Falling rents do little for plan
Low-income residents aren’t benefiting from lower prices
Plummeting New York City revenues are forcing spending cuts on affordable housing, meaning low-income residents aren’t benefiting from falling rents.
For the residents targeted by the city’s affordable housing program, rents would have to fall much more to make any difference. The pandemic, meanwhile, is taking a bite out of the city’s revenue, with businesses shut down and some residents moving to the suburbs in search of more comfortable places to quarantine.
That’s forcing spending cuts, including on affordable housing, said Alicia Glen, founder of development firm Msquared and former deputy mayor for housing and development under Mayor Bill de Blasio.
“People shouldn’t be dancing in the streets if rents drop 30 or 40 percent,” Glen said.
The de Blasio administration has promised to preserve and build 300,000 affordable housing units by 2026 and is more than halfway to that goal. But the city is facing budget cuts that threaten the program. New York already has reduced this year’s capital commitment for affordable housing to $741 million, from $1.2 billion at the start of the year.
There haven’t been this many apartments available in Manhattan since 2006, and the median monthly rent was down 16 percent in October to $2,868. That will help some in the short term, but ultimately do little to provide housing for low-income New Yorkers, according to Chris Leinberger, an urban real estate professor at George Washington University School of Business.
“It’s not going to solve the problem,” he said, adding that the city needs to build as many as 500,000 more units.
New York’s affordable housing crisis is years in the making. Developers tend to focus on the more profitable high-end, creating shortages of rental homes in a city where two-thirds of residents are renters. The city’s affordable housing program requires developers to set aside at least 20 percent of units for low-income residents in exchange for taxexempt financing.