midterm 222
To meet the 600,000 low income units goal there was also an allowable
"existing" portion of housing that could be refurbished and sold.
Two shortcoming to this IZ under Bloomberg
1. Being voluntary for developers, it produced very little AH 2. Units at 80% area median income (AMI) were not affordable to most New Yorkers • DeBlasio's MIH approach touches on both of these concerns
the Federal Era came to a close largely amidst the following:
1. Dramatic budget cuts to federal programs 2. Economic restructuring of urban areas and ensuing economic polarization 3. Mobilization of community-based housing to try and fill the void left by federal dollars
Three factors contributed to the proactive role that banks and private investors were starting to take:
1. Enactment of federal CRA and mortgage disclosure act 2. Incentives to reduce risk and provide market rate returns for investors 3. Resurgence of homeownership activity in urban centers
MIH is an expansion of AF but not an overhaul of the system:
1. MIH only takes effect when neighborhoods are rezoned 2. AMIs stretch lower but also go much higher than before 3. AMI levels still don't match the city's needs (greatest need is for 1/3 of residents who make 30% AMI or less) • Deeper issue of IZ • New AH is always linked to luxury development which raises the value of rezoned land and encourages land speculation in hopes it will be upzoned - • With this speculation comes rising rent as new landlords need to cover debt and old landlords capitalize on new hype, some small low-rent owners might sell to speculative investor.
De Blasios' 2014 AH Plan: Housing NY: 5 borough/10 year plan with 4 main strategies:
1. continue subsidizing non-profit development 2. leverage city power to preserve 120k extant units of AH 3. tweak zoning to allow slightly higher density in some low density areas 4. (most controversial), build 80k income targeted units through MIH
The FHA and GI Bill adopted HOLC's racist ideology and which financed
1/3 of all privately-owned housing between 1950-1960.
By 1972, these programs had helped
11 million new homebuyers and 22 million households improve their homes....overwhelmingly white people.
what % of adults in formerly redlined areas are uninsured
17.8% compared to 6.4% in A-rated census tracts.
Redlining was made illegal in the
1968 Fair Housing Act (FHA), but its affects persist today.
So, what is the "solution" to this problem, existing only two years after the passage of the 1968 Fair Housing Act:
1970 Housing Act provision, Section 518(b) allowed Section 235 homeowners reimbursement for damages in the amount they paid for repairs to their homes or payments to make repairs. However... • Deadline for making a claim under 518(b)was December 1971 HUD made very little effort to inform victims, relying on mortgage companies (who had also facilitated the sale of faulty homes) to inform their mortgage holders. By October of 1971,HUD had spent only$51,000 nationally on reimbursements or in grants to pay for home repairs. The 159 claims filed in Philadelphia were flat out denied because the area FHA director disagreed with the premise of the 518(b).
Originally the HUD Act allowed
25% of total subsidized housing to be existing, then that would drop to less than 10% within 2 years.
% of adults in formerly lined areas are obese
26.6% compared to 16.2% in A-rated census tracts.
Formerly redlined areas have a poverty rate of
3.6 times that of A-rated census tracts.
Black homeownership lagged behind that of whites by
35%-50% in the first half of the 20th century due to poverty, access, and discrimination.
By April 1970, Section 235 made up
75% of the mortgage lending business.
Downzoning
A change in zoning resulting in a decrease of allowable density
Upzoning
A change in zoning to a less restricted use such as from single family to multi-family use.
who were largely excluded from FHA assistance?
African-Americans and other non-whites
Self-Help Housing:
As tenant-activist were working to fix their homes aided by U-HAB, the city started foreclosing on buildings that were in deep tax arrears with extensive housing code violations and/or had already been forced to make emergency repairs. • These in-rem buildings were then sold to the tenants or to other nonprofit operators. • This activity made NYC stand out compared to other cities that often let tax- delinquent properties fall apart beyond repair. "The TIL program funded the renovation of buildings while they were still in city ownership. Tenants were required to participate in building management education programs, and after several years, the properties were transferred to tenants as cooperatives for a modest price."
