#affordable housing
AlterNet, January 29, 2015.
When we hear the word gentrification, we think of Google buses gliding through the streets of San Francisco and pre-fab luxury condo towers sprouting up along the Brooklyn waterfront. But gentrification, firstdefined by British sociologist Ruth Glass as a process in which a neighborhood’s “original working-class occupiers are displaced” by an influx of higher-income new arrivals, isn’t just happening in New York and the Bay Area. A potent combination of rapid private development, soaring rents and property values, and pro-growth public policy is radically reshaping the fabric of cities across the U.S.
This process doesn’t just lead to a proliferation of twee coffee shops, it contributes to the criminalization of the homeless, increased income inequality and deepened residential segregation. Investment is not necessarily a bad thing, of course, but too often, it is driven by developers whose interest is profit, not preserving local culture or ensuring that low-income residents still have access to affordable housing. Meanwhile, longtime residents are left out of conversations about what is happening to the places they call home.
Gentrificationdoes not happen the same way in every place. It is dependent on transit lines, local history and the political inclination of municipal authorities. Some cities that experienced previous waves of gentrification are now undergoing rapid new growth (like Philadelphia), while others are revitalizing downtown areas long overlooked by car-culture suburbanites (like Houston). But the signs are everywhere. Here’s a sample of what’s going on in five major cities across the country.
1. Boston
Boston wins the title of “unexpected gentrification capital of America,” according to data compiled by the Cleveland Fed. Looking at the percentage of urban homes that went from the bottom half of home price distribution to the top half, between the years 2000 and 2007, Boston came in first, with a 61 percent shift. Over a quarter of Boston residents now live in formerly low-income neighborhoods that have gentrified.
The rapid transformation of the city’s south end is being pushed by twin forces, according to Tim Davis, senior research fellow at the UMass Boston Center for Social Policy. In an interview with the Harvard Political Review, Davis explains why low and middle-income Boston residents are facing a decline in affordable housing options. According to the article, this is “caused by both ‘classic gentrification,” in which higher-income residents move into neighborhoods, and a ‘sub-prime lending bubble’ which led to a change in real estate prices that forced existing neighborhood residents to pay more of their income toward housing.”
Johnny Magdaleno reported on this insidious combination for Vice last summer. In the south Boston neighborhood of Dorchester, houses decreased in value by 40 percent between 2005 and 2007. During that same period, the neighborhood experienced twice as many foreclosures as the state average. Housing finance giants like Fannie Mae and Freddie Mac are leveraging these circumstances to their advantage, foreclosing the homes of low-income residents who fall behind in their mortgage payments. The newly empty homes are sold to large real estate developers eager to invest in newly hip areas like Dorchester. This has pushed many former homeowners into the rental market, but average rental prices in the city jumped from $1,984 in November 2011 to $2,487 as of December 2014, according to real estate database Zillow. Low-income and even middle-class Boston residents are left with fewer and fewer housing options from which to choose.
2. Nashville
The rapidity of Nashville’s metamorphosis has shocked observers and longtime residents. In a woeful New York Times column, Nashville Sceneeditor Steve Haruch laments that in recent years “we built a 78-mile, sprawl-inducing ring highway instead of investing in mass transit; we built not one but two massive stadiums downtown; we spent a half-billion dollars on a convention center the size of an aircraft….A house that went for $40,000 a decade ago might now go for 15 times that amount.” Apartment rents are up18 percent since 2009 and home values went up 9.1 percent last year alone, according to Zillow.
As construction booms downtown, concentrated development and rising rents are pushing longtime residents out of East Nashville neighborhoods like Cleveland Park, which has a significant concentration of older residents relying on fixed incomes. Working-class families have also been priced out, abandoning centrally located neighborhoods like Germantown and Hope Gardens for farther-flung, more affordable housing on the outskirts of the city. This speaks to a broader national trend: the suburbanization of poverty. As higher-educated, higher-income individuals flock to urban centers, lower-income residents are forced into suburban neighborhoods that offer limited job opportunities and social assistance programs.
