New York City Housing and Neighborhoods
27 September 2007, 2:00 PM EDT
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Transcript
Gotham Gazette:
We're speaking on-line this afternoon with Vicki Been and Ingrid Gould Ellen of the Furman Center at NYU. Every year, the center puts together a report on State of New York City Housing and Neighborhoods, filled with fascinating data about where we live and how we live in New York. You can examine citywide trends, look at the highest and lowest ranked neighborhoods for a variety of statistics and check out your own neighborhood.
Welcome Vicki and Ingrid and all you Gotham Gazette readers at your computers.
Welcome Vicki and Ingrid and all you Gotham Gazette readers at your computers.
Gotham Gazette:
Welcome Vicki and Ingrid and all you Gotham Gazette readers at your computers.
Gotham Gazette:
To start off, maybe you could briefly describe a few of the key trends you found in this year’s report.
Ingrid Gould Ellen:
1. Dramatic declines in affordability of housing, both among owner-occupied and rental stock, due to combination of rising prices and rents on the one hand, and stagnant incomes on the other.
2. The jump in rate of subprime lending – from 6.5% in 2002 to 22.9% in 2005.
3. The sharp racial and ethnic disparities in homeownership rates in NYC. We found the low homeownership rates among Hispanic New Yorkers the most striking. Only 16 percent of Hispanic New Yorkers owned their homes in 2005, as compared to 43.8 percent of non-Hispanic white New Yorkers.
2. The jump in rate of subprime lending – from 6.5% in 2002 to 22.9% in 2005.
3. The sharp racial and ethnic disparities in homeownership rates in NYC. We found the low homeownership rates among Hispanic New Yorkers the most striking. Only 16 percent of Hispanic New Yorkers owned their homes in 2005, as compared to 43.8 percent of non-Hispanic white New Yorkers.
Gotham Gazette:
Your report describes a housing squeeze both for renters and for people buying their own homes. But there also is a lot of new construction. Can you describe what type of construction is taking place and what effects it’s having on peoples’ ability to find and afford a place to live.
Vicki Been:
Residential construction activity has risen dramatically in recent years. In 2005, 31,599 units were authorized by new building permits. That is more than four times as many units as the average of 7,020 that were authorized by permits each year during the 1990s.
But even that level of construction has not been sufficient to erase the gap created by low levels of construction in the 1990s, and by the swelling population and demand for housing.
But even that level of construction has not been sufficient to erase the gap created by low levels of construction in the 1990s, and by the swelling population and demand for housing.
Sara Stuart:
Downtown Brooklyn is changing very rapidly as luxury apartments are being built opposite the jail and construction is rampent. How does this compare to other neighborhoods and other periods of time?
Ingrid Gould Ellen:
There were more units authorized by new residential building permits in Brooklyn than in any other borough in 2005 - the number was nearly double the number authorized in 2002. So there has been a dramatic increase in construction in the borough as a whole. In terms of downtown Brooklyn in particular, we didn't see that much construction activity being completed in 2005, but we expect we will see more in our data this year.
Lauren Harrison:
I am reporting on seniors in Harlem and their quality of living. Have you found a difference in acquiring affordable housing between seniors and younger groups?
Ingrid Gould Ellen:
Good question. We didn't look separately at the affordability of rental housing for seniors and for younger groups.
Gotham Gazette:
There has been a lot of talk about improvement in the Bronx. But the statistics still show that Bronx neighborhoods have the highest levels of poverty, unemployment and asthma, for example, and the lowest educational levels. What, if any, signs of progress do you see?
Vicki Been:
The Bronx saw considerable improvements in at least the following areas:
-- construction activity (certificates of occupancy moved from 1220 in 2002 to 1755 in 2004 and 1434 in 2005, and new building permits increased from 2626 in 2002 to 4937 in 2005.
--The percent of students performing at grade level in reading increased from 28% to 39.6% betweeen 2002 and 2005
--The percent of students performing at grade level in math inreased from 24% to 41.5% during that time.
--Felony crime dropped from 32.8 per 1000 residents in 2002 to 29.4 in 2005
--Elevated lead blood levels fell from 11.6 per 1000 children tested to 8.3 during those three years.
