City’s New “Open Door” to Finance Affordable Co-ops and Condos

There’s some good news mixed in with all the gloom for people who yearn to buy a co-op or condo apartment in New York City. For starters, this is merely the fifth most expensive city for housing in the land, behind San Jose, San Francisco, San Diego, and Los Angeles. (For its lowly ranking, New Yorkers owe thanks mostly to that price-infating economic dynamo known as Silicon Valley.) 

Now for more good news. Mayor Bill de Blasio has announced a new affordable-housing initiative called Open Door, which will finance the construction of condos and co-ops for moderate and middle-income New Yorkers, Curbed reports. It’s targeted toward first-time home buyers earning between $69,000 to $112,000. The program is expected to create 200 new homes annually, and 1,300 new homes over the next eight years. 

Unfortunately, that’s where the good news ends. The median sales price for a New York City home is $680,000, according to a recent Douglas Elliman/Miller Samuel report. The mortgage and loan information publisher HSH.com estimates that a person would need to earn at least $100,000 to buy a typical house or apartment in the New York metro area (which includes parts of upstate New York, Long Island, New Jersey, and even a sliver of the Poconos in Pennsylvania). Of course, this is assuming you’ve already made a 20 percent down payment, have a debt-to-income ratio of 28 percent, and a 30-year fixed mortgage rate with an APR of around 4 percent. Which brings us to the worst news of all: the city's median household income is around $60,000, according to the American Community Survey. 

If you do the math, the conclusion is inescapable: owning a home in New York City is becoming a dream for the fortunate few. And the Republican tax bill is likely to make matters even worse.