Many economically advanced societies are struggling with issues of affordable housing. Places like the Hudson Valley are trying a variety of strategies, some of which are turning out to be more successful than others.
Looking at the CityLab website last week, I came across an interesting European approach to increasing the supply of owner-occupied housing. The Dutch capital of Amsterdam is expected to pass a law this year restricting the purchase of new homes only to people who promise to occupy them themselves. Developers who want to build rental housing can go ahead and do so. It’s just that they can’t sell the units to anyone not intending to occupy them.
Trust the Dutch to come up with innovative social thinking. Amsterdam is trying to block out buyers who want to own new housing units only to rent them out. Presently, many middle-income households are being priced out of the market, writer Feargus O’Sullivan explained, by investors who then place the newly bought units on the rental market.
At present, about two-thirds of the Dutch population live in owner-occupied housing, a relatively high rate. The Dutch want to keep that proportion high.
Other European cities are proposing tougher laws against housing investors who rent out the homes they buy. Barcelona levies big fines on landlords who leave their properties vacant. Berlin is talking about renationalizing private housing after big landlords bought much of the city’s rental housing stock.
The Great Recession in the United States was characterized by the wholesale purchase of foreclosed homes by investors. According to research by RealtyTrac, institutional buyers bought 386,000 single-family homes across the country between 2011 and mid-2014. The Blackstone Group, the largest such acquirer, was spending $140 million a week on such transactions during the peak buying period. Having done very well financially, most of the original investors have now unwound these positions.
The Airbnb revolution of recent years has further complicated efforts to increase the supply of affordable housing. On the one hand, it has enabled families to supplement limited incomes with money from short-stay visitors. On the other hand, the short-term rental market has contributed to rising home prices, reducing the supply of housing available to lower-income renters.
Ulster County’s annual auction of foreclosed properties is scheduled this year for 9 a.m. on April 24 at Quimby Theatre on the SUNY Ulster campus in Stone Ridge. Some 196 properties are being offered at auction, the lowest number in quite a few years. Meanwhile, with assistance from the NoVo Foundation, the City of Kingston is coordinating disposal of its auctionable inventory in such a way as to encourage first-time homebuying.
Renters in low-income neighborhoods, especially urban ones, are subject to what two scholars describe as “the staggeringly high profit margins made by the landlords who own properties in these areas.” Landlords in poor neighborhoods make much more money per unit in those than in non-poor neighborhoods. In poor neighborhoods, a single year of rents amount to a quarter of the value of properties. In neighborhoods with a low poverty rate, renters pay an average of only a tenth of the value of the property annually, according to MIT’s Nathan Wilmers and Princeton’s Matthew Desmond, writing in the American Journal of Sociology.
In expensive cities, Wilmers and Desmond explained, landlords make money through price appreciation and gentrification. In poor cities, they make money through high rents. “Renters are exposed to exploitation on account of their reliance on housing and the lack of options for securing it.”
Kingston-based Rupco, which describes itself as the region’s leading provider of and advocate for quality affordable housing, is much in the news. Last week, State Supreme Court judge Richard Mott overruled Kingston’s planning board’s decision to reject Rupco’s site plan proposing 66 units of affordable housing at Landmark Place, the former Alms House on Flatbush Avenue. The city must now decide whether to appeal Mott’s ruling, to give more complete reasons for the plan’s rejection, or to now approve the project, perhaps with additional “reasonable conditions.”
Landmark Place is not Rupco’s only iron in the current Kingston fire. The physical outline of another substantial project is taking shape as the steel goes up on Energy Square at 20 Cedar Street in Midtown Kingston. The ground floor of the five-story building will be occupied by the Center for Creative Education, a non-profit like Rupco itself, and workforce development and training resources. The other four stories will be occupied by 57 apartments at various levels of affordability.
Three blocks down Greenkill Avenue is The Metro, a Rupco-owned former MetLife records space now intended as a commercial space occupied by film and tech businesses and various makers (Made in Kingston). It’s the first major Rupco project without a housing component.
Rupco, formed 38 years ago as the Rural Ulster Preservation Company, has not been Ulster-bound for a long time. The Greene County Mountaintop community of Prattsville, devastated by Hurricane Irene in 2011, got state support for a 45-unit housing development for tenants with limited incomes. Rupco did the marketing and is doing the management of the project, opened last November. The tenants were chosen by lottery.
Rupco’s involved in a major rehabilitation project in downtown Newburgh involving 45 units of housing on 15 properties within a five-block radius. Included will be gallery and meeting spaces and a police substation. Groundbreaking of the East End Apartments is scheduled for 11 a.m. on April 7.
Housing is a necessary but alone not a sufficient condition for community life, as Rupco’s slogan “Strengthening homes, communities and lives” recognizes. Some 38 people, a good turnout, attended the most recent Rupco first-time homebuyer informational session at the Kirkland building, 2 Main Street in Kingston. The next session is from 6 p.m. to 7 p.m. on April 17 at the Kirkland. This Thursday, March 28, there’ll be a credit workshop from 5:30 p.m. to 7 p.m. at the same location. According to vice-president Guy Kempe, Rupco does about 100 closings a year involving first-time homebuyers.
Almost everybody, it seems, is, in principle, in favor of “fair share” housing, by which affordable housing choices for disadvantaged and poor people are geographically distributed. On practice, however, jurisdictions find no lack of justification for exclusionary policies, such as: The new people are more likely to be criminals, drug addicts or threats to public safety; they have too many children needing special services, they’d bring too much traffic to the neighborhood, the water and sewer lines will be too costly; we already have more than our fair share; the contiguous town is not doing its part.
Westchester County was one place where the seemingly intractable struggle over affordable housing was put to the test over a long period of time. After years of dispute, the county government and the federal government reached a settlement agreement in 2009 requiring the county to provide 750 new units of affordable housing in the communities that had not done so. Throughout the years of the Obama administration, the federal government rejected ten county proposals as insufficient. On July 14, 2017, under a new administration, the county’s eleventh proposal was accepted. The New York Times story was headlined, “For Westchester, Eleventh Time Is Charm in Fight Over Fair Housing.”
Political melodrama to some degree overshadowed the substance of the case. Lynne Patton, an event coordinator previously employed by the Trump family, had been appointed regional director for the federal Department of Housing and Urban Development. It had taken her one day to approve the settlement. County executive Rob Astorino, who had put the matter at the center of his political campaigning, had fought the federal government for his eight years in office. The final settlement had been vindication of Astorino’s position, said his spokesperson. “Westchester won this on facts, principles and persistence.”
More recently, Lynne Patton’s recent background appearance at the congressional hearing at which Trump ex-aide Michael Cohen gave testimony became controversial after a Michigan congressperson said Patton’s presence was a racist prop. “What I’d like to ask the congresswoman from Michigan is you know, why does she take the word of a self-confessed perjurer, and criminally convicted white man, over a black female who is highly educated, rose up through the ranks of one of the most competitive companies in real estate, spoke before 25 million people at the Republican National Convention and now works in one of the most historic administrations in history?” said Patton about herself to Fox News. “That’s more racist than being put up there as a prop.”
Astorino was asked at the time of the final settlement whether discrimination existed in Westchester. “Yes,” he replied. “It exists everywhere in the world. Is it a part of the fabric of who we are? No.”
As Karl Marx once wrote, “History repeats itself, first as tragedy, second as farce.”