The Real Deal New York

Only 6% of NYC’s affordable units were built in Manhattan below 96th St.

Bulk of the subsidized housing is coming to impoverished neighborhoods: Furman Center

January 15, 2015 03:49PM
By Tess Hofmann

The latest affordable housing report from NYU's Furman Center

The latest affordable housing report from NYU’s Furman Center

As rising rents in desirable neighborhoods encourage landlords to convert non-market-rate homes to market rate units, a massively disproportionate volume of the city’s affordable housing is shifting to impoverished and low-opportunity neighborhoods, according to a new report by the NYU Furman Center.

On average, neighborhoods that lost affordable units between 2002 and 2011 had rents of $400 more per month than neighborhoods where affordable housing was preserved, the report found. Neighborhoods converting more apartments to market-rate also tended to have better public schools, lower poverty rates, lower violent crime rates, and better access to jobs requiring an associate degree or lower.

During this same period, the city’s newly constructed affordable units were located, on average, in neighborhoods with a violent crime rate in the top fifth of neighborhoods, a poverty rate over 30 percent, and a local public school where just 40 percent of students performed at grade level in language arts, according to the report.

“Rising market rents in a neighborhood make exits from affordability restrictions more likely, and they also may make preservation more expensive for the city,” said Max Weselcouch, director of the Moelis Institute for Affordable Housing Policy at the Furman Center. “Still, the need for affordable units greatly exceeds the supply, and preserving units in a range of neighborhoods—low-cost and high-cost—may allow the city to spread its subsidy dollars further.”

Building more affordable housing is central to Mayor Bill de Blasio’s agenda, and his administration has committed to building or preserving 200,000 units over the next decade. 

Since 2000, only 6 percent of the city’s subsidized housing has been constructed in Manhattan below 96th Street, and of these, all have been in mixed-income 80/20 projects. As a comparison, in the 1970s, 17 percent of the city’s new affordable housing was constructed below 96th Street.

Over the next decade, 58,288 subsidized units will become eligible to opt out of affordability restrictions, many of them located in high-amenity neighborhoods. The report notes that landlords with buildings in shabbier condition might be less likely to convert to market-rate, driving the overall quality of affordable housing down.

Currently, the city’s largest concentrations of subsidized housing are located in Upper Manhattan, the South Bronx, and Central Brooklyn.

  • Bob

    Maybe the city should make it truly beneficial. Why dont examiners offer more FAR on a case by case basis. Even though its easy to throw a pile of crap at the developer and say screw the rich guy, there are economics involved and sellers price the affordable housing SQFT into the sale price. Effectively making it not worth it.

  • Edward Johnson

    “only 6 percent of the city’s subsidized housing has been constructed in Manhattan below 96th Street”
    you meant to say… disgustingly, 6% of the affordable units were built in the most expensive neighbors in the world and had the idiots in our government decided to build them in less expensive neighborhoods would could have built 4 times as many units with the same amount of our tax dollars.
    Building luxury apartments in expensive neighborhoods with my tax dollars is stupid. Just stupid. Build it somewhere else and build more of it with the same amount of my money.

    • WallStWiz78

      You’re an idiot. The government don’t build crap with tax dollars, developers do. They build wherever they want, and offer 20% as affording housing to get tax benefits. Wow…. You really don’t know shit.

      • comment flagged

        Government subsidizes developers by foregoing tax revenue for affordable development. Constructively, if the government forgoes $10M in tax revenue through tax abatement to developer, that’s $10M that could have been spent on infrastructure ans schools. Alternatively, the government could have directly hired someone to build the property for $10M themselves.

        • WallStWiz78

          You went off topic, which was location. And second, I would love to see how efficiently the city can build something… Anything, without corruption by awarding the contract to campaign contributors. Back to the original topic, the city does not dictate where the 6% of the affordable housing is because it’s the private developers that dictate where they want to build, never the city. Cost of acquiring an existing building, cost of buying out existing tenants, cost of union contractors, cost of materials, cost of interest on the debt and cost of return to investors at private equity firms is the reason apartments are expensive. I know this because I work with multiple developers. At most, developers gets to pocket 5% of total sales. Premium location will ask for premium prices. The apartments are affordable for 10 to 15 years before they are reverted back to market rate rentals. If people can’t afford to live in certain locations, then perhaps they shouldn’t try to be living there in the first place, and find a location more suitable. Again, NYC isn’t for everyone.

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