COORDINATED BY Gabriela Rendรณn Assistant Professor of Urban Planning School of Design Strategies Parsons The New School For Design DEVELOPED BY Graduate Program in Design and Urban Ecologies, Fall 2015 Studio Parsons the New School For Design: Paul Kardous Michaela Kramer Ruchika Narendra Lodha Sruti Penumetsa Priya Pinjani Maria Isabel Saffon Sanin Jakob Winkler Heming Zhang
CREATIVE COMMONS Please feel free to use or reproduce parts or all of this book. Except where otherwise noted, this work is licensed under the Creative Commons Attribution-Non Commercial-Share Alike 0.4 International License. To view a copy, visit: http://creativecommons. org/licenses/by-nc-sa/4.0/ ACKNOWLEDGMENTS We want to thank all partners and community members who participated in this project and enabled this publication: Brigette Blood and Scott Short from Ridgewood Bushwick Senior Citizens Council; Rania Dalloul, Rachel Christmas Derrick, Alex Roesch and Brent Sharman from the Urban Homesteading Assistance Board; Maliha Safri from the Solidarity Economy Project; and the following interview partners: David Calvert, Pin Lo, Jack Moore, Alba and Edwin Orellana, Maria Ortez, Jova Puga, Henry Reid, Linda Rosario, Ray Sage, and Barbara and Sharon Taylor.
TABLE OF CONTENTS 1.
A HISTORY OF BUSHWICK
WHO LIVES IN BUSHWICK?
DEMOGRAPHICS GENTRIFICATION & DISPLACEMENT
HOW ARE LANDLORDS AND DEVELOPERS CHANGING BUSHWICK?
REAL ESTATE MARKET TRENDS NEW CONSTRUCTION DEVELOPER INCENTIVES PREDATORY PRACTICES
28 30 34 36
WHO CAN AFFORD BUSHWICK?
AFFORDABLE HOUSING PUBLIC HOUSING HOUSING SUBSIDIES RENT REGULATION COMMUNITY LAND TRUSTS HOUSING CO-OPS SHAREHOLDER INTERVIEWS
50 68 80 90 98 104 130
ALTERNATIVE HOUSING MODELS
SOLIDARITY ECONOMY SYSTEM MANDATORY INCLUSIONARY LIMITED EQUITY CO-OPS AFFORDABLE HOUSING REVITALIZATION PROGRAM
150 158 166
INTRODUCTION This long term research and design-based project was initiated as part of a first year studio of the Design and Urban Ecologies (MS) Program by Gabriela Rendón, Assistant Professor of Urban Planning, in 2013. Since then students have learned from and collaborated with long-term partners—residents, grassroots groups, and community based organizations—in the district of Bushwick. This district, located in North Brooklyn, is one of the most contested urban areas in the city. Recent rezoning processes and for-profit developments have made residents and local groups question the goals and outcomes of current urban policies and practices taking place in the city. Displacement in the name of development has become a policy. The first undertaking of this long term project, From Urban Homesteading to a New Ecology of Housing, was developed in collaboration with Frank Morales, a long term housing activist, squatter, author and part-time faculty. This initial project focused on a city wide investigation of the current housing condition, homelessness and structural vacancies, as well as the successes and failures of federal and local urban homesteading programs. The second iteration, Alternative Housing Models as an Urban Anti-Displacement Strategy, continued in the fall 2014. This project aimed to develop a thorough research on housing provision changes and urban restructuring processes in Bushwick. As part of the research, a participatory neighborhood survey was organized in collaboration with North West Bushwick Community Group. Community members and students walked block by block to identify and categorize vacant properties as well as new housing developments. The third iteration, Revisiting Housing Cooperatives as an Alternative Housing Model, took place in fall 2015. It delved once again into housing, but this time it focused on affordable housing opportunities in Bushwick and especially on Limited Equity Housing Cooperatives, a housing model providing shared ownership and permanent affordability. For this research students collaborated in a National Coop Research project led in this city by the Urban Homesteading Assistance Board (UHAB) and the Solidarity Economy Project. Students and UHAB’s members interviewed a number of shareholders to unearth their narratives and learn about the benefits, challenges and socioeconomic impact of limited-equity co-ops. 4
The three iterations offered a number of alternative housing models providing permanent affordable housing for low- and moderate income households. Students designed a number of strategies for community based access to housing, renovation and infill of existing housing stock, structured around the provision of public grants, loans, sweat equity subsidies and expertise to low-income families willing to renovate existing vacant dwellings towards shared homeownership. Most of the proposals promote community participation, ownership, and management as part of a long term strategy to generate local development without displacement in this district. The research and design proposals of the first two iterations were published in a neighborhood gazette format. The two volumes of the A Right to Housing Gazette have been distributed in Bushwick, as well as in many other districts of the city facing similar conditions. The research and design proposals of the third iteration have been published in two booklets. A small issue which includes the outcomes of a research on limited equity housing cooperatives, and this issue which offers an overview of a more elaborated research on Bushwickâ&#x20AC;&#x2122;s current economic, social and housing conditions, affordable housing opportunities, alternative housing models, as well as some proposals to strengthen and expand limited equity housing cooperatives in this district. In the design section of this publication, strategic design proposals developed by the students in collaboration with Ridgewood Bushwick Senior Citizen Council and the Urban Homesteading Assistance Board are illustrated. Students learned from and got inspired by an ongoing project developed by these two nonprofits in the area; the establishment of a Community Land Trust in 17 buildings that were previously foreclosed by the city and later rehabilitated by these two entities with the aim of creating a community housing cooperative. The students proposals envision ways to strengthen and expand this project as well as to preserve affordable housing and limited equity housing cooperatives in distress in the district. For more information about the project and previous publications go to: http://sds.parsons.edu/urban/projects/ 5
METHODOLOGY Quantitative and qualitative methodologies were used for this research. Census data and other secondary sources, such as news and scholarly articles, were analyzed and visualized in a series of diagrams and maps. A spatial analysis was carried out as well to illustrate the spatial distribution of a number of conditions in the district. Additionally, a public opinion survey on housing was carried out, as well as qualitative research, which included visual research, participant observation, informal meetings with residents and key informant interviews.
As part of the qualitative portion of the research, interviews with shareholders in limited equity co-ops were conducted. These interviews were organized and coordinated by UHAB and the Solidarity Economy Project (SEP) with shareholders and/or board members. Each interview was conducted by one UHAB representative and two students of DUE Parsons Studio I and videotaped with consent. One interview was in Bushwick and the other six spread among Manhattan, Bronx and Brooklyn. The questions were designed by Maliha Safri from The Solidarity Economy Project, with input from Parsons The New School For Design and UHAB. These questions were used as a guide to the conversations. These interviews provided both positive and negative insights into the functioning of co-op buildings and boards, as well as experiences of living in a co-op. 6
PUBLIC OPINION SURVEY In total, 90 residents were surveyed in public spaces throughout the neighborhood in October 2015, including Maria Hernandez and Irvin Square Parks, as well as blocks close to subway stations on the heavily frequented Knickerbocker, Wilson, Myrtle, and Wyckoff Avenues. The map below shows the exact locations where surveys were conducted.
H US FL
E AV M
W YC KO
E MYRTLE AV
OA M DW AY
The sampling followed a random selection of people that a) lived in Bushwick and b) were older than 18 years. The sample represents a balanced distribution across genders as well as different age groups. Due to the required minimum age, the average age of survey respondents (35.3) is slightly higher than Bushwickâ&#x20AC;&#x2122;s (29.9). The survey questions asked participants about current housing situations and satisfaction therewith, desired housing types, recent changes in the neighborhood, as well awareness of limited-equity co-ops as a possible answer to the current affordable housing crisis. The results of the survey will be presented throughout the booklet with the icon you see above and a frame that demarks it. The information analyzed will support the theoretical research. 7
A HISTORY OF BUSHWICK Bushwickâ&#x20AC;&#x2122;s history is one of struggle and resilience. Since the 1960s, the neighborhood has endured a variety of issues from institutionalized racism in the form redlining, disinvestment, high unemployment and a powerful drug market. At the same time, the people of Bushwick have fought against these battles through activism and the creation of impactful community organizations. It is by virtue of such groups that Bushwick was able to revitalize itself after its darkest period during the 1970s and 1980s. Today, the neighborhood faces new challenges of gentrification and displacement of many of its long time residents and businesses. The community continues to build a movement for survival and social justice. 8
AN UPHILL BATTLE 2010s 2000s 1990s 1980s 1970s 1960s WHITE FLIGHT Many white middle-class families move out of Bushwick to the suburbs. Simultaneously, African Americans and Puerto Ricans move to Bushwick during a period of migration from South to North for better economic opportunities.
INSTITUTIONAL DISINVESTMENT Bushwick suffers the effects of redlining and government disinvestment. In 1977, a massive blackout followed by fires destroy much of the neighborhoodâ&#x20AC;&#x2122;s buildings and leave many residents homeless.
NEIGHBORHOOD STRUGGLE High unemployment rates and housing issues trouble the neighborhood, however, a process of reconstruction begins by way of public investment and community-led programs.
RESILIENCE & RECOVERY Incomes and population begin rising alongside the creation of greater affordable housing opportunities by local nonprofit organizations.
BEGINNINGS OF CHANGE Artists looking for affordability begin to move into the neighborhood, converting former industrial buildings into artist studios and lofts.
GENTRIFICATION & RESISTANCE Incoming upscale residential developments and a loss of affordable housing displaces many long time residents. Activists and local organizations continue to fight for community justice. 9
WHO LIVES IN BUSHWICK? household characteristics/ demographic changes / social conflicts 14
BUSHWICKâ&#x20AC;&#x2122;S POPULATION AT A GLANCE Bushwick is and has long been a Hispanic working-class neighborhood, with Puerto Ricans, Dominicans, Mexicans and other Latin American groups making up 65.5% of the population.
MEDIAN HOUSEHOLD INCOME & EDUCATIONAL LEVEL The working-class character of the neighborhood is reflected in incomes far below the city-average, as well as a comparatively low percentage of people with higher educational degrees.
GENTRIFICATION & DEMOGRAPHIC CHANGES More recently, Bushwick has seen an influx of a wealthier and more white demographic and a simultaneous increase in living costs.
DISPLACEMENT This threatens the long-term residents that have made Bushwick into what it is today, as they are being pushed out of their neighborhood.
DEMOGRAPHICS In this chapter, we will take a closer look at the people living in Bushwick and demographic changes throughout the past decades. Bushwick has been and, despite more recent demographic changes, still is a predominantly Hispanic working-class neighborhood.
TOTAL POPULATION 120,798
80K 100K 120K 140K 160K Source: US Census, 2007-2013
Bushwickâ&#x20AC;&#x2122;s population amounted to 120,798 people in 2013. It has steadily been on the rise since the post-black out low in 1980 (92,497), reflecting the culmination of decades of public disinvestment in the neighborhood. The recent rise in population has been largely concentrated in the northern part of Bushwick, driving greater population density in the neighborhood, which in 2013 amounted to 56.5 people per square mile. Accordingly, Bushwick is a denser place than the borough of Brooklyn (36.2) and the City (27.6).
POPULATION DENSITY CY
E MYRTLE AV
The population density of Bushwick is higher in the North as compared to the South and has incresed marginally over the years.
OA DW AY
Persons per acre 150-199.9 100-149.9 50-99.9 16
Source: US Census, 2010
ETHNIC AND RACIAL COMPOSITION Bushwick is a predominantly Hispanic and, to a lesser extent, African American neighborhood. In 2010, these two groups accounted for 85.5% of the population, or 65.4% and 20.1% respectively. The Hispanic population is dominated by Puerto Ricans, Dominicans, and Mexicans, which in 2010 made up for 75% of the Hispanic and 48.4% of the entire population. A completely white neighborhood until the 1950s, the rapid decrease in the white population in the 1960s (“white flight”) and a steady influx of African Americans and Hispanics, especially Puerto Ricans, entirely changed the composition of Bushwick’s population within 50 years. In 2000, the neighborhood’s population had changed into primarily Hispanic (67.2%) and African American (23%), together making up for 91% of the overall population. Since 2000, a reversed trend can be observed again: from 2000 to 2010, the percentage of Hispanics and African Americans decreased to 85.5%, and the white population almost tripled, making up for 8.5% of the overall population of Bushwick in 2010. Asian Other 1.7% 4.3% White 8.5% Black/African American 20.1%
Puerto Rican 32% Dominican Republic 23% Mexican 19% South American 14% Central American 5.5% Other 6.5%
Hispanic African American/Black
23.8% (- 1.1%)
(- 2.5%) (+ 2.2%)
Hispanic African American/Black
Source: US Census, 1990, 2000, 2010
AGE AND HOUSEHOLD CHARACTERISTICS Bushwick is a comparably young neighborhood with a low number of residents 65 or older years (7.5%) and a high number of young residents under 19 years (27%). This is reflected in the relatively low median age of 29.9 as compared to the whole of Brooklyn (34.1) or New York City (35.5). As illustrated in the graph below, the age distribution differs greatly between the Hispanic, African American/Black, and white population. While the African American population is relatively older than the average, the Hispanic population is relatively younger. Almost 90% of the white population, in turn, are between the ages of 19 and 64, which indicates the â&#x20AC;&#x153;working-age populationâ&#x20AC;?, i.e. the total number of potential workers. As we will see, this high number of residents either too young or old to work within the African American and Hispanic population has effects on their employment rates and household incomes.
DISTRIBUTION OF AGES MEDIAN AGE
< 18 Years
Years 19 - 64
NYC Total Population Hispanic Black/African American White
7.4% > 65 Years 0%
Source: US Census, 2010
AVERAGE HOUSEHOLD SIZE 2.66 2.49 2.37
2.74 2.55 0
Source: Furman Center, 1990-2008
Bushwick is a family neighborhood. Almost 70% of the entire households are family households. This is represented in a traditionally high average household size as compared to both the borough of Brooklyn and New York City as a whole. However, following a city-wide trend, the average household size has decreased in Bushwick over the years. This has also to do with the more recent influx of more non-family households into the neighborhood.
HOUSEHOLD TYPOLOGY 69% 35% with children under 18
31% 65% without children under 18
POPULATION IN HOUSEHOLDS
Familiy households Source: US Census, 2009-2013
HIGHER EDUCATION 16.60% 28.64% 33.39%
Bushwickâ&#x20AC;&#x2122;s working-class population is reflected in a low percentage of people with higher education degrees. Despite a tripling in the number of people with higher education degrees from 1990 (5.2%) to 2010 (14.6%), this number is still considerably lower than in Brooklyn and New York City. While the percentage of higher education attainments among African American and Hispanic residents between 2000 and 2010 has decreased or stagnated, it has almost doubled among whites.
Source: Furman Center, 1990-2010
HIGHER EDUCATION AMONG ETHNIC AND RACIAL GROUPS 7.63%
29.87% 6.58% 2007
10.27% 2006 0
Source: Furman Center, 2010
Black/ African American Hispanic White Asian
38.40% 37.84% 30
MEDIAN HOUSEHOLD INCOME $38,780 $51,450 $52,914 BUSHWICK 2000
Source: Furman Center, 2000-2013
Bushwick’s median household income (MHI) amounted to $38,780 in 2013. Even though it has increased steadily over the years, it is still considerably lower than both Brooklyn’s and New York City’s MHI. Yet, the gap between Bushwick and the City has shrunk over the years. The rise in Bushwick’s MHI might indicate the more recent influx of a wealthier population and has led to a slightly more balanced distribution among different income categories and a higher number of households with an income above $60,000.
RACIAL DISTRIBUTION OF INCOMES 2006
Source: Furman Center, 2006-2010
However, this picture should not be misread as an even adjustment of incomes within Bushwick. In fact, MHI’s are distributed very unequally among racial and ethnic groups. The MHI of white households has grown substantially over the years while the median incomes of Hispanic and Black and African American residents has only risen very modestly. In 2010 the MHI of white households amounted to $60,000 and was almost twice as high as the MHI of Black/African American and Hispanic residents, which both came to approximately $34,000.
UNEMPLOYMENT RATE 10.22% 10.88% 11.2%
17.21% 10.74% 9.57%
16.73% 10.27% 8.98%
Source: Furman Center, 1990-2010
The unemployment rate of Bushwick has decreased considerably within the past twenty years and amounted to 10.22% in 2010. This was the first time that Bushwick’s unemployment rate was lower than both Brooklyn’s (10.88%) and the entire city’s (11.20%). The lower number of unemployed residents reflects the economic upturn of the neighborhood over the last several decades. However, again this varies among the ethnic and racial groups in the neighborhood.
UNEMPLOYMENT ALONG RACIAL AND ETHNIC GROUPS 9.1%
NO DATA AVAILABLE FOR WHITE POPULATION
NO DATA AVAILABLE FOR WHITE POPULATION
Similar to the unequal income distribution among racial and ethnic groups, the number of unemployed residents is considerably higher among Hispanic and Black and African American residents, as compared to the white population.
Looking at the employed civilian labor force of Bushwick, which roughly 16.55% 8.17% amounted to 60,000 in 2010, the vast majority works in the private 7.84% 2006 sector. Only a small percentage is self5.69% NO DATA AVAILABLE FOR WHITE POPULATION employed or works in government. 0 2 4 6 8 10 12 14 16 18 Most Bushwick residents work in the Black/African American service sector (31.9%), followed by Hispanic management (23.9%), and sales & office White occupations (21.3%). Source: Furman Center, 2006-2010 5.45%
CIVILIAN LABOR FORCE
CLASS OF WORKER 50,215
Source: US Census, 2009-2013
Private wages & salary workers
self employed government workers workers
sales & office occupations
Do you u work outside your home? 14%
5,755 onstruction & maintenance
If you answered yes, where do you work?
work at home MORE THAN ONE BOROUGH
work outside home MANHATTAN
N = 90
Out of the 77 respondents working outside of their home, a relatively large amount worked in Bushwick (18%) and other neighborhoods in Brooklyn, together accounting for 41%. Another 40% worked in Manhattan. The other boroughs play a minor role as work destinations for people living in Bushwick.
N = 77 21
GENTRIFICATION & DISPLACEMENT As discussed earlier, the population of Bushwick is changing. In this section we will discuss the ongoing process of gentrification in the neighborhood, the driving factors and costs of this phenomenon, as well as the involved actors and narratives that are employed to (de)legitimize these changes. In general, gentrification can be defined as a process whereby upper-income households push out lower-income residents of their neighborhood. Yet, as became clear in the previous section, gentrification is not merely a class conflict, but it is also a highly racialized process which unproportionally burdens low-income communities of color. Displacement is only the most severe among many negative effects. Even the long-term residents who can afford to stay might suffer from the displaced community networks and culture, experience landlord harassment and a decrease in quality of life due to higher housing and general living costs. Bushwick began to experience gentrification in the mid-2000s when investors and developers created a number of upscale residential and commercial buildings in order to attract a wealthier population. Developers have since worked to market Bushwick as a “trendy”, “up-and coming” neighborhood--a message echoed by mainstream media. This process has caused displacement among long-term residents and businesses, an issue which has sparked active community resistance.
What is driving gentrification? •Incoming artists driving up cultural capital of the area •Decline in local industrial sector •Vacant land and buildings attracting developers and speculators •A spilling over of wealthy residents & businesses from Williamsburg •Proximity to Manhattan via access on the L, M subway lines •Government investment •Marketing/promotional discourse in the media
What are the costs of gentrification? •Displacement of long-term residents and disintegration of the social fabric of the neighborhood •Decline in affordable housing •Housing construction and rehabilitation •Loss of rental units to ownership conversion •Increased housing costs in rent and taxes •Landlord harassment and evictions •Industry displacement •Introduction of commercial and residential spaces catering to incoming, wealthier population
The L train provides fast and easy access from Brooklyn to Manhattan. This linkage has been an important attraction to those moving into Brooklyn neighborhoods. The migration along the L train began as early as the 1980s in the Lower East Side and has since moved eastward into Williamsburg and continues to expand into Bushwick. t v Av St ier S Av se A an erson m d o m r r r a d t o o f L Bed 1 Av Grah Gran Mon Morg Jeff L L L L L L L L
Early 2000s Williamsburg
DISPLACEMENT IN NUMBERS The displacement of long-term residents is the most drastic consequence of gentrification and has severe repercussions for affected individuals as well as the neighborhood as a whole. Displacement not only cuts the social ties and networks built over time, but with it also the basis for culture and political organizing. Hispanic and African American and Black working-class communities are the groups most affected by gentrification. As shown in the map below, the demographic changes concentrate in the northwestern section of Bushwick, bordering Williamsburg, where a displacement process between white and Hispanic residents is evident. This area of Bushwick has seen a substantial gain of white residents and a concurrent loss of Hispanics. However, these recent changes, so heavily drawn upon by the media, only refer to a small portion of the picture. Bushwick is still a primarily Hispanic working-class neighborhood. Long-term residents and community organizations are continuing their fight for social justice and affordability.
