Policy Minute: Protecting Housing Stability Amidst the COVID-19 Crisis
At every level of government, policymakers are in the process of developing responses to address the impacts of the COVID-19 crisis on housing stability and the housing market. To help inform these efforts and longer-term discussions about housing needs that may arise in the wake of COVID-19, this Policy Minute provides key data, information and Furman Center resources.
By the Numbers
Even before the crisis, housing needs in New York City were substantial. Many households were grappling with housing instability:
- Over the past year, an average of 59,046 New Yorkers stayed in the New York City homeless shelter system each night.
- In 2018, over 25 percent of New York City renter households with earnings between $30,000 and $50,000 paid more than 50 percent of their income towards rent.
- New York City renter households with incomes between $30,000 and $50,000 paid a median rent of about $1,300.
- About 900,000 New York City households had earnings below $30,000.
- An additional 885,000 households earned between $30,000 and $75,000, and 320,000 households had earnings between $75,000-$99,000.
- 1,785,000 New York City households had earnings below $75,000.
- Out of almost 3.2 million households in New York City, almost 1,032,000 (totaling nearly 3.5 million people) had at least one household member that worked in a vulnerable occupation, and that person earned about 67 percent of the total income for the household.
- In about 549,000 households, all earners worked in vulnerable occupations, making these households hyper-susceptible to income loss.
- For households that earned less than $150,000 and had at least one worker in a vulnerable occupation in 2018, the median household monthly income was about $4,580 and the median rent was about $1,430.
- Hispanic workers in particular disproportionately worked in vulnerable occupations in 2018. The potential negative impact for low-income people of color, who are predominantly renters, could be at a scale equivalent to the effects of the foreclosure crisis.
Click here for a detailed Furman Center analysis of data on New York City and New York State household incomes, rent burden, rents, homeless shelter entries, and click here for a detailed analysis of households that rely on earned income from vulnerable occupations.
Furman Center Resources
In a new Shelterforce Op-Ed, Furman Center Faculty Directors Ingrid Gould Ellen and Katherine O'Regan and Legal Fellow Sophia House argue that COVID-19 will disproportionately harm housing insecure populations. They outline several policy recommendations to prevent an additional housing crisis. Read the Op-Ed
LocalHousingSolutions.org, hosted by the NYU Furman Center and Abt Associates, has curated a new webpage of housing-related resources in response to the COVID-19 pandemic. The resources address key strategies from localities related to a variety of issues including homeless services and outreach, eviction moratoria, property management, and additional topics. View the webpage
In November 2019, the Furman Center held a policy breakfast on Income Volatility, Housing Instability, and Housing Assistance. The presentation highlighted the critical need for housing policy to evolve in order to protect housing stability for those who experience unexpected income shocks such as a job loss or an unexpected expense such as a major medical bill. These resources are particularly relevant to current concerns about the economic impacts of COVID-19 on housing stability. View the presentation and recording
The NYU Furman Center’s Directory of New York City Housing Programs catalogues information on over 200 city, state, and federal government programs that have created, subsidized, regulated, preserved, or provided affordable housing in New York City. The following programs are some of the vital programs under discussion to provide assistance to New York:
|Emergency Solutions Grant||
The Emergency Solutions Grants (ESG) program, formerly the Emergency Shelter Grants Program, is designed to be the first step in a continuum of assistance to prevent homelessness and to enable homeless individuals and families to move toward independent living. The Emergency Shelter Grants program was originally established by the Homeless Housing Act of 1986, in response to the growing issue of homelessness in the United States. In 1987, the ESG program was incorporated into the McKinney-Vento Homeless Assistance Act. ESG is a formula-funded program that uses the Community Development Block Grant (CBDG) formula as the basis for allocating funds to eligible jurisdictions, including States, territories, and qualified metropolitan cities and urban counties for: rehabilitation or conversion of buildings into homeless shelters; operating expenses; essential services; and homeless prevention activities. The Homeless Emergency Assistance and Rapid Transition to Housing Act of 2009 (HEARTH Act) amended the McKinney-Vento Homeless Assistance Act, revising the Emergency Shelter Grants Program in significant ways and renaming it the Emergency Solutions Grants (ESG) program.
