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The Impact of New York City Real Estate Prices on the Middle and Lower Classes.   Term Paper ID:32991 Click to get this paper

Essay Subject: A comprehensive look at escalating real estate prices in New York City with a ...... More...

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Paper Abstract: A comprehensive look at escalating real estate prices in New York City with a focus on how such prices are eroding the availability of affordable housing for the city’s middle and lower class residents. Paper Introduction: The Impact of New York City Real Estate Prices on the Middle and Lower Classes ABSTRACT The following report represents a comprehensive survey of literaturepertaining to escalating real estate prices in New York City The focus ofthe report is how increasingly expensive real estate prices for both salesand rentals are impacting the middle and lower-classes residing in the five-boroughs of New York City The report includes an introduction thatdiscusses the current affordable housing crisis in New York City includingfactors responsible for it Text of the Paper: The entire text of the paper is shown below. However, the text is somewhat scrambled. We want to give you as much information as we possibly can about our papers and essays, but we cannot give them away for free. In the text below you will find that while disordered, many of the phrases are essentially intact. From this text you will be able to get a solid sense of the writing style, the concepts addressed, and the sources used in the research paper. . It's no coincidence that many of the news organizationsbeating the housing-bubble drum loudest are based in those very locales-particularly New York" (92). He argued that landlords would face increased liabilityinsurance, making them discriminate against families with children. Prices continue to be high not because of a lack ofavailability but because of government imposed regulations. Once Clinton tookoffice, the per-square-foot rental prices in Harlem soared. Jody Shenn (2 4), areal estate analyst for American Banker, claims that despite escalatingprices, the New York City real estate market is marked by "fiercecompetition" for a "relatively limited inventory", representing a marketthat is "ahead of the economy" (12). What's next for real estate? Residents continue to scour second-choice locations for housing,both to buy and rent in New York City. Restructure the property tax system that unfairly burdens rental housing residents. It is likely that any affordable housing owner orlandlord will want to convert to market-rate sale or rental units in lightof the continuing increase in sale and rent prices in New York City realestate. . However, such initiativesmust be viewed as only an initial step in meeting an affordable housingcrisis that demands a much greater response. Of this half, estimates of gross income paid forhousing by residents of New York City range from 27 percent to 35 percent(Thompson 2 4; Kuchment 2 1). Indirectly, the impact on nonprofit businesses threatens to erodethe quality of life for those hardest hit by the lack of access toaffordable housing, middle and lower-class residents. New York Post, 31.Shenn, J. However, both purchase and rentalprices on housing units in these areas have been escalating to a cost closeto Manhattan housing. (May 15, 2 1). Salins (2 4) maintains that a housing market is more than housingunits; "it is a hugely complex process" (3). D. New York Amsterdam News, 95(1), 3.Browne, J. No room at top. Theincreasing real estate prices in New York City are causing the flight ofboth workers and affordable housing developments from the city. The urgent need for affordable middle and lower-income housing isalso borne out by the percentage of income New York City residents arepaying to afford housing. The focus ofthe report is how increasingly expensive real estate prices for both salesand rentals are impacting the middle and lower-classes residing in the five-boroughs of New York City. Factors such as a labyrinth of red tape andhigh income guidelines to building regulations and a number of combativeinterest groups continue to undermine the availability of affordablehousing for middle and lower-class residents of New York City. N.Y. Viewed on May 24, 2 4: www.comptroller.nyc.gov/bureaus/opm/ reports.shtm, 1-29.Thompson, W. nyc.gov/html/dcp/html/pub/socind 2.html, 1-8.Economic spotlight. There are a number of accounts in the literature of how outdatedbuilding codes hamper greater development of affordable housing. Nonprofits feel the pain of the city's office crunch. (Sep 13, 1999). Critics of the Mayor's policies contend that hisaccomplishments only benefit some portions of the city and some segments ofthe population, typically not the middle and lower-classes. Such housing units have provided middle and lower-class residentswith affordable housing alternatives. Communityactivists argue that there are too few affordable housing units planned inthe development to meet the area's needs. New money, new economic development create new mood. (Dec 25, 2 3). (Feb 16, 2 4). . F. The impact of building restrictions on housing affordability. Those in favor of the development maintain that thepotential income of the new development will add to the city's economy andthe state's to a significant degree. The price had jumped to an unreachable $5.9 million"(29). This is true in terms of businessoperating costs as well as the impact on availability of a ready laborsupply. The lack of access to affordable housing is compoundedfor middle and lower-class residents because of development trends.Developers are still wary of the overbuilding boom of the 198 s, exhibitingmore discipline in the number of construction starts. However,only some property owners will benefit from the tax rebate. According to Bellmarc, the inflated prices of rentalsstems from the fact that many buyers are driven into the rental marketwhere they are in "a holding pattern", helping push rental prices evenhigher (Croghan 1999, 1). Failure to bolster suchefforts with additional measures, such as those recommended in thefollowing section, will result in the city's inability to meet the diversehousing needs of its millions of inhabitants, particularly those among themiddle and lower-class. The homeprices range from approximately $2 , to $285, , and some come with aone-bedroom rental apartment to further help owners with affordability(Adler 2 3). The Report is a collection of data fromindicators of conditions on population, economy, crime, health, education,poverty, housing, and the environment. Harlem is booming. Many feel that one of the restrictions on moreaffordable housing is the mountain of red tape and bureaucratic maneuveringthat must occur to be granted an application for construction of a housingdevelopment. Due to Jeffrey Levine, president of Queens-based Levine Builders,"Every month of delay adds critically to your cost of investment and thefeasibility of the project" (Boss-Bicak 2 4, 24). Aggressively change zoning laws to permit former industrial areas to be zoned for residential purposes. One of the biggest restrictions to more affordable housing accordingto Shira Boss-Bicak (2 4), an analyst for Crain's New York Business, isrezoning. Still other factors have an impact on the access to affordable andsafe housing in New York City, including the condition of those units thatare classified as affordable housing. Manhattan stays seller's market. . Office towers, a skating rink, and a jogging park arealso part of the planned development. With the continuing increases in realestate prices, especially in Manhattan, owners of these buildings know howlucrative the opportunities to leave are. Therefore, the middle and lower-classes of New York City are threatened not only by the current lack ofaffordable housing but also the anticipated loss of tens of thousands ofadditional units without adequate replacement plans. 