This heavily impacted
Black women and welfare recipients who were targeted with the sale of FHA-insured homes that were falling apart and unsafe. Many were coerced into buying being told there were no rentals available.
Devolution of housing policy
Community-based housing exploded in the 1980 and 1990s as states, cities, and local communities were now responsible for finding ways to fund low- and moderate-income housing with exceedingly limited budgets. • Non-profits housing groups emerged and became critical in delivering services • Housing advocates at state and local levels struggle for redistributive policies and form broad coalitions with other community-based groups Cities and local governments are spending own money to make themselves more attractive to investors in efforts to boost their economies by attracting capital State and local budget responses can't cover what was lost due to federal cutbacks •Between 1980 and 1987 funding for HUD(Dept. of Housing and Urban Development) fell by $19.2B. • Increases is state expenditures between 1980 and 1990 was$2.2B—a 350%increase but not near the amount that was provided by the federal gov't. This also marks the neoliberal turn and the deregulation of finance • For example: 1996 - Federal Reserve reinterprets the Glass-Steagall Act several times, eventually allowing bank holding companies to earn up to 25 percent of their revenues in investment banking. • This means banks are allowed to speculate and invest when they were restricted from doing so before...[more on this after mid-term when we talk financialization and subprime crisis] • Alternative policy paradigm for housing: a refiguring of public and private responsibilities and obligations for low-income housing • The Federal Era focused on public subsidies for the private production of housing • Post-federal Era carefully regulates private development while promoting the non-profit sector through community development corporations (CDCs) now increasingly responsible for developing ownership and low-cost housing.
PH was dismantled, and its numbers drastically reduced, in two ways in the U.S. (outside NYC):
Demolition - the most common form and often not with replacement units being built Disposition, a term used by HUD referring to the PH that had been sold off or converted for other uses conversion "...the transformation taking place in cities across the country represents a new, neo-liberal, post-New Deal policy strategy aimed at ending the welfare state approach to housing assistance embodied by public housing"
factors contributing to Residential Segregation
Great Migration, fleeing Jim • Crow > 90% rural/urban swap Second Great Migration, • 1940s/War effort labor FHA/Redlining Zoning Laws/ exclusionaryzoning Restrictive covenants •Blockbusting & Racial steering Discriminatory lending Migrant families moving in with family already in place White flight > shift of resources and investment to suburbs and subdivision scale of development that create insular environments/homogenous real estate brackets Structural racism > unequal quality in schools, job opportunities, limited earning potential Preference and Racism
Three factors contributed to undermining this goal
High demand for housing in urban areas, wake of urban unrest and riots •Resistance from the suburbs to any kind of low-income housing, including single-family homes • Intense lobbying from the housing industry to utilize existing housing.
HUD and local PHA's began disinvestment in PH in 1980s
In 1969, 1:1 replacement was added as amendment to the 1937 Housing Act in an effort to replace slum clearance with the production of PH, but Regan removed this in 1983 for vouchers instead (reinstated in 1987). In the 1980s, PHAs pressed HUD to approve demolitions of PH in lieu of rehab.
City efforts to provide low- income housing assistance are characterized by:
Increased use of local (non- federal) dollars Increased use of CDBG dollars Greater leveraging of private capital Increased reliance on non- profits developers like CDCs Use of off-budget items and regulatory strategies (e.g., land-use regulation) A shift from new construction to rehabilitation
The National Housing Law Project and contributors found the following problems with Hope VI Program.
Increasingly, it appears that the HOPE VI program is not addressing the problems identified by the National Commission on Severely Distressed Public Housing in 1992 or the goals set forth in the HOPE VI statutes. The Loose Definition of "Severely Distressed Public Housing". HOPE VI Worsens Acute Affordable Housing Needs Few Meaningful Opportunities for Resident Participation in HOPE VI The Exclusion of Public Housing Families from HOPE VI Opportunities The Lack of Data on HOPE VI Outcomes
Anti-PH policies, like Hope VI, were misrepresentational, suggesting the elimination of PH to be an improvement to the lives of PH residents by giving them a housing choice.
