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Co-ops and Condos Could Get Boost from Mayor's Homeownership Push

Bill Morris in Co-op/Condo Buyers on July 21, 2022

New York City

Affordable housing, home ownership, co-ops and condos, Mayor Eric Adams.
July 21, 2022

For the entire eight years of the de Blasio administration, the driving force of affordable housing programs was to build as many affordable rental apartments as possible. Now Mayor Eric Adams has embraced a housing plan that puts greater emphasis on “affordable homeownership,” including co-ops and condos as well as one- to four-family homes. The mayor's plan, as reported by The City, is designed to increase the distressingly low numbers of New Yorkers of color who are homeowners — and by doing so making a dent in the city’s yawning inequality.

“Homeownership got pushed aside in previous housing plans,” says Jessica Katz, Adams’ chief housing officer. “Across the country it’s the main source of wealth creation, and we have a much lower rate of homeownership, especially for people of color. If we are ever going to confront that issue head-on and create some intergenerational wealth, we have to focus on homeownership.”

The mayor has offered a few concrete steps to get his effort underway — and committed $44 million in new money over four years — while outlining many aspirational goals with specifics yet to be unveiled.

The city’s homeownership rate in 2019 declined to 31.9%, down from a little more than 33% a decade ago, according to the most recent NYU Furman Center State of the City report. That's half the national rate of 62%. Only a quarter of Black New Yorkers own their own homes, as do only 16% of Hispanic New Yorkers.

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The most specific action Adams and Katz have described so far is a promised doubling of funding for Home First, which provides up to $100,000 in down payment assistance, as well as expansion to more people with moderate incomes. The goal: triple home purchases under the program to 300 annually.

Also in line for a boost is the existing Open Door program, under which the Department of Housing Preservation and Development finances the construction of co-ops and condos. It’s in line for more capital funding and more flexibility for developers.

Meanwhile, land trusts are gaining popularity around the country. In land trusts, a non-profit owns the land under a home and maintains long-term affordability by building resale conditions into a long-term ground lease that limit resale to income-eligible families and give the land trust a purchase option when the home is put up for sale. Albany will need to approve legislation to make land trusts viable in New York, which is well behind other places in using this option.

Adams's push for increasing homeownership is likely to hit two roadblocks — one, because building owner-occupied housing is more expensive than building rental housing; and two, because homeownership benefits primarily those with moderate and not low incomes. Even advocates of homeownership programs acknowledge that there are pitfalls and that these homeowners need some sort of government safety net with advice, and sometimes money, when they hit a financial squeeze or face unexpected repairs.

The mayor has not yet set specific goals for the volume of new housing to be built or the number of people to be helped. But Katz, the chief housing officer, promises that the Mayor’s Management Report, due in the fall, will include metrics that measure home ownership. For now, if the Adams plan bears fruit, it looks likely that the number of owner-occupied co-ops and condos will soon begin to rise across New York City.

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