|Community Development Block Grant||
The Community Development Block Grant (CDBG) program is a federal grant distributed to localities to fund neighborhood redevelopment, economic development, and community services. Eligible uses include acquisition, rehabilitation, or demolition of real estate. Any central city of a Metropolitan Statistical Area (MSA), local government of over 50,000 people, or urban county with at least 200,000 people automatically qualifies for these formula-based funds from the U.S. Department of Housing and Urban Development (HUD). The formula allocation for CDBG funds is based on poverty levels, population, growth lag, overcrowding in housing, and the age of housing. The recipient must ensure that at least 70 percent of all funds received are used for people with low- or moderate- incomes. While the City of New York receives a direct allocation from HUD, New York State Homes and Community Renewal (HCR) oversees the distribution of a state-wide CDBG program to eligible cities, towns, and villages with populations under 50,000 and counties with an area population under 200,000. About 60 percent of New York City’s allocation is used by New York City Department of Housing Preservation and Development (HPD) for housing services.
|Public Housing Operations||
The federal government provides a subsidy source to fund public housing operations. Public Housing (PH) is constructed, owned, and operated by a public agency. The New York City Housing Authority (NYCHA) owns and manages public housing units, which are currently funded with project-based subsidies from HUD, and in some buildings, with city and state financing. NYCHA is the largest Public Housing Authority (PHA) in the country and is the biggest landlord in New York City with over 175,000 units. NYCHA completed the first public housing project in the nation in 1935, First Houses on the Lower East Side of Manhattan. To finance the project, NYCHA bought the site using a tax-exempt bond authorized by the State of New York. This bond had a 60-year amortization period, which significantly reduced the cost of construction, as did the employment of low-wage relief labor from the Public Works Administration program. However, the financing model would soon change. The nationwide Public Housing program, under which construction flourished in the middle part of the century, was mostly financed with grants for construction and operating subsidies from the federal government.
Through the Section 811 Supportive Housing for Persons with Disabilities program, HUD provides funding to develop and subsidize rental housing with the availability of supportive services for very low- and extremely low-income adults with disabilities. The Section 811 program allows persons with disabilities to live as independently as possible in the community by subsidizing rental housing opportunities which provide access to appropriate supportive services. The Section 811 program was authorized in 1990 by Title VIII of Cranston-Gonzales National Affordable Housing Act. Since its inception, the Section 811 program has created single purpose supportive housing properties that exclusively housed very low-income people with disabilities. The Section 811 program is authorized to operate in two ways: (1) the traditional way, by providing interest-free capital advances and operating subsidies to nonprofit developers of affordable housing for persons with disabilities; and (2) providing project rental assistance to state housing agencies. The assistance to the state housing agencies can be applied to new or existing multifamily housing complexes funded through different sources, such as Federal Low-Income Housing Tax Credits, Federal HOME funds, and other state, Federal, and local programs.
Through the Section 202 Preservation Program, tax-exempt bond financing is used to refinance (at lower interest rates) the original U.S. Department of Housing and Urban Development (HUD) mortgages issued for development of housing projects for seniors through HUD’s Section 202 program. In 2000, Congress passed a law authorizing HUD to allow pre-payment of Section 202 fixed-rate mortgages and to establish a limited partnership structure between non-profit organizations and equity investors. This allowed non-profits to raise equity through 4-percent Low Income Housing Tax Credits (LIHTC) and tax-exempt financing to inject capital into 202 buildings, upgrade their conditions, and provide development fees to support non-profit owners. The program also reduces the long-term amount owed by offering the capital to pay off high interest rate HUD mortgages, freeing up revenue for non-profit sponsors to offer additional services for their senior tenants, in addition to making capital improvements. In order to be eligible, residents must have an annual income not exceeding 60 percent of Area Median Income (AMI). The first component of the Section 202 program provides capital advance funds to non-profits for the construction, rehabilitation, or acquisition of supportive housing for seniors. The second program component provides rental assistance in the form of Project Rental Assistance Contracts (PRACs) to subsidize the operating expenses of these developments. Residents pay rent equal to 30 percent of their adjusted income, and the PRAC makes up the difference between rental income and operating expenses.