Instead, it has often been a matter of state sanctioned eviction and forced homelessness. The dismantling of PH has been more driven by race, the proliferation of neoliberal governance strategies, and economic revitalization.
421-a offers incentives to developers via tax exemptions, for a certain number of years, provided they create a portion of affordable housing.
It cost $1.7 billion in lost revenue last year. That makes it the most expensive tax break in the city, a title it has held since 2007, per Department of Finance records analyzed by the Community Service Society. The second-highest tax break, an abatement for coops and condos, cost $655 million last year. More than half, or 56%, of all the city's multifamily residential units created in the past eight years involved 421-a, according to Housing Preservation and Development data analyzed by the Real Estate Board of New York. More than a quarter, or 28%, of affordable units in the same time period were subsidized by 421-a, REBNY's analysis found.
Housing stability and tenant protection act (hstpa)
June 14, 2019 - cuomo makes laws permanent establishes rent stabilization as an option repeals high rent vacancy deregulation and high income deregulation repeals vacany decontrol and longevity increases makes preferential rent base rent limits mci rent increases and IAI rent increases reforms rent increase system for rent control tenants stronger tenant protection-- changes with security protection and eviction guidelines bans owner from refusing leasing to tenants in housing court cases limits rent increases in home parks
The argument against redistributive policies:
Local resources spent on redistributive purposes means less for maintaining the economic vitality of the city Potentially makes the city a "welfare magnet" for the poor Discourages private capital investment
1926 Limited Dividend Housing Companies Act
May 10, 1926, New York State governor Alfred E. Smith signed into law the Limited Dividend Housing Companies Act. The act revolutionized the traditional relationship between government and urban housing in the United States through: • 20 years of tax exemptions for housing projects • Use of eminent domain municipalities for site assembly • Developers' agreement to limit their profits to a maximum of 6% annually Prior to the 1926 Act, the public sector had avoided subsidizing— let alone financing, building, or owning—housing, but regulated housing for health and safety. However, these regulations did nothing help house the city's predominantly low-wage residents nor address the high cost of building and maintaining quality housing. • By the 1920s, many Western European nations were already offering subsidized (below- market interest rate) loans to low- profit (limited- dividend) developers for worker housing. These European practices were not taken up in the U.S., which relied mostly on philanthropic largesse for worker housing...until NY's 1926 Housing Act. The worker housing projects built under the Act were limited-equity cooperatives, a model borrowed from the U.K., and seen as a socialist alternative employed in a capitalist system.
The situation in Philadelphia spurred resistance and the formation of grassroots organizations like Concerned Section 235 Owners to litigate against HID-FHA for reimbursement demanding:
Permanency of Section 518(b)• Inclusion of those affected under 221(b)(2)...which made up most of the defective homes sold with government support in Philadelphia...in 1972 theConcerned 221(d)(2) Homeowners and Concerned City-wide Homeowners groups formed to take legal action against HUD-FHA. Grassroots activism led by Black women homeowners, with the help of Community Legal Aid, forced HUD-FHA to make changes in Philadelphia: • Mortgage companies, not the FHA, were now to be held financially responsible for selling defective housing...this leaves the FHA off the hook
This alternative policy paradigm for housing includes the following objective/techniques:
Reliance on non-market relationships for the production, management and ownership of land and housing—shift to non-profit sector Greater regulation of the private sector in ways that promote the production and preservation of low-income housing—shift to local land-use regulatory powers (e.g., moratoria on demolition or market-conversion of affordable housing, 1:1 replacement programs, rent control) Taxing the private development process to provide financial resources for low-income housing (e.g., real estate transfer fees, escrow fees) A reversal or mitigation of the impacts of downtown development and the subsequent reuse of inner-city land for low-income housing—means to preserve low-cost housing like single-room occupancy (SRO) hotels. Community-based planning and housing issues
Community Reinvestment Act
Required banks to make loans available in low income, minority communities help address the decades-long problems of home loan racial discrimination
The argument for viewing PH's fate as a "dismantling" is supported by:
Shifting of housing assistance to vouchers (tenant-based forms of subsidy) and other shallow subsidies like Low-Income Housing Tax Credits (LIHTC) This eliminates two fundamental and consequential elements of PH: it's long- term/permanent commitment to affordability and its depth. Now we have short term contracts for affordability (which eventually expire) and subsidies that target higher income, leaving the poor with even fewer options.