46969 The Impact of New York City Real Estate Prices on the Middle and Lower Classes ABSTRACT The following report represents a comprehensive survey of literaturepertaining to escalating real estate prices in New York City. Through the United States Department of Housing andUrban Development (HUD) Office of Community Planning and Development, NewYork City administrates the following four year entitlement programs:Community Development Block Grant (CDBG), HOME Investment Partnership(HOME), Emergency Shelter Grant (ESG), and Housing Opportunities forPersons with AIDS (HOPWA). Many argue that policymakers and housing agencies have neglectedto monitor the mortgage maturation of developments in the respectiveprograms. Daily Variety, 272(15), A1-A2.Medintz, S. Older one- and two-bedroom homeowners in New York Citypay just below one percent of their market value in property tax, but co-opand condo owners pay four percent while the rate for multi-family rentalproperties is five percent (Salins 2 4). Jr. No assistanceprograms currently exist to help those residents who are threatened withdisplacement as more and more developments elect to leave the Mitchell-Lamaand Limited Development programs. The median household income of New YorkCity renters is $31, , with 22.5 percent of renter households below thefederal poverty level in 2 2 (Thompson 2 4). Cut red tape to ease shortage. As of 2 , the 3, 21,588 occupied households in New York Citybreakdown into the following categories with respect to type of housing: HOUSING TYPE PERCENTAGE Mitchell-Lama Co-op 1.7% Condominium 2.1% Private Co-op 7.8% Conventional 21.1% Renter-Occupied 67.3% (Boss-Bicak 2 4, 25) Other segments of the population are hit especially hard byescalating housing prices. For instance, many individuals who compromise onlocation end up going downtown to TriBeCa or SoHo, but such trends havedriven up prices in these areas by 22 percent in a short space of time(Croghan 1999). M. In buildings with prestige, such as the GM Building, per-square-foot prices are going for as high as $8 . When a housing market isproperly functioning, Salins (2 4) maintains the following four conditionsare met by the cooperative behavior of suppliers and consumers: . As Browne (2 3) reports,ACORN's Patricia Boone "complained about scores of vacant city-owned lotswhich are being turned over to developers who are putting up structuresthat the community cannot afford" (5). Under the terms of the partnership, New York Cityprovides free land and required infrastructure improvements. Struggling middle and lower-class candidates with children are often frowned upon by such cooperatives. Many argue that the crush of upwardly mobile, successful whites andblacks into the area has been good for businesses in Harlem but representsa threat to affordable housing for middle and lower-income residents.While a large percentage of housing stock in Harlem is public housing,increasing prices tempt many developments to convert to market-rate orrental rate buildings. Better deals in Brooklyn. , 6(1 ), 62.Thompson: NYC may face dramatic loss of affordable housing units programs. Harlem is a prime example of how major renovation projects oftensqueeze out lower and middle-class residents from areas that are renovated. The lack of affordable housing even when a middle or lower-classresident can afford to purchase a unit means that many are forced into therental market where prices are just as high, include maintenance fees, andprovide no long-term value. Furthermore, of the 22 percentof individuals below the poverty line in New York City, 18.5 percent arefamilies, 3 percent are individuals under 18-years-of-age, and 17.8% areage 65 and older (City 2 4). The quality of many housing units in New York City is inferior whencompared to prices that keep escalating. Gargano, chairman of theEmpire State Development Corp. The average household size in New York City is 2.59 and theaverage family size is 3.32 (City 2 4). Many organizations likethe Posse Foundation, which helps inner-city children get into topcolleges, are most needed in areas like Harlem where they cannot afford topay increasingly high lease rates. Gotham prices bring 'burbs into focus. The 1961 ordinance maintains adistinction between residential and manufacturing areas. Theliterature reveals a record-setting trend among housing units, both forbuyers and renters. USA Today, 8B.Frieden, T. In comparison, apartment rentersin Dallas, Seattle, and Houston pay approximately 1.5 percent in taxes,with California apartment renters paying under one percent (Salins 2 4).This unfair tax burden continues to make access to affordable housing aburden for middle and lower-class residents. Investors find loaning far better than owning. Further, prices areremaining high and growing higher because many buyers feel that real estatevalues will only increase over time. Bloomberg argued that increased restrictions onlandlords would actually lead to less affordable housing for a couple ofreasons. Others view Bloomberg's veto as a good move for affordable housing,citing the great strides the city has made in reducing lead paint hazardsovert the past three decades. While the $6billion rehabilitation plan includes 225, units of affordable housing,many nonprofit organizations have been forced to relocate because ofescalating real estate prices (Frieden and Perine 2 4). Others give preferred parking tothose who choose to car pool, while some companies go as far as providingfree shuttle service between mass-transit stations and the office. New York City is alsoexperiencing an increase in demand and a decline in new housing production,as demonstrated by significantly low vacancy rental units for 2 2.Showing the enormous gap between the needs of middle and lower-incomeresidents and availability of affordable housing, the 2 2 vacancy ratesfor units with rents of $5 to $699 and $7 to $799 per month hadrespective vacancy rates of 1.7 percent and 2.6 percent (Thompson 2 4).With housing units renting for more than $1,75 per month, the HPD reporteda vacancy rate of approximately 1 percent during the same time period inthe Housing and Vacancy Survey (Thompson 2 4). Mayor Bloomberg argued thatsuch legislation would lead to developers being unable to afford escalatinginsurance costs. Apple firms vie to improve workers' commutes. The building will feature ageothermal heating and cooling system that does away with the need fortraditional gas heating or air conditioning, and units are equipped with "asteel superstructure and panelized walls and low-e windows that togetherare expected to reduce air infiltration by 85 percent" over traditionalbuilding materials (Ulam 2 3, 146). The revitalization ofHarlem has put upward pressure on real estate purchase and rental prices.Such development has not only reduced access to affordable housing for themiddle and lower-class residents of Harlem, but the renovations have alsomade purchase and rental prices out of reach for many nonprofitorganizations designed to serve the hardest hit populations. In the past, the mayor's Office of Affordable Housing was inplace to fast-track housing development applications. Many housing activists are upsetover the clearance of housing to make way for the development. (Apr 19, 2 4). Steep real estate prices inManhattan push many residents who work in the borough to other boroughslike Brooklyn, a traditional living alternative to Manhattan. Somecompanies assign people to branches close to their homes, while others areforced to develop creative work schedules. Adding to the woes of middle and lower-class would-be buyers, most apartments in New York are cooperatives. Currently, 35 percent of theavailable housing in New York City is among the most expensive rentals(Thompson 2 4). The real estate price increases are not only impacting middleand lower-class residents of Manhattan. Aggressive rezoning, replacing the building code withInternational standards, and other measures must be adopted soon to dealwith current and future crises in affordable housing. City officials, planners, and all stakeholders must develop, legislate, and implement policies that will increase production of affordable housing as well as those that keep Mitchell-Lama and Limited Development developments affordable. Businesses are also deleteriously affected bythe high cost of buying or renting commercial space. From Bill Clinton and Magic Johnson to Maya Angelou,many famous individuals have drawn both white and black yuppies to thearea. Thelegislation modified lead paint regulations for landlords, includingreducing the amount of time to fix lead hazards and other requirements thatcreated controversy. However, the two most successful of these initiatives, theMitchell-Lama