Policy Brief: 21st Century SROs: Can Small Housing Units Help Meet the Need for Affordable Housing in New York City?
This brief explores the potential demand for smaller, cheaper units to help address New York City’s affordable housing need. It considers the feasibility of self-contained micro units as well as efficiency units with shared kitchens and/or baths. The report considers the economics of building and operating small units and models their financial feasibility. It concludes by analyzing the main barriers to the creation of small units that exist in New York City and suggesting possible reforms that New York City can make to address these barriers.
21st Century SROs: Can Small Housing Units Help Meet the Need for Affordable Housing in New York City?
Single-room occupancy housing (SROs) used to be a readily available affordable housing type in New York City. During the second half of the 20th century, many SROs came to serve as housing of last resort, and mounting criticism of SROs led to laws banning their construction and discouraging their operation. Today, New York City faces a significant housing affordability crisis. In this context, it is worth considering whether the city needs an updated housing model that helps meet the need SROs filled in the last century. Here we analyze the benefits, risks, and challenges of reintroducing small housing units (self-contained micro units and efficiency units with shared facilities) in order to shed light on whether and how a new small-unit model could help meet the demand for affordable housing in the city today.
How Do Small Area FMRs Affect the Location and Number of Units Affordable to Voucher Holders?
This brief explores how the location and number of homes affordable to voucher holders will change in the 24 metro areas mandated by HUD to adopt Small Area Fair Market Rents (“Small Area FMRs”). The change to Small Area FMR—a more localized rent measures as a determinant of subsidy standards—is designed to allow housing choice voucher holders to rent homes in a wider variety of areas. The analysis finds that switching to Small Area FMRs would open up options for voucher holders in high-rent ZIP Codes while reducing them in low-rent ZIP Codes. In addition, the aggregate number of units affordable to voucher holders in these 24 metros would increase with the use of Small Area FMRs.
The Effects of the Low-Income Housing Tax Credit (LIHTC)
The Low-Income Housing Tax Credit (LIHTC) Program is the largest federal subsidy for the development and preservation of affordable housing. Since it was established by the Tax Reform Act of 1986, LIHTC has financed the development and preservation of more than 2.1 million units in over 28,000 developments across the country. As federal tax reform looms, however, there is growing uncertainty surrounding the future of LIHTC. In contemplation of debate about these possible changes, this brief explores what we know about who LIHTC serves and what research has shown about the impact of the program.
The Latest Reform Proposal for the 421-a Program
This report analyzes the potential impact of the most recent reform proposal for the 421-a program on housing development in New York City, which is currently under consideration by the New York State Legislature. In evaluating the proposal, the report finds that the proposed 421-a program’s increase in tax exemption exceeds the additional affordable housing benefit by $2.6 to $5.7 million for a 300-unit building. The report also finds that the higher tax break for developers may support a 10-18% rise in hard construction costs without affecting long-term financial returns.
Gentrification Responses: A Survey of Strategies to Maintain Neighborhood Economic Diversity
This report examines strategies used by local governments to address rising housing costs and displacement of low-income households in gentrifying neighborhoods. To assist tenants at risk of displacement, the report details strategies to regulate the landlord/tenant relationship well as strategies to provide assistance for households that move. To create and preserve affordable housing, the report explores ways to use city-owned land and other resources strategically to promote affordable housing in areas where costs are on the rise. It also examines ways to harness the market, such as inclusionary zoning and linkage fees. The report is part of an ongoing series of work by the NYU Furman Center on gentrification, but is the first to provide an overview of policy responses to the effects rapidly rising rents.
NYU Furman Center / Citi Report on Homeownership & Opportunity in New York City
This report, commissioned by Citi and conducted by the NYU Furman center, analyzes recent home sales data and examines the potential purchasing power of households at various income levels in New York City, as well as the nearby counties of Nassau, Suffolk, and Westchester. It finds that becoming a homeowner in New York City’s real estate market is a considerable challenge for the vast majority of New York City households due to the city’s severely constrained supply of affordable home-buying opportunities. And, according to the new report, homeownership prospects do not necessarily improve by moving out of the city to the surrounding New York suburbs.
Selling the Debt: Properties Affected by the Sale of New York City Tax Liens
This data brief sheds light on the process of tax lien sales in New York City, which affected over 15,000 properties and roughly 43,600 residential units between 2010 and 2015.
It finds that most tax liens in New York City eligible for sale are sold and generate substantial revenue for the city; between 1997 and 2015, the city raised more than $1.3 billion from the sale of tax liens. However, the city also has the power to remove liens eligible for sale from the lien sale list. The report also describes the characteristics of properties with liens sold in New York City between 2010 and 2015, including the property type, their location, and the outcome following the lien sale.
Mortgage Financing for Small Multifamily Rental Properties: What is the Problem?
This study examines the effect of mortgage financing on the long-term viability of the small multifamily rental stock in both Chicago and New York City. It also explores the relationship between the size of the mortgage gap and the condition of the housing stock, and looks for how the financial crisis and Great Recession affected and continues to affect the rate of origination of new mortgages for multifamily buildings of different sizes in the two geographies. It finds that, despite the mortgage gap, smaller multifamily rental properties may be in better condition generally and properties that have mortgages are generally in worse condition than those without mortgages, regardless of size. Moreover, it surfaces a number of possible reasons that can account for the mortgage gaps.
Renting In America’s Largest Metropolitan Areas
The renter population grew in both central city and suburban areas while more renters struggled to find affordable housing in the 11 largest metropolitan areas in the US, according to the NYU Furman Center/Capital One National Affordable Rental Housing Landscape report, which was released in March 2016. The Landscape examined rental housing affordability trends in the nation’s largest metropolitan areas, including Atlanta, Boston, Chicago, Dallas, Houston, Los Angeles, Miami, New York City, Philadelphia, Washington, DC and San Francisco from 2006 to 2014 and identified the impact these trends had as the renter population increased while affordable housing rates continued to decline. “Affordable” rent should comprise less than 30 percent of a household’s income. Read more >>