This increasingly stark residential income segregation can also be understood through the lens of education. Last year, the New York Times analyzedgentrification rates by looking at which cities witnessed the largest influx of recent college graduates between 2000 and 2012. Nashville, with an increase of 48 percent, was near the top of the list. Drawn by jobs and a wealth of amenities, highly educated young workers are increasingly concentrated in a handful of big cities, exacerbating geographic segregation. As Emily Badgerpoints out at the Washington Post, “College graduates in America aren’t simply gaining access to higher wages. They’re gaining access to high-cost cities like New York or San Francisco that offer so much more than good jobs: more restaurants, better schools, less crime, even cleaner air.”
3. Los Angeles
For decades, Skid Row was known as ground zero for L.A.’s homeless population. An industrial neighborhood lined with warehouses, dive bars and pay-by-the week motels, Skid Row was where the city’s poorest residents lived. Today, the area is gentrifying at lightning speed, as developers buy up large tracts of land, converting them to luxury apartments, designer stores, and upscale restaurants and bars. Though the neighborhood has witnessed previous waves of gentrification (AlterNet reported on the changing face of Skid Row back in 2007), what’s happening today far outpaces anything that came before. According to Politico, more than 23,000 new residents have moved to Skid Row in the last seven years alone.
What makes this area’s gentrification particularly striking—and disturbing—is that it is reliant on the criminalization of Skid Row’s low-income residents. Los Angeles has the highest percentage of homeless who have no shelter whatsoever, and the city leads the nation in the number of chronically homeless, as Politico reports. But this population, many of whom suffer from physical disabilities, addiction or mental illness, has been vilified by local authorities and police officials, who view them as a blight on the city’s downtown. In 2006, Mayor Antonio Villaraigosa and then-LAPD chief William Bratton collaborated on the “Safer Cities Initiative,” a broken-windows policing effort that involved arresting offenders for petty crimes such as jaywalking, going to the bathroom in public places or sleeping on the streets. Essentially, it criminalized people for being homeless.
Though activists challenged the initiative in court, the forced marginalization of Skid Row’s most vulnerable residents continues. Just last year, the L.A. City Council unanimously approved a real estate mogul’s plan to construct a pedestrian bridge connecting two halves of his new luxury condo, preventing upscale residents from having to walk on the sidewalk below. His reason? To reduce “potential incidents that could occur during the evening hours when the homeless population is more active in the surrounding area.” The poor are being shunted aside to make room for the rich.
Those who downplay the effects of gentrification say that longtime residents often benefit from the revitalization of their neighborhoods, and that the number of people who are forced to move out is overblown. But this is not the case in Skid Row, or in other L.A. neighborhoods like the Latino enclaves of Highland Park and Boyle Heights. In an interview with the L.A. Times, Moses Kagan, president of Adaptive Realty, defended his company’s massive condo development project in Highland Park. “Nothing is permanent,” Kagan told the reporter. “Including where we live.”
4. Baltimore
In Baltimore, local authorities are also facilitating the process of gentrification, though they are doing it through development grants rather than policing efforts. City officials, led by Mayor Stephanie Rawlings-Blake, have approvedmajor tax breaks for developers to spur new housing construction, and aregiving developers $400 million in public subsidies to build a massive new office park on the Baltimore waterfront. The project, which was strongly opposed by local community groups, unions and activists, will make room for the offices of the energy company Exelon, as well as a Morgan Stanley facility, residential towers and stores.
In an article for Salon, Sally Kohn outlines the dire consequences of these grand acts of municipal benevolence. “Private companies are tricking public officials into sweetheart deals that never pay off for the public…. The private development of mass gentrification, made way for by public policy including public financing, not only systematically ossifies but intensifies the economic inequality within our nation’s cities.”
Yet local authorities are also turning to public-private partnerships to mitigate the city’s affordable housing crisis, as Dusty Christensen reported for AlterNet last year. Their two-pronged strategy involves selling public housing units to private investors, and the enforcement of an initiative called Vacants to Value. In neighborhoods with fewer vacant houses, which are deemed “strong,” landlords are pressured to fix their properties or risk losing them at public auction. Areas classified as “weak” are transformed into “community development clusters,” allowing developers to buy up entire blocks of both city-owned property and houses that have been pushed into auction. What they choose to build is out of the city’s control.