CHANGES IN HISPANIC AND WHITE POPULATION Hispanics
Gain of 500 or more
CY PR E
200 to 499 G
CY PR E
AV E G
50 to 199 W
-49 to 49
-50 to -199 BR
OA DW AY
OA DW AY
-200 to -499
Loss of 500 or more
Source: US Census, 2000, 2010
Have you seen changes in your neighborhood?
78 6 YES
6 NOT SURE N = 90
If yes, what kind of changes have you noticed? oticed?
Newhousing developments Changes in public spaces
New establishments Change in population Other
25.2% N = 190
According to our survey, residents of Bushwick are highly aware of changes in their neighborhood. A vast majority of 87% of all respondents has seen changes in the neighbohood, particularly the cre creation of new housing dev developments, changes in public spaces, and new establishments, spa suc such as restaurants, cafĂŠs, or sto stores. Changes in the population, in turn, t were noticed to a lesser ext extent. 23
How long have you lived in Bushwick? 9%
< 1 year 1-3 years 23%
4-6 years 7-9 years
10 years and more 17%
AVERAGE YEARS LIVED IN BUSHWICK
N = 90
How long do you plan to stay? 16%
< 1 year
1-3 years 24%
3-5 years more than 5 years
N = 90
People working in Bushwick vs. Number of years they have lived in Bushwick 46%
On average, survey participants have lived in Bushwick for 13.3 years. While many of the respondents have been Bushwick residents for many years, few of them plan to stay in the neighborhood long-term. A comparison between these two results reveals that long-term residents generally plan to stay in the neighborhood longer than newcomers. Of the respondents who have lived in Bushwick for under three years, 27.5% sees themselves leaving within one year, while only 6% plan to stay longer than five years. Comparably, fewer people who have lived in Bushwick for 4-10 years and over 11 years plan to leave the neighborhood in under a year. These long-term residents more often see themselves staying in Bushwick for 3-5 years or over 5 years. For newcomers Bushwick thus seems to resemble a more transitional place. Arguably, being priced out of the neighborhood for long-term residents that are also invested in and plan to stay for a long time illustrates the higher related costs.
Years lived in Bushwick vs. Time planned to stay
How long people see themselves staying in Bushwick
< 1 year
< 3 years4
11 years +
< 3 years4
4 -10 years
Number of years living in Bushwick
THE ACTORS AT PLAY
INCOMING RESIDENT S DEVELOPERS INCOMING BUSINESSES
LONG TERM RESIDENT S
REAL ESTATE AGENTS
Gentrification is a complex process containing a network of actors who interact with one another in implicit and explicit ways. Certain actors are in relationships of coalition, some in relationships of antagonism, and others are merely complicit to one another.
CONFLICTING NARRATIVES SURROUNDING GENTRIFICATION Beyond changes in the demographics and the physical appearance of Bushwick, such as new developments and changing streetscapes, the ongoing process of gentrification can also be observed in the ways people speak about the neighborhood and make sense of recent changes. This discursive dimension is crucial as narratives about Bushwick carry the potential to (de)legitimize gentrification and foster or prevent ongoing changes. We identified three main narratives of how people talk about Bushwick, discussed in more detail below. These narratives are not mutually exclusive, but potentially overlap, react to, and interrelate with each other. Moreover, the same actors can deploy different narratives in different situations and times. Narrative of Community Empowerment Activists, community organizers, and long-term residents, supported by critical media, emphasize the history of Bushwick’s long-term community and the legacy of empowerment and organizing. This narrative directly addresses and tries to combat gentrification and displacement, and lobbies for affordable housing and the preservation of the ethnic and cultural vibrancy of the neighborhood. Narrative of Colonization Real estate developers and landlords as well as parts of the media describe and market Bushwick as “hip”, “trendy” and “up-and-coming”. They see the neighborhood as now being “discovered” and “developed” by new residents who are thought of as pioneers or even “settlers”. This narrative neglects the history of Bushwick and its long-term residents. Narrative of Dissonance Newer residents often apply a narrative of dissonance, acknowledging the gentrification of the neighborhood but disassociating themselves from it and neglecting their own position as facilitators in these processes. Oftentimes this is done by disparaging places of gentry and more recent “transplants”.
“This is our neighborhood and we deserve to make sure our families have a future here” -Long-term resident & activist “Here in bohemian Bushwick, Brooklyn, you’ll find a group of like-minded settlers, mixing the customs of their original homeland with those of one of NYC’s most historic neighborhoods to create art, community, and a new lifestyle.” -Broker for luxury apartments at former Colony 1209 “I don’t want the neighborhood to change further, if it does, it looses its appeal in the first place.” -Recent resident, student 25
HOW ARE LANDLORDS AND DEVELOPERS CHANGING BUSHWICK? housing costs & real estate market trends / new development / developer incentives / predatory practices 26
A COMMUNITY OF RENTERS Bushwick is a community formed by many different people. The cast of characters who own Bushwick is also varied. While part of the neighborhood is owned by non-profits, homeowners, and community groups, Bushwick is above all a community of renters. Private landlords make up the lions share of the owners of Bushwick, and many of them are leading the transformation of the neighborhood, often to the detriment of the current residents.
Total Housing Units in Bushwick (2010)
Total # Affordable Properties
Owner Occupied Units (2008)
Properties for Sale (10/2015)
Public Housing Units
Properties in Pre-Forclosure
Rent Regulated Units
10,000 Median Rent (Bushwick)
Median Rent (NYC)
$1,226 Sources: Zillow.com, MNS, UHAB, Furman Center/NYU
RENTALS AVERAGE MARKET RENTS: BUSHWICK 2010
$1,200 $1,300 $2,300 $1,753 STUDIO
$1,832 $1,375 $2,647 $2,152 1 BEDROOM
$1,697 $1,575 $2,510 $2,366 2 BEDROOM $3000
Studio 1 Bedroom 2 Bedroom
The average rent in Bushwick dropped by almost 16% between 2014 and 2015. This went against the trends of almost every Brooklyn neighborhood, and was almost exclusively due to the increase in supply. The number of available units increased four times the current supply from 2014-15. The surge in supply is a mix of long term tenants being moved out, new construction, and renovation of formerly off line housing stock. 28
Source: MNS Brooklyn Housing Report
SALES MEDIAN SALES PRICE (BUSHWICK, BROOKLYN, NYC) 1991
Bushwick Brooklyn New York City
The median sale price in Bushwick, as compared to Brooklyn as a whole, and the combined five boroughs of New York City showed a trend which closely followed the market. Bushwick however was much more severely impacted by the 2008 financial crisis. Since the recovery began, the fortunes of Bushwick have turned, and the median sales price has been on a much steeper trajectory, gaining back more than $100,000 between 2010 and 2011. Source: Furman Center, NYU
NEW CONSTRUCTION BUILDING PERMITS IN BUSHWICK While Bushwick is one of the hottest neighborhoods in Brooklyn for new development, the number of building permits issued has still not recovered from its pre-recession peak. Building permits are actually on track to be equal with the numbers issued in the early 2000s.
BUILDING PERMITS ISSUED BY YEAR
Source: Furman Center, NYU
BUILDING PERMITS BY TYPE NEW BUILDINGS
BUILDING ADDITIONS (ALT-1)
New building starts in Bushwick continue to increase, jumping exponentially between 2013 and 2014, they are on track to exceed the 2014 numbers in 2015. The other marker of increased activity is the number of Alteration Type 1 permits (ALT-1) which includes increasing the floor area of a building, converting from one type of use to another, and changing the egress, which usually indicates a major renovation. Source: NYCOpenData 31
MAPPING THE CONSTRUCTION The density of new building permits is slightly concentrated on the western edge of Bushwick. This map shows the permits applied for New Construction in 2013.
OA DW AY
KNOLLWOOD PARK CEMETERY
Source: NYC DOB, NW Bushwick Community Map
NEW CONSTRUCTION MAJOR DEVELOPMENTS With market rate developments exploding in the neighborhood, these are a selection of the largest developments which have been announced or are currently under construction. Pricing data is not yet available, but only the Rheingold Brewery development involves any affordable housing units.
• 10 Building Complex • 1,000 Apartments • Largest project in neighborhood
301 Himrod Street
• 12-story mixed use building • 55 market rate apartments • 10,232 sq ft of retail
600 Bushwick Avenue
• • • •
1255 Bushwick Avenue
• 7 Story building • 32 market rate condos • 21,897 square ft
• 5 Story office & retail complex • 160,000 square ft
810 Flushing Avenue
• 7 Story mixed use building • 42 market rate units • 44,260 square ft
2 Story mixed use complex 64 market rate units 12,500 square ft retail 2,500 square ft medical office
DEVELOPER INCENTIVES There are multiple programs offered by the city which give incentives for developers to build, build bigger, or build more dense projects. There are also programs at the state and federal level that can be used to help defray the cost of development. These incentives have impacted the type, location, and amount of development that happens throughout the city.
• J-51: As-of-right tax exemption
• • •
• 420-c: Complete or partial tax and abatement for residential exemption for low-income housing rehabilitation or conversion to developed with tax credits. multiple dwellings. • UDAAP: Tax exemption for 421-a: Partial tax exemption for new rehabilitation or new construction of multiple dwellings. housing in UDAAP areas. 421-a Affordable Housing Program. • Article XI: Tax exemption for 421-b: Partial tax exemption for HDFC-owned new construction or new construction or substantial rehabilitation. rehabilitation of owner-occupied • 420-a: Complete tax exemption for one- and two-family homes. HDFC-owned housing with on-site 421-g: Tax exemption and abatement social services. for conversion of commercial buildings to multiple dwellings (Downtown Manhattan).
• Brownfield Investment Grant (BIG):
• Superfund Grants: Used to clean up
highly polluted former industrial areas Assistance with environmental processes and funding in Brownfield • Low-Income Housing Tax Credit: Gives tax credits to private equity development sites used in the creation of affordable • Real Property Tax Abatement: Varied housing abatements of state property taxes 34
AFFORDABLE HOUSING PROMISES
Image Source: Bushwick Daily/Katarina Hybenova
Affordable housing promises by developers have been a mixed bag in Bushwick. The most prominent development in the neighborhood has been the Rheingold Brewery Site, where a parade of different developers have proposed new developments. The current plan, which involves over 1,000 units of housing, was approved by the city council only after verbal promises were made to set aside 20 percent of the units for affordable housing, as well as to donate land for the development of an additional 10 percent of affordable housing. Unfortunately, after parts of the property were sold in late 2015, the new developer had no binding agreement to make the new housing affordable. Many community groups, led by the Rheingold Construction Committee, are rallying to try and pressure the new developers into keeping the promises inherited from their predecessors. 35
Predatory practices are unfair, deceptive, or fraudulent practices that work against the tenants who pay below market rate rent. The ultimate aim is to increase profits. Several strategies are deployed by the various stakeholders to ‘prey on’ tenants, who are generally low-income and/or long-term tenants. 1 - LANDLORDS 2 - THE CITY AND PRIVATE DEVELOPERS 3- BANKS
1 - LANDLORDS Scenario 1: Buyout Scenario 2: Unlivable Conditions Scenario 3: False Permits Scenario 4: Rent Increase
2 - THE CITY AND PRIVATE DEVELOPERS Scenario 1: Rezoning Scenario 2: Zoning Loopholes Scenario 3: Incentives
3 - BANKS Scenario 1: Abusive Lending Scenario 2: Predator Equity
SCENARIO 1 - RENT INCREASE
A landlord watches a new tenant paying This gives the landlord an idea to do market-rate rent to a developer in a new something similar to increase profits. housing project.
Long-term tenants face the brunt of the increased rent.
Long-term tenants gets displaced if they cannot pay the increased rent.
A new tenant moves in at market-rate to the landlord. The property value and thus the rent of the old property increases.
SCENARIO 2 - BUYOUT This usually plays out on long-term tenants who pay below market-rate rent. In this scenario, the landlord tries to buyout older tenants and replace them with new tenants paying market rate rent. The graphs below show the median monthly rent distribution of Bushwick residents between 2005 to 2013 in comparison to the rest of NYC. Evidently, the recently moved renters of Bushwick pay a comparable rent to that of NYC renters.
Rent Increase - Bushwick
New Tenants (Bushwick)
All Tenants (Bushwick)
Rent - Bushwick VS New York 1500 1460 1125
0 2005-2007 2005-20072 New Tenants (Bushwick)
Source: Furman Center
2011-2013 011-2013 New Tenants (NYC)
SCENARIO 3 - UNLIVABLE CONDITIONS Bushwick has been a neighborhood with one of the greatest number of code violations across the city. However, recent years show that this condition is improving.
Housing Code Violations in Bushwick - Class C Year 2005 2007 2009 2011 2013 0 Source: Furman Center
Per 1000 50 Rental Units
“They have made our lives unbearable to see how long we can take it before we leave.”
Source: www.nytimes.com Image Source: Dave Sanders for The New York Times
A common predatory practice by landlords is to make the living conditions in a unit so unbearable that its tenants are forced to vacate. This process allows landlords to get rid of long-term tenants living at below market rate and bring in higher-paying tenants. They employ several strategies to achieve this. The following are a few examples: - overlooking complains by the tenant - physically vandalizing the property Source: www.nytimes.com Image Source: Dave Sanders for The New York Times
SCENARIO 4 - FALSE PERMITS
Another predatory practice by landlords is to declare the building vacant and construct a false renovation. This permit gives landlords a legal status to make the tenants living conditions unbearable for an indefinite period. Ultimately, this practice forces tenants to leave the units themselves.
â&#x20AC;&#x2DC;City officials acknowledge they have no system to verify whether buildings undergoing construction are unoccupied, a blind spot that tenants and their advocates argue has helped promote a climate of lawlessness, particularly for rent-stabilized resident.â&#x20AC;&#x2122; 42
Source: www.nytimes.com Image Source: Richard Perry for The New York Times
SCENARIO 1 - REZONING 46 acres (3.5%) of the total area of Bushwick is industrial and manufacturing land of which 6 acres are within an Industrial Business Zone (IBZ). Rezoning within these industrial and manufacturing areas and IBZs, that sit on the periphery of Bushwick, open up opportunities for developers to convert land into market rate rentals. Rheingold Brewery is a prime example. CY NG
VE MYRTLE A
OA DW AY
KNOLLWOOD PARK CEMETERY
Rhiengold Brewery Industrial or manufacturing
INDUSTRIAL/MANUFACTURING LAND AND IBZâ&#x20AC;&#x2122;s: Established to protect existing manufacturing districts and encourage industrial growth citywide.
CITY REZONING: The city change zoning laws to encourage development in physically depleted/ deteriorated areas.
PRIVATE DEVELOPER: Great opportunity for developers to multiply their profits.
MARKET RATE HOUSING: Housing became a very lucrative business.
SCENARIO 2 - ZONING LOOPHOLES Rezoning processes, tax incentives, public policy and grants have facilitated new developments benefiting the wealthy at the expense of those in critical need. Developers sometimes find loopholes in the state laws to build more market-rate housing; reducing the number of affordable housing further. Following are two such examples of loopholes.
INCENTIVES FOR PRIVATE DEVELOPERS 421a Program The 421a program is a tax exemption available to new housing developments of 3 or more units. Owners do not have to pay an increase on property taxes that results from new construction. For instance, if a property is originally a vacant lot with a value of $750,000, and luxury housing is built on it, raising the value to $10 million, the owners continue to pay taxes set at the original value of the property for up to the next 25 years. In exchange, developers purchase certificates from low-income housing developers who may build anywhere in New York City. Each certificate purchased equals one luxury or market-rate unit. Developers of affordable housing receive 4 to 5 certificates for each unit they build.
J-51 Tax Incentive Program The J-51 Tax Incentive Program gives exemptions and abatements to developers for residential rehabilitation or conversion to multifamily housing. Two principle brackets exist: a 34 year term (in which the property owner receives 30 years of full tax benefit, with a four year phase out) and a 14 year term (ten years of full tax benefit, with a four year phase out). In addition, the existing real estate taxes are reduced up to 8.3% or 12.5% of the cost of work for each year for 20 years. In return all rental units are subject to rent regulation for as long as the tax benefits continue, and the landlord must waive 50% of the rent increase that would be allowed under Rent Stabilization. After the tax incentives expire, the units may not remain as affordable housing. Source: www.nyc.gov and www.furmancenter.org
SCENARIO 3 - INCENTIVES The Loft Law or Interim Multiple Dwellings was initially an attempt to protect original building inhabitants from conversions of commercial and manufacturing loft buildings into residential use without complying applicable building codes and laws. However, it has repercussions beyond its original intention including rent increases and/or heightened pressure on landlords. The law ultimately served private developers, creating a loophole allowing them to capitalize on the industrial aesthetic and art movement happening in Bushwick.
People, typically artists, move into vacant building within commercial and industrial zones.
Landlords of commercial and industrial buildings get to fill a residency certificate upon compliance with certain housing regulations.
City enforces Loft Law or Interim Multiple Dwelling as a response to the complains from owners and residents of any commercial or industrial building being used for residential purposes for 3 or more families thats fits the law.
POSITIVE EFFECTS Industrial buildings do not have the facilities that residential buildings have and through this law, are required to be rehabilitated to get an official certificate of occupancy. This results in improved safety and living conditions for its residents.
If choosing to become residency certified, the landlord now has the option of selling their building to private developers or increasing rent for current tenants.
NEGATIVE EFFECTS A. Renovations leading to drastic rent increase.
Time consuming and expensive processes of renovation and certification.
B. Negligent/uninterested landlords selling buildings back to commercial business. Source: www.nyc.gov
SCENARIO 1 - ABUSIVE LENDING “Lying on forms that are designed to protect tenants is a very serious offense, whether on its own or as part of a larger scheme to harass and evict New Yorkers.” - State of New York Attorney General
Abusive lending is any lending practice that imposes unfair or abusive loan terms on a borrower. It is also any practice that convinces a borrower to accept unfair terms through deceptive, coercive, exploitative or unscrupulous actions for a loan that a borrower does not need, does not want or cannot afford. This can be done in multiple ways including: • a financial provider can repeatedly refinance a loan within a short period of time and charge high points and fees with each refinance. • a financial provider can pack a loan with single premium credit insurance products like credit life insurance and not adequately disclose the inclusion, cost or any additional fees associated with the insurance.
Unless there is fraud, many of the predatory lending practices fall under the category of bad business practices but not criminal acts. These merchants frequently target low income, minority communities and elderly consumers, who they believe have poor credit or little access to traditional lines of credit. The consumers are pressured into accepting high cost loans, usually secured by a mortgage on their home, which provide little or no financial benefit to the consumer. This gives these lenders a free-pass of sorts. Even though these lending practices don’t directly effect house leases, they lead to a confusion of ownership. Typically, foreclosure process is a bank or other secured creditor selling or repossessing a parcel of real property after the owner has failed to comply with an agreement between the lender and borrower called a “mortgage” or “deed of trust.” As a result, the predatory equity speculators sell their buildings and foreclosure loans. Fraud foreclosure: consolidation plans that require the homeowner to sign over the deed to the investor. Negative amortization: a method of paying back a mortgage in which a borrower pays less than the total interest due each month. This results in an increase in the amount owed rather than a decrease with time. Loan flipping: Convincing homeowners into refinancing their properties to consolidate unsecured debts. This is done by tapping into equities until they are maxed out on their equity. 46
Source: www.nytimes.com and www.bka.org
SCENARIO 2 - PREDATOR EQUITY Backed by huge institutional investors, real estate speculators purchase rent-regulated properties at prices that cannot be justified by the current income flow from rents at the buildings. These speculators promise their investors high rates of return that can only be achieved, if at all, by aggressively raising rents and driving out existing rent-controlled tenants. After acquiring the property, they implement a broad range of tactics to drive out tenants, including harassment, exorbitant rent increases and/or evictions.
(80%) SPY: Investors look for a building that they can buy and resell at a profit.
BUY: To raise cash for this purchase, they turn to private investors (20%) and banks (80%).
CONVERT: To make quick profits, the owner forces existing tenants out of their homes, â&#x20AC;&#x153;renovatesâ&#x20AC;? the building into condos and apartments at marketrate rentals. Source: www.welcometocup.org
FLIP: The owner tries to sell the building to make profits. Failure to do so, leads to foreclosure as a large loan was taken to buy the building in the beginning. 47
WHO CAN AFFORD BUSHWICK ? affordable housing / subsidies / public housing/ rent control / community land trusts / co-ops 48
HOW DO WE MEASURE AFFORDABILITY? AMI
What is AMI? Area Median Income (AMI) is the income in the middle of the distribution (it is not average). It is used to calculate different types of affordable housing via categories that determine if people are eligible for affordable housing programs.
AFFORDABLE FOR WHOM
GOVERNMENT ALTERNATIVES Public housing Public housing is a state project to provide decent and affordable housing in a safe and secure living environment for low- and moderateincome residents. Subsidies Subsidies are a form of financial aid or support with the aim of helping low-income individuals or families afford their homes. Rent regulated Rent regulated buildings protect tenants against unjust evictions and unwarranted rent increases.
