It’s been a decade since the financial crisis, but there are still some causes for concern when it comes to the housing market, particularly affordable housing. New York City has been facing an affordable housing crisis for several years now, and for many live here, homeownership just isn’t an option. A new report from the Center for NYC Neighborhoods examines how homeownership for working- and middle-class families is fairing in New York ten years after the crisis.
The report, entitled “Aftermath: Affordable Homeownership in New York City,” found that as of 2017, NYC homeowners tend to be “wealthier, older, and whiter than most New Yorkers.” While homeownership rates across the city have showed just modest decreases in the last 10 years, the racial composition of city homeowners has drastically shifted.
“In Queens, there are more than 20,000 fewer black homeowner households in 2017 than there were in 2005. The number in Brooklyn decreased by 5,000 during the same period,” says the report. Among NYC homeowners, black and Hispanic households are more likely to enter foreclosure and overall, more than a third of all homeowners are struggling to afford their monthly housing costs. In fact, more than 180,000 NYC homeowners are spending more than 50 percent of their income on mortgage and other related housing costs, and are just one major crisis (an unexpected medical bill, change in household size to due death or divorce, etc.) away from potentially defaulting on their mortgage.
Meanwhile, investor home purchases have doubled since the financial crisis and real estate investors are increasingly outbidding working-class New Yorkers who are attempting to become homeowners. In 2017, 62 percent of affordable single-family home purchases were made by investors and investor purchases were up in all five boroughs. Millennial home buyers are essentially “shut out of the housing market due to skyrocketing prices, stagnant wages, investor competition, and tight lending conditions.”
The report also found that roughly 400,000 New Yorkers now live in FEMA’s proposed high-risk flood zones, and highlights the housing affordability and safety challenges that the city is facing as a result of rising sea levels. It stresses the importance of making resiliency options affordable for homeowners through programs like how-cost financing and grants to carry out resiliency upgrades.
There’s much more within the 30-page report that covers everything from how senior homeowners are being affected, home prices outpacing incomes, and a series of suggested solutions to help working- and middle-class New Yorkers become homeowners to to prevent those that already are from entering foreclosure. Some of the recommendations include implementing a flip tax, offering assistance to seniors in place, expanding down payment assistance programs, and much more.
Read the report in its entirety here.
- Aftermath: Affordable Homeownership in New York City [Center for NYC Neighborhoods]