5. Denver
Like Nashville and Boston, Denver is becoming home to a growing number of highly educated, affluent young adults, and is building the amenities, nightlife opportunities and centrally located housing to draw more of them. More than 25,000 new housing units have been built along the city’s light rail lines in the last 15 years. But as Jonathan Thompson makes clear in a piece for the High Country News, this new development, much of which is being built on the path of the rail lines, has done little to benefit Denver’s longtime low-income residents. “Denver doesn’t just need more housing, it needs more affordablehousing,” he writes. “And the free market has no incentive to provide it.” Rents went up 10.8 percent in Denver last year, the second highest increase in total rent in the country after San Francisco, according to Zillow.
Areport by the local chapter of the National Association for Working Women looked at the role public transportation is playing in the city’s gentrification. It found that bus and commuter-rail fares are too high for most low-income residents. As Zoe Williams, an organizer with the group, told the Denver Postin an interview, “Low-income communities and communities of color pay for the transit system. Their neighborhoods face major changes with build-out. The bus routes they rely on get cut out. They can’t afford to ride light rail, and it doesn’t go to places they need to travel.” This means that even as low-income residents get priced out of downtown, more remote neighborhoods along public transportation lines are becoming similarly out of reach.
AlterNet, August 26, 2014.
“Cities are difference engines, and one of the qualities they assign is the place of class in space.” — Michael Sorkin, The Nation
On the shores of the Hudson River, where Riverside Park tapers into a strip of bike lane and busy highway, a row of glass behemoths punctuates the skyline. Rising 30 to 40 stories above street level, these towering residential condominiums are self-contained worlds of steel and glass, their backs to the city behind them. The Trump Place apartments have long been reviled for their architectural blandness and isolation from the surrounding social fabric of the neighborhood. But they will soon have a new, equally glittering neighbor that has taken on a more loaded role in the city’s architectural landscape: poster child for rampant income inequality.
Last fall, the Extell Development Company received approval from the city to construct a 33-floor luxury condo with two separate entrances: one for residents paying market rate for their riverfront views, and another for affordable housing tenants. Housing advocates, outraged locals and city councilmembers have pointed to the development as a prime example of how New York City prioritizes the interests of its wealthier residents, relegating those in need of affordable housing to the status of “second-class citizens.” Assemblymember Linda Rosenthalsaid the poor door was a “separate but equal arrangement” that “has no place in the 21st century.” Public Advocate Letitia James called it “segregation.” And New York Magazineproclaimed that with the construction of 40 Riverside, the city “moved just a little closer to all-out class warfare.”
Extell’s development is part of New York City’s inclusionary housing program, under which developers set aside 20% of apartment units for low-income tenants in exchange for incentives including cheap financing, significant tax breaks and permission to build 33% more square footage than would otherwise be allowed. The affordable units can either be scattered throughout the project (onsite) or located within the same community district (offsite). In the case of 40 Riverside Boulevard, the building where the affordable units are housed is immediately adjacent to the market-rate tower. But this still technically qualifies as offsite, meaning that constructing two separate entrances is perfectly legal, just one of the many creative ways developers have managed to undermine the inclusionary intention of the program.
New York City lawmakers are taking steps to correct this loophole and prevent the implementation of similar “separate but equal” policies in developments currently under construction. Gale Brewer, the Manhattan Borough president, has promised to reject plans for future developments that have separate entrances. And a cohort of elected officials on the Upper West Side, where 40 Riverside is located, wrote to the heads of New York’s Department of Housing Preservation and Development urging them to change the zoning resolution’s language. As Helen Rosenthal, a councilmember from the Sixth District and one of the lead authors of the letter, said in a phone interview, “It’s a question of fundamental dignity and human rights that people should be able to walk through the same door to get to their homes.”