ALTERNATIVE HOUSING MODELS In the face of rent burden, communities have worked to selforganize and promote affordable housing models. Some examples are: CLTs, co-ops, and other hybrid housing models. 49
A FAMILY SPENDS
70% OTHER LIVING COSTS
30% GROSS INCOME
According to the US Government, to avoid rent burden, to have an affordable house, households should not spend more than 30% of their gross income in rent. The term affordable housing refers to housing models that provide households with low incomes a suitable house within their financial means.
HOW DOES THE AMI IMPACT NYC CITIZENS?
NYC uses the metropolitan area to measure affordability; as a result the parameters of income do not mirror the actual incomes of people. Consequently, the programs for affordable housing do not target lower income populations.
BUSHWICK’S AMI Bushwick is a low income district, with an AMI of $38,780 representing only 45% of NYC’s AMI. By Government standards more than 66% of the population would need subsides or other programs to have an affordable house.
AFFORDABILITY CRISIS Bushwick is facing a shortage of affordable housing. Even though the housing prices are not extremely high, they don’t mirror its inhabitant’s incomes. More than half of the population in Bushwick (59%) is rent burden, paying more than 30% of their income in housing. Consequently there are great rates of displacement.
HOW DO WE MEASURE AFFORDABILITY?
Source: CUP. The Center For Urban Pedagogy
WHAT DOES AMI MEAN? Area Median Income (AMI) is the income in the middle of the distribution (it is not an average). AMI is used to calculate different types of affordable housing via categories that determine the eligibility of people for affordable housing programs. Categories are defined as a percentage of the AMI, and each of them refer a level of income: • Extremely low income (30%) • Very low income (50%) • Low income (80%) • Median income (100%) • Moderate income (120%) • Middle income (250%) • High income (above 250%) 52
NEW YORK’S AMI $$$$$$$$$
$$$$$$$$ $$$$$$$ $$$$$$$$$
Since all incomes are different, 30% of it is relative to the particular household’s income amount. Thus, affordable housing is not the same for everybody.
AMI $$$$$$$ $$$$$ $$$$ $$$$$$
$$$ $$$$$ $$$$ $$ $
HOUSE HOLD IN THE MIDDLES Source: CUP. The Center For Urban Pedagogy
HOUSE HOLD IN THE MIDDLES
extremely low income
very low income
extremely low income
very low income
Source: CUP. The Center For Urban Pedagogy
NEW YORK’S AMI NEW YORK STATE
$67,900 New York State has a higher median income than the national income. New York State has the 16th highest income in the US.
NEW YORK METROPOLITAN AREA
New York City uses the New York Metropolitan Area (including Putnam, Suffolk and Winchester County) to set its AMI.
NEW YORK CITY: 5 BOROUGHS MANHATTAN: $69,659 STATEN ISLAND: $72,569
BRONX: $ 34,388
QUEENS: $57,001 BROOKLYN: $46,085
KING COUNTY: BROOKLYN
$61,600 New York City has a diversity of median incomes throughout the 5 boroughs. Manhattan’s AMI is 50% greater than Bronx’s AMI.
$46,085 Brooklyn ranks 4th in median incomes within the boroughs. It is followed by the Bronx.
$38,780 Bushwick’s median income is equivalent to 45% of the median income in New York Metropolitan Area..
Sources: NYCHD New York City Housing Development Corporation; CUP. The Center For Urban Pedagogy; Furman Center
HOW DOES THE AMI WORK IN NYC? AMIs changes drastically between neighborhoods, boroughs, counties, the city and the state. New York’s AMI is $83,300, and it refers to New York Metropolitan Area which includes the five counties that form the city (Boroughs): Bronx. Manhattan, Queens, Brooklyn and Staten Island and additionally Putman, Sufflok and Winchester County. The AMI is used to evaluate the eligibility of households for affordable housing programs within this area. Since housing is very expensive in New York City, AMI is measured with the inclusion of the entire metropolitan area , in order to adjust income categories upward by including other counties with higher incomes. This calculation attempts to allow more families to qualify for affordable housing subsidies.
>250,000 $200,000 $100,000
% HOUSEHOLDS NEW YORK METROPOLITAN AREA vs NEW YORK CITY: 5 BOROUGHS AMI CALCULATION
Very low income
Extremely low income
households eligible for subsidies
Very low income
Extremely low income
households eligible for subsidies
By raising the median income, more people are eligible for subsidies, since more people are categorized as low income. Unfortunately, in reality this has not been beneficial. City programs, such30as%20/80 Inclusionary Housing, only 80 % AMI AMI and 60Mandatory % AMI require affordable units to serve 60% and 80% AMI households. Thus, individuals extremely very lowoften income with extremely low incomes are excluded from ‘affordable’ housing. household low income low income 55
AMI CATEGORIES IN NYC 7% >250,000
In order to better understand affordable housing in NYC, take the example of a $100,000 household of 4: $75,000 11% $75,000 • $50,000 Extremely low income: below16% $25,890 annually • Very low income $49,980 annually $50,000 • $25,000 Low income $69,040 annually • $25,000 Median income $83,300 annually • $15,000 Moderate income 11% $103,560 annually
Affordable Housing uses these limits to determine program eligibility. 0
% NEW YORK METROPOLITAN AREA vs NEW YORK CITY: 5 BOROUGHS AMI CALCULATION
30 % AMI extremely low income
$83,300 80 % AMI 60 % AMI $70,000 very Median income
Low income low income low income
100 % AMI median income
$50,000$69,040 $49,980 Very low
$61,600 Median income 120 % AMI $50,000 above Low income median income
$37,000 $103,560 Very low income
Extremely Extremely Source: NYCHD New York City Housing Development Corporation low income low income APPROPIATE HOUSING PRICES ACCORDING TO AMI IN NYC
$2,600 households eligible for subsidies 30% of gross income monthly aprox
households eligible for subsidies
$2,200 $1,700 $1,200 $650
INCOME LIMITS VARY DEPENDING ON THE HOUSEHOLD 30% of gross income monthly aprox
Annual Income $25,890
$ extremely low income very low income low income median income moderate income 56
80 % AMI
30 % AMI $31,000 60 % AMI $26,000 extremely $21,000 very low$15,000 income low income
MONEY FOR HOUSING
Source: U.S. Department of Housing and Urban Development
HOUSING ACCORDING TO NYC AMI APPROPIATE HOUSING PRICES ACCORDING TO AMI IN NYC APPROPIATE HOUSING PRICES ACCORDING TO AMI IN NYC $2,600 30% of gross income $2,200 $1,700 monthly aprox $2,600 $1,200 30% of gross income $2,200 $650 $1,700 monthly aprox $1,200 $650 $31,000 $26,000 30% of gross income $21,000 $31,000 monthly aprox $15,000 $26,000 30% of gross income $7,800 $21,000 monthly aprox $15,000 $7,800
$103,560 $86,300 $69,040 $103,560 $86,300 $69,040
Annual Income Annual Income 0
$43,890 $25,890 $43,890 20,000 $25,89040,000 60,000
$ MONEY FOR HOUSING 20,000 40,000 60,000 extremely low income $ MONEY FOR HOUSING 0
100,000 120,000 100,000 120,000
very lowlow income extremely income low income very low income median income low income moderate income median income moderate income Chart by the authors based on NYCHD New York City Housing Development Corporation
PRICES AND AFFORDABILITY This chart represents the amount of money spent on housing deemed affordable (30% of gross incomes) according to different categories of AMI (monthly and annually). As evidenced, for a household with extremely low income, rent should be approximately $650; $ 1,200 for very low income; $1,700 for low income; $2,200 for median income and $2,600 for moderate income. According to the American Community Survey, in 2013 the median monthly gross residential rent in New York was $1,109. However, this is likely much higher (see chapter 2: How are Landlords & Developers Changing Bushwick?). Taking in account this fact, it becomes clear that there is an incongruency between official AMI calculation and what affordable housing means according to real prices of the market are. The incredibly expensive housing market in New York City makes finding affordable housing a major challenge for many. 57
BUSHWICKâ&#x20AC;&#x2122;S AMI CY P
GA TE S
M M M
W YC KO
OA M DW AY
KNOLLWOOD PARK CEMETERY
<$25,000 Extremely low income $25,000 - $35,000 Very low income $35,000 - $50,000 Very low income $50,000 - $70,000 Low income $70,000 - $83,300 Median income $83,300 Above Median income
Source: US Census, 2013
WHO AFFORDS BUSHWICK? According to the Metropolitan area AMI, Bushwick is a low income district with an AMI of $38,780. This represents only 45% of NYC AMI. In Bushwick, 22% of people have an extremely low income; 27% a very low income and 17% a low income. By government standards, more than 66% of the population would need subsidies or other aids to have an affordable home. Unfortunately, since there is much more demand than supply, there is a great number of people that are rent burdened but not receiving subsidies. 58
INCOME DISTRIBUTION IN BUSHWICK
Source: NYC Census Fact Finder ACS 2013
BUSHWICK: A LOW INCOME NEIGHBORHOOD
EXTREMELY LOW INCOME
VERY LOW INCOME
30 % AMI
60 % AMI
80 % AMI
BUSHWICKâ&#x20AC;&#x2122;S WAGES 1%
>$200,000 $200,000 $150,000
$50,000 $35,000 $35,000 $25,000
Source: NYC Census Fact Finder ACS 2013 59
HOUSING STOCK IN BUSHWICK HOUSING OCCUPANCY
TOTAL HOUSING UNITS
NYC 3,380,513 OCCUPIED 90.8% (3,070,298 ) Vacant 9.2% (310,215)
OCCUPIED HOUSING UNITS
86. 30 % 37,867 RENTER
NYC 3,070,298 OWNED 32.2% (989,708 ) RENT 67.8% (2,080,590)
Renters depend on the landlord and do not have much impact in their dwelling. Source: US Census Maps, 2013
Bushwick’s housing stock corresponds to the average New York’s housing stock, where 90% of the units are occupied, and 10% are vacant. From the total occupied units, Bushwick 13.7% are owned and 86.3% rented. This is a low ownership rate compared to the rest of New York with 32.2% ownership. The low ownership rate in Bushwick is troubling since renters, most of whom are not protected by government programs, are in danger of losing their homes as a result of the increasing rent and other predatory practices described in last chapter: How are Landlords & Developers Changing Bushwick? 60
LONGEVITY OF TENURES IN CURRENT UNIT
YEARS WHEN HOUSEHOLDS MOVED
2010 OR LATER
1989 1980 1979 1970 BEFORE 1969
2.5% % 0
Source: NYC Census Fact Finder, ACS 2013
29% 27% 9% 12%
< 1 year
10 years and more
According to the American Community Survey in 2013, 20% of the Bushwick population have lived in their current dwelling since 2010; 50% between 2000 and 2009; 15% between 1990 and 1999; 8% between 1980 and 1989; 4% between 1970 and 1979 and only 2.5% before 1969. This chart shows that during the first decade of the 21st Century, housing opportunities increased. However, it is not clear if the people that moved during that time were from the district. What is clear is that around 30% of the households are long term residents. Even though the majority of the population rents, long-term residents tend to stay in the same unit for long periods of time. This information is supported by the survey, which shows that 29% of the respondents have lived 10 years or more in their current dwelling and 5% 61 have lived their entire life in their current dwelling.
CURRENT HOUSING SET UP 7%
Ownership Market-rate rental
Rent stabilized rental
Public housing/ subsidized housing
Market rate co-op
Limited equity co-op Other
% INTERVIEWED 60
INDIVIDUAL HOUSING SET UP PREFERENCE 54%
Ownership Market-rate rental
Rent stabilized rental
Public housing/ subsidized housing
Market rate co-op
Limited equity co-op Other
% INTERVIEWED 60
% INTERVIEWED 60
HOUSING NEEDED IN BUSHWICK 21%
Ownership Market-rate rental
Rent stabilized rental
Public housing/ subsidized housing
Market rate co-op
Limited equity co-op Other
Rent stabilized rental
Public housing/ subsidized housing 9%
Market rate co-op 3% 4%
Limited equity co-op
Other 1% 4%
% INTERVIEWED Current housing set up Individual housing set up preference Housing needed in Bushwick
SURVEY ANALYSIS ABOUT HOUSING IN BUSHWICK The survey results (as well as the quantitative investigation) show that most of the people rent in Bushwick (including market rate, rent stabilized and public housing 80%); mostly in market rate rentals (42%). By contrast, most of the respondents report that they would prefer to own their homes (54%), but unfortunately they cannot because of the outrageous costs. Clearly, there is a disparity between peopleâ&#x20AC;&#x2122;s circumstances and their ideal housing situation. As a second choice, the survey shows that people would like to live in rent stabilized units- as it is an affordable option. Additionally, the survey shows that most of the people believe that rent stabilized housing is what is most needed in Bushwick. Evidently, even though, as individuals, people prefer to own, the respondents understand the need for affordable housing in Bushwick.
HOUSING ISSUES IN BUSHWICK AFFORDABILITY SHORTAGE Bushwick is facing a shortage of affordable housing. Even though the housing prices seem to be suitable, since the prices are equivalent to affordability in the categories of extremely low, very low and low income; more than half of the population in Bushwick (59%) is paying more than 30% of their income in housing. This means Bushwick population is very vulnerable: low incomes, high rents, which are increasing, low rate of ownership and large rates of displacement. This scenario calls for new alternatives of permanent affordable housing in the neighborhood.
EVENTHOUGH AFFORDABLE FOR EXTREMELY LOW INCOME
30 % AMI
AFFORDABLE FOR VERY LOW INCOME
50 % AMI
AFFORDABLE FOR LOW INCOME
80 % AMI
RENT PRICES IN BUSHWICK > $1500
$299 $200 < $200
APPROPIATE HOUSING PRICES ACCORDING TO AMI IN NYC $2,600 Moderate income $2,200 Median income $1,700 Low income $1,200 Very low income $650 Extremely low income
40 Source: US Census, 2013
ARE THE PRICES AFFORDABLE FOR PEOPLE IN BUSHWICK?
HOUSING IS NOT AFFORDABLE <30 % >30 % INCOME INCOME AFFORDABLE NOT AFFORDABLE HOUSING HOUSING
% INCOME SPENT IN RENT IN BUSHWICK
% INCOME SPENT IN RENT
> 35% 35% 30%
Source: US Census, 2013
TYPES OF HOUSING The following is an overview of housing typologies that exist in New York City. These models are investigated in detail in the following sections.
Single family home consists of one dwelling unit and typically one household. The owner owns and occupies the land and building.
$ 650,000 2 Bedroom 2 Bath*
Condominium is a market rate single real estate unit in a multi-unit development. The owner has both ownership of the unit and an undivided interest in the common elements of the building.
$ 875,000 2 Bedroom 2 Bath*
Market rate co-op is a housing model where all the households own the building through â&#x20AC;&#x153;sharesâ&#x20AC;?.
$ 650,000 2 Bedroom 2 Bath*
RENTALS Market rate rental units are rented to tenants by a landlord at market rate on short term lease.
$ 2,000 per month 2 Bedroom 1 Bath*
Public housing is a state affordable housing program; typically for low and very low income residents.
$ 299 - $511 per month***
Subsidized Housing is a form of state financial aid or support with the aim of helping the low income individuals or families to afford their housing.
according to household needs
Rent Regulated buildings follow a system of laws, administered by the Rent Guidelines Board (NYC), which aim to ensure the quality and affordability of housing and tenancies on the rental market.
below market prices, max $ 2,700 per month**
Limited equity co-op is a model where households are shareholders with a long term lease. They do not own a unit, but rather shares of the co-op which collectively owns the building; there are resale caps and eligibility restrictions.
$250 shares + $500 monthly fee****
Community Land Trust (CLT) is a land ownership model that ensures permanent affordability through long term lease (99 years) unaffected by the market. Lower income households buy and own homes on CLT-held land
regulated resale price, permanent affordable
SOURCE: *Trulia.com **NYC Rents Guideline Board ***NYCHA Development Data Book 2015 **** Limited Equity Cooperatives a Legal Handbook by UHAB (although prices differ from co-op to co-op)
•Typically larger, private •Owners have (some) liberty to change their homes according to their needs
•Expensive •Maintenance is the owner’s responsibility •Potentially little sense of community
•Maintenance and amenities costs are shared and issues are dealt with by the property management company •Owners get tax deduction on mortgage interest payments and property taxes
•Expensive •Owners pay mandatory monthly maintenance and amenities costs, irrespective of use
•Shareholders can sell their units at market rate price since there are no resale restrictions and gain profit
•Units are susceptible to the market so they are often unaffordable
•Maintenance is taken care of by building manager or landlord •Renters can rent on monthly basis, sublet, have flexibility to move easily
•Permission of landlord or manager is required to make changes/improvements •Renters can be unduly evicted, do not receive tax benefits, rents may increase
•Permanently affordable •Renters get benefits like child care, government regulated cleaning and property maintenance
•Exclusivity for low and very low income households leads to stigmatization and segregation •No new construction, long waiting list •Poor maintenance due to lack of funds
•More than 7 kinds of subsidies targeting low income groups •Renters get benefits like food stamps, Medicaid, and Earned Income Tax Credit
•Few landlords willing to provide subsidies, tenants have become segregated in particular buildings and certain areas of cities.
•Tenants protected from unfair evictions •Limitations/control on rent increases •Landlord gets tax benefits •Housing is more affordable compared to market rate rentals
•Tenants are forced out of the apartments through predatory practices to get newer residents (who would pay higher rents) •De-regulation threatens sustainability, especially in gentrifying areas
•Permanently affordable •Shareholders get tax deductions •Democratic model, ownership promotes community engagement
•Engagement of shareholders to reach consensus is challenging •Small co-ops face financial difficulties, creation of new co-ops is slow
•Long term lease and re-sale price restrictions promote permanent affordability •Can support small businesses as well as housing and community facilities
•Exorbitant costs of land in the city make the creation of CLT very difficult •Consensus between board members and shareholders is challenging •Has few executed models 67
Public housing is a form of housing tenure in which the property is owned by a government authority.
Usually with the aim of providing the affordable housing to the low-income residents, the elderly, and persons with disabilities.
Most of public housing is stable. There had been construction, which completely ended. If units are demolished today, they are not replaced.
BACKGROUND OF PUBLIC HOUSING Early tenement reform was primarily a philanthropic venture, like The New York Tenement Act of 1895 Tenement Law of 1901, which attempted to use new architectural and management models to address the physical and social problems of the slums. However, these attempts were limited by available resources.
1910 The National Housing Association (NHA) was created to improve housing conditions in urban and suburban neighborhoods
In the spring of 1934, PWA Administrator Harold Ickes directed the Housing Division to undertake the direct construction of public housing, a decisive step that would serve as a precedent for the 1937 Wagner-Stegall Housing Act, and the permanent public housing program in the United States.
1933 Title II, Section 202 of the National Industrial Recovery Act directed the Public Works Administration (PWA) to develop a program-Limited-Dividend Program, which aimed to provide low-interest loans to public or private groups to fund the construction of lowincome housing.
Photojournalist Jacob Riisâ&#x20AC;&#x2122; How the Other Half Lives (1890) brought considerable attention the conditions of the slums in New York City. 70
1937 United States Wagner-Stegall Housing Act of 1937 provided for subsidies to be paid from the U.S. government to local public housing agencies (LHAs) to improve living conditions for lowincome families.
Discontent with Urban Renewal came fairly swiftly on the heels of the passage of the Housing Act of 1949. Urban renewal had become, for many cities, a way to eliminate blight, but not a solid vehicle for constructing new housing. Jane Jacobs would famously describe the new products as, “This is not the rebuilding of cities. This is the sacking of cities.”
1949 The American Housing Act of 1949 Dramatically expanded the role of the federal government in both public and private housing.
Techwood Homes was the first public housing project in the United States, located in Atlanta, Georgia. It was completed on November, 1935
In 1973, President Richard M. Nixon halted funding for numerous housing projects in the wake of the building concerns regarding the housing projects constructed in the prior two decades. In keeping with Nixon’s market-based approach, as demonstrated by Experimental Housing Allowance Program , Nixon also lifted the moratorium on the Section 23 voucher program late in September, allowing for 200,000 new households to be funded.
1965 Housing and Urban Development Act of 1965 A major revision to federal housing policy in the United States which instituted several major expansions in federal housing programs. This act created the Department of Housing and Urban Development (HUD).
1992 HOPE VI program It is meant to revitalize the worst public housing projects: makes use of New Urbanism, meaning that communities must be dense, pedestrianfriendly, and transitaccessible. HOPE VI has become the primary vehicle for the construction of new federally subsidized units.
Pruitt–Igoe, in the picture, was a large urban housing project, which was built in 1954 in St. Louis, Missouri. These high-rise developments were declared unsuitable for families. By the late 1960s, vacancy rates reached as high as 65%. 71
PUBLIC HOUSING PROGRAM The New York City Housing Authority (NYCHA) was created in 1934. NYCHA provides decent and affordable housing in a safe and secure living environment for low- and moderate-income residents throughout the five boroughs. To fulfill this mission, NYCHA must preserve its aging housing stock through timely maintenance and modernization of its developments.