and Little Dividend programs are in jeopardy. The group is calling for the city to require reportingsubsidies for this reason, arguing since they are paid for by tax dollars"it would only be fair to know who they are and their plans for putting upfacilities" (Browne 2 3, 5). Many owners areanxious to charge market-rate sale or rent prices, after years of beinglimited on profitability through government regulation. This further fueled a booming market. Officials need to modify affordable housing income guidelines to include residents earning less than $4 , annually. Additions to housing numerous enough to accommodate new household formation and replace obsolete or deteriorated dwellings, . According to ComptrollerThompson (2 4), "19 percent of households have a severe housingaffordability or quality problem" (4). . The "last-chance" mentality that has seized many buyers of New YorkCity real estate is often absent among middle and lower-class residents whocannot begin to think of affording $1 million housing on average incomes of$4 , per year. The authors argue that homes areexpensive in such areas because of government regulation, including zoningand other building restrictions. In thefirst quarter of 2 4, the average number of days to sell an apartment fromto 98 days, a reduction of 33% from the previous quarter (Economic 2 4).While the jobless rate fell in February, 2 4, inflated climbed 1.1% inMarch, the highest monthly increase in a decade and a half (Economic 2 4). Realtor, 1- 5.Anastasi, N. Between thetwo programs, 292 housing developments with more than 149, units ofaffordable housing were built between 1928 and 1978 (Thompson 2 4). Z. Residents who earn a median income or less in New York Cityhave little chance of affording median rents or sales prices for housing inNew York City. Crain's New York Business, 2 (16), 46- 48.Real estate. The Mitchell-Lama and Little Dividend programs provide 292 housing developmentsthroughout New York City, including 149, units of affordable housing(Thompson 2 4). (Nov 17, 2 3). Daily Variety, 269(15), B1-B2.Salins, P. . While some of the restrictions are the result of governmentregulation and can be readily corrected, others demand a long-termcooperative approach among all stakeholders to successfully resolve. A review of real estate prices, affordable housinginitiatives, restrictions on access to affordable housing, the impact onbusiness of the affordable housing crisis, and plans for developingaffordable housing will be included in the analysis. (Feb 18, 2 4). Last year's fluctuatinginterest rates, which rose from record lows before returning to currentlows at present. A one-bedroomapartment in these areas now costs more than $1,1 per month, if one isable to find a bargain (Rosenthal 2 , B1). Refrain from public auctions of land in low income areas. Despite such developments, however, the prices of even thesehomes are often out of reach for many middle and lower-class residents ofNew York City. Karen ChestnutOzkurt, of the Northern Manhattan Improvement Corporation, argues that"making homes safe for New York City children will not put people in thestreets" (Browne 2 4, 3). Where are home prices too high? ThePartnership was created in 1982, when Adler (2 3) argues that "the city'sbusiness community saw that a housing crisis affected its ability to findquality employees" (1). In Brooklyn, a new $2.5 billion arena isplanned that would include 4.4 million square feet of affordable, moderate-income and high-end housing (Post 2 4). Other factors are also undermining the availability of affordablehousing, like large-scale renovation projects. Wikepedia. The current administration under Mayor Mike Bloomberg has put forthits vision for affordable housing in a report entitled, The New HousingMarket Place: Creating Housing for the Next Generation. The group argues that to a degree the city isresponsible for the crisis because for a host of reasons. NYC ' 3 luxe market neared the record. Historically, mostaffordable housing does not come with the latest sophistications in modernliving. . Crain's New York Business, 15(37), 1-2.Croghan, L. Viewed on May 25, 2 4: http://en.wikipedia.org/wiki/New_York_City, 1-6.Department of City Planning, (New York City). Not only do increasing prices make it difficult for nonprofitorganizations to provide needed services in communities where needed, butnonprofit organizations also represent a major employer of New York City.As Croghan (2 ) warns, "The space crunch threatens the well-being of thesector-the city's sixth largest employer, with 19, organizations...thepresence of these organizations is vital to New York because they improveits quality of life with offerings as disparate as housing for the homelessand care of cancer patients" (29). . According toNew York City Comptroller William C. Real estate tax exemptions and low-interest, long-term loans tocover as much as 95 percent of total construction costs were provided tothose willing to build moderate and middle-income housing (Thompson 2 4).In New York City, the Division of Housing Supervision oversees Mitchell-Lama projects. Evenif residents in outlying boroughs can locate affordable housing,significant commuting costs often add $2 or more to monthly expenses. However, during the same decade,the City issued only 94, new certificates of occupancy, a 3.3 percentincrease in the number of housing units citywide compared to a 6. Engineering News, 252(1 ), 29.Rosenthal, J. New York Amsterdam News, 95(9), 6-7.Browne, J. . Replace outdated building code with the International Building Code. This analysis will review the escalating real estate prices in NewYork City for their impact on middle and lower-class residents. A list of recommendations is then provided as a means forpolicymakers to resolve the affordable housing crisis in New York City.INTRODUCTION Most cities struggle with the challenge of providing affordablehousing to the working poor, but in New York City rapidly escalating realestate prices are challenging city planners to provide affordable housingto highly educated workers. The followingchart provided by Crain's New York Business shows the increase of differenthousing in different locations in Manhattan for the period 1999-2 1: 1999 2 2 1 Area Upper West Side Average $54 , $626, $674, Studio $142, $166, $2 9, 1-Bedroom $248, $319, $377, 2-Bedroom $623, $755, $785, 3-Bedroom $1,664, $1,698, $1,828, 4+-Bedroom $3,39 , $3,5 2, $3,71 , Upper East Side Average $741, $86 , $911, Studio $129, $142, $198, 1-Bedroom $241, $317, $353, 2-Bedroom $677, $863, $988, 3-Bedroom $1,624, $1,665, $2,847, 4+-Bedroom $4,292, $4,38 , $4,491, Downtown Average $293, $417, $427, Studio $136, $169, $211, 1-Bedroom $251, $341, $383, 2-Bedroom $469, $691, $877, 3-Bedroom $1, 29, $1,165, $1,255, 4+-Bedroom n/a n/a n/a (Real 2 2, 19-2 ) The above average prices demonstrate the difficulty for middle andlower-income families with children to find affordable housing in areaslike Manhattan, where many of them work and earn incomes of $4 , or lessper year. Failure to do sowill not only disenfranchise large numbers of middle and lower-classresidents now residing in New York City, but it will also compound theproblem as New York City's population and affordable housing crisiscontinues to grow.ReferencesCity of New York. Companies arecompeting with each other to make the burden of commuting less bothersometo employees. Based on the evidence providedherein, the following courses of action are recommended to New York Cityplanners to successfully meet this challenge: . The flight of many lower and middle-class residents from New YorkCity because of high housing costs has a tremendous impact on a business'ability to attract and recruit talented labor. old culprits. Such an impact from escalating housing priceshas potentially negative ramifications for New York City's business, whichnot only struggle to find affordable commercial space but also rely uponthe middle and lower-classes for labor needs. Mayor Bloomberg recently proposed a$4 tax rebate that aims to bring relief to property owners. Mandated by the City Charter, the2 2 edition of the report maintains New York City's five boroughs are hometo 8, 8,278 individuals (Department 2 2). Calls for replacing the code aresupported by New York City costs of construction for residential housing,costs that per-square-foot