February 21, 2018
Pushed Out: Countering Housing Displacement in an Unaffordable Region
By Pierina Ana Sanchez, Moses Gates, and Sarah Serpas
In New York City’s tristate metro region, more than one million low- to moderate-income households, 70% of them Black or Hispanic, are vulnerable to displacement. As the Regional Plan Association’s recent report on this crisis shows, those most at risk live in pedestrian-friendly urban communities with good access to jobs and services. As demand pushes rents and sale prices in such areas upward, lower-income households are pushed outward. There is a clear link between increasing rents, displacement, and homelessness. In New York City, a 5% rent increase has been associated with an additional 3,000 residents becoming homeless.
The current situation is largely the result of decades of discriminatory policies, such as unequal access to financing and restrictive covenants that prohibited people of color from living in the suburbs. Black and Hispanic families were largely confined to urban areas that today are experiencing growth and reinvestment, and were also often prevented from owning homes and building equity and stability, increasing vulnerability to the shifting forces of the housing market.
Income Shifts, Neighborhood by Neighborhood
Ending the region’s affordability crisis will ultimately require creating enough homes for all income levels. But this will take many years to achieve. To more quickly stabilize communities, we must preserve affordable housing, strengthen tenant and rent protections, and enable existing residents to capture more of the wealth created from rising property values, through such strategies as:
Using government-owned land to support shared-equity homeownership models.
Community land trusts, limited-equity cooperatives, community development corporations, and mutual housing associations are effective tools for producing affordable homes and stable neighborhoods. Municipalities at risk of rapid neighborhood change should inventory publicly owned land and transfer underused parcels to such shared-equity ownership models.
Such collective ownership limits speculative price increases, making housing less of a commodity. By dividing property rights between homeowners and the community at large, households also gain access to affordable homes and can build wealth through real estate.
Investing in public housing.
Public housing provides stable, permanent, and deeply affordable homes for more than half a million people in the region. But it is at serious risk. It’s been severely underfunded for decades; the region’s public housing authorities face a capital budget shortfall of over $20 billion. The federal government, all three state governments, and their municipalities should dramatically increase public housing maintenance budgets and invest in upgrades to raise public housing to modern standards and improve resilience to climate change.
Enabling rent regulation to prevent sudden, sharp rent increases and keep homes safe.
Rent regulation is the most effective policy to mitigate unexpected increases in rents for low-income residents. States should be more proactive in strengthening—or in the case of Connecticut, enabling—rent regulations to cover municipalities where displacement is a concern. These should include limits on the amount, frequency, and timing of rent increases, as well as other tenant protections. At minimum, rental properties that receive any government subsidy should automatically be subject to rent regulations.
Strict enforcement of the housing code should accompany rent regulations, to prevent landlords from displacing low-income tenants through lack of upkeep and maintenance. When fines are not effective, municipalities should conduct repairs proactively, with a foreclosable lien filed against the property.
Providing free legal counsel to those most at risk of losing their homes.
Approximately 400,000 eviction actions take place each year in southern New York State and central/northern New Jersey, with more than three-fourths in New York City and New Jersey’s Essex, Hudson, and Middlesex counties. Even when tenants win in court, legal fees and lost wages from attending court often create a downward financial spiral leading to evictions and, often, homelessness.
New York City has been a leader in enacting a “right to counsel” for eviction cases. Other cities and counties, with state support, should also provide free legal counsel to all economically vulnerable residents facing eviction. A right to counsel also helps enforce anti-harassment policies, such as those recently passed by New York City, and discourages landlords from using negligence or intimidation to coerce tenants into leaving their homes.
Homelessness in New York City has tripled over the last 20 years. But other parts of the region have made great progress in reducing, or even ending, homelessness. In 2017, Bergen County, NJ, became the first county in the nation to end chronic homelessness; statewide, Connecticut has the lowest number of people experiencing homelessness on record.
Such progress shows that we can end homelessness in the entire region with the right level of commitment and funding for a range of initiatives, including those that:
Prevent people from losing their homes, and rapidly rehouse those who do. The leading cause of homelessness in New York and New Jersey is eviction due to rising housing costs, overcrowding, and loss of jobs. That’s why better rent protections, free legal counsel to at-risk families, and directing subsidies and housing assistance to families who need it most are key.
Investing in supportive housing. Combining affordable rents with individualized social services, supportive housing helps those coping with mental illness, substance abuse, chronic illness including HIV/AIDS, or socio-medical-psychological needs. It significantly reduces the need for emergency medical assistance, police, jails, homeless shelters, and other publicly funded services. New York State has made progress on this front, building more than 50,000 units of supportive housing, and recently committed to building another 35,000. But more is needed. All three states should expand or institute long-term agreements on funding and siting supportive housing.
Public costs and benefits.
These efforts will require public outlays – some higher than others. In New York City alone, the cost of returning public housing to a state of good repair is estimated to be $17 billion, and the annual cost of managing and maintaining it at least $2.2 billion. Federal funding should remain the largest source of this revenue—and it’s imperative that the region’s congressional representatives continue working to reverse the trend of declining federal support. States and cities will need to provide new revenue as well. New York City, for instance, is evaluating parking lots and other Housing Authority property for development that could both generate revenue for existing public housing and bring needed affordable housing, new jobs, and other services. The cost of expanded supportive housing would also be high, but would reduce other more expensive public services.
Creating permanent affordable housing could be accomplished at a relatively low cost in places where local or state governments own significant assets; the price would be higher where land would have to be acquired and where housing market demand is strong. A cost-effective approach would focus on neighborhoods where trusts can be established before prices escalate.
Expanding rent regulation would entail low to moderate costs (housing agencies would also need additional funding for enforcement). There would be tradeoffs: rent regulation reduces turnover, making it more difficult to find apartments, and can also result in subsidizing higher-income residents. However, well-structured regulations can minimize these effects.
Free legal counsel could be fiscally neutral or even beneficial when accounting for public savings related to eviction, especially emergency shelter costs.
Taken together, such initiatives will go a long way toward stopping displacement of low-income households and help preserve racial and economic diversity in a rapidly changing region.