This social housing bill seeks to do … a lot.
Rep. Alexandria Ocasio-Cortez and Sen. Tina Smith have introduced a measure that would create a national housing development authority, which would acquire property and build social housing, or help other entities (nonprofits, community land trusts, etc.) do so.
Those social housing providers would have to set aside, in the aggregate, at least 70 percent of units for low-income (earning up to 80 percent of the area median income) and extremely low-income households (30 percent of AMI), with at least 40 percent dedicated to the latter. Initial rents would be capped at 25 percent of income.
Social housing would also include limited equity co-ops, which limit resale value to maintain the property as affordable.
The measure seems closely modeled after the Social Housing Development Authority bill introduced by New York lawmakers last year. Both cap annual rent increases (the federal limit is 3 percent, the state’s 2 percent) and protect tenants against eviction without cause. They also allow for eminent domain to acquire land for such housing.
The federal measure specifies that land seizures would only be permitted if residents of federally assisted housing form a tenant organization and petition the authority to acquire the property, if a state or local government is trying to block affordable housing and in order to support transit-oriented development. (Some people in New York do not even want to allow three-story apartment buildings within a half-mile of transit.)
The federal measure calls for annual funding of $30 billion from 2025 to 2035, and sets up a revolving loan fund. The authority could also issue bonds to finance its work.
The bill would repeal the Faircloth Amendment, which bars the federal government from financing public housing beyond the number of units run by a public housing authority as of October 1, 1999.
It authorizes “such sums as may be necessary to address the public housing capital backlog” at the Department of Housing and Urban Development.
I probably do not need to tell you these are big asks and face an uphill battle in Congress. Just reading the above requirements of the bill might have made your head explode.
This measure raises many of the same questions that the New York version did. How do you convince lawmakers that government is well-equipped to be a developer, landlord and property manager, given the state of public housing? An infusion of cash and the repeal of the Faircloth Amendment could change that narrative, but that would take time.
Are there enough nonprofits and other entities to also take on this challenge? With the profit restrictions placed on such housing, would there be enough capital to maintain the housing long-term?
The legislation is billed as protecting housing from “for profit investors” and the “speculative market,” but to what extent would the private sector be involved? Presumably, private construction companies, designers and even developers would be involved in constructing this housing.
Then there is the question of what allocations could be expected after 2035. What is clear is that we’re going to be hearing a lot more about social housing in the coming year.
What we’re thinking about: Will the Chetrit Group lose control of 265-275 Cherry Street? Send a note to kathryn@therealdeal.com.
A thing we’ve learned: During a recent interview, City Comptroller Brad Lander discussed floating a pilot program (potentially as part of his mayoral platform) to upzone areas of the city as part of an affordable homeownership program. Lander suggested to me that this would be voluntary; communities would have to raise their hands to participate.
Elsewhere in New York…
— OceanFirst Bank in New Jersey agreed to pay $15 million to settle federal allegations that it failed to provide mortgage lending services in predominantly Black, Hispanic and Asian neighborhoods in Middlesex, Monmouth and Ocean counties, Gothamist reports. The bank neither admitted nor denied wrongdoing. New Jersey U.S. Attorney Philip Sellinger said in a statement, “We are committed to ensuring that everyone in New Jersey has access to the American dream of homeownership, regardless of race, color or national origin.”
— Donald Trump held a rally Thursday on Long Island. He has no real chance of winning New York, but Long Island is key to whether Republicans control the House next year, Politico New York reports. “While New York perhaps is not a battleground state, Long Island is a battleground island,” Rep. Anthony D’Esposito told the site. “It does benefit him, because as president, he’s going to need a majority in the House, and those seats that we’re defending on Long Island and around New York are key to that majority.”
Closing Time
Residential: The priciest residential sale Thursday was $8 million for a 4,660-square-foot condominium unit at 8 East 12th Street in Greenwich Village. Jed Lewin of The Agency had the listing.
Commercial: The largest commercial sale of the day was for $18.5 million for Chelsea Manor, a 26,800-square-foot, 36-unit apartment building at 421 West 21st Street. It was sold by Madison Realty Capital to Sky Management.
New to the Market: The highest price for a residential property hitting the market was $15 million for a 3,006-square-foot condominium at 40 Mercer Street in Soho. Nick Gavin of Compass has the listing. — Matthew Elo