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Thursday, March 29, 2007

The Bronx and Affordable Housing

When it comes to local affordable housing trends, University Neighborhood Housing Program, a nonprofit based on the Grand Concourse, is usually the first to spot them. In the late 1980s and early 1990s, the group identified the disturbing lending practices of Freddie Mac, the quasi-federal mortgage outfit that didn’t seem to care or notice that the landlords it financed were taking on a lot more debt then they could pay back. The result: a pattern of foreclosure and neglect that scarred our northwest Bronx neighborhoods.
UNHP also pointed out the problems of sub-prime mortgages and foreclosure rates long before the current national media obsession.
On Tuesday, at Fordham University, UNHP issued its latest report, “Shrinking Affordability: Housing Prices, Quality & Preservation in the City’s Last Expanse of Affordable Private Rental Housing,” which documents, among other trends, how rents are rising while the people moving in are getting poorer and the housing stock itself is increasingly in disrepair. The well attended Fordham forum featured feedback on the report from bankers, city officials and real estate industry representatives.
We’ll have more to say about the report in our print edition, but we hope to strike up a conversation right here on these important issues (just click the comment button below). Check out the report. We, and UNHP, look forward to the discussion.


  1. Thanks for starting this up, Jordan. I'll add a few comments about what struck me from the forum.

    A few people mentioned thinking regionally about affordable housing for NYC low income workers, which is something I'd also thought about. Jersey City may already be too pricey, but Newark does offer some options with decent connection to the City through the PATH and NJTransit.

    For those of you who didn't see it, News 12 did a great piece on the forum and the topic yesterday. For those of you who missed it, check out http://www.news12.com/BX/topstories/article?id=191768# but you may need a cablevision account number to view the story. The reporter Diana Perez interviewed a few residents of 1387 Grand Concourse about the rising rents. The comments were telling, as one man spoke of his rent continually going up but he can't get a raise at his job. Another resident was quoted saying he had to choose between moving and renting out a room in his apartment to a stranger.

    Panelist Frank Anelante's comments about buildings collapsing were someone prescient as the partial building collapse took place in East Harlem the same day as our forum: http://www.ny1.com/ny1/content/index.jsp?&aid=68074&search_result=1&stid=8

    Also, there is a new story on another large sale of bronx rental properties at Eastchester Heights Apartments. Taconic Investment Partners and ING Clarion Partners paid $136 million for the 1,416 unit complex (about $96,000/unit). Here are two articles on the sale: http://www.globest.com/news/872_872/newyork/159273-1.html and http://www.cpnonline.com/cpn/property_type/article_display.jsp?vnu_content_id=1003564055

    The comments made about 3 family homes pushed a few people's buttons, but it's good we didn't get too off topic at the forum. Of course many of the homes are investor-owned, and many of the homes are sold to buyers who probably can't afford them and who have never had training as landlords. A great related article on the subprime woes came out in the Daily News yesterday. Juan Gonzalez's piece highlights the work of one of our partners, NEDAP, and rightfully places a lot of the blame on the subprime lenders and brokers who have steered primarily black and latino borrowers into crappy loans. Check out this piece at http://nydailynews.com/news/2007/03/28/2007-03-28_set_up_for_a_fall-3.html

    - Greg

  2. Greg:

    You folks did a great job with the forum/presentation, and you looked and sounded great on News 12 too, Greg.

    One thing you touched on in your comment that Juan Gonzalez also mentions brings to mind a situation I'd run across when my ex-roommate was looking at one bedroom coops in Flatbush.

    Gonzalez says:

    "Sen. Chuck Schumer (D-N.Y.), a fierce industry critic, claims subprime lenders routinely targeted many black and Hispanic homebuyers with otherwise good credit histories in a form of "reverse-redlining." Those borrowers were steered into high-interest loans even though they were eligible for conventional prime rate loans."

    The convoluted redlining scheme seemed clear in the case of the Flatbush coop my friend saw as well: get folks with somewhat limited assets to move into recently renovated, reasonably priced, "sponsored" coop units, in most cases after forcing the formerly rent-controlled, primarily minority tenants out by any means necessary. Work only with bank(s) which agree to offer only 80 percent financing, so only those who can come up with 20 percent down can qualify. Get these (primarily young, white, first time buyer) shareholders in, and then perhaps establish a coop board that eventually, say, doubles the maintenance, thus forcing these "second tier" shareholders out. From then on it's buy and flip, rinse and repeat, and voila--no more pockets of poor or minority residents in gentrified neighborhoods. (I was frankly astounded that my friend was able to see anything in the neighborhood of 120-150K in any part of Brooklyn, but of course there's the rub.)

    Recently I began to write about some of these unsavory practices by real estate and mortgage brokers and lawyers on my New York blog. It's unfortunate that in today's real estate climate, overweening greed all too often overrides all human decency, but somehow these folks manage to still sleep at night. I relish the downfall of these unsavory lenders, brokers, and other "players" in a heretofore under-regulated industry.

    Kudos to Greg, Jordan, and all those who are fighting for affordable housing and fair lending practices for all New Yorkers.

  3. in light of the operating cost issue that was discussed at the forum, the incerase in the cost of water is about to get worse. The New York City Water Board has proposed an 11.5% increase for July 1, 2007.
    There are hearings about the increase proposal. The Bronx hearing is Wednesday morning at 9:30AM at Lehman's Carman Hall, Room b-34. To register to speak, call 718-595-3601.
    The hearing information is on the DEP web site at http://www.nyc.gov/html/dep/html/notices/wboard35pn.html

  4. This six-story newly constructed building was developed as a Single Room Occupancy Program building of fifty- three studio units that will serve as permanent housing for individuals who are homeless or those with a history of drug dependency. Thirty-two of the apartments have been reserved for homeless individuals and will have Section 8 rental subsidies available. Twenty-one units in the building have been reserved for low-income individuals. The building also contains amenities such as a community room, library/learning center, tenant lounges on each individual floor, a laundry room and an outdoor garden.



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