are 9 percent higher than in Los Angeles and 22percent to 3 percent higher than in Dallas (Boss-Bicak 2 4). Many companies are offering subsidies to employees toreimburse them for mass-transit fees. ACORN drops in to demand affordable housing. (May 2 4). However, in acomprehensive study conducted on affordable housing in the U.S., theauthors conclude that in most places in the country housing prices are"fairly close" to the costs of construction and that "only in particularareas-especially New York City and California-do housing prices divergesubstantially from the costs of new construction" (Glaeser and Gyourko2 4, 35). (Jun 2 3). When it comes to protecting our kids, the mayor just doesn't get it. Mitchell-Lama & Limited Dividend Housing From 1942, when rent control was introduced in New York as acomponent of the U.S. Harlem's real estateboom has occurred due to renovation projects and took off when formerPresident Bill Clinton located his offices there. TheAgency oversaw loans, acquisition of land, destruction of unsafe housing,and the construction of new housing. Price City Avg. While the terrorist attacks didplace a slight downward pressure on office and commercial space, Crain'sNew York Business (2 2) reports that the attacks "had little effect onManhattan co-ops, as sale prices kept rising" (Real 2 2, 18). Kathryn Wilde, president of the Partnership for NewYork, argues that the Office made a considerable impact on the constructionof affordable housing by encouraging more developers to engage in theapplication process, "It absolutely had an impact. Making progress and keeping our kids healthy in all our homes. Enact legislation that prohibits real estate from being sold at a price that is inordinately higher than the costs of production. Crain's New York Business, 16(49), 29-3 .Fogarty, T. Frieden and Perine (2 4) maintain thelegislation would have led to discrimination against families withchildren, while hindering landlord compliance. The average purchase price of a New York Cityapartment is a few dollars shy of $1 million, at $998,9 5, while theaverage rental unit is going for $2,21 per month. The following table shows the existing Mitchell-Lama andLimited Dividend housing units in the five boroughs of New York City: REMAINING MITCHELL-LAMA & LIMITED DIVIDEND HOUSING Borough Co-op Units Rental Units Total Units Brooklyn 13,758 16,255 3 , 13 Bronx 24,17 16, 24 4 ,194 Queens 13,2 2 5,273 18,475 Manhattan 15,867 19,454 35,321 Staten Island 988 988 (Thompson 2 4, 9) The Mitchell-Lama Housing Program was sponsored by New York StateSenator MacNeil Mitchell and Assemblyman Alfred Lama and became law in1955. (Jan 15, 2 4). In exchange for a cap of six percenton profits, the Limited Dividend program offered developers real estate taxexemptions for a fifty year period (Thompson 2 4). Public auctioning of land continues to provide developerswith real estate that is not designated for adorable housing use. Business Impact of Affordable Housing Crisis There are a number of different impacts on business from New YorkCity's affordable housing crisis. This equates to approximately 2million of New York City's residents having lack of access to affordableand safe housing, an overwhelming majority from the middle and lower-classes. The development of affordable housing goals that are arrived at by planners on a neighborhood-by-neighborhood manner. Ebony, 56(1 ), 136-14 . R. This istrue in terms of formerly affordable housing developments under Mitchell-Lama and Limited Development programs, as well as for developments in areaslike Harlem, where renovation continues to out-price many middle and lower-income residents. New York Amsterdam News, 94(48), 5-6.Browne, J. Many nonprofits organizations are finding that rising pricesprevent them from maintaining space in the communities which they serve.New York City's Outward Bound Center wanted to expand its office, locatinga building in Hell's Kitchen for sale at $3.2 million. RealEstate Inc., claims that the reaction of many landlords equates to outrightdiscrimination against nonprofit organizations: "Many landlords assume thatservice agencies will bring hordes of poor people into their buildings, andthat foreign consulates and reproductive-health organizations will drawpicketers and bomb threats. New York City and Statehave a history of assisting developers with low-interest loans, taxabatements, and direct subsidies to promote the construction of affordablehousing. Such trends make it difficult for middle and lower-classresidents to find affordable housing, while also creating a difficult timefor businesses who must rely on a ready supply of labor from both classes. And people are lining up for them" (Mohr2 , A1 ). Price Tokyo $1,844, New York $1,589, Hong Kong $1,7 9, San Diego $1, 94, New York $1,589, Los Angeles $947, London $1,327, San Francisco $925, Sydney $1,265, Seattle $856, (Real 2 1, 62) The rising real estate prices in New York City are representative ofnationwide trends, including recent data that shows prices across thecountry grew at an annualized 14.7 percent in the fourth quarter of 2 3, afigure not realized since 1979 (Medintz 2 4). It is apparent from the literature that theabove restrictions and obstacles to greater affordable housing must beremoved and/or successfully resolved by city officials and stakeholdersbefore significant units of affordable housing will become available toresidents. Business are also impacted by disgruntled employees who faceincreasingly difficult commutes to and from their place of employment. (Mar 8, 2 4). Arlene Wysong, a senior marketing director at Newmark & Co. The currently plannedvolume of new units to be developed in New York City over the next decaderemain inadequate to cover the affordable housing gap that middle and lower-class residents face. Adopt measures to prevent discrimination against nonprofit organizations and agencies in communities where their services are required. According toTownsend (2 4), "The city has created part of its affordable housingproblem by having a building code that is outdated and that reflects thepowers of various interests that thwart the use of more modern materialsand construction methods" (3 ). The process to be approvedfor a cooperative building involves reams of paperwork, a formal sit-downmeeting with shareholders, and revelation of personal information fromsocial security number to missed car payments. (May 1, 2 3). Z. Another restriction on access toaffordable housing continues to be New York City's property tax system.The tax system is one that discriminates against "co-ops, condos, new owneroccupied housing, and even more against rental housing", according toSalins (2 4, 4). Part of the Private Housing Finance Law, the program was devised toencourage the construction of moderate and middle-income housing throughoutNew York. However, inareas like Brooklyn Heights, across the East River from Wall Street, andPark Slope, in the center of the borough, neighborhoods with tree-linedstreets and a view of the skyline offer residents a commute of less timethan residents of the Upper West Side. I mean rate holesthat people pay $15 , for. Continue to work on eradicating the city's rent regulation system that help promotes a housing shortage. The New York Beacon, 1-2.Adler, J. . A number oftrends are marking it more appealing for developments to leave the program,including significantly low interest rates, increasing real estate prices,and mortgages nearing maturation. New York Amsterdam News, 94(52), 13.Post, N. Many expertsand affordable housing advocates maintain this will be an inadequate numberof units to stave off the current crisis for middle and lower-classresidents. Charles A. (Apr 5, 2 4). In short, even inareas where they once could find affordable housing, the middle and lower-classes are being priced out of such former alternatives. There are some affordable housing projects in the works that arequite unique in terms of amenities and accommodations. Losing tens of thousands ofunits in these respective programs over the next decade will create anenormous crisis in affordable housing, particularly in light of its alreadycrisis proportions. Willwe maintain our critical supply of low-income housing that exists both inpublic housing and outside of it? (Jan 1, 2 4). Scarcity of housing and inflated prices have led