2,553 residential buildings in 328 developments
The first public housing project of NYCHA was completed in May, 1936, in the lower east side of Manhattan, which was called â&#x20AC;&#x153;First Housesâ&#x20AC;?.
177,666 apartments 3,314 elevators
On March 27, 2015 there were: 270,201 families on the waiting list for Conventional Public Housing. 121,356 families on the waiting list for Section 8 Housing. 17,398 applicants are on both waiting lists.
Serving 175,747 families and 403,917 authorized residents
Average monthly rent is
Average family income in Conventional Public Housing is
Working families account for
46.9% of NYCHA families.
19.2% age 62 or older 33.5% age 21 or younger
ELIGIBILITY OF PUBLIC HOUSING LOWER INCOME <80% of median family income VERY-LOW INCOME <50% of median family income
Pay 30% of family Income for monthly housing rent
FAMILY COMPOSITION (Children/Elderly/Disabled) CURRENT LIVING SITUATION
U.S. CITIZENSHIP or ELIGIBLE IMMIGRATION status
INCOME LIMITS ...................................... $55,250 IN NEW YORK
................................... $62,150 ................................ $69,050 ............................. $74,600
NYCHA uses income limits developed by the U.S. Department of Housing and Urban Development (HUD). The income for admission varies for the county or metropolitan area, so you may be eligible in one area and not the other.
TOTAL TENANT PAYMENT
The rent, which is referred to as the Total Tenant Payment (TTP) in this program, would be based on familyâ&#x20AC;&#x2122;s anticipated gross annual income less deductions, if any. HUD allows deductions of $480 for each dependent; $400 for elderly family/ disability; and some medical deductions headed by an elderly person or a person with disabilities.
SENIOR BUILDING ELIGIBILITY The elderly residents could apply for Senior Building program, which allow the elders live in the public housing as long as they need. The household or co-head must be at least 62 years of age and all other household members must be at least 62 years of age.
PUBLIC HOUSING IN BROOKLYN
NEW YORK CITY
Brooklyn has 99 with Brooklyn hasdevelopments 99 developments 58,454 with apartments; 58,454 apartments. Bronx has 89 developments with 44,423 apartments; Manhattan has 98 developments with 53,113 apartments; Queens has 22 developments with 17,126 apartments; Staten Island has 10 developments with 4,502 apartments.
There are 6 developments in Bushwick
6 DEVELOPMENTS IN BUSHWICK CY P
BUSHWICK II CDA(Group E)
BUSHWICK II (Groups B&D)
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BUSHWICK II (Groups A&C) part 2 HOPE GARDENS
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PALMETTO GARDENS (ELDERLY)
Total buildings: 68 Total apartments: 2,533 Total population: 5,980
BUSHWICK II (Groups A&C) part 1
KNOLLWOOD PARK CEMETERY
Bushwick 811 Flushing Avenue, Brooklyn, NY 11206 Residential Buildings: 8 Total Number of Apartments: 1,220 Total Population: 3,023 Completion Year: 1960
Bushwick II (GROUPS B&D) 1201 Gates Avenue, Brooklyn, NY 11221 Residential Buildings: 25 Total Number of Apartments: 300 Total Population: 788 Completion Year: 1984
Bushwick II (GROUPS A&C) 580 Central Avenue, Brooklyn, NY 11207 Residential Buildings: 25 Total Number of Apartments: 299 Total Population: 798 Completion Year: 1983
Bushwick II CDA (GROUP E) 172 Menahan Street, Brooklyn, NY 11237 Residential Buildings: 5 Total Number of Apartments: 276 Total Population: 570 Completion Year: 1986
Hope Gardens 120 Menahan Street, Brooklyn, NY 11221 Residential Buildings: 4 Total Number of Apartments: 324 Total Population: 684 Completion Year: 1981
Palmetto Gardens(Elderly) 85 Palmetto Street, Brooklyn, NY 11221 Residential Buildings: 1 Total Number of Apartments: 114 Total Population: 117 Completion Year: 1977
In an interview, Brigette Blood, community organizer at Ridgewood Bushwick Senior Citizen Council, talked about some challenges in senior public housing buildings and public housing in general. The first challenge is the disconnection between the residents and the management office. For example, when the elevator of a 14-story senior building broke down, residents called the centralized office to get a ticket (a kind of appointment) for the elevator to be fixed. This action led to a repairman being called and eventually the repair of the elevator. However, this process may take time if the resident’s call is not reported right away. Residents often face delayed responses. “People don’t feel empowered in that way,” Brigette said. The second challenge is the high density. In some high-rise buildings people may not know each other very well. Moreover, sometimes illegal practices are hard to track in and around dense public housing developments. The third challenge is the lack of funding. NYCHA needs a considerable amount of money for the maintenance of its aging public housing. However, Federal and local governments have increasingly reduced public housing funds. The benefits are also obvious, especially affordability. Public housing is a kind of rent stabilized housing. This is a great choice for lowincome families. However, public housing is at risk. Demolition of public housing and the leasing of land (in public housing developments) to developers have been considered in recent years. One colleague of Brigette described the challenge of public housing. If a public housing building is torn down, it would not be replaced. Developers would provide limited affordable units for low-income families, usually only 20% of the newly built housing units. The rest would be market rate housing.
“Mayor Bill de Blasio announced a plan to shore up public housing, calling for significant new financial help from the city and for squeezing more revenue out of the housing projects and their residents...The plan will include a redeployment of staff and functions...The agency also plans to eliminate its customer-call center, which means that public housing residents will instead start calling the general 311 city help line for repairs and complaints.” - MIREYA NAVARRO (The New York Times, MAY 18,2015) Housing officials conceded the need for improvement but have blamed most problems on aging buildings and reductions in federal funding.... ‘NYCHA has been very honest and transparent about our challenges with maintenance and repairs,” the agency said in a statement.” - MIREYA NAVARRO (The New York Times, JULY 13,2015) “In spring 2015, city officials announced they would encourage private developers to build on land inside public housing complexes...In the hopes of securing cheaper land in a city where lots at any price are growing scarce. they are ignoring taboos against living near public housing and venturing into areas once considered unprepossessing and even dangerous.” - C. J. HUGHES (The New York Times, JUNE 26,2015)
CASE STUDY: HOPE GARDENS HISTORY OF HOPE GARDENS HISTORY OF HOPE GARDENS In early 1970’s During this period, arson and fires destroyed residential buildings at a rate of 500 per year. Many of the lost buildings were at the actual site of Hope Gardens. In 1975 The government brought out an urban renewal project to clean the whole site to replace old buildings, but after they torn down all the buildings, the government found itself near-bankruptcy. It could not build the replacement housing.
In late 1970’s A old plan for a project of five 14- and 15-storey buildings on the cleared urban renewal site was strongly opposed by residents. “We didn’t want them to become an institutionalized thing where people feel like there is a fence around them.” Arlene Young said. In 1979 Ground was broken for the first 330 apartments. Eight thousand people applied to live in them at that time. In the end, Hope Gardens has a 14-story residential tower for the elderly and three seven-story apartment buildings.
KEYWORDS OF HOPE GARDENS lower-density, green space, anti-high-rises
“[Hope Gardens is]a gem-low scale, low density, that gives a sense of control and a feeling of private ownership.”
- Sally Hernandez-Pinero “I think if the Secretary of Housing and Urban Development is ever going to visit a housing project in New York City, this is the one he should see. It’s the best public housing in the city.”
- Msgr. John Powis
Source: MARTIN GOTTLIEB, Bushwick's Hope Is a Public Project, August 15, 1993 78
CONVENIENT TRANSPORTATION There is a senior citizen who has lived in Hope Gardens for almost 34 years, and is very satisfied resident. The most convenient thing for him is the public transportation. Surrounding Hope Gardens is a bus stop, which sits just outside the building, as well as several subway stations nearby. He enjoys taking the bus to get vegetables with his wife.
HOUSING SERVICE The government provides house cleaning services for senior residents.
NYCHA HOPE GARDENS SENIOR CENTER The Senior Center is directly connected with 14-storey senior building in Hope Gardens. This community center provides 200 hot meals for seniors. Every morning and noon, the elderly pay $2 for their breakfast and lunch. This place not only provides meals for the seniors in Hope Gardens, but also many nearby residents as well. The Senior Center provides a platform for the elderly to share their daily life and celebrate together. “ I like this place,” said one senior, “this is a family!” There are also some complaints, like one senior woman said “I can’t get enough food: it’s cheap, but it’s not enough for me.”
Subsidies provide financial aid or support to help the low-income individuals or families to afford their house
Subsidies come in various forms, including direct and indirect.
Commonly extended from Government, the term subsidy can relate to any type of support.
FEDERAL HOUSING ASSISTANCE PROGRAMS When the public housing program was halted, in the 1960s and 1970s, the federal government created subsidy programs to increase the supply of low-income housing and to help families pay their rent.
1965 Section 236 Leased Housing Program Selected eligible families, determined the rent that tenants would have to pay to perform regular building maintenance.
1970 The Housing and Urban Development Act
1974 Housing and Community Development Act
Federal Experimental Housing Allowance Program (EHAP) & Community Development Corporation.
Amend US Housing Act of 1937 and help to create Section 8.
HIGH RENT OF HOUSING?
In the 1970s, studies showed that the worst housing issue affecting low-income people was no longer substandard housing, but the high percentage of income spent on housing.
SECTION 8 INITIAL SUBPROGRAMS New Construction Substantial Rehabilitation Existing Housing Certificate
ADDED SUBPROGRAMS Moderate Rehabilitation Program (1978) Voucher Program(1983) Project-based Certificate program(1991) 82
The 2008 Consolidated Appropriations Act Combine HUD Housing Choice Voucher rental assistance for homeless veterans with case management and clinical service support. Allocated $75 million funding for the HUD-Veterans Affairs Supportive Housing (HUD-VASH) voucher program
SECTION 8 The housing choice voucher program is the federal governmentâ&#x20AC;&#x2122;s major program for assisting very low-income families, the elderly, and the disabled to afford decent, safe, and sanitary housing in the private market.
TENANT-BASED SECTION 8
PROJECT-BASED SECTION 8
Section 8 gives the very low-income tenants vouchers to help them pay rent. The tenants are free to choose a unit in the private sector, not limited to specific housing developments, and may reside anywhere in the United States where a Public Housing Agencies (PHA) operates a Section 8 program.
PHA enters into an assistance contract with the owner for specified units and for a specified term. The PHA refers families from its waiting list to the project owner to fill vacancies. Because the assistance is tied to the unit, a family who moves from the projectbased unit does not have any right to continued housing assistance.
......................................... $29,050 ...................................... $33,200
................................... $37,350 ................................ $41,500 ............................. $44,850
Not exceed 50% of the median income
Income limits in NY
Must be 18 or older earning income
US citizens or eligible immigration status
Approximately 90,000 Section 8 vouchers and over 29,000 owners currently participate in the program. The NYCHA Section 8 waiting list closed in December 2009 due to funding shortfalls.
SECTION 8 IN BUSHWICK BETHANY APARTMENTS 411 BLEECKER STREET BROOKLYN 11237 Unit: 150 (16 Studios and 134 One Bedroom) Year Built 1986
NEW YORK CITY
RIDGEWOOD BUSHWICK SENIOR CITIZEN HOUSING 137 HIMROD STREET BROOKLYN 11221 Unit: 60 Year Built 2007
WILLIAMSBURG APTS 753 BUSHWICK AVE BROOKLYN 11221 Unit: 70 Year Built 1919
GOODWIN HIMROD APTS 43 GOODWIN PLACE Brooklyn 11221 Unit: 100 Year Built 1991
PROJECT-BASED SECTION 8: 1041 BUSHWICK AVE APTS 1041 BUSHWICK AVENUE Brooklyn 11221 591 UNITS Unit: 48 Year Built 1924
TENANT-BASED SECTION 8: ABOUT 400 UNITS 84
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DUNCAN GENNS APARTMENTS 717 EVERGREEN AVENUE BROOKLYN 11207 Unit: 103 Year Built 1982
Eligible families will receive a voucher to begin searching for housing. Generally, families will pay 30% (in some cases no more than 40%) of their adjusted monthly income toward their rent share
PAY 30% INCOME FOR RENT 85
SECTION 202/811 Section 202 Supportive Housing for the Elderly Program
Section 811 Supportive Housing for Persons with Disabilities
The Section 202 program helps expand the supply of affordable housing with supportive services for the elderly. It provides very low-income elderly with options that allow them to live independently in an environment that provides support activities such as cleaning, cooking, transportation, etc.
The Section 811 program allows very low- and extremely low-income persons with disabilities to live as independently as possible in the community by subsidizing rental housing opportunities which provide access to appropriate supportive services.
Eligible Customers: Any very low-income household comprised of at least one person who is over 62 years old or disabled at the time of initial occupancy.
SECTION 202/811 IN BUSHWICK
TOTAL UNITS 706 86
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LOW-INCOME HOUSING TAX CREDIT (LIHTC) The low-income housing tax credit (LIHTC) program, created in 1986 and made permanent in 1993, is an indirect federal subsidy used to finance the construction and rehabilitation of low-income affordable rental housing. The LIHTC gives investors a dollar-for-dollar reduction in their federal tax liability in exchange for providing financing to develop affordable rental housing. Investorsâ&#x20AC;&#x2122; equity contribution subsidizes low-income housing development, thus allowing some units to rent at below-market rates. In return, investors receive tax credits paid in annual allotments, generally over 10 years. The LIHTC is designed to subsidize either 30 percent or 70 percent of the lowincome unit costs in a project.
The 4 Percent Tax Credit
The 9 Percent Tax Credit
The 30 percent subsidy, which is known as the so-called automatic 4 percent tax credit, covers new construction that uses additional subsidies or the acquisition cost of existing buildings.
This is designed to subsidize 70 percent of the eligible development costs for new construction and substantial rehabilitation of housing projects that are not otherwise subsidized by the federal government.
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LIHTC 9% BUILDINGS:151 UNITS:1537
KNOLLWOOD PARK CEMETERY
LIHTC 4% BUILDINGS:8 UNITS:421
OTHER SUBSIDIES RENTAL ASSISTANCE PROGRAM(RAP) Established in 1987, provides rental subsidies to homeless individuals and families for up to two years so that they can transition into and independently maintain permanent affordable housing. RAP providing monthly rental subsidies of either $300 for single adults or $450 for families. RAP applicants must meet specific income requirements to show that they will be able to meet their rent responsibility with the RAP supplement. In addition, RAP provide the course of the two year program to develop and implement strategies to increase their job skills, earning potential and ability to afford their rent after graduating from the program. http://portal.hud.gov/hudportal/HUD?src=/states/new_york/ renting/assistanceprograms
ADMINISTRATION FOR CHILDRENâ&#x20AC;&#x2122;S SERVICES (ACS) Its primary purpose is to assist in reuniting parents with children placed in foster care (foster care subsidy), as well as to prevent children from entering foster care by providing a monthly rent allowance (preventive subsidy). Monthly subsidy is calculated, in part, on monthly rent and lasts for a period of up to 3 years or $10,800. The subsidy also has an allowance for two special grants or one shot deals in the amount of $1,800. http://www.nyc.gov/html/acs/html/support_families/housing.shtml 88
FAMILY EVICTION PREVENTION SUPPLEMENT (FEPS) FEPS is a housing supplement provided by the State of New York to help prevent evictions and provides rental support to families for up to five years on a sliding scale based on the number of eligible household members. Must have at least one minor child and an open Public Assistance case. The child must be under the age of 18 years old or under 19 and attending high school or vocational school full time. Families need to pay 30% of their income. http://www.coalitionforthehomeless.org/get-help/imin-needof-housing/family-eviction-preventionsupplement-feps/
LIVING IN COMMUNITIES (LINC) In September 2014 NYCDHS (Department of Homeless Services) and HRA (Human Resources Administration) rolled out a limited number of targeted rental assistance slots to low-income families and single adults living in homeless or domestic violence shelter in both the DHS and HRA shelter systems. http://www.newdestinyhousing.org/userfiles/file/Housing%20Resource%20Center/LINC%20Update%2011%2007%2014%20FINAL.pdf
LINC I - Working Families (3+2 years)
LINC IV (so long as needed)
This program is targeted to families with demonstrated work histories and at least one adult currently working full time or two or more adults with a combined 35 hours or more of work for at least 90 days.
Eligible households must have an active or single issue public assistance case and earn less than 200% of the federal poverty level. At least one member of your household is age 60 or above.
LINC II - Families with Multiple Shelter Stays (4 years)
LINC V (5+ years)
The LINC II rental assistance program helps families in shelter who have income but can’t afford stable housing who have a history of needing DHS or HRA shelter. Families with income such as SSI or employment who have been in shelter multiple times may be eligible with priority given to those with the longest shelter stays.
At least one member of the household is working in unsubsidized employment or as part of the Shelter Exit Transitional Jobs Program (SET). Your household income does not exceed 200% of the federal poverty level.
LINC III - Domestic Violence Survivors (4 years)
LINC VI - Family with Children (5 years)
This program is targeted to families that have become homeless due to domestic violence and are residing in HRA DV shelter. Families in DHS shelter may be eligible if they are former HRA DV shelter residents who “timed out” of the DV shelter system.
The LINC VI rental assistance program helps families with children move out of shelter and reunify with host families consisting of friends or relatives (“host families”).
Rent regulated buildings protect tenants against unjust evictions and unwarranted rent increases.
Rent Regulated buildings include both “rent controlled” “rentboth Rent Regulated buildings and include stabilized” apartments. the “rent controlled” and “rentBesides stabilized” benefit of limited rent increases apartments. Besides the benefit that of are set a government agency, limited rentbyincreases that are set by tenants in rent regulated housing a government agency, tenants in rentalso regulated housinglegal also have greater legal have greater protections (like protections (like agaisnt evictions) than against evictions) than those living in those living rate in market rate housing. market housing.
RENT CONTROL RENT CONTROL Rent control is a state law that limits
Rent control is arents. stateIt law thatinlimits the increase started 1943, the and increase rents. It started in 1943, applied to people continuously and applied to people continuously living in the apartment since July 1971. living since July 1971. It covers fewer It covers fewer than 50,000 units than 50,000 units and is shrinking fast and isthey shrinking fast because they because get converted to market get converted to market rate or rent rate or rent stabilized properties upon stabilized properties upon vacancy. vacancy.
RENT STABILIZED RENT STABILIZED Rent stabilization is a state law that limits how much landlords can Rent stabilization a state lawto that limits increase rentsisfrom year year. It howstarted much landlords can increase in 1969, and applies torents prefrom yearbuildings, to year. Itand started in 1969, and 1974 to some post-1974 applies to pre-1974 buildings, and to some buildings that got tax breaks under post-1974 buildings that got tax breaks other housing programs. This law under other housing programs. This law enforces against evictions. enforces strictstrict rulesrules against evictions. 7 91
RENT ACTS The NYC Rent Guidelines Board (RGB) is mandated to establish rent adjustments for approximately one million dwellings* subject to the Rent Stabilization Law in New York City. The RGB holds an annual series of public meetings and hearings to consider research from staff, and testimony from owners, tenants, advocacy groups and industry experts.
The following are key moments from the Rent Acts through the years.
RENT REGULATION REFORM ACT OF 1997 Succession Rights: An apartment can be “passed down” for only a single generation without a vacancy increase.
Luxury Decontrol: Households earning more than $175,000 in two consecutive years with rents of $2,000 or more are subject to vacancy decontrol.
RENT REGULATION ACT OF 2003 Individual Apartment Improvements: Individual apartment improvements completed in buildings allow the landlord to permanently increase the legally regulated rent by 1/40th of the cost of the improvements.
Lease Renewal: Allows an owner, upon renewal, to increase a rent stabilized tenant’s rent to the maximum legal regulated rent in order to compensate for possible renovations.
SOURCE: *NYC Rents Guideline Board 92
RENT REGULATION ACT OF 2011 High-Rent/Vacancy/High-Income Deregulation: The deregulation of an apartment with a monthly legal regulated rent of $2,500 or more is allowable if household income is in excess of $200,000 in each of the two preceding years.
Individual Apartment Improvements: In buildings with more than 35 units, the landlord can permanently increase the legal regulated rent by 1/60th of the cost of improvements. However, in buildings with 35 or fewer units, rent increase may be 1/40th of the cost of improvements.
Frequency of vacancy increases: Rent increases legally permitted upon vacancy may not be taken more than once a year.
RENT REGULATION ACT OF 2015 High-Rent/Vacancy/High-Income Deregulation: The deregulation of an apartment is allowable with a monthly legal regulated rent of $2,700 or more if household income is in excess of $200,000 in each of the two preceding years.
If a vacating tenant is paying a preferential rent, the vacancy lease rent increase that can be applied to the vacating tenantâ&#x20AC;&#x2122;s legal rent will be limited to 5% if the last vacancy lease commenced less than two years ago, 10% if less than three years ago, 15% if less than four years ago and 20% if four or more years ago.
