Jamaal Bailey grew up in a building his family owned on Paulding Avenue in the North Bronx, in an area where it’s common for Black households to own their own homes.
Now a state senator, he’s part of a group of elected officials of color who are pushing for more help for New Yorkers who want to become owners. “It made me who I am,” he said. “I know New York City is a city of renters, but I want it to be a city of homeowners too.”
For the entire eight years of the de Blasio administration, the driving force of affordable housing programs was to build as many affordable rental apartments as possible. Now Mayor Eric Adams has embraced a housing plan that puts greater emphasis on “affordable homeownership” designed to increase the distressingly low numbers of New Yorkers of color who are homeowners — and by doing so making a dent in the city’s yawning inequality.
“Homeownership got pushed aside in previous housing plans,” said Jessica Katz, Adams’ chief housing officer. “Across the country it’s the main source of wealth creation and we have a much lower rate of homeownership, especially for people of color. If we are ever going to confront that issue head on and create some intergenerational wealth, we have to focus on homeownership.”
To be sure, the construction and ongoing affordability of rental apartments remains the centerpiece of the Adams plan, which also breaks with the de Blasio administration by emphasizing improvement of NYCHA public housing.
But the Adams effort comes as homeownership is gaining importance especially for elected officials of color, who are seeking a turnaround more than a decade after the foreclosure crisis led to steep drops in Black and Latino homeownership. Boosters of homeownership programs who spoke with THE CITY include Bailey and State Sen. Leroy Comrie (D-Queens).
The mayor has offered a few concrete steps to get his effort underway — and committed $44 million in new money over four years — while outlining many aspirational goals with specifics yet to be unveiled.
The city’s homeownership rate in 2019 declined to 31.9%, down from a little more than 33% a decade ago, according to the most recent NYU Furman Center State of the City report. That is half the national rate of 62%.
Only a quarter of Black New Yorkers own their own homes, as do only 16% of Hispanic New Yorkers. Middle-class Black neighborhoods, especially in Queens, were targeted by exploitive subprime lending in the middle of the last decade and saw thousands lose their homes in the foreclosure crisis.
But in previous decades, promoting homeownership offered economic stability for communities that had seen widespread housing abandonment and decay. Nonprofit groups and the city teamed up to build and sell affordable homes to revive neighborhoods such as East New York in Brooklyn and the South Bronx, through the Nehemiah Plan and New York City Housing Partnership.
City housing plans typically had a homeownership component, noted Rafael Cestero, who served as city housing commissioner under Mayor Mike Bloomberg. Started during the administration of former Mayor Rudolph Giuliani, the New Foundations Program supplied developers with small city-owned parcels of real estate, plus loans, for the construction of affordable homes for purchase.
Then the financial crisis hit. As mortgages became more costly and harder for buyers to access, the Bloomberg administration shifted its efforts toward preserving existing affordable housing and preventing foreclosure.
Cestero, who moved on to run the nonprofit Community Preservation Corporation, anticipated City Hall would resurrect homeownership efforts under the next mayor. But the de Blasio administration showed little interest, focusing first on producing or preserving 200,000 (later increased to 300,000) affordable units, and then ensuring more of those could be accessible to people with very low incomes.
“The gap lasted longer than we thought it would,” he said.
Interest is growing around the country in expanding access to homeownership for the middle class, as purchase and rental prices both grow out of reach amid housing shortages. New York City’s current median home purchase price is about $750,000.
Local governments can help people of modest means muster down payments, access mortgages and surmount other obstacles.
“It’s a great tool in the toolbox of creating housing,” said Christopher Ptomey, executive director of the Terwilliger Center for Housing of the Urban Land Institute, a national organization.
Production, Repairs — and Zombies
The scale of what it will take to move the needle in New York City is daunting. The Adams administration aims to keep current owners in their homes when they run into financial and other difficulties like the need for extensive repairs. It must find a way to deter scammers from taking advantage of owners, through schemes such as deed theft. It’s responsible for making more efficient the many city agencies that touch homeowners. And it must build many more affordable homes.
“A mindset shift is a priority and we need to work within agencies and across agencies because there are a lot of barriers to buy and maintain homes,” said Christie Peale, CEO of the Center for New York City Neighborhoods, an organization founded in 2008 to help homeowners survive the foreclosure crisis.
Peale added: “There is a need for the city to be able to scale a homeownership plan, since it’s been many years since the city had production programs that produced that kind of housing.”
The most specific action Adams and Katz have described so far is a promised doubling of funding for Home First, which provides up to $100,000 in down payment assistance, as well as expansion to more people with moderate incomes. The goal: triple home purchases under the program to 300 annually.
Also in line for a boost is the existing Open Door program, under which the Department of Housing Preservation and Development finances the construction of co-ops and condos. It’s in line for more capital funding and more flexibility for developers.
Teaming up with Peale’s organization, Adams will expand citywide a Homeowner Help Desk the Center for New York City Neighborhoods has been operating in central Brooklyn, southeast Queens and the north Bronx since 2017.
The plan commits to a significant increase in resources for the existing HomeFix program to help low- and moderate-income homeowners in one- to four-unit properties fund home repairs ranging from windows to roofs.
A goal of getting new owners for zombie homes — vacant, deteriorated houses whose owners are significantly behind on their mortgages — is typical of the work that remains to be done. The administration will create a permanent Zombie Homes unit at HPD, to conduct field surveys, track properties, and, in the words of the housing plan, “develop strategies to drive the acquisition and transformation of zombie homes into homeownership.”
It is much the same story with land trusts, which are gaining popularity around the country. In land trusts, a non-profit owns the land under a home and maintains long-term affordability by building resale conditions into a long-term ground lease that limit resale to income-eligible families and give the land trust a purchase option when the home is put up for sale.
Albany will need to approve legislation to make land trusts viable in New York, which is well behind other places in using this option.
No Target Number
The mayor declined to set specific goals for the volume of new housing to be built or the number of people to be helped. But Katz, the chief housing officer, promises that the Mayor’s Management Report due in the fall will include metrics that measure home ownership.
So far, little public opposition has emerged to the homeownership programs, in part because many people are reluctant to anger the administration. But there is a tension that is likely to surface because homeownership is more expensive than building rental housing and because it benefits primarily those with moderate and not low incomes, says Cestero.
Even advocates of homeownership programs acknowledge that there are pitfalls and that these homeowners need some sort of government safety net with advice, and sometimes money, when they hit a financial squeeze or face unexpected repairs.
The key point, advocates say, is that homeownership is the best avenue to build wealth in communities of color because it can be passed from generation to generation.
Last week, Comrie bumped into a couple of his constituents at his dry cleaner who had just become first-time homeowners, an important issue for years for the state senator who represents Southeast Queens.
“You could see their pride and how they would be able to stay in the city and help strengthen minority communities,” he said. “It gives a boost of self confidence to people, increases their sense of responsibility to their communities and encourages a focus on long-term success.”