Hope VI
Since the 1990s the abandonment and neglect (de facto demolition) of PH by Authorities (PHAs) gave birth to the Clinton-era Hope VI revitalization efforts and thus, the complete replacement of old communities with new and mixed-use communities.
Urban Homesteading Assistance Board
Tenants organized themselves to save their buildings thus giving shape to NYC's decentralized housing network. • Homesteaders were among the first tenant- activist to undertake this kind of work and were aided by the Urban Homesteading Assistance Board (U- HAB), established in 1973 by former city employees. Tenants converting owner-abandoned buildings into tenant-led limited-equity co- ops. U- HAB trained groups to do cost estimates, hired professionals, wrote grant applications, and worked with the city to obtain permissions and loans. Additionally, they trained groups to do much of the renovation work themselves.
Includes 3 sub programs
The first, 421-a (1-15), extends the program for projects that began construction before December of 2015 421-a (17), extends the exemption period for properties that began construction before 2008 and already qualified for earlier versions of the program. 421-a (16) "Affordable New York" program, is available to developers of new housing projects who have not yet participated in the program or who began construction between January of 2016 and June of 2022. Affordable New York (ANY) includes seven options for rental and homeowner housing, which include varying term lengths and affordability levels.
The argument for viewing PH's fate as a "dismantling" is supported by:
The huge reduction in the number if PH units has not been replaced via redevelopment policies. The new model of mixed-income redevelopment (i.e. Hope VI and CNI) have largely worked to reduce the PH program and shrink the number of subsidized, very-low income units. Furthermore, Hope VI and CNI have done a poor job of adhering to one-for-one replacement demolished PH. HUD and local PHA's demolished more PH units than Hope VI did. By August of 2012, HUD reported over 285,000 set for demolition (including for Hope VI) and another 250,000+ already demolished. This is equivalent to destroying 20% of the nation's total PH stock. Atlanta, GA became the first city to eliminate all its PH (and was the first to have a competed PH project in 1936), other cities like Memphis and Las Vegas were eager to follow.
why was this a revolutionary change?
This was a revolutionary change in housing and made monthly mortgage payments more manageable and the insurance program removed risk, thus making interest rates low and housing more affordable for the average person
Discriminatory Valuations
a home in a majority Black neighborhood is likely to be valued for 23 percentless than a near-identical home in a majority-white neighborhood
De Blasio's Housing Plan Goals...
aimed to create or preserve 200,000 housing units over a 10-year period, in 2017, the administration upped that goal to 300,000 housing units—120,000 new and 180,000 preserved— by 2026. had financed the construction of 50,656 new affordable homes and the preservation of 114,934 more, for a total of 165,590 units by July 2020
Economic Constraint Model
characterizes urban policy in the 1980s. It consists of: • An increasingly globalized economy • Greater mobility of capital via business and investments • A perceived dependence of local economies on decisions made by economic and political actors who are not local and beyond the control and influence of local authorities • The logics of this model promote unbridled growth and the political hegemony of land-owners, property interests, and business and public officials. • Encourages privatistic policies that grant incentives and subsidies to private actors
Impacts of HOLC
cities that were HOLC graded and redlined became more segregated over time than those cities HOLC ignored.