Their efforts are laudable, and in keeping with the spirit of Mayor de Blasio’s campaign promise to loosen the Dickensian economic strictures that define life in this most unequal of cities. But, like the outpouring of articles condemning the poor door, they don’t address the root causes of our national affordable housing crisis or confront the profound difficulties of finding a reasonably priced place to live in our most populous urban centers. In his column this week, the New York Times’ Paul Krugman argues that affordable housing is the key to job creation and regional growth—which explains why people are moving out of the prohibitively expensive Northeast to locations further south. But as Krugman warns,
“In a fundamental sense, they’re moving the wrong way, leaving local economies where their productivity is high for destinations where it’s lower. And the way to make the country richer is to encourage them to move back, by making housing in dense, high-wage metropolitan areas more affordable.”
Krugman is exactly right. These five factors explain why the “poor door” uproar doesn’t begin to address the complexity of the affordable housing conundrum in America.
1. Building for the Rich
Starting with the basics, many apartment complexes like 40 Riverside don’t just have a separate door for low-income residents; they also have gyms, spas, elevators, rooftop gardens, storage areas, and playrooms that are available only to tenants who pay market rate. Developers have tried to explain this away, insisting that affordable housing tenants are luckyto get a spot in their buildings, regardless of their access to these amenities. Free-market advocates and conservative publications have vigorously come to their defense, with the New York Post labeling critics of such policies “wealth-distribution advocates” who are “satisfied merely to play the ‘racism’ card.”
But these arguments only highlight how transparent the motives of the developers are. They want to build luxury apartment buildings, and they include as many amenities as possible in order to attract those who can pay top dollar. But they leverage the affordable housing units, which provide them with tax incentives and permission to build larger and taller buildings, to their advantage without giving the low-income residents anything in return. This is why it is so disingenuous to hide behind the argument that Extell is legally allowed to have two separate entrances for its two buildings. These decisions are not just accidental quirks of design; they are intentional ways of isolating affordable housing tenants and preventing them from feeling at home in their own apartment buildings.
In a piece on the widespread use of these practices, the Times noted that tenant advocates “view the policies as ways to demoralize people who pay less than the going rate and to not so subtly encourage them to move elsewhere.” This isn’t a New York-specific issue; low-income residents in cities from Los Angeles to London have reported similar incidents of systemic exclusion.
2. The Elusiveness of Integration
One of the goals of inclusionary housing programs is to promote social mixing between individuals from different economic backgrounds, avoiding the concentrations of poverty that plagued sprawling midcentury affordable housing developments. But as Henry Grabar arguesat Salon, “If there’s one aspect of mixed-income housing that has most obviously fallen short, it’s the promise of new social dynamics and inter-class bonding.” While low-income and wealthy tenants may live in proximity to each other in inclusionary housing buildings, studies by the Department of Housing and Urban Development have shown that little interaction actually occurs between them. Needless to say, isolating affordable housing tenants in their own buildings and preventing them from sharing elevators, lobbies and facilities with their higher-income neighbors only exacerbates this divide.
David Von Spreckelsen, senior vice president at Toll Brothers—another high-end developer operating within the inclusionary housing program—contends it is not the responsibility of private developers to build unified communities. “No one ever said that the goal was full integration of these populations….I think it’s unfair to expect very high-income homeowners who paid a fortune to live in their building to be in the same boat as low-income renters.”
But income levels are not the only distinction between these two groups; race is a critical factor, too. Rent-regulated tenants not only earn less, they are far more likely to be minorities. Seventy-three percent of those who rent at market rates are white, compared to just 47% of rent-regulated tenants. This means that the cries of segregation and “separate but equal” policies are more than just hyperbole; poor people of color are in fact most affected by restrictions on entrances and amenities.
In a phone interview, Barika Williams, deputy director of the Association for Neighborhood and Housing Development (ANHD), a New York-based housing advocacy group, expressed concern that these policies reflect the troubling direction the city is headed. “One of New York City’s most enduring and unique attributes is its diversity. And I think there’s widespread concern that we’re turning away from that and no longer embracing the mixed-income, mixed-race, mixed-religion, mixed-culture quality that really makes New York New York.”
