A leading housing advocacy organization has completed an exhaustive look at threats to affordability in every community in the five boroughs, and has found that Lower Manhattan ranks among the ten most at-risk neighborhoods, as measured by two key metrics.
The Association for Neighborhood and Housing Development (ANHD), an umbrella organization of 100 non-profit affordable housing and economic development groups that serve low- and moderate-income residents in all five boroughs of the City, recently published the 2017 edition of its annual roundup, “How Is Affordable Housing Threatened In Your Neighborhood.” For this report, Lower Manhattan was defined as the catchment of Community Board 1, a collection of neighborhoods encompassing 1.5 square miles, bounded roughly by Canal, Baxter, and Pearl Streets, and the Brooklyn Bridge.
ANHD’s analysis finds that Lower Manhattan housing has, in recent years, become markedly less affordable in two keys respects. “The first is per-square-foot change in residential sale prices,” explains ANHD deputy director Barika Williams. “This figure jumped 87 percent between 2014 to 2016.”
The second is, “the portion of properties sold that went to buyers who meet the definition of low income households,” says Ms. Williams. For a household of three in the New York area, “moderate income” is defined as less than $100,000 per year, while the threshold for “low income’ is less than $68,700, and “very low income” is defined as anything less than $43,000. “These sales declined by 70 percent from 2011 through 2015, Ms. Williams notes. “Because of the increase in home prices Downtown, it is now very unusual for somebody making less than $70,000 per year to purchase here.”
ANHD deputy director Barika Williams: “I don’t think any of us want for the de facto City policy to be that home buyers have to be rich or else to get lucky, but that is the direction in which things seem to be moving.”
“There are still a handful of transactions,” she noted, “but these appear to be mostly cases of family members or close friends agreeing to transfer a property for less than it would otherwise sell.” Another driver of this dynamic may have been the recent privatization of Southbridge Towers, the cooperative apartment complex built under the State-sponsored Mitchell Lama program, which once contained guarantees of affordability for new home buyers. In 2015, this 1,600-unit development exited the Mitchell Lama system and converted to market-rate pricing.
“I don’t think any of us want for the de facto City policy to be that home buyers have to be rich or else to get lucky,” reflects Ms. Williams, who hold a Masters Degree in City Planning from the Massachusetts Institute of Technology. “But that is the direction in which things seem to be moving.”
Elsewhere in the report, ANHD finds that 37.8 percent of Lower Manhattan residents contend with “rent burden,” which is defined as the cohort of tenants who spend more than one-third of their gross monthly income on rent. Although apartment rents are climbing ever higher in Lower Manhattan, this statistic appears to be a function an unusually high local household income combined with a large number of dwellings owned by their occupants. (Condominium apartments are excluded from rent surveys.) It may also be worth noting that the “rent burden” is traditionally much higher in economically distressed neighborhoods, where rents tend to be significantly lower, but household incomes are even more depressed.
The relatively small percentage of local residents who struggle with rent may also reflect the 7,326 rent-stabilized apartments that the ANHD report inventoried in Lower Manhattan. Among affordable units, however, the analysis determined that 339 (which contain limits on rent increases because of subsidies from the federal Department of Housing and Urban Renewal) are at risk, along with another 251 where affordability is provided by the federal Low-Income Housing Tax Credit. In the latter, case, ANHD determined that such protections on these apartments are slated to expire within five years.
“In these two categories, Lower Manhattan ranks as among the ten most-threatened communities anywhere in the five boroughs,” Ms. Williams notes. “But these are challenges the people who need affordable housing are confronting throughout the City.”