|Tenant-Based Rental Assistance||
Created under the Homes and Community Development Act of 1974, the Housing Choice Voucher (HCV) Program is a nationwide program that provides rental assistance and a homeownership option to low-income households. Under the program, assisted households are not confined to units located in subsidized housing developments, but have the option to use vouchers to find suitable housing in the private rental market. Upon receiving a voucher, eligible households are responsible for paying 30 percent of their annual income towards the apartment rent. Voucher payments are made by New York City Department of Housing Preservation and Development (HPD), New York State Homes and Community Renewal (HCR), or New York City Housing Authority (NYCHA) to building owners for the remaining gap between the family’s payment and the market rent (a capped amount). This gap and subsequent subsidy is known as the Housing Assistance Payment, which varies depending on the income of the family or individual and the approved rent or mortgage amount for the unit. In New York City, a small number of Section 8 HCV was used for homeownership payments by HPD in partnership with Neighborhood Housing Services of NYC. HCR also has a small program for homeownership assistance.
|Project-Based Rental Assistance||
Section 8 Project-Based Vouchers (PBVs) are a component of a Public Housing Authority’s (PHA’s) Housing Choice Voucher (HCV) program. Although PHAs are not allocated additional funding for PBV units, PHAs use its tenant-based voucher funding to allocate project-based units to a project. Projects are typically selected through a competitive process managed by the PHA. A PHA can use up to 20 percent of its authorized voucher units to project-base units in a specific project if the owner agrees to either rehabilitate or construct the units, or the owner agrees to set-aside a portion of the units in an existing development. In certain cases, the PHA may use an additional 10 percent of its authorized voucher units for PBV assistance. The PBV program was enacted in 1998, as part of the statutory merger of the certificate and voucher tenant-based assistance programs under the Quality Housing and Work Responsibility Act of 1998. Significant changes to the program were subsequently enacted in law in 2000, by the Fiscal Year 2001 Appropriations Act, and in 2008, by the Housing and Economic Recovery Act of 2008. The latest statutory changes to the PBV program were enacted recently by the Housing Opportunity Through Modernization Act of 2016 (HOTMA).
|Housing Opportunities for People with HIV||
The Housing Opportunities for People with AIDS (HOPWA) program, with funds from U.S. Department of Housing and Urban Development (HUD), helps grantees provide housing assistance and related supportive services to individuals affected by HIV/AIDS. There are two types of grantees: non-profit organizations, which win funds based on competition; and municipalities, which are awarded funds based on the number of residents affected by HIV/AIDS. HOPWA funds may be used for a wide range of housing, social services, program planning, and development costs. These include, but are not limited to, the acquisition, rehabilitation, or new construction of housing units; costs for facility operations; rental assistance; and short-term payments to prevent homelessness. HOPWA funds also may be used for health care and mental health services, chemical dependency treatment, nutritional services, case management, assistance with daily living, and other supportive services.
|Indian Public Housing Block Development Grant||
The Indian Public Housing Block Grant provides federal aid for Indian tribes and Alaska Native Villages to develop viable Indian communities. The program offers grants on a competitive basis to eligible Indian tribes and Alaska Native Villages to improve the housing stock, provide community facilities, make infrastructure improvements, fund microenterprises, and expand job opportunities. Eligible activities include housing rehabilitation, acquisition of land for housing, and assistance for homeownership opportunities for low- and moderate-income persons. Grantees may also use funds for construction of single- or multi-use facilities, streets, and public facilities, as well as for economic development projects, especially those sponsored by nonprofit tribal organizations or local development corporations. Funds may not be used for constructing or improving government facilities, for new housing construction (unless carried out by an eligible nonprofit organization), for general government or income expenses, for operating or maintenance expenses, for political activities, or to purchase equipment.
Additional Research and Perspectives
The New York Housing Conference provides a regularly updated list of resources and news for affordable housing stakeholders in the wake of the COVID-19 pandemic. View the resource
The National Low Income Housing Coalition provides national housing policy and advocacy updates related to the COVID-19 response. View the resource
The Urban Institute published a data analysis of hourly and self-employed workers showing their extreme vulnerability to income and expense shocks. Read the analysis
The JP Moragan Chase Institute published an analysis of four key imperatives to weaken the blow of COVID-19 on households and small businesses. Read the analysis.
An article published in Curbed reviews how New York City’s built environment has been influenced by pandemics over time. Read the article
HUD’s Office of Policy Development and Research documents evaluation findings from the Rapid Re-Housing for Homeless Families Demonstration Program. Read the evaluation