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Affordable Housing 101


For decades, government at all levels has taken steps that made housing more affordable to some residents. It uses a number of tools to do so.

Una translacion de Espanol de este articulo esta aqui.

Tool 1: Regulation

One way the government targets affordability is by putting in place laws that affect how the housing market works. Rent control and rent stabilization are ways the government limits how much landlords can charge for rent.

Tool 2: Helping individual renters and buyers

Another way the government tries to make housing affordable is by giving money to individual people to make it easier for them to buy or rent homes. This doesn’t involve writing checks or handing out cash, but rather:

  • The government lets you deduct how much you pay in interest on a mortgage before you calculate your annual income taxes—lowering your taxes and making it easier for you to afford a home.
  • The government also pays for rental vouchers, like Section 8, which promise that the government will pay the difference between the rent a landlord charges and what a renter can afford.
  • Tool 3: Public housing

    Sometimes the government builds and operates its own housing. Public housing began in New York City during the Great Depression, and with more 175,000 apartments, the New York City Housing Authority remains the nation’s largest public-housing entity.

    Tool 4: Shelters

    Then there’s temporary housing—like for homeless people, or for families displaced by natural disaster. The government might operate its own shelters or contract with private entities to offer the service.

    Tool 5: Subsidizing builders and owners

    When people in New York City discuss affordable housing, however, they’re usually talking about city policies that subsidize the creation or preservation of multiple units of privately-owned housing that is considered affordable for some income groups.

    This practice began in earnest under Mayor Ed Koch, who in 1985 announced a 10-year plan (called “The Ten-Year Plan”) to create or preserve 250,000 units of affordable housing. Mayor Michael Bloomberg unveiled his New Housing Marketplace Plan in 2006 and committed to building or preserving 165,000 units over 10 years. Mayor Bill de Blasio in 2014 set a goal of building or preserving 200,000 units of affordable housing over 10 years.

    The city creates this housing by giving private entities—nonprofit or for-profit—subsidies in return for a promise to rent apartments only to people within certain income groups for a prescribed time period, usually 30 years. A small share of these programs might offer homeownership opportunities, but mostly, it’s rentals.

    The government support can take the form of free or cheap land, low-interest construction loans or direct subsidies. It can also come as a tax exemption, like the now defunct 421-a benefit.

    That money can fund the construction of new housing. Alternately, it can “preserve” existing housing by enticing an owner to keep apartments affordable.

    What does “affordable” mean?

    Under these programs, “affordable” generally means that person or family living in the unit pays no more than 30 percent of its monthly income on housing. Different affordable housing programs serve different income groups. A particular “affordable” apartment could be off-limits to people who make too much, but it also could be out of reach of people who make too little to afford the discounted rent.

    Affordable housing is usually pegged to Area Median Income, or AMI, a regional measure of income with a complex history. An apartment might be aimed at a family of four making up to 60 percent of AMI. That means rent for that apartment is pegged to an income of $54,360, for whom a monthly rent of around $1,400 is considered affordable.

    What is Mayor de Blasio’s plan?

    Mayor de Blasio wants to preserve 120,000 units of affordable housing and get 80,000 new units built. He is using may different subsidy programs, including a newly revamped one called ELLA, to pursue those goals, and has also pushed for strengthening rent regulations.

    In addition, the mayor plans to upzone several city neighborhoods, meaning allow bigger buildings to be constructed there. Using a tool called mandatory inclusionary zoning that was passed in 2016 by the New York City Council, the city will require developers who take advantage of the rezonings to set aside a certain number of units for specified income groups. The idea is that some of the profit owners make from renting many new apartments at market rates will be used to provide lower-rent units.

    Many critics worry that the affordable housing created through those rezonings won’t serve the people who currently live in the neighborhoods likely to see rezonings. What’s more, the new development prompted by rezonings could change a neighborhood’s rental market, pushing rents up and making apartments that are now affordable less so.

    City Hall’s contention is that the city must build to accommodate a growing population; they argue the mayor’s plan is the best way to protect affordability while making room for a bigger city.

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