the city’s for-profit developers and realtors. Nor does it go over big with Mayor Eric Adams’ administration, opposition that was made plain at a February City Council hearing. “The breadth of the legislation significantly risks disrupting the housing market, potentially causing the most significant harm to small property owners,” said Kim Darga, the deputy commissioner for development for the city’s Department of Housing Preservation and Development, commenting on the Community Opportunity to Purchase Act.

Owners and developers, big and small, expressed other concerns. One often repeated was that the bills would undercut minority and women-owned firms just as they are getting a foothold in the city’s housing development programs.

Edward Amador, a spokesperson for Councilmember Carlina Rivera, who sponsored the bill, said in a phone interview that she recognizes the importance of ensuring the role of minority and women-owned firms. But “in a housing market driven by speculation,” said Amador, it’s important for city leadership to foster proven approaches to provide low-cost housing by “qualified mission driven organizations.”

Social housing is not some new or radical concept. In fact, for some time, it was a standard part of the approach to building and maintaining affordable housing in the city. The city’s public housing developments, apartment complexes like Amalgamated Houses built by unions, the Mitchell-Lama program launched in the 1950s by the state and the limited-equity coops initially fostered under the city’s Tenant Interim Lease program—and aided by organizations like the Urban Homesteading Assistance Board—all share fundamental elements of the social housing ethos.

As New York struggled to revive following its near bankruptcy in the 1970s, there was an abundance of derelict and abandoned buildings in neighborhoods across the city. For-profit developers saw little opportunity to make money from these properties, leaving many of them ripe for “co-ops, squatters and bootstrap nonprofits,” City Comptroller Brad Lander said in a phone interview. During the mayoral administrations of Edward Koch and David Dinkins, about a third of city-owned land and subsidies for housing went to for-profit developers, a third to nonprofit developers and another third to tenant groups to form limited-equity coops, Lander said at the February Council hearing.

But the success of efforts by socially motivated tenants and organizations contributed to renewed interest in the blocks and neighborhoods property owners and developers had left for dead. Since the Giuliani administration, the for-profit sector has been at the forefront of city-backed housing efforts. Some of this is probably ideological, particularly in the case of Giuliani and Bloomberg. As Stein noted in a telephone interview, a court decision also gave Giuliani additional motivation. With the court ruling that the city was responsible for maintaining all the tax delinquent buildings it had seized in the 1970s and 1980s, then-mayor Giuliani eagerly sought to divest the city of these properties, in part through implementation of tax lien sales.

The dominant role assumed by for-profits also reflects the extraordinary power and influence the real-estate industry has in the city. “Developers are good at talking to City Hall and making campaign contributions,” Lander, who once headed the Fifth Avenue Committee, a Brooklyn-based community development organization, noted.

Many might have expected the pendulum to swing back to an approach that gave a greater stake to tenants and community groups under the de Blasio administration, given its focus on inequality and “the tale of two cities.” Recognizing the city’s critical need for housing—and wanting to outdo Bloomberg—de Blasio aimed to create and preserve 200,000 affordable apartments, and later upped the ante to 300,000. With the emphasis on numbers, or the supply of housing, rather than the level of affordability and other elements of social housing, for-profit developers remained in the driver’s seat. “De Blasio’s problem is that his entire affordable housing program, which did so much to get him elected, depends on the goodwill of the real-estate barons,” wrote Sandy Boyer in 2015 in the Jacobin.

While many New Yorkers agree the city needs a lot of very affordable housing, they appear to doubt that the “real-estate barons” are the ones to count on, according to a poll released in September by Data for Progress. While 81 percent of likely voters said they preferred a social housing approach to addressing the city’s housing needs, only 16 percent favored making it easier for private, for-profit developers to build housing.

“New York City faces a severe housing crisis—and it’s clear that voters want lawmakers to swiftly take action. Data for Progress finds that New York City voters strongly prefer the city investing in housing that is actually affordable and accessible to New Yorkers across income levels, rather than relying solely on the free market and private real-estate developers,” said Danielle Deiseroth, the organization’s executive director, in an email statement.

If many New Yorkers share a common distrust of the for-profit real-estate industry, the industry shares an obvious dislike for the social housing bills. One common refrain among real-estate industry representatives at the February hearing, and echoed by city housing officials, was that the Community Opportunity to Purchase Act would distort the housing market. As testimony submitted by the New York Association of Realtors stated, the act would “greatly impair the ability of our members to effectively and efficiently serve consumers looking to buy and sell multifamily properties in New York City.”