toanother situation for those who need to rent affordable housing. Viewed on May 26, 2 4: http://www.manhattan- institute.org/html/cr_2.htm, 1-1 .Sanderson, B. It gave developersconfidence that they wouldn't have to battle with bureaucrats to get thejob done" (Boss-Bicak 2 4, 24). The city must undertake a number of criticalsteps to try to meet the needs of housing for middle and lower-classresidents. As one analyst maintains,"Some fear that low and moderate-income people and small businesses maysoon be priced out of Harlem" (Whitaker 2 1, 136). Since its inception, the Partnership has providedmore than 2 , homes to middle and low-income residents (Adler 2 3).The most recent project is known as Ocean Pointe at Bayswater. Other trends have served to undermine access to affordable housingin New York City. Such trends in light of escalating housing pricesserve to compound the factors that diminish the quality of life for manymiddle and lower-class residents of New York City. it remains the leader inpricey real estate as viewed in the chart below: WORLDWIDE UNITED STATES City Avg. It is critical thatcity officials start immediately to create policies and programs that willmeet the diverse housing needs of neighborhoods and families through thefive boroughs. Kuchment(2 1) maintains that the real estate market has never looked back, despitedownward trends on Wall Street. In Harlem, a moderate-income condominium now under constructionwill offer residents "the city's most high-tech residences, boasting bothan advanced internal IT system as well as several green-building features"(Ulam 2 3, 146). Long Island Business News, 51(16), 5A-6A.Birger, J. Thismeans that tenants are considered shareholders in the buildings, havingveto power over who moves in and who does not. Such rezoning, to be effective, must occur in areas thathave both adequate "infrastructure and public transportation" according toBoss-Bicak (2 4, 24). In light of the growing crisis inaffordable housing for middle and lower-class residents of New York City,such streamlined measures are greatly merited. Establish income restrictions on city subsidized housing. Viewed on May 25, 2 4: http://www.tenant.net/news/?x=121 , 1-3.Townsend, A. There are a number of factors that contribute to the lack of accessto affordable and safe housing in New York City. Low interest rates are cited as one reason for the increase in real estateprices, with a seller's market being the status quo over the past decade inNew York City. (3) Salins (2 4) argues from his study of the housing market in NewYork City that a number of factors such as high rents, development andenvironmental regulations, zoning, and other housing policies "hobble allfour components of a vital housing market-they keep new housing from beingbuilt, they provide disincentives to maintenance and reinvestment, theyfreeze much of the household population in place, and they keep obsoletehousing from being removed" (3-4). Bold visions vs. Even so, areas once considered a bargaincompared to housing in Manhattan are keeping pace with the borough in termsof rental and sales prices. Because of NewYork City's successful rehabilitation efforts, the number of city-ownedbuildings has decline from 1,763 in 1994 to 524 in 2 2 (Department 2 2).HPD listed over 3 , units in occupied buildings in its portfolio for2 4 (Department 2 2). Theauthors conclude that housing prices in the U.S. Of themore than 3 million households in New York City, nearly one-in-five or 19.1percent have a female householder with no husband present and 29.7 percentare families with children under the age of 18 living with them (City2 4). (Economic 2 4; Boss-Bicak 2 4). , forcing many businesses torelocate to other states entirely (Haughney 2 3). In the other New York you have double-digit unemployment,dilapidated housing and schools, inadequate health care services, crime,lack of affordable housing and gentrification" (Browne 2 4, 3). Crain's New York Business, 18(26), 18-2 .Real estate beyond your reach. Economic Policy Review, 9(2), 19-39.Haughney, C. New York Amsterdam News, 95(1), 1 - 11.Glaeser, E. Experts predict that a significant number of national organizationswill be forced to vacate New York City permanently because of escalatingprices. For example, Verizon allowsworkers to work longer hours so they can work fewer days per week. The increasing lack of available rental housing under $1, permonth in New York City represents a major challenge to city officials,planners, businesses, communities and other stakeholders. The successof renovating Harlem to a point rivaling the era of the Harlem Renaissancehas sent prices on housing into the stratosphere. Such beliefs are in part fueled byreal estate industry media promotion. Theaverage price for new apartments, either to rent or purchase, continues toset historical records. The demand for retail, nonprofit, and residential spacecontinues to climb in Harlem, fueling prices even higher than for somemidtown and downtown locations. Include affordable housing plans that realistically meet current and future needs as a primary element of all large- scale development projects throughout New York City.In order to offset the numerous challenges that are involved in the complexissues of affordable housing in New York City, officials, city planners,community organizations, residents and other stakeholders must worktogether to develop and implement such recommendations. Median income for a household inNew York City is slightly below $4 , , but the income for a family isonly slight higher at $41,887 (City 2 4). Continuous movement of households through the housing stock as their needs, desires, and incomes dictate, . ACensus Bureau study concluded that the commutes of those who work in NewYork City, particularly Manhattan, are "the worst in the country-an averageof 38.4 minutes each way, each day" (Sanderson 2 4, 31). (Mar 2 4). ACORN arguesaffordable housing income guidelines must be lowered to include householdsearning less than $4 , per year. As CouncilmanCharles Barron said of Bloomberg's accomplishments, "He left out the otherNew York. Theseareas need rezoned for residential construction to provide the city withmore space for affordable housing. Last year Mayor Michael Bloombergvetoed the Childhood Lead Poisoning Act (Intro 1 1A), making many middleand lower-class residents perceive the Mayor as giving them a choicebetween affordable housing and unsafe housing. Within this reportthe followed questions are proposed, according to Thompson (2 4): Will wemaintain healthy moderate and middle-income communities? According to the Federal Census Bureau reported in2 1, the population of New York City increased since 199 by approximatelya half a million people (Thompson 2 4). The 1961 zoning ordinance alsorestricts affordable housing in terms of density. The Limited Dividend housing program was part of the State HousingLaw of 1926, Chapter 823. New York City's housing gap. According to Kuchment (2 1), the averageprice of a "decent" one-bedroom apartment in New York City is closer to$3 , with two-bedroom units selling for $55 , at a minimum with thereality closer to $75 , (6 ). Technology has produced new materials andconstruction methods that are safe and less costly than those mandated bythe New York City building code. The Department of Housing Preservation and Development (HPD)undertook 4,816 rehabilitation and new construction units and 7, 14moderate rehabilitation units in 2 2, accounting for an additional 11,83 units of governmentally assisted housing (Department 2 2). . Real Estate Prices The single most significant factor undermining access to affordablehousing for middle and lower-class residents of New York City is rapidlyescalating real estate prices. As such, the Posse Foundation hasrelocated its offices from the community where it is most needed to WallStreet, finding less expensive office space there than in Harlem. Tax policies that often favor the wealthy instead of and at theexpense of the lower and middle-classes are another restriction onaffordable housing in New York City. Affordablehousing must also be a component of any large-scale renovation ordevelopment projects proposed for New York City, if the housing crisisamong middle and lower-class residents is to be successfully resolved.Businesses, sorely affected by the crisis, must work together