HOLC (Home Owner's Loan Corporation)
created to help people with distressed mortgages refinance by introducing long-term amortized mortgages. Between 1933-35 it supplied $3B toward this and created the appraisal process we know as redlining
the Housing and Urban Development Act (HUD Act) was passed to
encourage low-income homeownership in previously denied "inner city" urban areas.
the creation of the FHA meant the
federal government would insure mortgages provided by private lenders.
Hope VI activities included:
funding of major reconstruction, rehabilitation and other physical improvements, provision of new housing, planning and technical assistance, implementation of community service programs and supportive activities, and planning for any of the previous activities. Housing Authorities that received grants were required to provide supportive services for both original and new residents to obtain self-sufficiency.
Section 235 and Section 221 (d) (2)
further disadvantaged Black women, welfare recipients, and lower-income urban residents and thus further entrenched segregation
was the growth even or uneven and what conditions did it create for whites? blacks?
growth was uneven and created conditions for a flourishing (mainly white) suburbia at the expense of inner-city urban development in which the Black population was largely trapped
The racially exclusionary practices of the FHA and other policies in the 1930s
helped to catalyze urban uprisings by the 1960s
FHA policies discouraged
homeownership among African-Americans and those living close to them
Between 1933-1951, redlining was employed and created an
intentionally race- based appraisal system that explicitly denied mortgages and loans to African Americans.
421-a Developer Incentives (1971)
is a partial real estate tax exemption for new construction of housing.
Mandatory Inclusionary Zoning
is a variation of inclusionary zoning (IZ) undertaken by the de Blasio • IZ began in 1987 under Mayor Ed Koch as density bonus for developers, but it failed to create much AH • IZ was kept through Mayorships of Dinkins and Giuliani then Bloomberg expanded (rezoning 40% of NYC)
The 1968 HUD Act
made it a ten-year plan, federal mandate to produce 26 million units of housing (6M federally assisted) and 600,000 units of low- income housing (to meet this mandate, welfare recipients were included).
FHA Section 235
mortgage insurance program help new borrowers achieve homeownership by allowing them to take out government-insured mortgages with no money down on new properties
Both the FHA and Veterans Administration excluded
nearly all African Americans, by 1959 less than 2% of FHA-insured properties went to non- whites while over the course of mid-1930s to mid-1970s FHA provided $119B in home mortgages.
Racial Steering
occurs when home seekers are guided by housing providers to communities where their race is already highly concentrated. So as racial minorities are channeled to integrated or predominantly non white neighborhoods and whites are shown homes primarily in white communities, steering contributes directly to the segregated housing patterns that have long persisted in urban communities and the many costs associated with that separation
HOPE VI provided Public Housing Authorities (PHA) with grants for
planning and implementation aimed at the comprehensive revitalization of severely distressed public housing developments.
The FHA would continue to insure
poorly constructed, existing homes with "faulty plumbing, leaky roofs, cracked plaster, faulty and inadequate wiring, rotten wood in the floors, staircases and porches, lack of insulation and faulty heating units
The problems that were to beset HUD's homeownership program stemmed from the federal government's reliance on a network of
private institutions that, in turn, relied on racial discrimination as the guarantor of its bottom line
De'blasio plan realities
produced 300% more housing for New Yorkers earning up to 30% AMI and 33% more aimed at households earning between 31%-50% AMI, compared to Bloomberg produced 50% less housing for higher income earners compared to Bloomberg AMI eligibility for AH units did not meet the real needs in most neighborhoods the city's homeless shelter population is still high NYCHA still underfunded and in crisis with lead paint issues and an estimated maintenance bill of $40B essentially ignored the interconnected issues of homelessness, public housing, and affordability furthered disparities facing vulnerable New Yorkers• 72% of households earning 200% of the Federal Poverty Line are rent burdened
Section 221 (d) (2)—(NHA)
program insures mortgage loans made by private lenders This program increases homeownership for low- and moderate-income families by insuring small mortgage loans and thus reducing the lender's risk. Traditionally, this program has been targeted to assist displaced persons.
those benefiting from the FHA got their liberal impact in the form of:
reduced down payments and longer repayment periods even as home prices rose by 52% between 1952 and 1956.
maps led to
reduced home ownership rates, house values, and rents and increased racial segregation in later decades.
