The citizens of New York City deserve a feasible pathway to homeownership, regardless of race, class, or background. That is why Isaac Wright, Jr. is outlining a plan for the New York City Housing Authority (NYCHA) to provide residents with a means for purchasing their own property, converting rental apartments under NYCHA into homes owned by New York City families.
In times of crisis, the city looks to the Mayor’s office for direction and leadership. In many instances, a crisis is realized during a major event that alters our way of life, such as the COVID-19 pandemic or the terrorist attacks on September 11th, 2001. However far too often, a crisis is allowed to manifest, lasting for generations, until it becomes an accepted part of our reality. New York City residents are currently experiencing a home-ownership crisis that has extended across multiple Administrations, and it will require innovative structural change to lead the city out of it.
This pathway for NYCHA residents to own the units they previously rented is just one aspect of Mr. Wright’s plan as Mayor to ensure all New York City citizens have a path to homeownership. Mr. Wright recognizes that this plan is dynamic yet doesn’t solve the entire crisis. As Mayor, he will build on this policy to address challenges surrounding housing and homelessness.
The Homeownership Crisis
The Urban Institute recently confirmed that “homeownership remains the principal way most families build wealth in this country.” Meanwhile, the New York City Housing Authority reports serving over 450,000 New York City residents, with some unofficial estimates putting these numbers over 600,000. While the work NYCHA is doing is commendable, the reality is that these 600,000+ residents are working without any possibility of future home ownership. That’s more people than live in major cities like Miami, Atlanta, Cleveland, New Orleans, Cincinnati, and Pittsburgh. NYCHA is responsible for a major city’s worth of people, none of whom have a realistic opportunity to purchase the homes they live in and build generational wealth for themselves and their children. NYCHA needs to be restructured in a way that puts its tenants on a path towards ownership.
According to the U.S. Census Bureau, the homeownership rate in the United States has hovered between 69.2% and 63.7% for the past 30 years. However in New York City, the homeownership rate is only 33%. If homeownership stands as the principal way for families to build wealth, it is unacceptable for New York City, the financial capital of the world, to have a homeownership rate at half of the national market. The city has become a real estate-powered piggy bank for billionaires to enrich themselves, while working-class citizens are left without a reasonable means to build wealth.
More concerning, the inability to buy one’s own home is an issue that disproportionately impacts Black and Brown communities. According to a survey conducted by the US Department of Housing and Urban Development, the homeownership rate for white people in America was 73.7%, but just 48.9% for Hispanic people and 44.7% for Black people. For a city as culturally diverse as New York City, it is vitally important we stand as an example for the rest of the nation, with pathways to homeownership that specifically target communities that have been historically underrepresented.
NYCHA’s Role In Combating The Crisis
Wright’s plan will provide a pathway to homeownership for all inclined NYCHA residents.
Residents with moderate incomes will automatically qualify for a mortgage to buy their unit, with subsidized payments to assist paying off the mortgage. Residents who would not qualify for a mortgage can enroll in a ‘Rent-to-Buy’ process, where rent payments go towards home ownership of the unit currently being occupied.
The policy will also include stipulations and safeguards against individuals or immediate family members owning more than one unit; this is to prevent corporations from buying up facilities. This program is intended as a path to homeownership, not as a purchasing opportunity for the wealthy.
As such, residents who have bought their own unit looking to sell in the future will have two options:
- Sell the unit on the market, like any other owned home, OR
- Sell the unit back to the city, where it returns to NYCHA to again be used as a pathway to ownership for a new family
Units sold on the market fall under the same regulations, where one family or corporation can’t buy multiple units.
NYCHA will remain responsible for basic maintenance on all units. In an effort to provide additional funding, the city must repeal the unconstitutional FairCloth amendment, to ensure more federal funds and increase the number of NYCHA units being funded, the FairCloth Amendment currently limits federal funding to only 176,895 units within NYCHA.
NYCHA’s total revenues for 2020 was approximately $3.84 billion. About $2.19 billion, or 57 percent, of the Authority’s Operating Budget in 2020, was supported by federal assistance programs, including $1.21 billion for the Section 8 Housing Choice Voucher program and $984 million in federal operating subsidies. Tenant rental revenue was estimated to account for barely a quarter of NYCHA’s overall funding.
Despite NYCHA residents accounting for almost ten percent of the city’s population, the current administration’s NYCHA Executive Commitment Plan grants barely three percent of the city budget, for Fiscal 2020-2024 to be used by NYCHA to maintain and upgrade their properties.
Resident Councils for each NYCHA complex:
Currently, >95% of developments within NYCHA have a democratically-elected resident council, which are utilized to work alongside all levels of NYCHA to voice the concerns of residents. The scope of the resident councils will be expanded, to act as a Home Owners Association style overseer of the property, for each development. The Resident Council will then also be in charge of overseeing day-to-day operations, such as maintenance, which includes approval on budgetary allocations.
This policy is applicable via the current regulations of HUD, which state “a Public Housing Authority may sell all, or a portion of, a public housing development to eligible residents or resident organizations, for purposes of homeownership, provided that a Homeownership Plan has been submitted by the PHA and has been approved by HUD.” It seems inconceivable to envision HUD or other federal entities standing intentionally in the way of providing over 600,000 residents with the possibility of homeownership.
The Impact This Will Have:
There is precedent for Wright’s proposed policy:
“In the late 1970s and early 1980s, the US Department of Housing and Urban Development transferred more than 700 FHA-repossessed homes and buildings to NYCHA. NYCHA utilized these properties as additional public housing, while working with tenants so they could become eventual homeowners of the properties. In the past 35 years, NYCHA has helped more than 300 NYCHA residents become homeowners of FHA Homes.”
The end result was that several hundred families would own their homes over the next thirty years. A similar policy throughout all of NYCHA could result in homeownership for literally hundreds of thousands of families.
Isaac Wright, Jr. life’s work has been dedicated to securing justice for those who have suffered under a system of injustice. As Mayor, his focus will be on policies specific to following that path, and ending the homelessness and housing epidemic that has impacted our city for generations is just the first step in bringing NYC into a more prosperous future. If New York City is to continue referring to herself as the greatest city in the world, it is past time for that greatness to be available to everyone.
By providing residents of NYCHA with a reasonable path to homeownership, we are allowing over half a million people to accumulate wealth for themselves and their families via an avenue never before available. Equally notable, we’ll be providing an economic building block to groups and communities that disproportionately have been left behind on these avenues of wealth creation.
There are moments in the history of this city where a sudden shift has required our residents to immediately and fully unite towards a common cause. Under Mayor Wright’s leadership, the city will unite in an effort to address a homeless and housing crisis that has plagued our citizens for generations.