Source: North West Bushwick Community Group
CONVERSION GUIDE GUIDE CONVERSION Rent regulated buildings can be de-regulated unit by unit when the units are vacated, however the entire building can not be de-regulated as a whole.
Entire buildings can not be converted
The following pages explain how the units are converted from rent-control to rent-stabilized and/or market rate units.
Units upon vacancy (depednding on the Rent Acts) can be converted
CONVERSION PROCESSES CONVERSION PROCESSES DE-CONTROL
DE-CONTROL De-control and de-regulation of Rent Controlled Buildings DE-CONTROL De-control de-regulation of Rent Controlled Buildings Rent Control Unit Rent Controland generally covers Rent control covers about 38,000 apartments Rent Control Unit apartments occupied by lower Rent control covers about 38,000 apartments Rent Control covers apartments occupied occupied generally by an older, lower income Rent Control covers apartments occupied income populations who been occupied generally by an have older, lower in income generally by lower income population population who have been in occupancy since generally by lower income population occupancy since July 1971, in oroccupancy bysince theirJuly population who have been since who have been in occupancy who have been inIfoccupancy since July lawful successors. the apartment is in 1971, or by their lawful successors. If ments under rent control become decontrolled Rent > Succession Vacant 1971, or under by their successors. a building with six or more units itwith ments rent control become the apartment inlawful a building sixIf Rent > upon vacancy. Ifisthe apartment is indecontrolled awill building Vacant $2700 toSuccession next the apartment in awill building six generally fall under rent stabilization vacancy. Ifis the apartment isfall inwith aunder building orupon more units it will $2700 with six or more units itgenerally generally fall under to next generation or more units it units will fall under upon vacancy. Buildings with five with six or more itgenerally will generally rent stabilization upon vacancy. Iffall inunder a rent stabilization upon vacancy. If in aor building generation rent stabilization upon vacancy. in to a fewer apartments will become marketrent stabilization upon vacancy. Ifita in aIfbuilding building five or fewer apartments with fivewith or fewer apartments will "go building with five or fewer rate rental. If apartment is apartments init rental. awillrental. five orthe fewer apartments "goIf Ifto it with will become a market-rate market," that is, become a market-rate Rent De-regulated it will become a market-rate rental. building with or more units, itrental. market," that six is,isbecome market-rate the is a abuilding with sixIf If Rent Control theapartment apartment inin a building withand six or more Rent Stabilised or De-regulated market Rent Control the apartment a building with six rents for more than itwith will be apartment isisin a$2,700, building six orthe more units, and it rents for more than units, and it rents forin more than $2,700 itor willmore be Unit Unit Stabilisedrate or market Unit or more and rents for$2,700 moreit than fully deregulated. units, and it rents foritmore than will be $2,700 itunits, will be fully deregulated. Unit rate $2,700 it will be fully deregulated. Case 1: Rent Controlled building with less than six units Case Case 1: 1: Rent Rent Controlled Controlledbuilding buildingwith withless lessthan thansix sixunits units Stage 1: rent control Stage 1: rent control
Stage 2: vacant unit Stage 2: vacant unit
Stage 3: deregulated/ market unit Stagerate 3: deregulated/
market rate unit
Case Case 2: 2: Rent Rent Controlled Controlled building with six or more units or rent higher higher than than $2700 $2700 Stage 1: rent control
Stage 2: vacant unit/ rent >$2700
Stage 3: rent stabilized/ de-regulated/ market rate
LIKELY RENT STABILIZED APARTMENTS EXISTING RENT STABILIZED APARTMENTS
1149 RENT REGULATED 10,000 UNITS *
recent years, many units have been deregulated. * In There is no reliable information available however. Source: North West Bushwick Community Group
Source: North West Bushwick Community Group
To convert a rental apartment building, DE-REGULATION the sponsor owner must Before owners sponsors may present convert a rental To convert aoror rental apartment building, an offering plan to each tenant and the sponsor or owner must present an ing plan to each tenant and to sponsor the Attorney to the Attorney The offering plan toGeneral. each tenant and to the General. This a preliminary prospectus of the may choose to convert the building Attorney General. proposed conversion is referred toa as a the “red under either an eviction plan nonThe sponsor may choose to or convert eviction plan. The sponsor who presents building under either an eviction plan or the tenants with plan. an eviction plan may a non-eviction The sponsor who The sponsor may choose it toto convert the building subsequently change a non-eviction presents the tenants with an eviction plan under either an eviction or a non-eviction plan, example, if change theplan number may for subsequently it toofa nonplan. Thewho sponsor whoto presents the tenants with tenants agree purchase their eviction plan. Such a change might occur, an eviction plan may subsequently change it to a apartments is below minimum for example, if the the number of tenants non-eviction plan. Such a change might occur, required to to putpurchase an eviction plan into who agree their apartments for example, if the number of tenants who agree effect. A non-eviction plan, in return, is below the minimum required to put cannot be changed to effect. an eviction one. a an eviction plan into However, mum required to put an eviction plan into effect. plan which is initially as a nonHowever, aeviction plan which ispresented initially presented as a Under anplan plan, a noneviction may not be changed to an non-eviction plan may not be changed to an purchasing tenant may be evicted eviction plan. from ananapartment by the purchaser Under eviction plan, a non-purchasing or the sponsor after a certain tenant may be evicted from anperiod apartment Under an eviction plan, a non-purchasing tenant of time. For an eviction plan to be after by the purchaser or the sponsor a may be evicted from an apartment by the declared effective, 51% of the tenants certain period of time.after Fora certain an eviction purchaser or the sponsor period in occupancy (excluding eligible senior plan to be declared effective, 51% of the citizen and occupancy disabled tenants) of alleligible the tenants (excluding tive, 51%in of theon bona fide tenants in occupancy dwelling units the date the Attorney senior citizen disabled eligible tenants) of (excluding from and the calculation senior General accepts the offering plan for all the and dwelling onofthe date the citizen disabledunits tenants) all the dwelling filing (the “acceptance date”)the must sign Attorney General accepts offering units on the date the Attorney General accepts written agreements. plan forpurchase filing (the date”) the offering plan for “acceptance filing (the “acceptance must sign written purchase agreements. Under plan, nonUnder a non-eviction a non-eviction plan, nonpurchasing tenants not be purchasing tenantsmay may not beevicted evicted Under a non-eviction plan, non-purchasing for failure to buy their apartments; for failure to buy their apartments; tenants may not be evicted for failure they tothey buy may continue to occupy them as rental may occupy them as their continue apartments;tothey may continue to rental occupy tenants. non-eviction plan to to beplan tenants. Fora atenants. non-eviction plan be them as For rental For a non-eviction declared effective, atatleast 15%15% of the declared effective, least ofofthe to be declared effective, at least 15% the dwelling units must be sold to bona fide dwelling units must be sold to bona fide tenants dwelling units must be sold to bona fide tenants or who or non-tenant purchaserspurchasers who intend, or whose tenants ornon-tenant non-tenant purchasers who family members intend, tomembers live in the unit. The intend, or family intend, intend, or whose whose may include sales of vacant and to live unit. The percentage may topercentage liveininthe the unit. The percentage may occupied apartments. However, an outside include sales ofof vacant andand occupied include sales vacant occupied purchaser of However, an However, occupied may not apartments. anapartment outside apartments. an outside evict the tenant living in the apartment. The purchaser ofofanan occupied apartment purchaser occupied apartment may not evict the tenant living in the may not evict the tenant living in the bilized or rent-controlled paying rent to apartment. The may in in apartment. Thetenant tenanttenant, maycontinue continue the outside purchaser or the sponsor, who must occupancy rentoccupancy as asaarent-stabilized rent-stabilizedoror rentcontrolled rent to the controlled tenant, tenant,paying paying rent to the outside who outside purchaser purchaserororthe thesponsor, sponsor, who must services required must provide provideallallthe the services required under under applicable applicable laws. laws. 12 96
Landlord/ Sponsor Offering Plan
Through eviction or non-eviction plan
COMMUNITY LAND TRUST (CLT)
Community Land Trust is a community based membership organization whose mission includes stewardship of land for community benefit and permanent affordability.
CLTs acquire and hold land or multiple parcels of land scattered across a targeted geographic area. These lands are never resold, but are removed permanently from the market and managed on behalf of a place-based community.
CLTs make it possible for lower income households to buy and own homes on land. They also promote commercial, local businesses on the leased land.
CLTs offer long-term (typically 99year), renewable, inheritable ground leases, assuring long-term stability and security for the CLT homeowners and tenants. CLTs place equity limitations into the ground lease agreement that restrict the resale price of properties to provide permanent affordability.
COMMUNITY LAND TRUST OWNERSHIP
A nonprofit corporation holds title to one or multiple parcels of land, scattered across a targeted geographic area. These lands are never resold, but are removed permanently from the market.
Any buildings on this communityowned land are rented or sold off to homeowners, cooperatives, nonprofits, or other corporations or individuals. These structures may already exist when the nonprofit acquires the land, or they may be constructed thereafter.
A ground lease knits together – and equitably balances – the interests of the nonprofit landowner and the interests of the buildings’ owners. This ground lease lasts for an extended period of time, typically 99 years; it is also inheritable and mortgagable, allowing the owners of residential or commercial buildings to obtain private financing to construct or to improve their structures. 100
ORGANIZATION A CLT has a corporate membership that is open to anyone living within the organization’s service area, which may be as small as a single block or as large as an entire city, county, or region.
A majority of the nonprofits governing board is elected by its membership. The governing board has a balance of interests, divided among three voting blocks. The board of directors is composed of three parts, each containing an equal number of seats and representatives:
people living on the CLT’s land (leaseholder representatives)
residents of the CLT’s service area who do not live on the CLT’s land (general representatives)
public officials and nonprofit organizations providing housing or social services in the area, or other individuals representing the public interest (public representatives)
OPERATION • A CLT strives to preserve the permanent affordability of housing (and other structures) that are located on the CLT’s land or placed under the CLT’s care. • There is an organizational commitment to maintain these structures in good repair. • People who have been excluded from the economic and political mainstream and disadvantaged places that have been buffeted by successive waves of disinvestment and gentrification have the first claim on a CLT’s resources. 101
FEATURES OF OF CLTs FEATURES CLT DUAL DUAL OWNERSHIP OWNERSHIP HOMEOWNER HOMEOWNER HOMEOWNER
CO-OP CO-OP CO-OP
NON-PROFIT NON-PROFIT NON-PROFIT
COMMUNITY CONTROL 1/3 RESIDENT 1/31/3 RESIDENT RESIDENT REPRESENTATIVES REPRESENTATIVES REPRESENTATIVES 1/3 GENERAL 1/31/3 GENERAL GENERAL REPRESENTATIVES REPRESENTATIVES REPRESENTATIVES 1/3 PUBLIC 1/31/3 PUBLIC PUBLIC REPRESENTATIVES REPRESENTATIVES REPRESENTATIVES
FLEXIBLE FLEXIBLE DEVELOPMENT DEVELOPMENT SINGLE FAMILY SINGLE FAMILY HOMES SINGLE FAMILY HOMES HOMES CONDOS CONDOS CONDOS CO-OPS CO-OPS CO-OPS MULTI-UNIT MULTI-UNIT MULTI-UNIT APARTMENT BUILDING APARTMENT APARTMENT BUILING BUILING NEIGHBORHOOD NEIGHBORHOOD NEIGHBORHOOD BUSINESSES BUSINESSES BUSINESSES COMMUNITY PARKS COMMUNITY PARKS COMMUNITY PARKS
PERPETUAL AFFORDABILITY LONG TERM LEASE LONG TERM LEASE LONG TERM LEASE RESALE PRICE RESALE PRICE RESALE PRICE RESTRICTION RESTRICTION RESTRICTION 102
18 18 18
•A CLT acquires land in its service area. Buildings already located in such land or later constructed are rented or sold to individuals, housing co-ops, non profit and for profit housing corporations. •CLTs intend never to resell their land and provide for the exclusive use of their land by the owners or tenants of any buildings located thereon.
•CLTs occasionally own both the land and the building(s). Example: CLTs developing and managing rental housing. •CLT may own only the land and an affordability covenant is applied for the buildings hold in such land.
•The board of directors is composed of three parts, each containing an equal number of seats representing the interests of people: who lease land from the CLT (“leaseholder representatives”), from the surrounding community who do not lease CLT land (“general representatives”) and public officials, local funders, nonprofit presumed to speak for the public interest (“public representatives”).
•Most of the CLTs that are structured as programs or subsidiaries of another nonprofit often have governing boards (or advisory committees) appointed by the “parent” organization. •Some CLTs that are created by municipal governments allow the mayor, city council, or county board to appoint some of the CLT’s board.
•There is great variability in the types of projects that CLTs pursue and in the roles they play in developing them. •CLTs around the country have constructed (or acquired, rehabilitated, and resold) single-family homes, condos, co-ops, SROs, multi-unit apartment buildings, and mobile home parks. •CLTs have created facilities for neighborhood businesses and nonprofit organizations. •CLTs have provided sites for community gardens and parks.
•While most CLTs carry out development with their own staff, some delegate development to nonprofit or for profit partners, confining their own efforts to stewardship: assembling land and preserving the affordability of any structures located upon it. •Many CLTs focus on a single type and tenure of housing. However, an increasing number of CLTs develop housing of many types and tenures; mix housing and non-residential projects and revitalize neighborhoods.
•CLT retains an option to repurchase any structures located upon its land. The resale price is set by a formula (in the lease) designed to give present homeowners a fair return on their investment, and future home buyers fair access to housing at an affordable price. •CLTs are committed to preserve affordability from one owner to another, one generation to another, in perpetuity.
•In some states, laws or court precedents limit the duration on leases. •Some CLTs do not re-purchase but require the direct transfer of these price-restricted structures from one owner to another. • Most CLTs closely monitor and tightly control owner’s occupancy, maintenance, and improvement of buildings that are located on its land. 103
Housing co-ops are an alternative ownership model where households become shareholders of a cooperative (enterprise) that owns the building they live in. Shareholders do not own a unit, instead they own shares of the co-op and they receive a long term lease for the unit they live in. Additionally, each household is responsible for a monthly maintenance fee to cover the shared expenses of the building. In this model, householdsâ&#x20AC;&#x2122; economic, social and cultural housing needs and aspirations are unified, promoting a strong sense of community commitment. Housing cooperatives are run by a board of residents/shareholders, which uses a democratic system to make decisions for the control and management of the property. Limited equity cooperatives are an alternative housing model that advocates for permanent affordability by restricting eligibility to low income people and by requiring limitations on the amount of profit shareholders receive when they resell their units. 104
TYPES OF CO-OPS MARKET RATE CO-OP Are defined as cooperatives without resale restrictions. The units can be sold at market rate prices and without eligibility limitations. These types of cooperatives do not promote permanent affordable housing since the return of the investment can be quite high.
= LIMITED - EQUITY CO-OP
= Source: UHAB. Urban Homesteading Assistance Board
Are defined as co-ops that advocate for permanent affordable housing through resale caps on the property. Usually the initial equity is below market rate, as well as the resale price. Thus the return on investment is low. This model encourages setting limits on the income of the new shareholders to preserve affordability.
HISTORY OF CO-OPS
Located on 816 43rd Street, Brooklyn NY, this was the first cooperative apartment building in the US (1916). Self-managed by Finnish families, it eventually included commercial space as well. At the time, the concept of housing cooperative was not known, so it was classified by the State under the Department of Agriculture, which regulated cooperative farms. After 100 years, it still is a housing co-op. Source: Places That Matter
This co-op was a housing reform experiment targeted at providing housing for African Americans. It was designated a NYC Landmark in 1970. It was foreclosed on in 1936. A year later the buildings were converted to rental units. In 2013 the buildings were sold to a developer who plans to turn the former co-ops into an upscale complex. Source: Wikipedia
The Amalgamated Clothing Workers of America and The International Ladiesâ&#x20AC;&#x2122; Garment Workers Union sponsored, organized and built 4,500 apartments in 12 buildings in the Lower East Side, Manhattan (1951) which were self managed by the workers. Title I of the National Housing Act, which assisted municipalities with clearing slums was used to develop this co-op. Shareholders decided in separate votes in 1997 and 2000 to abandon the limited equity model and convert the buildings to a market-rate co-op. Source: Coop Village
Co-op City, opened in 1973, is the largest housing co-op in the world, with 15,372 units located at the intersection of Interstate 95 and the Hutchinson River Parkway. It was sponsored and built by United Housing Foundation (organized by Amalgamated Clothing Workers of America and A. Kazan) and financed with a mortgage loan from New York Stateâ&#x20AC;&#x2122;s Housing Finance Agency (HFA). In 1975, because of mismanagement, the community was not able to pay the loan, so the State took over control. Renovated in 2000, it is today managed by the River Bay Corporation. Source: River Bay Corporation
In 1977 a group of homesteaders on East 102nd Street, East Harlem used the Urban Homesteading Program by UHAB to create a cooperative and buy a 40-unit building from the City. Today it still exists as a limited-equity co-op. Source: UHAB
During the 1980s, nonprofit organization called Ridgewood Bushwick Senior Citizenâ&#x20AC;&#x2122;s Council (RBSCC) began managing a series of co-ops in Bushwick. These small scale co-ops were created through the Community Management Building Program and have a contract with HDP. Today, RBSCC is the largest provider and owner of affordable housing in Bushwick. Source: RBSCC
In 1984, a 77-unit building called St. Johnâ&#x20AC;&#x2122;s was abandoned by its landlord and foreclosed on. In response, its tenants used the TIL Program and the help of UHAB to take over ownership and create a co-op. Today, it still operated as a limited-equity co-op. Source: UHAB
In 2001, the city foreclosed on the former HDFC building due to unpaid property taxes. It was initially formed through the Third Party Program--in which the city transfered buildings/properties from delinquent and negligent landlords to responsible entities--, and with help by UHAB. Today, the building is run by a for-profit management company. Some of the old tenants continue living there in now rent-stabilized apartments.
Currently under construction at 21 East 1st St in the East Village, Manhattan, this project features 65 luxurious market rate units and 4 units that constitute an affordable housing cooperative. The co-op targets low income shareholders with an annual income between $40,115 - $44,720. This building is being constructed through the Inclusionary Housing Program (IHP), NYS Affordable Housing Corporation (AHC), and The Housing Partnership.
Source: Columbia Daily Spectator
Source: JUPITER 21 and UHAB
BENEFITS OF COOPS COMMUNITY SENSE Co-ops encourage a sense of community by integrating shareholders in the decision-making process and in the physical management of the building. Usually, through teamwork experiences, a strong bond between shareholders is generated, where residents are not only neighbors, there are a close-knit community.
RESIDENTS AUTONOMY Since shareholders own and manage their building, they have a strong influence on the built environment. Through action, this model empowers communities to take problems into their own hands instead of delegating them. Additionally it is autonomous from free market pressure.
DEMOCRATIC MODEL Co-ops work on a democratic model where every shareholder has a voice. Even though the board manages the cooperative, shareholders have voting power.
ANTI DISPLACEMENT STRATEGY Thanks to housing co-ops, communities are able to set roots in a neighborhood. Since shareholders are owners, they are not vulnerable to strong pressure from the market or to predatory practices.
LEGAL AND TAX BENEFITS Administrative and service costs are shared. Shareholders have income tax deductions under Section 216 of the Internal Revenue Code.
PERMANENT AFFORDABILITY In limited equity housing cooperatives permanent affordability is achieved through resale caps and maximum income eligibility requirements.
Source: UHAB. Urban Homesteading Assistance Board
ORGANIZATION OF CO-OPS SHARES
SHAREHOLDERS Each resident of a cooperative is a co-owner of the property, through shares of the corporation that owns the building they live in. Shareholders/ residents do not own a unit, instead they receive a long-term lease for the unit they live in. As a community, they self manage the property.
BOARD OF DIRECTORS Using a democratic system, housing cooperatives are run by a group of shareholders that make the decisions and the policies of the corporation. The board is elected annually, by a democratic election or by volunteering. All the residentsâ&#x20AC;&#x2122; thoughts are taken in account, but the board is in charge of the actions.
COOPERATIVE BY-LAWS As a corporation, housing co-ops have a set of parameters and rules to run the property to unify all the residentsâ&#x20AC;&#x2122; needs and aspirations. The most common by-laws advocate for permanent affordability by setting income eligibility restrictions for new shareholders and re-sales caps. Additionally, the by-laws establish the maintenance fee, the sublet policies, the uses of the common spaces, etc.