-- construction activity (certificates of occupancy moved from 1220 in 2002 to 1755 in 2004 and 1434 in 2005, and new building permits increased from 2626 in 2002 to 4937 in 2005.
--The percent of students performing at grade level in reading increased from 28% to 39.6% betweeen 2002 and 2005
--The percent of students performing at grade level in math inreased from 24% to 41.5% during that time.
--Felony crime dropped from 32.8 per 1000 residents in 2002 to 29.4 in 2005
--Elevated lead blood levels fell from 11.6 per 1000 children tested to 8.3 during those three years.
Gotham Gazette:
This is maybe a question for would be real-estate speculators. Looking at the lists of neighborhood where housing prices have appreciated the most since 1994, are there any characteristics they share? Any clue as to where the next ”hot” neighborhoods will be?
Ingrid Gould Ellen:
This is a question we're really interested in and are currently researching. We're examining what characteristics of neighborhoods tend to be correlated with subsequent change, and we're most interested in learning how various public and private investments can shape a neighborhood's trajectory.
Nelson Alexander Smith:
I actually contacted the Furman Center about this previously, but thought it wouldn't hurt to ask again.
I am a writer looking for any books or sources that provide a broad historical overview of land ownership and the real estate business in Manhattan. Who owns what? What families or companies or governments are the largest owners? What have been the historical trends? I only seem to find uninterpreted data or biographical pieces of a jigsaw puzzle. Any ideas on how I can grasp a "big picture" profile of land ownership in the city? Thanks.
I am a writer looking for any books or sources that provide a broad historical overview of land ownership and the real estate business in Manhattan. Who owns what? What families or companies or governments are the largest owners? What have been the historical trends? I only seem to find uninterpreted data or biographical pieces of a jigsaw puzzle. Any ideas on how I can grasp a "big picture" profile of land ownership in the city? Thanks.
Ingrid Gould Ellen:
Unfortunately, we don't have any obvious sources to recommend. New York is probably a little different than other places because of the long-time involvement of a few families. But we do not have historical data on land or property ownership in the city. Get back in touch when/if you find the perfect source!
Carlos:
Given the current less-than-favorable fiscal condition of the New York City Housing Authority, and considering that NYCHA is an important segment of New York City's affordable housing market, this area of urban policy seems to be a timely opportunity for the scholarly community to inform policy. Furthermore, this activity may be best pursued by taking stock of comparable public housing strategies that are occurring nationally.
What is the academic/scholarly community doing to explore options for the city to enhance the viability and sustainability of such a vital housing resource. What would such options include (such as public-private partnership opportunities, etc.)?
What is the academic/scholarly community doing to explore options for the city to enhance the viability and sustainability of such a vital housing resource. What would such options include (such as public-private partnership opportunities, etc.)?
Ingrid Gould Ellen:
good question. unfortunately, the academic community has not paid as much attention to the public housing program as one might like. Some researchers are now working to examine how the public housing program as a whole is structured, and whether affording additional flexibility to local housing authorities -- including allowing them to refinance existing developments to get an infusion of equity for capital improvements -- would help them to more effectively manage their housing. Others have explored the efficacy of using HOPE VI funding to rehabilitate public housing developments and convert them to mixed income developments. One challenge with HOPE VI is ensuring that existing residents are all placed in alternative, affordable housing. Researchers have also found these efforts to be very expensive.
Ken Dircks:
Do the goals of HPD's Marketplace Plan align with the needs/trends you found?
Vicki Been:
The Mayor's ambitious affordable housing plan targets more than 2/3 of the rental units to households earning $50,240 or less. It is certainly appropriate to target the lowest income groups, but also necessary to try to help keep New City affordable for middle class families.
Jane:
How will growing numbers of foreclosures among subprime mortgage holders affect the market for affordable housing in the city (supply, demand, and government support)?
Ingrid Gould Ellen:
We're not seeing foreclosed homes sitting vacant as often in New York as we are elsewhere in the country. There still seems to be substantial demand. But we are doing further research right now on the impact of foreclosures on local neighborhoods. It is also possible that the growing foreclosure crisis and the tightening of credit markets will push households to the rental market, thereby bidding up rents.