3. The Developer’s Choice
One of the critical flaws with New York’s inclusionary housing program is that it is voluntary. Given the reluctance of developers to participate in a relatively new housing system when they can just as easily make huge profits from constructing market-rate luxury buildings, the current program provides little guarantee that communities will get the affordable housing they so desperately need. Indeed, a 2013 report by city councilmember Brad Lander found that since the program began in 2005, it has generated only 2% of all multifamily units built in the five boroughs.
Critics have used this lack of interest on the developer’s part as a reason to overlook discriminatory policies like the poor door for the greater good of more affordable housing. After all, they say, it’s better to have some percentage of affordable housing units than none at all. But this twisted logic ignores the fact that a voluntary program simply doesn’t do enough to address the city’s staggering housing needs. What the low participation rates really prove is that we can’t simply allow the private sector to dictate how affordable housing gets built. As the Nation’s architecture critic, Michael Sorkin, explained in an article on inclusionary zoning, “If we concede that the market is not a system that makes equality its first priority, then we must interfere with it in some way to produce equitable results.”
A report from Association of Neighborhood and Housing Development found that an inclusionary zoning policy that required developers to participate, rather than allowing them to join voluntarily, could generate 4,000 affordable units annually, instead of the current 400 per year. Mayor de Blasio has made mandatory inclusionary zoning a centerpiece of his ambitious housing plan, which is a crucial step in the right direction, but this still won’t do enough to supply a sufficient number of low-income apartments. As ANHD points out, “rent-regulated units are disappearing fast, either as the result of being deregulated once they become vacant, or because of the demolition of the buildings in which they sit.” (Demolition alone cost the city around 8,000 units between 2005-2012.)
4. Affordable, But Not Permanent
Most of the nation’s affordable housing programs only require temporary affordability, which often expires in 30 years or less. This means that developers will continue to profit from the affordable units in their buildings long after they have ceased to be rented to low-income individuals. In New York, the erosion of affordability seriously undermines the mayor’s goal of providing the city with 200,000 affordable units over the next decade. As ANHD reports, starting in 2017, New York City will begin losing an average of more than 11,000 affordable units a year.
5. The Many Shades of Poverty
One of the most striking aspects of the poor door debate is that these affordable housing tenants are defined as “poor.” In order to qualify for one of the 55 affordable units at 40 Riverside, for example, a tenant would need to earn less than 60% of the area’s median income—which would be about $52,000 a year for a family of four. As Pat Regnier pointed outat Time, that family could rent a two-bedroom under the program for around $1,100 per month. Although the extremely high costs of living in New York City mean that a $52,000 salary doesn’t go very far, this income level is still far above what most of New York’s affordable housing seekers earn.
Writing at Vox, Matthew Yglesias argues that “the real victims are every economically struggling New Yorker who doesn’t get the discount” made possible through inclusionary zoning. And there are thousands of these people. ANHD found that a full two-thirds of New York City’s affordable housing is actually unaffordable to most neighborhood residents; the typical Bronx household would have to make 1.5 times its income in order to afford the majority of affordable housing built in the borough.
* * * * *
The affordable housing crisis will not be solved because of the elimination of one policy, nor will it be solved quickly. But in order to mitigate this urgent crisis there are myriad policies cities like New York can implement, like making inclusionary zoning mandatory for developers; ensuring that new low-income units remain permanently affordable; and preventing the displacement of rent-stabilized tenants. The fight for affordable housing is not just about demonizing developers, or attacking the most visible symbols of inequality like the poor door. It’s about taking more than a piecemeal approach to housing policy, understanding the economic constraints for developers, and guaranteeing a supply of comfortable, safe apartments for the urban residents who need housing assistance the most.
Correction: This article has been updated to include the full street name of the Extell company’s Upper West Side development. Not to be confused with 40 Riverside Drive, the new inclusionary zoning development will be located at 40 Riverside Boulevard between 63 and 64th streets.
Instead of Tariffs or National Rent control.
What we really need is National up-zoning
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