PROPRIETARY LEASE The long-term lease is usually for 99 years and gives each shareholder the right to live in a housing unit. The corporation is the lessor, and the shareholder is the lessee of a particular unit. Additionally, the lease states the obligation of tenants to pay a monthly maintenance fee. 112
Source: UHAB. Urban Homesteading Assistance Board
INCOME CAP NEWCOMERS
PROFIT RE-SALE PRICE
USE OF COMMON AREAS
MAR APR MAY
AUG SEPT OCT NOV
For more information see the Limited Equity Cooperatives a Legal Handbook by UHAB http://www.uhab.org/programs#sthash.bf3zm2mt.dpuf Source: UHAB. Urban Homesteading Assistance Board
UHAB URBAN HOMESTEADING ASSISTANCE BOARD UHAB is a non-profit organization that advocates for permanent affordability by empowering and assisting communities to reclaim ownership over their homes by the creation of housing cooperatives. The organization was born during the 1970â&#x20AC;&#x2122;s economic crisis in New York when the group began helping residents of abandoned buildings to become owners. UHAB continues to provide services to tenants that want to turn their buildings into co-ops.
PROGRAMS Organizing and Policy Co-op Development Co-op Preservation Technical Assistance and Training Member Services Sharing our Expertise
To know more about the workshops and services please visit their website. http://www.uhab.org/programs#sthash. bf3zm2mt.dpuf
Source: UHAB. Urban Homesteading Assistance Board
FORMATION OF THE LEGAL ENTITY
H D F C HOUSING
= WHAT IS A HDFC?
HDFCs are limited equity co-ops. According to the Financial law (Article XI of the Private Housing Finance Law), Housing Development Fund Corporations are used to create limited equity co-ops, wherein the corporation exclusively builds affordable housing for low income households. HDFCs are supervised by city agencies (in some cases this may be the State Division of Housing and Community Renewal), and the local housing agency, New York City’s Department of Housing Preservation and Development (HPD).
Source: UHAB. Urban Homesteading Assistance Board
As an entity that works under the City’s policies umbrella, HDFCs redeem tax benefits, including lower real estate property tax and the corporation management. 115
CO-OP CONVERSIONS HOMESTEADING GROUPS
$$$ $$$ $$$ $$$ GOVERMENT PAYS PAYS FOR FOR LABOR: LABOR: GOVERMENT SWEAT EQUITY EQUITY SWEAT GOVERMENT PAYS FOR LABOR: TENATS BECOME HOMESTEADERS SWEAT EQUITY TENANT COOPERATIVES GOVERMENT PAYS FOR LABOR: TENATS SPONSORED BECOME HOMESTEADERS SWEAT EQUITY TENATS TENATS BECOME BECOME HOMESTEADERS HOMESTEADERS
$$$ $$$ $$$ $$$
COMMUNITIES COMMUNITIES ORGANIZE ORGANIZE TO TO BUY BUY PROPERTIES PROPERTIES COMMUNITIES ORGANIZE TO BUY TENANT SPONSORED COOPERATIVES PROPERTIES PRIVATE SPONSORSCOMMUNITIES ORGANIZE TO BUY TENANTDEVELOPERS SPONSORED COOPERATIVES PROPERTIES TENANT TENANT SPONSORED SPONSORED COOPERATIVES COOPERATIVES
PRIVATE PRIVATE DEVELOPER DEVELOPER SPONSORS SPONSORS
AND AND CONSTRUCTION CONSTRUCTION BENEFITS BENEFITS
PRIVATE DEVELOPER SPONSORS
AND CONSTRUCTION BENEFITS
PRIVATE DEVELOPER SPONSORS
AND CONSTRUCTION BENEFITS
NON PROFIT SPONSORS
$ $ $ $ $$$ $$$ $$$
NOT-FOR-PROFIT NOT-FOR-PROFIT SPONSORS SPONSORS NOT-FOR-PROFIT SPONSORS NOT-FOR-PROFIT SPONSORS 116
THE CITY CITY SALES SALES$$$ ABANDENED BUILDING BUILDING THE ABANDENED TO REHABILITATE TO REHABILITATE AND AND FUNDS FUNDS THEM THEM THE CITY SALES ABANDENED BUILDING TO REHABILITATE AND FUNDS THEM THE CITY SALES ABANDENED BUILDING TO REHABILITATE AND FUNDS THEM Source: UHAB. Urban Homesteading Assistance Board
Tenants become homesteaders by staying in and rehabilitating vacant or abandoned properties. In exchange for their work, homesteaders become owners of the property by creating a cooperative. This is known as sweat equity. Programs: Homesteading Program HOMESTEADERS BECOMESHAREHOLDERS
Groups of neighbors organize themselves and negotiate with the propertyâ&#x20AC;&#x2122;s owner (private or public) to buy and convert it into a housing co-op. Programs: Tenant Interim Lease Program; the Ownership Transfer Project of the Community Service Society TENATS BECOMESHAREHOLDERS
NEW UNITS OF AFFORDABLE HOUSING
REHABILITATION OF ABANDONED BUILDINGS NEW RESIDENTS Source: UHAB. Urban Homesteading Assistance Board
The City and State encourages non-profit organizations to acquire abandoned property by selling them for very low costs. Usually these projects are financed through grants and loans from State initiatives and the projects are sold to a low income housing co-op. Programs: State Urban Initiatives Program, the federal Urban Development Action Grant
The State assist developers in building limited equity cooperatives by providing financial aid and transferring public properties. The units have resale restrictions. Programs: Community Management Program
FIRST PROGRAMS DESCRIPTION TENANT INTERIM LEASE (TIL) PROGRAM
LOW INCOME CO-OPS
$250 PER UNIT
Transfer low income / No cap on the re-sale price / Regulatations for incomers Source: UHAB. Urban Homesteading Assistance Board
This City program gives organized tenant groups opportunities to lease, self manage and buy city property buildings. In this program, the shareholders of the limited equity co-op have a lease with HPD and received technical training and advising by UHAB before closing the purchase. Only HDFCs are eligible for this program, and it requires 60% of tenants to sign purchase agreements before the building can be sold to the corporation. Tenants that do not agree to be part of the co-op (except for eligible senior citizens and disabled persons) are subject to eviction. The initial equity in these plans is set for $250 per unit. The only resale provision concerning affordable housing is that the units must be sold to low income newcomers. Their incomes should not exceed six times the annual maintenance, plus utilities, for the apartment. These plans do place limits on how much of the profits are for the shareholder and how much for the co-op. For more information read the Limited Equity Cooperatives a Legal Handbook by UHAB http://www.uhab.org/programs#sthash.bf3zm2mt.dpuf 118
HOMESTEADING PROGRAM DESCRIPTION HOMESTEADING PROGRAM
STATE SALES IT TO COMMUNITIES
H D F C
INITIAL EQUITY noaction letter
$250 PER UNIT
$50 - 100/ MONTH TOOLS FOR WORK
Transfer low income
Original purchase price All license fees Membership dues Special Assessments improvements
Source: UHAB. Urban Homesteading Assistance Board
Vacant city-owned buildings are sold to low income homesteading groups, which agree to rehabilitate the building with voluntary work. This model is also known as a sweat–equity co-op, where the funds for the physical enhancement come from the City, State, and private sources, including foundations. To be eligible for this program, co-ops must be an HDFC. On several occasions, groups of squatters have reclaimed ownership of the City’s properties, becoming homesteaders. This program evolved from the squatter movement. The buildings are sold by HPD at $250 per unit. The extra money needed for the repayments are collected within the co-ops. For more information read the Limited Equity Cooperatives a Legal Handbook by UHAB http://www.uhab.org/programs#sthash.bf3zm2mt.dpuf 119
LOW INCOME HOUSING TRUST FUND COOPERATIVE CURRENT PROGRAMS PROGRAMS
LOW INCOME HOUSING TRUST FUND COOPERATIVE DESCRIPTION
80 % AMI LOW INCOME POPULATION
$250 TO $1,500 PER UNIT
TRANSFER LOW INCOME
Original cash equity Assessments Amortization Balance on all loans Reasonable costs and expenses Source: UHAB. Urban Homesteading Assistance Board
Since 1985, the Private Housing Finance Law (Article XVIII), gives State funds for rehabilitation and construction of low income cooperatives and condominiums. The eligibility of this program is individuals or households whose incomes do not exceed 80% of AMI in NYC. The price for the initial equity varies but must remain affordable for the purchaser. Usually prices oscillate between $250 to $1,500 per unit. This program states re-sale provisions in which the shares must be transferred to low income individuals or households. This aims to maintain affordability. These co-ops can be rented (depending on the by-laws), but the price should not exceed the shareholderâ&#x20AC;&#x2122;s actual monthly maintenance and should not exceed 30% of the income of the subtenant. For more information about the resale provisions visit: http://www.uhab.org/ programs#sthash.bf3zm2mt.dpuf 120
COMMUNITY MANAGEMENT BUILDINGS DESCRIPTION
NON PROFIT MANAGEMENT
PRIOR CO-OP CONVERSION
$ $ No profit regulations Improvements limited TRANSFER LOW INCOME Source: UHAB. Urban Homesteading Assistance Board
This model describes a building that is manage by a non-profit (versus being self managed by tenants). The non-profit has a direct contract with HPD prior to the conversion to cooperative. This program receives a a sizable portion of City funds for repairs. The re-sale provisions applies only for 15 years, in which shareholder do not receive any profit for the first three years. Additionally, there is a limited reimbursement for capital improvements to individual units ($1,500). The profits made from the unit are divided between the co-op (70%) and the shareholder seller (30%). For more information read the Limited Equity Cooperatives a Legal Handbook by UHAB http://www.uhab.org/programs#sthash.bf3zm2mt.dpuf
RECENT PROGRAMS THIRD PARTY TRANSFER
NON PROFIT (Neighborhood Restore)
DEVELOPER (NON / FOR PROFIT)
qualified developers WITH EXPIRIENCE in property management
qualified developers WITH EXPIRIENCE in property management
CONVERTION TO CO-OP
Third Party Transfer Program (TPT) was created in 1996 by HPD. When New York City forecloses on properties (for unpaid real estate taxes), ownership is transferred directly to a non-profit organization, Neighborhood Restore, who works with responsible and qualified non-profit and for-profit developers to stabilize, manage, and plan for the rehabilitation and future ownership of these properties. Neighborhood Restore then transfers ownership of the properties to the qualified developer who rehabilitates the building and manages it as affordable housing. This program has been used to transfer buildings to tenants as a cooperative, who self manage the property. For more information visit http://furmancenter.org/institute/directory/entry/thirdparty-transfer-program
AFFORDABLE NEIGHBORHOOD COOPERATIVE PROGRAM LOAN
H D F C TIL TENANTS IN OCCUPANCY $2,500.
HPD Loan Terms
UP TO $110,000 PER UNIT
Maximum loan term: 30 years. Interest Rate: 1.0% per annum 0.25% servicing fee during construction 1% per annum during the permanent term (includes 0.25% servicing fee).
80-100% HUD Income Limit Affordability monthly mortgage payments 10% down payment 30 year mortgage term 5% annual fixed mortgage rate
HPDâ&#x20AC;&#x2122;s Affordable Neighborhood Cooperative Program (ANCP) provides lowinterest loans for the rehabilitation of buildings under the TIL Program for the creation of affordable cooperatives for low and moderate-income households. HPD Loan Amount: up to $110,000 per unit. The amount per-unit may be reduced for projects utilizing other sources. HPD Loan Terms: maximum loan term 30 years, with an interest rate of 1.0% per annum plus 0.25% servicing fee during construction and 1% per annum during the permanent term (includes 0.25% servicing fee). The subsidy states sales prices as following: the insider purchase price for all eligible tenants in occupancy, regardless of unit size is $2,500. Outsider purchase must be calculated using the following formula based in 80-100% HUD Income Limit Affordability $83,900 (2014 HUD Income Limit price) For more information visit http://www1.nyc.gov/assets/hpd/downloads/pdf/ developers/term-sheets/PDF_ANCP_Term_Sheet.pdf
CO-OPS IN BUSHWICK CY P
GA TE S
LIMIT EQUITY 419 UNITS
M M M
W YC KO
OA M DW AY
MARKET RATE 102 UNITS
MARKET RATE AND LIMITED EQUITY TOTAL COOPS UNITS 521
MARKET RATE CO-OPS
LIMITED EQUITY CO-OPS
Source: UHAB. Urban Homesteading Assistance Board
SIZE OF CO-OPS
17 IN PROCESS
CO-OPS 83 UNITS
M M M
ABOVE 24 UNITS
18 TO 23 UNITS
13 TO 18 UNITS 7 T0 12 UNITS 4 TO 6 UNITS 1 TO 3 UNITS
YEARS WHEN HOUSEHOLDS MOVED
SIZE OF CO-OPS ABOVE 24
10.25% 146 UNITS 3 COOPS
18 TO 23 UNITS
7.70% 63 UNITS
13 TO 18 UNITS
12.80% 5 COOPS
7 T0 12 UNITS
10.25% 36 UNITS
4 TO 6 UNITS
46.15% 18 COOPS
5 COOPS 1312.80% UNITS 13 UNITS
1 TO 3 UNITS 0
Source: UHAB. Urban Homesteading Assistance Board
CO-OPS IN BUSHWICK 100% SHARED EQUITY NEIGHBOARHOOD RESTORE 1 UNITS RIDGEWOOD BUSHWICK 3 UNITS RIDGEWOOD BUSHWICK 3 UNITS 1000 DECATUR 3 UNITS WEST BUSHWICK 3 UNITS RIDGEWOOD BUSHWICK 4 UNITS RIDGEWOOD BUSHWICK 4 UNITS WEST BUSHWICK 5 UNITS RIDGEWOOD BUSHWICK 5 UNITS
RIDGEWOOD BUSHWICK 5 UNITS RIDGEWOOD BUSHWICK 5 UNITS 1185 PUTNAM AVE HDFC 5 UNITS 924 HART STREET 6UNITS RIDGEWOOD BUSHWICK 6 UNITS RIDGEWOOD BUSHWICK 6 UNITS 221 HARMAN ST HFDC 6 UNITS T 164 BLEECKER HDFC 6 UNITS RIDGEWOOD BUSHWICK 6 UNITS RIDGEWOOD BUSHWICK 6 UNITS 160 BLEECKER HDFC 6 UNITS 114 GROVE ST HDFC 6 UNITS 24 MOFFAT ST HDFC 6 UNITS RIDGEWOOD BUSHWICK 6 UNITS
1158 DEKALB 8 UNITS 107 BLEECKER HDFC 8 UNITS 1087BUSHWICK AVE HDFC 8 UNITS 175 LINDEN ST HDFC 12 UNITS 1095 BUSHWICK AVE HDFC 14 UNITS 111 LINDEN ST HDFC 16 UNITS 115LINDEN ST HDFC 16 UNITS 12 BLEECKER HDFC 16 UNITS 1091BUSHWICK AVE HDFC 16 UNITS 924 STANHOPEHFDC 20 UNITS 87 STOKOLM 20 UNITS 101 LINDEN ST HDFC 23 UNITS 890 FLUSHING AVE 27 1050THE NEW HANCOCK HDFC 27 UNITS 24 FURMAN AVE HDFC 53 UNITS 246 CORNELIA AVE HDFC 39 UNITS
CHALLENGES CONSENSUS While consensus is also a benefit, the democratic model can be a challenge to co-ops since reaching consensus between co-op shareholders can be very difficult.
PROMOTING AFFORDABLE HOUSING Co-ops are made up of individuals, each with their own financial pressures. It can often be challenging for shareholders to obtain from selling their units at market-rate prices and instead consider the communityâ&#x20AC;&#x2122;s needs over their own.
COMMUNITY SENSE Creating a community sense and engaging the total population in the coop is not easy. Co-ops struggle to find volunteers for the board.
Have you heard about a limited equity co-op?
25% knows knows
65% 65% does does not not knowknow
The survey shows that most people in Bushwick do not know what a limited equity co-op is. Evidently, one of the biggest challenges facing co-ops is to spread the word. 127
AFFORDABLE HOUSING IN BUSHWICK
ADVOCACY FOR PERMANENT AFFORDABILITY 129
SHAREHOLDER INTERVIEWS As part of the qualitative portion of the research, interviews with shareholders in co-ops were conducted. The interviews were organized and coordinated by UHAB with HDFC shareholders and/or board members. Each interview was conducted by one UHAB representative and two students of DUE Parsons Studio I and videotaped with consent. In total, 7 interviews were conducted; 1 in Bushwick and the other 6 spread among Manhattan, the Bronx and Brooklyn. The interview questions were designed by Maliha Safri, from the Solidarity Economy Project (SEP), with input from Design & Urban Ecologies Students at Parsons, The New School for Design, and UHAB. These questions were used as guides to navigate the conversations with the interviewees. These interviews provided both positive and negative insights into the functioning of co-op buildings and boards, as well as experiences of living in a co-op. In the following pages we provide some of the key findings.
DAVID CALVERT, Board Member 212 West 105th Street Co-op Upper West Side, Manhattan
PIN LO, Shareholder 204 Bushwick Avenue Co-op Williamsburg, Brooklyn
ALBA ORELLANA, Shareholder EDWIN ORELLANA, Shareholder 1898 Longfellow Street West Farms, Bronx
BARBRA TAYLOR, Board Member SHARON TAYLOR, Board Member 842 Park Place HDFC Crown Heights, Brooklyn
MARIA ORTEZ, Former Board Member RAY SAGE, Board Member 175 Rivington Street HDFC Lower East Side, Manhattan
HENRY REID, Building Manager 678 Street Nicholas Avenue Co-op Harlem, Manhattan
LINDA ROSARIA, Former Board Member JOVA PUGA, Shareholder JACK MOORE, Board Member 295 Stanhope Street HDFC Bushwick, Brooklyn 131
DAVID CALVERT 212 West 105th Street Co-op Upper West Side 10 Units Tenant Interim Lease Program 1979 “Living in a co-op everyone has an interest in the building working. And what we’ve been able to do is to define working as not just accelerating in value, but as actually working as a community.”
CREATING CO-OPS & GETTING INVOLVED Previous housing conditions and reasons for getting involved Co-ops seem to promise a permanent affordable housing solution. They attract different people from different backgrounds. Therefore, keeping capacity in mind, co-ops have to establish and maintain a screening process of applications and policies. Maria and Linda share similar stories of landing in their respective HDFCs, “I was homeless, I was in a shelter” and thought “well you know what, this is better than being in the streets, let me stay here.” As more people moved into a co-op, the word spread amongst their friends and friends of friends. Jack moved in on Linda’s advice, “[I was] a renter but then I saw light at the end of the tunnel... When I had the opportunity to buy, it gave me the opportunity to... if I had to step away from my job I could. And at that time I had two young children. So I jumped at the opportunity to move into this building.” Other applicants included people who were dissatisfied with their housing conditions of physical space and/or troubles with their landlords. David described his previous home before moving to his co-op as “a rat infested, roach infested, cold water flat in East Harlem, and it had no rent. It was such a poor apartment that the city wouldn’t collect rent from us. It was a half of a building, the top half was completely burned out, water came in through the roof. I mean it was just really poor housing.”
The conversion process Not everyone had a functioning co-op to plug themselves into. They have lived through different kinds of housing typologies before setting the buildings up to be a co-op by themselves. The time lines of these self-created co-ops varied and therefore their processes varied. 842 Park Place had to go through the “TIL program… because they wanted to see how we [Barbara and the others] managed the building, we had to elect a president, a treasure and a secretary, and everybody was paying the same rent…. anyway she [Anita Robinson] would collect any rent she could collect, and we would fix up what we could fix up.” 678 Nicholas Ave in Harlem had a similar trajectory. Henry moved into his building when he was a child, “I was 5, over 50 years ago. It wasn’t a co-op at that time. It’s was a two story rental situation. When in 1979, the owner went broke then city took over the buildings, so the ladies in the building got together and formed a co-op and took over the building.” Henry went on to explain that the co-op system came as a relief to the renters as it meant they could now “own for themselves.”
Sweat equity required and initial struggles Setting up a co-op as new shareholders or as new board members means creating a new management structure and a new set of rules. Therefore, the first ones in the building and/ or board had to put in a lot of effort in cleaning up the physical premises of these buildings and struggle to settle into their new positions. Even though David moved into the co-op because he was seeking a better living condition, his new space needed work as well. He says, “the first minute I walked into this apartment, I mean it looks nice now, but it was unbelievably unlivable. There was no bathroom at all. We had to completely change all the walls. The only existing thing that is still here is the old, the exposed brick walls. Aside from that everything had to be put in new. And over a 30 year period we’ve done that.” As a shareholder and not just a renter, David was encouraged to put in the required effort to fix his apartment building. “There have been multiple periods of renovation work but we were able to do that because it mattered so much to us.” Maria has now been in 155 Rivington Street HDFC for about 30 years, of which, she has served on the board for 20. Talking about her initial experiences she said “we started running the building, thank god, because I was already, I mean, at a point I had to take people, like… they were selling drugs… I had to take people out of the building because they were selling drugs.” 133
SHARING OWNERSHIP, SHARING RESPONSIBILITY Personal interest vs community interest in decision making David summarizes the notion of shared ownership and shared living as “and you know, living in a co-op, everyone has an interest in the building working. And what we’ve [board members] been able to do is to define working as not just accelerating in value, but as actually working as a community.” Living in a coop is exactly that. It is a community in a communal living. They share the space and hence also the work that comes with it. Some of the HDFC application processes, like the one of 175 Rivington Street, screen applicants on the basis of whether or not they would be an asset to the HDFC. For Carter, the HDFC provides an opportunity to choose to do what they want to do via community support. He explains this phenomenon with, “here each person has a certain standard of power that affects everybody else and the vote severity make a difference. People want personal powerful things and personal goals and that they can’t afford on their own, but it affects everybody else. It doesn’t matter, they choose to do what they want to do. But it really affects the people, the personal power.”