Lauren Harrison:
Luxury condos seem to be everywhere in Central Harlem. How does this affect the rates of rent in the areas? Do renters have a valid fear of being pushed out by $1.5 million 2 bedrooms?
Ingrid Gould Ellen:
While dramatic changes are clearly taking place in Central Harlem, they seem to be mostly affecting the market for owner-occupied units. Rents still remain relatively low (the median monthly rent in 2005 was $600, one of the lowest in the city), and 70 percent of all the rental units in the neighborhood are rent-regulated.
Harold Shultz:
Do you think the subprime lending meltdown will have an impact on affordable/rent stabilized multifamily buildings? either through neighborhood deterioration or through reduced availability of funding for rehabilitation?
Vicki Been:
The subprime lending (and broader mortgage) meltdown may impact affordable/stabilized mf housing in several ways:
--Evidence suggests that mortgage foreclosures have a negative effect on the surrounding properties, and lead neighborhoods to decline. It's not clear that New York City will follow the same path as other cities, because the evidence of the foreclosure effect comes from weak market cities in which foreclosures lead to vacancies. Foreclosures may not result in vacancies here. We're studying the effect of foreclosures in NYC now, but don't yet have results.
--A tightening of credit may cause sales prices to drop because fewer buyers will be able to bid for the units. Also, a credit squeeze will reduce the ability of people to maintain their buildings and homes.
--REITs were buying up many of these buildings. To the extent that credit becomes tighter, and/or values drop, REITS may be less interested.
--Evidence suggests that mortgage foreclosures have a negative effect on the surrounding properties, and lead neighborhoods to decline. It's not clear that New York City will follow the same path as other cities, because the evidence of the foreclosure effect comes from weak market cities in which foreclosures lead to vacancies. Foreclosures may not result in vacancies here. We're studying the effect of foreclosures in NYC now, but don't yet have results.
--A tightening of credit may cause sales prices to drop because fewer buyers will be able to bid for the units. Also, a credit squeeze will reduce the ability of people to maintain their buildings and homes.
--REITs were buying up many of these buildings. To the extent that credit becomes tighter, and/or values drop, REITS may be less interested.
Gotham Gazette:
The racial diversity index is an intriguing one. Can you tell us a bit about that and what kind of neighborhoods in today’s city tend to be the most diverse?
Ingrid Gould Ellen:
We find it intriguing too!
In general, the most diverse areas are those that have high concentrations of immigrants.
In general, the most diverse areas are those that have high concentrations of immigrants.
Gotham Gazette:
At the beginning, your report has these lists of highest and lowest ranked neighborhoods by category. Some of them are for better or worse fairly predictable. But a few are startling. One is the ranking for felony crime where all the highest felony neighborhoods are high-end area of Manhattan, along with Brooklyn Heights. What explains that?
Ingrid Gould Ellen:
I think the high crime rates in some of these affluent neighborhoods are driven by the fact that they include commercial areas. The crime rate is based on the resident population; but clearly these neighborhoods have much larger daytime populations.
Dave Hanzel:
With rising construction costs, lack of buildable land, and a flat capital budget, how will the Mayor meet the production targets he set forth in the New Housing Marketplace plan?
Vicki Been:
The mayor is going to have to "create" buildable land through rezonings, innovative programs to identify underused development capacity, and pressure on government agencies to be more efficient in their own use of land. He'll also have to push the envelope in terms of creative financing options.
It's a huge challenge, to be sure, but we certainly hope the Mayor will rise to the task!
It's a huge challenge, to be sure, but we certainly hope the Mayor will rise to the task!
Gotham Gazette:
This concludes our chat on housing and neighborhood. Thanks so much to Vicki Been and Ingrid Gould Ellen for joining us today. And thanks too to our readers who sent in questions.
Gotham Gazette:
For further reading... looking for more information about housing and neighborhoods in New York City? Take a look at Gotham Gazette's housing archives and be sure to read the Furman Center's report: State of New York City's Housing and Neighborhoods 2006.