withstakeholders to create affordable housing for middle and low-incomeworkers. This theory fits in with charges that NewYork City's affordable housing crisis is exacerbated by an outdated zoningordinance and an archaic building code, both of which add to the costs ofconstruction. Virginia Fields views the tax relief as a measure thatlets renters "out in the cold" (Browne 2 4, 3). SYNTHESIS The above review of literature demonstrates a pressing urgency forthe creation of additional units of affordable housing for middle and lower-income residents in New York City. Another conclusion that isreadily apparent is that the crisis exists to a large measure fromshortsighted policies and proposals from city officials, housing agencies,and developers. Major retailers like the Gap, Old Navy, and Blockbuster linerenovated commercial streets, while housing prices continue to soar.According to Whitaker (2 1), people realized Harlem has excellent masstransit, is central in location, and prices were much cheaper. Women have a median income of $32,949, which isapproximately $5, less than the average for males (City 2 4). Z. Of this number, 124,991 units remain but ten developmentshave left the programs since 2 , with another eleven developmentssubmitting notice to leave the programs (Thompson 2 4). ACORN maintains that many neighborhoods throughout the cityillustrate a need for "truly affordable housing", but developers whoauction for vacant lot properties neglect the needs of these communities invying for the upper-class market (Browne 2 3, 5). (Feb 26, 2 4). However, others argue that the proposed initiatives are inadequate tocounteract these losses. Affordable housing is one of the primaryrecipients of such federal funding. Continuous investment in maintaining the quality of existing stock, and . Funding programs like the New Venture IncentiveProgram (NewVip) must require developers who receive city assistance toprovide a minimum number of affordable housing units, which NewVip andother programs do not at the present time. The Association of Community Organizations for Reform Now (ACORN)had been holding a number of rallies to generate support for legislationdesigned to eliminate what it views as restrictions to increased affordablehousing in New York City. (Feb 25, 2 4). (Jul 1, 2 2). Increasingnumbers of middle and lower-class residents cannot afford access tohousing. Manhattan falls into category three, with home prices being muchhigher than the cost of new construction. Boss-Bicak (2 4) reports that one-in-four of New York City renters pays morethan half of his or her income for housing, and the city "regularly losesworkers to the suburbs in their search for housing" (24). However, throughout the city new developments that encompassaffordable housing units or those designed for middle and lower-incomeresidents are taking shape. Restrictions on Affordable Housing There are a number of restrictions to access of affordable housingin addition to a dwindling number of developments in the Mitchell-Lama andLimited Development programs. While the Office ofAffordable Housing existed during the Koch administration, it has beeninactive since then. homeseekers gear up for real estate battles. One of the most promising plans for affordable housing is a programbeing sponsored by the New York City Housing Partnership. Such a scenario did not occur as interest rates fell to currentlows, but during the spike in mortgage interest rates many felt it was timeto buy. Specific recommendations to meet the affordablehousing crisis in New York City will then be offered. When interest rates reached 5 percent, many would-bebuyers believed buying was a wise decision before interest rates rose evenhigher. As prices increase in the area, many businessesthat serve the community are also in jeopardy of being forced out ofHarlem. Lebenstein, a broker of real estate deals for nonprofits,calls the situation "a crisis" (Croghan 2 , 29). In Harlem, whererezoning has occurred, new affordable housing units have been built withmore planned. Such demographics do not bode well for families, theyoung, and the elderly among the middle and lower-classes. David N. As agreater number of middle and lower-class residents are forced to payexorbitant amounts of their income on housing, they are left with lessdiscretionary income and even less income for vital needs from health careand insurance to groceries. As Haughney(2 4) maintains, "As nonprofits and social agencies clustered around Mr.Clinton's offices, much of the neighborhood's 3.4 million square feet ofcommercial space filled up, and rents quickly doubled to about $3 a squarefoot" (21). As George Armstrong,president of the New York City Housing partnership, maintains "Ordinaryworking people don't make enough money to afford a house in New York City.That affects our ability to attract and retain quality employees" (Adler2 3, 1). There are a number of different figures provided for median homeprices and median annual household income for New York City in theliterature. Business 2. In light of the 4 , units of affordable housing in jeopardy ofbeing lost, city officials and housing agencies maintain that the scheduleddevelopment of new units of affordable housing will make up for the losses. Such issues demonstrate the powerful interest groups that oftencontrol the real estate market in New York City. This trend will have an impact on the real estate market,as a continually growing segment of the middle and lower-classes find thattheir "buying power in the housing market is slipping" (Boss-Bicak 2 4,24). As the authors maintain, "To us, a housing affordabilitycrisis means that housing is expensive relative to its fundamental costs ofproduction-not that people are poor" (Glaeser and Gyourko 2 3, 21). As pricescontinue to escalate, even expensive housing units are often located inhigh crime neighborhoods or are on the market despite problems from leadpaint to rat infestations. L. Councilman Bill Perkins questioned why the Mayor is"protecting slumlords" (Perkins 2 3, 13). City planners, officials, and housing agencies must work to ensurethat new affordable housing development plans include units that aredesigned to replace potentially lost units as well as new housing. (Feb 16, 2 4). Writing for Realtor, Jane Adler (2 4) maintains the mediansale price of a single-family home in New York City is $32 ,3 , with thearea's median household income at $58,6 . We do not need toplace more children at risk for other negative health effects" (1 ). Certain demographics pertaining to New York City do not bode wellfor middle and lower-class residents with respect to real estate prices.This is particularly true for the youngest, oldest, and single female head-of-household residents in New York City. Quite often the choice is between quality and safe housing oraffordable housing, especially for middle and lower-class residents.However, a new development that will create 128 affordable housingcondominiums is offering residents both affordability and quality andsafety. (Sep 17, 2 2). (2 4), "Access toaffordable and safe housing is one of the most critical challenges facingNew York City" (1). Like with the example fromBrooklyn, the move of the upper-class into other areas drives rental andpurchase prices upward. Currently, the median income of New Yorkers isbelow $4 , per year, making the need for affordable housing a challengefor many middle and lower-class residents. 