Taking responsibility to get things done inside and outside the board HDFCs are self-managed by a board of elected or volunteered shareholders. These members are responsible for applications, finances, housekeeping, coordination with the city etc. Henry explains the role of a board as, “you have a president, vicepresident, and you have the treasure, secretary, everybody have their own little responsibilities. And the whole key of the board is this: is a group consensus, which means you vote as a team. Not one person makes decision, you gonna vote as a team.” While the experience of being on the board can be fulfilling for some, it can also be exhausting. Barbara quotes a particular example from her experience, “we had to fight for a new roof... we did what we were supposed to do. If they send me some papers and say fill this out, because you have to do this, it can be as thick as this book, I fill them out and give it back to them.” In David’s case, cost cutting meant additional workload. He says “we [212 HDFC, Upper West Side] still don’t hire a management fee, a management company, so we sort of keep our maintenance, is only $550 per month. We keep it pretty reasonable by doing all of the work ourselves.” Both, Maria and Jack, had stories of helping out the board even after stepping down. “I’m not on the board currently, officially. I do get a lot of calls pertaining to the building, ya know.” They both had the experience of being on the board, so, they felt “if they need help I can always help.”
MARIA ORTEZ 175 Rivington Street HDFC Lower East Side 26 Units Tenant Interim Lease Program 1983 “When we work as a team we get stronger. This is what happened here. Together working as team. So the building is standing! That’s the way it should be. Just continue going and keep positive.”
BARBARA TAYLOR 842 Park Place HDFC Brooklyn 8 Units Tenant Interim Lease Program 1998
â&#x20AC;&#x153;But I just see this as a total blessing, you know, being able to come back to where I was raised, come back to a beautiful huge apartment...â&#x20AC;?
CHANGING LIVES, FOSTERING OPPORTUNITY Cooperatives allow shareholders to control their own lives, and create a home that remains the center of the extended family “Living here for 30 years, is a while… This is my home. I raised my kids here, I have grand kids, they come here” says Maria Ortez. Knowing that home will always be there, and be in the same place can be very comforting. Sharon Taylor sees this “as a total blessing, you know, being able to come back to where I was raised, come back to a beautiful huge apartment...” What Sharon Taylor describes remains elusive for most low and moderate income New Yorkers.
Living in a co-op allows for more flexibility when it comes to work, vacation, and the need to care for loved ones Jack Moore of Bushwick found more control of his own life “when I had the opportunity to buy, it gave me the opportunity to, if I had to step away from my job, I could.” But it has also allowed him to be confident in his situation as he has moved on to retirement; “if I didn’t have the apartment, I couldn’t retire... Like I said, if it wasn’t for the co-op, my pension wouldn’t even pay my rent necessarily.“ For David Calvert, his co-op has allowed his family to move around the world with his wife’s career. “When we took a job in Mexico, when we took a job in Mozambique, to know that we could sublet for 4 years and come back, was just great.” There were even opportunities to travel, where there might not have been a possibility before; “Yeah, I bought a couple of time shares so I could travel with my bike now that my children are older, so that we could enjoy time by ourselves“ said Moore.
At the end of the month, sometimes it’s nice to have a little extra in your pocket, allowing for more disposable income, coops can create more opportunities to enjoy life “At least with an HDFC, it gives them the opportunity to at least afford beyond necessity. You know, so they can go out there and maybe…enjoy a day out, maybe a movie every now and then,” said Moore. It allows for others, like Ray Sage’s wife to pursue their passion. “...I can take some of my income and share it with her.” “She does a lot of advocacy for climate change and that does not pay much…”
For people on a fixed income, being part of a co-op can be a lifeline to stay in your home, and allow for a more stable life Linda Rosario knows what it gives her; “If you take ownership you have a little bit of control.“ This is echoed by her fellow shareholder Jack, “it enables her [Linda] to live. Ya know, she said, she’s on monthly income. She’s on disability, having to pay everything out in bills at least she’s able to have a little something. Ya know, and that’s what helps is stability. So sometimes just having that peace of mind is enough.” Co-ops allow for opportunities to be created to give shareholders more flexibility, more stability, and more control. Because at the end of the day, where you live should enhance your life, not drive it.
BUILDING COMMUNITY Building community Many people who live in co-ops do have a sense of community, even a sense of family. The residents in co-ops are willing to help each other, and they are sharing resources and responsibilities, celebrating together. People may feel more comfortable here, because they have the sense of belongings to co-ops, no matter what race, gender, age you are—co-ops are communities that welcome diversity. The communities built and sustained through co-ops can also form a basis to fight against gentrification in their neighborhood.
Sense of community, sense of family In co-ops, people could have a sense of community, since they know each other very well. Henry Reid, who is the manager of his co-op building, said: “They feel comfortable here. They know their neighbors. So they know if something is going on, people will come and say what’s going on… You know people get your back in this building.” Also this sense makes people feel save: “I know the people around here, I feel safe around here”, as Barbara Taylor states. “I was also seeing a lot of people around, a lot older now, you could talk to them and you could stay out all night, nobody had a problem” said by Carter Wesley. “It can become more than just a passing neighbor; it can become family” as Jack Moore said. In some coop buildings, people leave their doors open, and don’t have to worry about their property and children—the whole building is a family. This sense of family could be in the mind of the long-term residents, like Sharon Taylor, who has lived in a coop for 33 years, as well as in the mind of people who just moved in, as in the case of Maria Ortez. To Jack Moore, this sense of community and family can “get the people to be positive and you can bring a community up, you can bring a block up.”
Sharing resources Many residents in co-ops share resources with their neighbors, and are involved in community events. Ray Sage states that “people have been talking through the years about how we should develop a communal space. Share the roof and do a deck and there may be more opportunity to interact.” Sharon Taylor is more excited about people celebrating together: “And now we have all kinds of celebrations down here, in our big beautiful basement and our backyard”. It can also be like family; “we’ve had shared meals where multiple families would like alternate cooking for each other,” David Calvert said, “It helps us with raising kids to not have everyone all the time cooking.”
Sharing responsibilities Besides sharing resources, being part of a co-op community also means sharing responsibilities. Maria Ortez spoke about coming together; “We used to work together [physical work of renovation]. But you know when something major happened, like when [hurricane] Sandy happened, its like, we managed to be together.” “You got a lot of people who want to do things for the building. So it is a good thing, because it is not just your apartment” said Reid. 138
PIN LO 204 Bushwick Avenue Co-op Brooklyn 16 Units Community Management Program 1987
â&#x20AC;&#x153;The common interest is I think important for someone to live together.â&#x20AC;?
EDWIN ORELLANA 1898 Longfellow Street Bronx 18 Units Tenant Interim Lease Program 1979
â&#x20AC;&#x153;But with this open area that we have here, any resident from the building can come a have their own party, and they can invite or have a private event. But we have a space to enjoy.â&#x20AC;?
BUILDING COMMUNITY Building a diverse community One co-op building can include people from different cultures, countries and races, which means people can learn a lot from their neighbors and “you don’t have to go outside, don’t have to go down a block, it’s all in the building here,” as Henry Reid said, “we have diverse groups of people here, and there is nothing could end about this. So diversity is one of the things that I like about this building… that is why this building has to stay.” This type of housing model “gives them [HDFC shareholders] an opportunity for working class, non-working class, elderly, everything, to come together as a community.” Claimed by Jack Moore.
Co-op as a mechanism for affordability against gentrification Co-ops also have a major impact on their communities. “The neighborhood’s picking up, but the idea is to have these HDFCs for people to pull themselves up from being homeless or you know from a minimum wage job, being able to go into a house that’s theirs, that they can sit down and don’t have to worry about the rent going up again, that the landlord is trying to get rid of them,“ said Jack Moore. “You have to have a whole area thrive and an HDFC to help that because by keeping people where they can afford to pay their rent and have a little extra helps an area because now they can afford to go out and eat or go out and buy and eat and or go purchase something so it helps the shopkeeper, it helps the diner, you know, be it McDonald’s or a little cafe or whatever.”
ACKNOWLEDGING CHALLENGES Acknowledging challenges The challenges of co-ops come from two parts: one includes the problems of the co-op system, lack of education, friction between the board and other shareholders; the other includes lack of government support, and the affordability of co-ops being threatened by the real estate market.
Problems of the co-op system “One of the biggest challenges is trying to get some of the owners and even [rental] tenants to stay up with their rent. They’re not at market value yet they think that they don’t have to pay for it monthly” said Jack Moore. Some co-ops are lacking commitment, which constitutes a huge challenge in running or maintaining the building; “People have to realize that you’re hurting the building... You’re hurting everyone.” Another challenge is the structure of the board: One board may only have 10 shareholders but 4 in management. “You can’t run an effective co-op that way,” says Henry Reid. How to run a board or make decisions more efficiently is a problem that needs to be fixed in the future.
Lack of education about co-ops The proper functioning of co-ops requires ongoing education; “people still don’t fully understand what a co-op is” says Henry Reid. Linda Rosario mentioned the same problem; “If you don’t study, you have to get study what is it to get into a coop. Because they don’t know the difference between a condo, a co-op, or a house. It’s three different things.” The problem is shareholders could learn what the co-op is, but they don’t get information for themselves” said Reid.
Friction between board members and other shareholders In some buildings, several people don’t realize their responsibilities, but still want to exert control, which causes friction between the board and other shareholders. “Now we got gas and heat and everybody is complaining there’s not enough heat, there’s not enough heat…. As long as I was running down here, cutting this heat on, it was alright. Nobody came down here to help me. But they were appreciative. Now they act like, you know, it’s gotta happen…” Said Barbra Taylor; “They appreciate but they just try to act like they don’t and some of them feel like they could do better, you understand? Like if they were in charge, maybe they have issues because they’re not running things…. That’s what that’s about. Control issues… They want to control and they can’t control and we’re not going to let them control,” said Sharon Taylor. 142
LINDA ROSARIO 295 Stanhope Street HDFC Bushwick 20 Units Community Management Program 1989 “The tenants and the management took over in Bushwick, and you know what, they converted it into an HDFC. And it’s been the most wonderful thing they have done for affordable housing in my community.”
HENRY REID 678 St. Nicholas Avenue Co-op Harlem 70 Units Tenant Interim Lease Program 1979
â&#x20AC;&#x153;Cause in renting you just think about your apartment, in coops you will think about what you do to contribute to the wholeâ&#x20AC;?
ACKNOWLEDGING CHALLENGES Democratic systems entail commitment, reaching consensus and active involvement HDFCs work on a democratic basis in which everyone works together and gets to be involved in the process of decision making. But, obviously, this does not come easy. By and large, the board has to face the challenges of disagreements and conflicts amongst shareholders. Talking about these challenges, Maria was reminded of her time as a board member; “there was a lot of issues… They [residents] did not wanted to pay, because they didn’t agree on this… so the little bit of people that were paying their rent, we were trying to manage the whole building, and pay all the bills... I used to have people coming at my apartment and knocking on my door, trying to hit me, and people trying to come and trying to help me… like… it was really crazy back then.” Stanhope Street HDFC has a problem of shareholders not being involved in the process, sometimes out of lack of will, and sometimes out of lack of information. Jack spoke about how shared responsibility is like a family; “It can become more than just a passing neighbor; it can become family.” Linda informs us about their “training... And when you get this training, you get this booklet that’s called the operating plan and the operating plan has the guide about how the co-op should be run and also it tells you, the shareholders, you need to pay your maintenance.” David’s account of his board member experience was the opposite. In the HDFC that he lives in, they “don’t really use the term board in this building; We use the term shareholders, association, and officers... I’ve probably held every title over the years, but so has everyone else in the building. Its very democratic. Its very transparent. We have been very successful because we don’t let one person monopolize the whole building.”
ACKNOWLEDGING CHALLENGES Affordability and threats coming from the real estate market “I think the biggest challenge is to try to maintain affordable housing… In this town, trying to maintain affordable housing lived by the regulatory agreement is the toughest challenge” said Sage. Co-ops are on the front line of the affordable housing crisis. The lure of selling at the market rate is hard to overcome. Sharon Taylor could see her neighborhood change; “...my heart just goes out to the millions of people in New York that are forced out of New York City cause they can no longer afford to live here... All these brand new developments coming up over here in my neighborhood, I’m glad to see it, but none of my childhood friends can move in there. They can’t afford it. And that’s not right.” The threat is not only from new developments, but also from offers from others, according to Moore; “There are so many people in this area, especially elderly that are being offered buyouts by their landlords and they fairly realize that it is easier for their landlord to give you $30,000 because he is gonna recoup that money within two years...” Even if co-ops manage to resist threats by the real estate market, gentrification drives up living costs of a neighborhood and changes its social fabric. “We want to stay in the socialist world. And, right now, it seems like the capitalist world is winning,” says Sage.
Lack of government support “We need the support of the government, we need more HDFCs for the low income people, for people in the community” says Linda Rosario. The City has the responsibility to keep housing affordable for citizens: “I think it’s an important part in understanding what allows this building to go forward. Its city being benevolent. Right, they’ve decided that there could be this little island of affordability. This building doesn’t stand alone in the face of millionaires” said Sage. While co-ops were supported by the government in the early years, there are currently no programs and efforts by the government to expand or preserve this housing model. The neoliberal urban development of the city puts co-ops, like other forms of affordable housing, at risk. It is largely due to non-profit organizations like UHAB and committed shareholders that limited equity co-ops can survive in this context.
JACK MOORE 295 Stanhope Street HDFC Bushwick 20 Units Community Management Program 1989
â&#x20AC;&#x153;One of the biggest challenges is to try and get some of the owners, and even tenants to stay up with their rent.â&#x20AC;?
ALTERNATIVE HOUSING MODELS 1) 2)
solidarity economy system
affordable housing revitalization program
mandatory inclusionary limited equity co-ops
PROJECT DESCRIPTION This Design and Urban Ecologies Studio, “Revisiting Housing Cooperatives as an Alternative Housing Model”, took place in partnership with Ridgewood Bushwick Senior Citizens Council (RBSCC) and the Urban Homesteading Assistance Board (UHAB) in fall 2015. In recent years, RBSCC and UHAB have worked together to rehabilitate 17 dilapidated buildings foreclosed by the city and organize their long term tenants to collectively establish a Community Land Trust comprised of those scattered properties and a single limited equity community cooperative housing. The studio’s objective was to envision different models to strengthen and expand this community cooperative housing project as well as to assist in the preservation and growth of limited equity housing cooperatives currently in distress in Bushwick. The proposals respond to the current housing crises, discussed in the previous sections, and to the lack of visions to generate development without displacement in working class districts as Bushwick.
INTRODUCING ALTERNATIVE HOUSING MODELS The Solidarity Economy System looks at ways to strengthen and expand the co-op model by integrating it into a larger solidarity economy network, ensuring long-term affordability and sustainable development of the neighborhood. Mandatory Inclusionary Limited Equity Co-Ops proposes to tweak the Mayor’s current Mandatory Inclusionary Housing policy by requiring a percentage of limited equity housing co-ops. This policy change would offer community members permanent affordable housing and a greater say in the development of their neighborhood. The Affordable Housing Revitalization Program, finally, introduces a multistakeholder policy process to preserve, revive and create new affordable housing in 149 Bushwick.
art and culture
local businesses AFFORDABLE HOUSING
SOLIDARITY ECONOMY SYSTEM
COMMUNAL SERVICES skill training
BySPACES Michaela Kramer, daycare yoga nt OPEN craftsIsabel
Saffon & Jakob Winkler playgrounds ownership
The Solidarity Economy System (SES) aims to address the housing affordability crisis and recent threats to the neighborhood due to gentrification. It promotes the long-term affordability and development of the neighborhood in a holistic and sustainable way. In this proposal, a community becomes connected by shared capacities for living,SENSE working, andgardening playing, where affordable housing is art and COMMUNITY ownership complimented by other uses and services. The SES enhances the current urban setting, both the social and the built communal environment. gardening kitchens COMMUNAL
community sense dancing center STRUCTURES OF OPPORTUNITY
self empoyment OPEN SPACES
M M M M
1 FLOOR GARAGES M
gardening and culture art and culture COMMUNITY SENSE gardening COMMUNITY SENSE art AFFORDABLE HOU ownership ownership local businesses local busine gardening
gardeningCOMMUNAL communal kitchens communalSERVICES kitchens
playgroundsSERVICES COMMUNAL co-workingplaygro space
dancing community center senseskilldancing WORKING SPACES trainingcenter skill training
urban WORKING agricultu SPA
daycare OPEN yoga daycare playgrounds yoga play self empoyment OPEN SPACES self empoyment craftsSPACES crafts ownership
17 IN-PROCESS CO-OPS
local businesses AFFORDABLE HOUSING
Through a spatial analysis we identified potential underutilized structures that can be used for the SES. The 17 buildings that are currently being transformed into a community co-op by Ridgewood Bushwick Senior Citizen Council (RBSCC) and the Urban Homesteading Assistance Board (UHAB) form the basis or core of our project. Second, we want to incorporate existing co-ops that are currently at risk (16 small, 22 in total). Third, we identified vacant and distressed buildings that are underutilized and available for housing. Finally, we see an opportunity in the many one floor garages that are often vacant or being used as storage. Since 70% of Bushwick households do not own a car, they can be used for the SES. 151
CREATING THE NETWORK PHASES The phases do not represent successive steps that need to be taken necessarily one after another to achieve a set outcome. Rather, they represent a number of strategies that community members can develop towards a shared general goal of holistic affordability. Phases may act on their own or change course as relationships and circumstances develop.
PROCESS NOT PRODUCT PHASE 1 - Establishing the Foundation PHASE 2 - Consolidating the Core PHASE 3 - Building and Sharing Knowledge PHASE 4 - Expanding Affordable Housing
PHASE 5 - Strengthening the Solidarity Economy System PHASE 6 - Densifying the System
ESTABLISHING THE FOUNDATION
To establish the foundation, community organizations, public officials and co-op shareholders work together to develop a community land trust (CLT). This phase is about building trust as a basis for cooperation between the involved stakeholders and might take several months. Once established, the CLT will own the land while all buildings are owned and managed by a community co-op (CCC) that is comprised of the shareholders living in them. This separation between land and building ownership guarantees long-term affordability.
ESTABLISHING THE FOUNDATION COMMUNITY C0-OP
Shareholders who leave resell their share at an affordable price
The foundation of the Solidarity Economy System involves the Community Land Trust (CLT) and the Community Co-op (CCC) The CLT owns the land CLT recieves land, The CCC owns the holds it forever buildings which sit on the CLTâ&#x20AC;&#x2122;s land Shareholders make up the CCC and occupy the building units
The foundati Solidarity Eco System is bas decommodif land that ena affordability Shareholders democratically manage the CCC
CCC COMMUNITY LAND TRUST
Community Co-op recieves ownership of buildings
Shareholders join the CCC and earn the right to occupy a housing unit
CONSOLIDATING THE CORE
In the second phase, the CLT works to earn ownership of the land of the 17 inprocess co-ops to consolidate the core. The buildings become collectively owned by their current tenants who together create the CCC. Currently, there are 17 vacant units in these buildings which will be put on the market and the rents generated will help bring revenue to the CCC. ANNUAL COSTS RESERVE
OPERATION AND MAINTENANCE
$2,000 PER UNIT PER UNIT CONSOLIDATING THE$7,000 CORE CONSOLIDATING THE CORE TOTAL UNITS 83 TOTAL UNITS 83 $166,000
a) filling existing units Community co-op:
ANNUAL REVENUES unitsunits (66) -occupied 66 occupied MAINTENANCE FEES MARKET-RATE RENT limited-equity become limited
co-opsco-op units equity 54%
unitsunits (17) become become -vacant 17 vacant residential units $30,000 PER UNIT $2,500 MONTHLY via the CCC TOTAL UNITS 17
$5,820market-rate PER UNIT $320-$650 MONTHLY units leased TOTAL UNITS 66 $384,120
SURPLUS ACQUISITION FUND
$320-$650 PER MONTH (1BR - 3BR) 50% BUSHWICK’S MHI ($19,400 ANUALLY)
$2,500 PER MONTH (1BR - 3BR) 250% BUSHWICK’S MHI ($95,000 ANUALLY)
a) filling existing
occupied units (6 become limited-e New members pa co-ops symbolic amount the co-op and bec vacant units (17) b shareholders. market-rate reside units leased via th
Resale provisions adopted by CLT a limit the potential for shareholders l the co-op.