Bloomberg Rezoning
rezoned about 40% of NYC or 302.6 spare miles meant to create patterns of land use with: • Restrict development in low density areas (e.g. outer boroughs) • Encourage development along major transit corridors including allowing for large- scale residential development in formerly non-residential areas (e.g. West Side of Manhattan, Downtown Brooklyn, Williamsburg /Greenpoint Brooklyn, and Long Island City in Queens) Bloomberg's rezonings added only a slight increase in residential capacity city-wide Black and Hispanic neighborhoods were disproportionately upzoned White neighborhoods were disproportionately downzoned
FHA policies prohibited
small home improvement loans made available to whites.
From 1933 to 1980- the Federal Government was seen as
the purveyor of housing for low-income Americans.
Hope VI was less about housing the poor, but
tracked with gentrification and real estate wealth accumulation.
complaints about the conditions of homes sold under Sections 235 and 221(d)(2)
warranted a congressional investigation led by Democrats against Republican- administration programs.
Home Loan Disclosure Act
was enacted by Congress in 1975 This regulation provides the public loan data that can be used to assist: • in determining whether financial institutions are serving the housing needs of their communities; • public officials in distributing public-sector investments so as to attract private investment to areas where it is needed; • and in identifying possible discriminatory lending patterns. This regulation applies to certain financial institutions, including banks, savings associations, credit unions, and other mortgage lending institutions.
Homes purchased under Section 235 and 221(d)(2)
were unsafe, not up to code, and falling apart; however, the system left these predominantly Black, urban residents with little to no recourse adopting what
investigations findings
• 25% of the investigated homes had deficiencies 11% of the 16,000 new homes had "significant deficiencies" affecting Of existing homes... • 25% were in such poor condition they should never have been insured • 50%+ had "significant deficiencies affecting safety, health or livability" 80% of existing housing had significant problems compared to 43% of the new subsidized homes with defects.
Under the Reagan Administration of the 1980s, the federal government rescinded its role as the primary lead in housing policy
• Between 1979 and 1988 Federal budget authorization for low-income housing fell by 80% There was an overall reduction in commitment to low-income housing, shallow subsidies, and limited support for affordable housing Housing programs were cut more than any other domestic program as the peace-time defense budget grew.
On August 4, 1970, four women, who were also welfare recipients, from Seattle, WA contacted Legal Services, eventually waging a class- action suit (as were many of the suits against HUD-FHA) on the basis that there was a violation of the law.
• Congress had made the provision that existing homes sold under Section 235: "shall...meet the requirements of all state laws, or local ordinances or regulations relating to the public health or safety, zoning or otherwise which may be applicable thereto" (Taylor, 2019, p. 201). • The women's homes were condemned by the city of Seattle mere weeks after purchase...and never should have been insured by the FHA...a clear violation of the law
Operation Breakthrough
• Reduce cost of housing, especially for low- and moderate-income earners • Mass produce quality homes for a variety of incomes; have year-round employment in housing industry• Reduce urban tension •Achieve stable communities by reversing suburban migration • Increase job and opportunities for minority groups • Encourage innovation to help the economy
Sections 235 and 221d2 were beneficial for two reasons:
• They tapped into areas that had been redlined and therefore had low homeownership and eager buyers when other areas were saturated markets • Being government-backed, they required low down payments; S235 had huge interest-rate subsidies; 221 offered 40-year loan terms to lower monthly payments. in a reversal to the racist attitudes that drove redlining, now African Americans were sought after potential buyers.