2 2 Annual Report on Social Indicators. Of the 124,991 regulated units that remain under these programs,66,997 are cooperative apartments and 57,944 are rental apartments(Thompson 2 4). The City of New York works in cooperation with a numberof federal housing agencies to meet the diverse housing needs of itsmillions of residents. (Nov 27, 2 3). One study conducted by Glaeser and Gyourko (2 3) suggeststhat it is not income level or housing shortages that lead to a lack ofaffordable housing but prices that are significantly higher than the costsof construction. City officials and planners need to work in cooperation with federal agencies (HUD, CDBG, HOME, ESG, HOPWA) to seek more federal funding for affordable housing while developing creation solutions to increase access to affordable housing for middle and low-class residents. As Whitaker (2 4)maintains, "Rowhouses in need of total renovation that 2 years ago couldhave been had for $15, are now selling for $5 , and one will go for$1 million before the end of the year" (136). F. According to Glaeserand Gyourko (2 3), a housing affordability crisis exists when the price ofpurchase significantly exceeds the costs of construction. Plans for Developing Affordable Housing Mayor Bloomberg's $6 billion, five-year plan for the development ofaffordable housing includes the creation of 27, new units and thepreservation of 38, units between 2 4-2 8 (Browne 2 4). As Sanderson (2 4) reports,"Some big institutions, like Columbia University and New York-PresbyterianHospitals, subsidize housing for thousands of employees so they can walk towork" (31). (Sep 22, 2 ). (Aug 2 1). An extensive literature review is then presented, one thatdiscusses relevant factors impacting the lack of access to affordablehousing for middle and lower-class residents. Harlem's office revival stumbles on steep costs. New York City real estate prices also consume more gross income ofresidents than anywhere in the world. Recent tenant news. This isparticularly true with respect to costs of construction. AsCroghan (2 ) reports, "That may be a reasonable amount of decision-makingtime in the nonprofit world, but in today's white-hot real estate marketit's a lifetime. Rezoning in accordance with the city's 1961 ordinance no longerfits the reality or needs of the city. Housing complex under construction in Manhattan boasts high-tech accoutrements. Even in areas wheremany nonprofit organizations need to locate, such as Harlem, increasingprices have forced many to find other alternatives. The condominiums in this new development are going for approximately$2 per-square-foot, the average price for most affordable housing in thecity, but they are equipped with sophisticated technology like high-speedbroadband services permitting video conferencing, Internet telephoneservice, and Web-based security (Ulam 2 3). C. Worldwide, New York City is the third most expensivelocation for prime real estate, while in the U.S. percentincrease in population (Thompson 2 4). As prices for housing units continue to spiral, increasingnumbers of working, educated middle and lower-class residents are beingforced to leave the city. . ManhattanBorough President C. 4 , affordable homes may be lost. The lack of willingness to modify the building code and toaggressively rezone are also greatly undermining the availability ofaffordable housing, primarily by keeping construction costs high andcreating poor use of available real estate in formerly commercial zones.The lack of foresight and planning to accommodate the flight of Mitchell-Lama and Limited Development developments is also a primary factor in theaffordable housing shortage. To removethis obstacle to needed rezoning, city officials must develop a way ofcompensating such homeowners. and Gyourko, J. Over the past decade, the number of housing units in New York Cityrose by approximately 7 percent, with a total of 3,2 ,912 units as of 2 2(Department 2 2). Renters already faceenormous tax percentages in comparison to other forms of housing, andFields argues that "Many renters, who have seen their rents increased as aresult of the mammoth property tax hikes, will get no relief under thisplan" (Browne 2 4, 3). Already facing an impossible time finding affordable housing,Browne (2 4) argues the loss of tens of thousands of units of affordablehousing under these programs will have an enormous impact on the middle andlower-classes, "This means that apartments will become unaffordable to low-income and moderate-income people, and in some instance people are going tobe evicted from their apartments" (6). Newsweek, 137(25), 6 -61.Leas, C. Furthermore, the high demand for housing amongthe upper-class forces many upper-class residents to move into the rentalmarket. In California, New York, and six other states, home buyersseem to be justifying higher prices with the rationale that home values canonly go up. Affordable housing success stories. a continuous process to remove or renovate deteriorated and obsolete housing stock. Crain's New York Business, 2 (14), 21-22.Haughney, C. Mayor: Affordable housing outweighs lead cleanup. TheMayor also argued the unrealistic timeframes provided in the legislationfor landlords to fix lead paint violations would lead to noncompliance,putting tenants at greater risk. As Thompson (2 4) claims, "There is no firmcommitment by the Administration that a significant portion of the housinggenerated under these initiatives with the support of public subsidies willbe affordable to the average New Yorker" (1). (Feb 18, 2 4). (Mar 9, 2 4). One of the most successful methods of achieving affordable housingwould be to restore the Mayor's Office of Affordable Housing, in order tofast-track affordable housing development, cut bureaucratic red tape, andencourage more of this kind of construction by developers. The average rental price of a New York Cityapartment is $2,21 per month (Boss-Bicak 2 4). . Approximately half of all New York City familiesrent their residences. The crisis in partstems from the potential inability of nonprofit organizations to locate incommunities where they serve the needs of mainly middle and lower-classresidents. Many ofthe developers ACORN complains about are recipients of subsidies that comefrom tax dollars. However, increasing the currentcrisis in affordable housing, many developments are leaving the Mitchell-Lama and Limited Development programs. Politically, rezoning is often a difficult accomplishment becausecurrent homeowners often lose substantially in such a process. These include: New York Citysocioeconomics; real estate prices; the impact of Mitchell-Lama and LimitedDividend programs; plans for developing affordable housing; restrictions onaffordable housing; and the business impact of the affordable housingcrisis. The law was created to "correct housingconditions that were considered a menace to health, safety, morals, welfareand reasonable comfort of the citizens of the state" (Thompson 2 4, 6).To oversee the law, the New York State Housing Agency was created. But in the most recent boom, prices in theseneighborhoods have nearly caught up to Manhattan" (B1). (May 2 4). Thus, the pace atwhich developments are leaving these programs creates even less access toaffordable housing for middle and lower-class individuals. One of the biggest pressures driving up the cost of housing pricesin New York City is a real estate market that continues to thrive. There are a number of factors that areinvolved in the housing and real estate market in New York City that makethis crisis a complex, involved condition that cannot be resolvedovernight. Creation of assistance programs in order to help displaced residents of Mitchell-Lama and Limited Dividend developments find affordable housing in their neighborhoods. Tenants also must paymaintenance fees in addition to rental prices on a per monthly basis. Therefore, average rental orpurchase prices for housing units are often misleading as they include manystudio and one-bedroom apartments that do not meet the needs of majority ofNew York City households and families. As prices for saleand rental units continue to soar, many want to leave the programs as fastas possible. Viewed on May 25, 2 4: http://www. The illusion that housing is a lucrative investment is a notion thatmany would-be buyers continue to maintain, but Stuart Gabriel, a financeprofessor and director of the Lusk Center for Real Estate at the Universityof Southern California argues that most people's expectations ofappreciation are exaggerated with "house prices increasing at close to therate of inflation over time, not much more and not much less" (Birger 2 4,93). Other reports support the contention that it is primarily the costsof construction that are responsible for New York City's escalating realestate prices. (Jun 22, 2 1). Reestablish the Mayor's Office of Affordable Housing that fast- tracks affordable housing development applications, minimizing approval time and lowering costs. Such statistics demonstrate that many poor, female householders,elderly, and families with children are locked out of the escalatinghousing market because of making less income while at the same time needingmore space. Such opposing beliefs of powerful interests are often a restrictionto achieving more