Yet the housing market is hardly a pure market, noted Stein, with government interventions such as zoning and rent regulation already key features. And giving nonprofit community organizations a first shot when buildings go up for sale could help spur the long-term preservation of affordable housing, supporters argue. As could purchasing abandoned, vacant or tax delinquent buildings and putting them under the aegis of a land bank for future use as affordable housing or another public good.

But it’s an approach Darga of the city’s housing department said was unwarranted. Although in 2011 the state authorized up to 35 land banks across New York, the city has yet to act. Darga told the Council it was unnecessary because the city already has programs that meet the need, and owners might take advantage and up the sales price if the city is involved.

Lander contends that the city’s failure to have a land bank squandered an opportunity to purchase hotels for reduced prices when many sat vacant during the COVID shutdown. The city is now paying more than $300 a night at some hotels to house asylum seekers. Lander said that if the city had purchased the hotels at an appraised price during the first year of COVID “we would have saved a lot of money.” Absent the migrant crisis, the hotels could have met the need for supportive and other housing for unsheltered New Yorkers.

While councilmembers at the February hearing did not seem swayed by many of the industry’s objections, one that drew sympathetic attention was how the social housing bills would affect the minority and women-owned real-estate firms that have increasingly gained a foothold in affordable housing preservation and development.

Karim Hutson, the president and chief executive officer of Genesis Companies, a real estate development and management firm, pointed specifically at the bill that would prioritize the sale of city-owned properties to nonprofits or community land trusts, saying it would undercut minority-owned firms like Genesis in an industry that already favored white-owned or controlled organizations, both for-profit and nonprofit.

“I grew up in Harlem and the Bronx in the 80s. I experienced many of the perils that face Black and Latino residents today,” said Hutson. He continued, “This was the impetus for me, fresh out of Harvard Business School, to leave a career in private equity and banking, to reinvest in the communities I grew up in. I figured a young Black kid from the Bronx and Harlem could make a difference. I came to believe we can make positive change and utilize my financial equity and create long-term financially sustainable housing.”

But Boris Santos, the treasurer of the East New York Community Land Trust, wondered why Hutson and other developers who spoke at the hearing weren’t there asking for his phone number. “We came about to end speculatory housing practices, period. That’s why we’re here and that might not be a mission MWBEs are aligned with,” said Santos.

His colleague, Hannah Anousheh, the land trust’s campaign director, was even blunter: “We fundamentally don’t believe that for-profit developers alone, even if they are MWBEs, can meet the needs of low-income Black and brown communities like East New York. They have and will continue to prioritize their profit margins over tenants.”

It’s impossible to know whether the fate of The Windermere—or its tenants—would have been any different if the social housing bills had been in place years ago. What is clear is how the for-profit housing market led to its decline. In the 1980s, then-owner Alan B. Weissman instigated a harassment campaign to force out tenants that led to a steep fine and jail terms for his super and managing agent.

Weissman ultimately sold the building to a wealthy Japanese tourist who reportedly never even went inside, he just liked the Queen Anne structure. The building fell into further disrepair. It’s now owned by Moshe Tress, who bought it for $13 million in 2009. His latest plan is to turn it into a hotel with ground floor retail space. It would also include 20 affordable apartments, as required by the Landmarks Preservation Commission in recognition of the building’s bleak history of tenant harassment.

The legislative fate of the social housing bills remains unclear. 

“We are still actively reviewing and engaging in good-faith conversations with [MWBE] developers and city agencies alike on how these bills fit in our larger goal of preserving and expanding affordable housing,” said Sanchez, the committee chair, when asked if the bills would be voted on by the housing committee or the full City Council by the end of the year.

Given the real-estate industry’s strong opposition to the bills—and its political power—achieving a compromise with the mayor and bringing the legislation to a vote will take a steadfast effort. Or maybe, as Lander suggests, the perception of the bills can be reframed.  

Rather than seeing the social housing bills as competition, developers and city housing officials could view them as presenting a complimentary approach to meeting New York’s gaping housing needs. 

Even if the bills were to pass, there are other more prosaic issues that could hamper their intent. As Mironova of CSS puts it, there’s “no money and no people.” While the capital budget adopted for this fiscal year includes $2.5 billion for the Department of Housing Preservation and Development, the agency has been able to commit far less than that amount in recent years, about $1 billion annually, according to the Independent Budget Office. The housing agency’s staffing is also coming up short, currently 166 positions shy of the more than 2,600 that are budgeted for this year, based on information from IBO.

While programs fostering social housing could be a game-changer for the creation and preservation of deeply affordable housing in the city, it’s unclear if or when the rules of the game may be changed.

Doug Turetsky, a former City Limits reporter and editor, was most recently chief of staff and communications director at the New York City Independent Budget Office. 

*Editor’s note: Community Service Society is a City Limits’ funder.