Incorporating market-rate units as a source of revenue further allows to reduce the first equity or down-payment to enter into the CCC to a symbolic amount. Resale provisions adopted by the CLT and the CCC limit the potential profit that shareholders can make when leaving the co-op and ensure long-term affordability. 153
BUILDING AND SHARING KNOWLEDGE
In the third phase, the CCC utilizes the relationships itâ&#x20AC;&#x2122;s been fostering internally to reach out to the wider Bushwick community, supporting cultural exchange and community engagement housed in the central HUB. Together, community members will participate in a project of co-creation within and surrounding the HUB. The HUB will function as a central space for political organizing and the creation of connections among people throughout the neighborhood. It will host community and educational events about housing justice, among other things. TheseEXCHANGE consistentAND community engagement activities will strengthen cultural CULTURAL BUILDING AND SHARING COMMUNITY ENGAGEMENT connections among residents and support neighborhood camaraderie. KNOWLEDGE
Creation of a HUB that catalyzes cultural exchange and community engagement. The SES HUB is a space for shareholders to organize and outreach for the wider community.
HUB The HUB will be a catalyzer of activity and will be created in partnership with a private garage owner.
EXPANDING AFFORDABLE HOUSING
To expand affordability, the fourth phase includes various strategies for land acquisition, ranging from the use of government programs to partnerships with and incentive models for building owners. External funding will be used only for the acquisition and rehabilitation of buildings. Once incorporated into the CCC, the daily operation and maintenance of the buildings will be self-sustaining through revenues gathered from market-rate units. HUB HUB Out reach Outreach campaign Campaign
AT-RISK CO-OPS AT-RISK CO-OPS Transfer land Transfer Land Trainig residents Training Residents Restoration (ANCP) Restoration (Ancp)
VACANT VACANT Acquisition (TptorOr Acquisition (TPT Partnering withOwner) owner) Partner With Restoration (ANCP) Restoration (Ancp) Training newcomers Training Newcomers DISTRESSED DISTRESSED Acquisition (TPT) Acquisition (Tpt) Training residents Restoration (ANCP) Training Residents Restoration (Ancp)
REACHING OUT Small existing co-ops will be invited to information events at the HUB about the benefits of joining the CCC (strengthening their financial stability and participation). Vacant buildings can be transferred to the CLT through the Third Party Transfer (TPT) program. Additionally, vacant buildings owned by local owners can be incorporated by offering the owners a percentage of the rehabilitated units which will be a long term revenue for the owner preventing bank landing. For distressed buildings, the SES will work with tenants living in tax-delinquent buildings to get the city to aquire the land through the TPT program. Tenants of such distressed buildings will be identified through tenant counseling sessions at the SES HUB AND by local tenant advocacy groups such as the Bushwick Housing ACQUISITION FUNDING Independent Project (BHIP) and RBSCC, and through additional outreach OPERATION ACQUSITION + REHABILITATION campaigns and information events at the HUB.
STRENGTHENING THE SOLIDARITY SYSTEM
SES will identify underutilized structures to develop communal kitchens, spaces for craft production, affordable daycares, co-working and affordable commercial rental space for local businesses, which will strengthen the system of holistic affordability. CCC and CLT could acquire the land through the revenues of the solidarity fund or partnering with owners. Additionally, roofs in garages could be a space for planting community gardens and hosting community events. COMMUNAL SERVICES
ACCESS TO GREEN SPACES
ADAPTING THE SYSTEM Acknowledging the challenges and difficulties of acquiring land, SES can reuse some spaces in residential buildings for communal services, local businesses and green spaces. ACCESS TO GREEN SPACES
AFFORDABLE COMMERCIAL RENTS 156
DENSIFYING THE SYSTEM
Phase six highlights a possible strategy to densify the SES through adding prefabricated micro-units onto co-op buildings. Micro units would help diversify housing unit types, providing singles and couples with affordable units. These micro units together with the market-rate units subsidize the limited-equity co-op units and add revenue to the solidarity fund. The micro units will be prefabricated by local industrial businesses which would help support the local economy and provide union-level wages. PROMOTING JOBS WITH JUST WAGES
DENSIFYING THE SYSTEM Local construction of prefab micro units Creation of local jobs Union wages
Can be rented for $1000 a unit which is affordable to people with incomes of 100% of Bushwickâ&#x20AC;&#x2122;s MHI.
THE PILOT PROJECT To study the feasibility of the creation of the SES, we identified a pilot project in Bushwick with possible buildings that can be used in this project. We investigated the owners, creating strategies appropriate for the specific site. MELROSE ST
CONSOLIDATING THE CORE
1) 2) 3) 4) 5) 6)
BUILDING AND SHARING KNOWLEDGE
7) 276 JEFFERSON ST (Garage) 8) 77 STAR (Garage)
EXPANDING AFFORDABLE HOUSING
16 15 TROUTMAN ST
8 17 14
276 JEFFERSON ST 763 TROUTMAN 76 STAR 85 STAR 238 SUYDAM 762 HART ST
9) 10) 11) 12)
93 TROUTMAN ST (At risk) 308 TROUTMAN ST (Vacant) 314 TROUTMAN ST (Vacant) 218 SUYDAM (Distressed)
STRENGTHENING THE SOLIDARITY ECONOMY SYSTEM 13) 14) 15) 16) 17)
277 TROUTMAN ST (Business) 79 STAR (Business) 217 TROUTMAN ST (Garage) 83 WILSON (Garage) 81 STAR (Garage)
DENSIFYING THE SYSTEM WILLOUGHBY AVE
MARIA HERNANDEZ PARK
1) 276 JEFFERSON ST 2) 763 TROUTMAN 3) 76 STAR 4) 85 STAR 5) 238 SUYDAM 6) 762 HART ST 9) 93 TROUTMAN ST (At risk) 10) 308 TROUTMAN ST (Vacant) 11) 314 TROUTMAN ST (Vacant) 12) 18 SUYDAM (Distressed) 13) 277 TROUTMAN ST (Business) 14) 79 STAR (Business)
MILEC: MANDATORY INCLUSIONARY LIMITED EQUITY CO-OPS By Paul Kardous & Priya Pinjani
PERMANENT Much of the affordable housing built in New York City has been for a fixed period of time, often with a sunset clause of 20 or 30 years that allows the owners to convert them into market rate units. Instead, affordable needs to be permanent, not just viable for the short term.
AFFORDABLE Affordability varies greatly across the city. Many of the formulas in calculating it are based on Area Median Income (AMI), which is usually much higher than the true media income of the neighborhood. Under the MILEC model, the income will be the Median Income for the neighborhood in which it is implemented, thereby making the units affordable to much more of the community.
Source: NYC Mandatory Inclusionary Housing Report, September 2015
OWNERSHIP Home ownership levels in New York City are more than half the national average, and in certain neighborhoods, like Bushwick, the rate is less than a third of the national average. Ownership is an important factor in stabilizing neighborhoods and helping to keep affordable housing permanent
HOME OWNERSHIP RATE
USA 64% NYC 32% BUSHWICK 11%
HOW IT GETS IMPLEMENTED MILEC will be implemented in areas of the neighborhood which the residents select for an upzoning. A developer will identify a site within this zone and will be required to build a number units of limited equity co-ops within the neighborhood. The new co-op will be controlled by a Community Land Trust (CLT) created for the neighborhood. The CLT will engage with the community from the start of the process via a broad base of community members. As the projects progress, the CLT will assist with training and management of the co-ops themselves, and manage funds contributed by developers.
The type of model the developer must use will vary depending on the size of the development. For some options they are able to chose between on or off site units, but for buildings with 19 units or less, they must contribute the cost of building the units to the CLT.
< 20 Units
< 4 Units
> 20 < 250 Units 4-50 Units
> 250 Units 160
> 50 Units
Contribution to CLT
On site or Off Site
This mechanism is meant for projects where the number of units added would not be appropriate as stand alone entities. This contribution will: - Be equal to the real construction costs of the required number of units - Include an additional 5% fee for construction management by the CLT - Must be located in the same Community Board District, or within 1/2 mile from the site. - First priority for co-op sites will be directly adjacent to development. If not possible, nearby vacant buildings or parcels will be used. -Required land purchase will be funded 40% by developer, 60% by public funds - Building will be constructed by developer to city required standards. - Affordable units building and land will be deeded to CLT. - Ground floor commercial space owned by the co-op to help subsidize maintenance. A combined model will follow these guidelines: - 20% of the units in the building would part of a limited equity coop - Building will be constructed by developer to city required standards, with oversight by a community based housing group - Units would remain as a co-op for the life of the building. - If the building is torn down or replaced, the units must go into a new project, or new co-op units must be built in the district.
71 68 70 69 72 64 66 67 65
2 4 3
8 9 10 7 6 12 11 M
75 44 40 43 39 42 41
80 78 79
26 2325 24 M
CRITERIA -Has an existing zoning of R-6 or higher, or a Commercial district -Encouraged in Residential areas with existing Commercial overlays -Community Input/feedback
The floor area (FAR) in R6 districts ranges from 0.78 (for a single-story building) to 2.43 at a typical height of 12 stories; the open space ratio (OSR) ranges from 27.5 to 37.5 COMMUNITY INPUT When choosing an area for MILEC to be implemented, generating input from the community is key. The process for selecting what areas get upzoned will involve workshops with the community, input from the Community Boards in the impacted areas, and the endorsement of the elected officials in the neighborhood.
FUNDING Funding for MILEC will come from multiple sources including: • Developers building or paying for units • Local, State, & Federal grants, and tax incentives that can be used by the CLT • Tax Increment Financing For purchases of land to be made by the CLT, a model called Tax Increment Financing will be employed. Often used for other pieces of infrastructure, this model will be able to draw on funding via the city, without diverting revenue from other needs.
COMMUNITY LAND TRUST A new Community Land Trust, called the Greater Bushwick Community Land Trust will be created to manage the co-ops created, as well as other possible community facilities. The CLT is envisioned to serve a specific neighborhood, as well as those within a half mile of its borders. These borders include the areas where the off-site units can be constructed.
The Greater Bushwick Community Land Trust will be managed by three key groups:
• Co-op shareholders • Neighborhood members who are not members of co-ops • Public or Non-Profit officials The CLT will focus on affordable housing, but could also include holdings of other land used for community benefit, such as community gardens, green spaces, or buildings used by local non-profit organizations. The Greater Bushwick CLT will take ownership of the 17 limited equity co-ops currently being developed by Ridgewood Bushwick Senior Citizen’s Council & UHAB, thereby giving them increased stability going forward. 163
PART OF THE CO-OP New shareholders are required to meet a certain number of conditions: -Meet income eligibility requirements for the building (60%, 40%, 20% of the neighborhood median income) -Provide proof of income level, family size, and financial information -Take a class on limited equity co-ops offered by UHAB or other approved organization -Purchase an initial share in the building dependent on income level (ranges from $750 to $2500)
CO-OP MAKEUP BY INCOME LEVEL To make each co-op building sustainable, the units should accommodate a range of incomes. Therefore, each co-op should STUDIO provide opportunity for $750* people of these ranges:
1 BEDROOM 2 BEDROOM $1000* $2000*
3 BEDROOM $3000*
*Examples given for a 20% NMI Property
40% NMI SHAREHOLDER
UP TO 100% NMI
-Residents must contribute a monthly maintenance fee to remain in their homes. -Sweat Equity in repairs and maintenance on the buildings that are a part of the co-op are required -Residents will serve at least one term on the co-op board.
When shareholders decide to move on, it is important to make sure that the housing remains affordable, but also that they can recoup their investment if they decide to sell their shares. These restrictions will help balance both goals: -The unit may only be sold back to the co-op/CLT. -The original equity paid when the shareholder bought into the co-op plus 6% interest. -The pro-rated share of any assessments made for building improvements while they were a shareholder, plus 6% interest. -Any principal paid by the shareholder to reduce any loans they had on the property to pay for improvements. -Any outstanding loan balance that the shareholder currently has on the property. -These restrictions will remain in place for the term of the ground lease that the co-op has with the CLT.
IMPLEMENTATION Implementing the MILEC plan will ultimately take political will. Many of the stakeholders are already in place and have started to implement similar programs, including the Mandatory Inclusionary Housing Program.
Propose which areas of the city would best be served by being rezoned to take advantage of the MILEC plan.
DEPARTMENT OF CITY PLANNING
It will be key to get the Community Boards of the impacted areas to help communities decide which streets are to be upzoned, and to remain committed throughout the process.
COMMUNITY LAND TRUST
CITY PLANNING COMMISSION MAYORâ&#x20AC;&#x2122;S OFFICE Continuing with a similar concept as MIH, increasing home ownership through MILEC should be a less difficult political sell.
Decide that this plan is another to use in its arsenal of tools to encourage construction of more housing, both affordable and market rate. 165
AFFORDABLE HOUSING REVITALIZATION PROGRAM / PRESERVE REVIVE CREATE By Heming Zhang, Ruchika Lodha & Sruti Penumetsa The affordable housing revitalization program aims to ameliorate the housing affordability crisis in Bushwick and prove to be a precedent model for the city. The focus of the proposal is on the existing physical and programmatic infrastructure and suggests modifications or alterations to local current local policies, in order to address the housing crisis in Bushwick by redesigning to suit the context in Bushwick. The city, landowners, non-profit organizations, for-profit organizations and community all come together against the rising crisis of housing affordability.
EXISTING SCENARIO UNAFFORDABLE MAINTAINING AFFORDABLE HOUSING CRISIS CODE VIOLATION
DISPLACEMENT EVICTED CULTURE DIVERSITY
The proposal is defined by a Preserve- Revive-Create strategy that address buildings that do not involve or incorporate a prevalent affordable housing situation and could be potential facilitators for affordable housing. Through the spatial analysis, three categories of buildings were recognized that the proposal could address; de-regulating buildings, buildings under code violations or in bad condition and vacant buildings. Through the preserve strategy, the renter community is targeted which protects rent regulated buildings from de-regulation. The revive strategy addresses buildings in bad condition or under code violations, and the create strategy addresses vacant buildings to create new affordable housing units. The following diagram delineates the various stakeholders and programs involved in the process to achieve a holistic sense of community. 166
The proposal is carried out in 5 stages:
1] FORMATION OF COMMITTEES To drive the proposal and regulate all the processes involved an expert committee is dedicated to different stages. This committee will comprise members from non-profit organizations with expertise in particular fields. They would collaborate with CLTs, co-ops, institutions, and the city at different levels, scales and various stages. The proposed committees are the Outreach committee, Acquisition committee, Rehabilitation committee and Community engagement committee. The stakeholders and their roles involved are shown in the diagrams below.
2] IDENTIFYING BUILDINGS The intervention site is composed of potential facilitators, comprising of the cathedral of joy, Maria Hernandez park and PS 145 Andrew Jackson School. These would be the catalyzers for the proposal. The de-regulated, code violated and the vacant buildings addressed by the preserve, revive and create strategy are identified at this stage. The deregulated building is identified by the Tenant protection unit facilitated by the outreach committee and are reported to the city who then approach the landlord through the outreach committee. Simultaneously, the outreach committee produces a report of the buildings under code violations and vacant buildings and releases it to the public. HPD identifies the buildings under code violations, releases a list of the cityâ&#x20AC;&#x2122;s worst landlords, and disseminates the information to the public and the press. The city then reaches out to the landlords of the buildings by issuing notices.
DE-REGULATED VIOLATION VACANT IN PROCESS COOPS
38 DE-REGULATED BUILDINGS 10 CODE VIOLATION BUILDINGS 3 VACANT BUILDINGS 3 IN PROCESS COOPS
3] BUILDING ACQUISITION After the Landlords are notified, the acquisition takes places through existing policies such as seizures, third party transfers and negotiations. Seizures as a process would be implemented if landlords fail to comply in which case the building is ceased by the city. Currently 17 buildings are in the process of being converted into co-ops by RBSCC. The third party transfer employs the transfer of the building to RBSCC, which would enter into the 17 co-op plan. 169
3] CONVERSION OF ACQUIRED BUILDINGS INTO CO-OPs The strategies of conversion of the acquired buildings are based on the three 3]CONVERSION OF ACQUIRED BUILDINGS INTO CO-OPâ&#x20AC;&#x2122;S targeted buildings. The strategies of conversion of the acquired buildings are based on the three targeted buildings. BUILDINGS RENT REGULATED The identified rent regulated buildings can be converted through two processes: RENT REGULATED BUILDINGS one by breach through predatory practices and the other by suggesting alterations The identified rent regulate buildings can be converted through two processes: one to the rent regulation act. As mentioned earlier, the Outreach Committee mediates by breach through predatory practices and the other by suggesting alterations to between the landlord and the city and in case of compliance the building is the rent regulation act. As mentioned earlier, the Outreach Committee mediates re-regulated. In case of non-compliance, the building is acquired through the between the landlord and the city and in case of compliance the building is Acquisition Committee. The second part targets the Rent Regulation Act in order re-regulated. In case of non-compliance, the building is acquired through the to preserve and sustain existing affordable housing units. The alteration in clauses Acquisition Committee. The second part targets the Rent Regulation Act in order are as follows: to preserve and sustain existing affordable housing units. The alteration in clauses -Changing the existing rent high rent, high income values to address household are as follows: incomes of Bushwick, thus if the rent of the building exceeds $2100 or annual -Changing the rent high rent, high income values to address household incomes of income exceeds $83,000, the building is suggested to go under co-op or CLT Bushwick, thus if the rent of the building exceeds $2100 or annual income exceeds model to prevent foreclosure of the building. $83,000, the building is suggested to go under co-op or CLT model. -Rent increases due to improvements in specific units should be temporary, -Rent increases beacuse of individual apartment improvement should be allowed only until funds are recovered. temporary till funds are recovered. -Should allow re-regulation on lease renewal and succession rights. -Should allow re-regulation on lease renewel and succession rights. -Preferential rent should be provied for very low income population.
M M M
YC KO F
PERCENTAGE CHANGE IN NUMBER OF RENT REGULATED BUILDINGS FROM 2007-2014: INCREASE: 1739 UNITS (IN 236 BUILDINGS) LESS THAN 50% LOSS: 335 UNITS (IN 192 BUILDINGS) MORE THAN 50% LOSS: 2689 UNITS (IN 333 BUILDINGS) 170
3] CONVERSION OF ACQUIRED BUILDINGS INTO CO-OPs BUILDINGS UNDER CODE VIOLATIONS The conversion of the acquired buildings under code-violations contextualizes the revive aspect of the strategy. After the code violated building is acquired and transferred to CLT via a third party transfer, the building violation system is updated, a board is formed and under the supervision of the rehab and the community engagement committee the building is converted to a co-op, with 80% of the units as ownership, and the remaining 20% rental units.
AD W AY
LEGEND LEGEND (AMOUNTOF OF VIOLATION (AMOUNT VIOLATIONS INASINGLE IN SINGLEBUILDING) BUILDING)
LA VE CEMETERY
0-50 51-100 100-200 >200 source: www.landlordwatchlist.com Source: www.landlordwatchlist.com
3] CONVERSION OF ACQUIRED BUILDINGS INTO CO-OPs VACANT BUILDINGS OWNED BY PRIVATE OWNERS Parallel, the vacant buildings acquire are converted to a co-op similarly, with the supervision of the rehab and the community engagement committee. The converted building will accommodate commercial spaces, which generates incomes to maintain the co-op. The conversion of the acquired vacant buildings owned by private owners into co-ops addresses the create aspect of the strategy which aims at creating new affordable units.
4] CO-OP POLICIES BUILDING OCCUPANCY After the buildings are converted into co-ops, through the facilitation of the committees, the buildings are sustained through a set of policies. The revitalized buildings will have a composition of extremely low, very low and low income population. In, the case where owner is in a partnership with the CLT, the owner is incentivized with 1/4 of the units which he retains, or puts on the market, for a cap of $2,100. If zoning allows, the building may have an opportunity to incorporate a commercial space.
BOARD FORMATION A co-op board is formed with representation from the different parties. 1/4 of the members will come from representatives of Brooklyn Community Board 4, 1/4 from community stakeholders, 1/4 from shareholders, 1/4 from the ownership. There will also be a representative from the CLT. The board oversees the maintenance, share sales, resale prices and other criteria.
FUNDS AND INCENTIVE The city has set of loans and incentives for low income housing. The proposal recommends the adoption of the Participation loan program and 450-a tax exemption with specific changes to sustain the proposed policy.
5] CREATION OF SUSTAINABLE COMMUNITY The final and a very crucial part of the program is identifying tools for community engagement to encourage involvement through every stage. The following diagram depicts the stakeholders involved and the processes. One of the methods to engage communities is sweat equity. The Cathedral of Joy and Andrew Jackson School have been identified as the pilot interventions to create a community open space as community members already engage with these community centers and schools. Similarly, the community can be mobilized, provided with training, employment and education through the infrastructure and partnership through Cathedral of Joy. Finally, the vacant buildings identified close to Cathedral of Joy and Fermi playground, will give impetus to local businesses and provide local employment. 176