affordable housing in New York City. and Perine, J. The events of September 11, 2 1, have done littleif anything to dissuade New York City real estate developers nor have theyput a damper on the real estate market. Frieden and Perine (2 4)also maintain that the impact of the legislation would have put middle andlower-income children at risk for even greater health threats, "Theunintended consequences of this bill could also be the decreasedavailability of affordable and safe housing for city families. Chief among these arerapidly escalating rental and purchase prices. New York City Comptroller William Thompson's report Affordable NoMore, discusses the crisis in affordable housing stemming from Mitchell-Lama and Limited Development development flight. Furthermore, landlords of commercial spacein areas like Harlem are often reluctant to lease space to nonprofitorganizations. Manhattan rentaland cooperative prices are the highest in New York City. The report was developed by Thompson as a means of providing the DHCRand HPD with a system of knowing exactly when new housing must be plannedto make up for the expected losses in Mitchell-Lama and Limited Developmenthousing. Another impact on businesses from the escalating housing prices hasa direct impact on the middle and particularly lower-class residents of NewYork City. Of the population of over 8 million people,there are 3, 21,588 households and 1,852,233 families living in New YorkCity (City 2 4). Powerful special interests also play arole in reluctance to replace what Boss-Bicak (2 4) calls the "archaicbuilding code" with one adopted in other parts of New York State, theInternational Building Code" (24). Conclusions are then offered which posit a great deal ofresponsibility for the crisis on current administration policies andprograms. (May 26, 2 4). As of 2 3, New YorkCity office buildings were, on average, renting for $389.87 per squarefoot, up dramatically from the average price of $296.31 in 2 (Haughney2 3, 4). Emergency Price Control Act to the Mayor's recentfive-year $6 billion renovation plans, a number of housing initiatives havebeen introduced in New York City. (Apr 9, 2 4). that is building the development, argues itwill provide many jobs for local area residents in addition to affordablehousing. REVIEW OF LITERATURE New York City Socioeconomics The New York City Annual Report on Social Indicators is prepared bythe Department of City Planning. The report includes an introduction thatdiscusses the current affordable housing crisis in New York City, includingfactors responsible for it like the flight of many developments fromsubsidized affordable housing programs like Mitchell-Lama and LimitedDevelopment. The impact of rising housing prices on retail businesses fromclothing stores to eateries in New York City is also negative. The Association also maintains thatthe city's practice of auctioning off public land in low-incomeneighborhoods undermines affordable housing. A synthesis willdiscuss the findings of the analysis, followed by conclusions based on theinformation presented. Affordable no more: New York City's looming crisis in Mitchell-Lama and Limited Dividend housing. The city's rent control system, realestate tax system, outdated building code, and archaic zoning laws continueto undermine the availability of affordable housing. Crain's New York Business, 19(46), 4-5.Kuchment, A. From lead paint and ratinfestations to units that require significant improvements, many housingunits are hundreds of thousands of dollars and fall far below those inother areas in terms of quality. ThePartnership then searches for private developers to choose companies tobuild low-cost homes. In light of the current crisis and a worsening of that crisis overthe next decade, city officials need to elicit greater support and fundingfrom federal agencies in order to develop creative solutions to affordablehousing so that construction can begin now to meet anticipated futuredemand. American Banker, 169(46), 12.Thompson, W. Crain's New York Business News, 2 (7), 24-25.Browne, J. Center for Civic Innovation, Manhattan Institute. According to Glaeser and Gyourko (2 3), incities in this category of housing prices "both poor and nonpoor peoplesuffer from higher housing costs" (22). The building codesand zoning laws continue to keep the costs of construction, a key indicatorof rent and sale prices, high. Daily Variety, 267(21), A1 -A12.Perkins, B. Will we provideresources for low-income communities to a mix of all income groups? Mayor Mike's rosy state of the city. For example, building restrictions, zoning laws, and otherfactors create costs of construction for new housing. (Mar 31, 2 ). A majority of the policies and plans of current officialshave actually served to widen the gap between affordable housing and middleand lower-class incomes. Apartment living. Adding to the problem for nonprofit organizations and agenciesis the fact that many Harlem landlords expect tenants to pay for sorelyneeded renovations on top of rental fees. Approve the use of more modern, cheaper materials and construction methods to lower the cost of construction. Such is the casein New York City where incomes are far from keeping pace with risinghousing prices. City of New York, Office of the Comptroller. This in turn is driving up the prices of rental units,particularly larger, safe rental units. $2.5 billion Brooklyn minacity could create exclusive new address. (Dec 4, 2 ). Otherbusinesses provide assistance for housing. Surreal estate: Oh, those prices. Staying on track. (Jun 18, 2 1). Money, 33(5), 28-29.Mohr, I. Despite this reality, the real estate market in New York has seen thefastest growth in housing prices than any market in the U.S., representingan increase of 3 %, according to Fogarty (2 2, 8B). Crain's New York Business, 2 (7), 3 .Ulam, A. Thompson's (2 4) report provides such policymakers and agencieswith a system for knowing by when affordable housing must become available,"Knowing the year, the location and the number of developments and unitsthat are scheduled to retire their subsidized mortgages provides electedofficials, policymakers and housing advocates with valuable informationconcerning the pace at which Mitchell-Lama and Limited Developmentdevelopments many naturally leave" (Thompson 2 4, 1). The average purchaseprice of a New York City apartment is a record $998,9 5, according to theDouglas Elliman Manhattan Market Overview (Economic 2 4). Daily Variety, 272(15), A8-A9.Leas, C. The Department of Buildings is trying to helpminimize red tape associated with affordable housing applicationprocedures. RECOMMENDATIONS The results of this analysis demonstrate that New York City isfacing a critical challenge with respect to access to affordable housingfor middle and lower-class residents. The answer to these questions wereencompassed by the proposal to create or preserve over 65, units ofaffordable housing over the next five years. In Hong Kong and Londonrespectively, would-be renters and mortgage holders pay 29 percent and 18percent of gross income for housing, while New York City residents pay 35percent of their income on rent, according to Kuchment (2 4, 6 ). Dann Florek, an actor on the popular TV showLaw & Order, explains the difficulty of finding affordable and safe in thesame housing unit, "I've seen places I think are awful. Such policies include a tax system that unfairlypenalizes renters, a land auction system that includes no guarantees ofaffordable housing, renovation projects that out-price the middle and lower-class residents in neighborhoods where they unfold, and an unwillingness towork on a neighborhood-by-neighborhood basis of planning to meet the needsof residents. . Haughney (2 4) reports that many tenants argue that a largepercentage of office space for lease in Harlem "is in disrepair, withlandlords expecting tenants to pay for costly renovations...developers ofnew buildings also ask for pricey office construction costs above rentalfees" (2 4). CONCLUSIONS The main conclusion to be drawn from this research is that theescalating real estate prices in New York City are out-pricing a largepercentage of the middle and lower-classes. According to Rosenthal (2 ), "Up until re If this paper is not what you are looking for, you can search again: Search for: or Click here to request an essay written just for you.