Ownership options in the Bronx vary by neighborhood. The land use pattern of neighborhoods like the South and West Bronx, including Fordham, Highbridge and Hunts Point is predominantly multifamily rental buildings with a scattering of 1 to 4 family homes. Other areas, such as the North and East Bronx with neighborhoods like Williamsbridge, Soundview and Throggs Neck are mostly one to four family homes. Riverdale has a mix of 1 to four family homes and multifamily properties, but the multifamily properties are heavily coop and condo, offering ownership options. Large ownership developments like Parkchester and Co-op City stand out on the map in green and purple, as does the waterfront coops of Silver Beach and Edgewater.Is Homeownership an Option for Low to Moderate Income families in NYC?
UNHP has seen an increase in interest in ownership from Bronx renters evident by increasing attendance at UNHP, bank and Neighborhood Housing Services homeownership workshops and 1:1 homebuyer counseling. As rents in the Bronx continue to rise, people are looking to buy and create a more secure housing situation. A recent report by NYU Furman/Citi Report on Homeownership and Opportunity in NYC points out “the vast majority of home sales in New York City in 2014 were at prices unaffordable to low income ($34,000 annually) and moderate-Income households($55,000), which comprised 51 percent of New York City households. The report goes on to say that “homes sales under $500,000 in NYC are clustered in eastern Queens, the north shore of Staten Island and the north Bronx, the homeownership rate in the Bronx at 18% is the second-lowest of any county in the U.S. and of the sales affordable to households earning up to up to $34,000 annually, a large share (37%) were condominiums.The bar chart above shows Bronx median co-op sales prices in 2015 at $165,000, condos at $101,500 and single family homes median at $315,000. There are fewer condos in the Bronx than co-ops or homes. Even though the Bronx median sales are rising since 2012, Bronx median prices are among the most affordable in NYC.
What is available in the Bronx for Low and Moderate Income buyers?
In an effort to help Bronx renters interested in homeownership get a sense of the Bronx market, UNHP worked with Dong Soo Michael Seo, a student working towards his master in planning at Cornell University to create a guide for Bronx homeownership opportunities under $400,000. Using a free online guide, StreetEasy, Michael created The Bronx Property Price Tracker as part of the online BronxOwner Guide. The Bronx Property Price Tracker and BronxOwner Guide were made possible by support from Citi.Looking at co-ops, condos and homes under $300,000 in October 2016 on StreetEasy, there are 5 condos available in that price range, 242 cooperatives and 3 single family homes. The average monthly common charges on the condominiums was $700 and the average maintenance charges for the co-ops was $750 per month (average $900 in Riverdale). Bronx cooperatives are more plentiful than condos and more affordable than single family homes. One issue with Bronx homes and co-ops is their physical and/or financial condition. Many of the homes on our Bronx Property Tracker for sale under $400,000 require renovation and/or repair. A low or moderate income buyer may be able to afford the purchase price, but not the costs of renovation.
The value of a Bronx cooperative is only as good as the quality of the building. Even though it can be an affordable option, a co-op in disrepair, with a low percentage of owners, a fractious board or financial problems can foreshadow increasing maintenance charges and problems with resale. A quick look at 6 cooperative buildings with apartments for sale showed two buildings have open water and sewer charges over $50,000, but none of the properties had excessive open violations. One of the properties had been in prolonged serious physical and/or financial distress. Maintenance charges for co-ops in Riverdale are higher than the rest of the West Bronx, but tend to have amenities such as doormen and may have had higher mortgages at conversion. Unlike other parts of NYC cited in the NYU Furman/Citi Report on Homeownership and Opportunity in NYC, Bronx co-ops under $500,000 are available. Co-op boards set the down payment requirements and the option becomes less affordable to those without the savings to cover a high down payment.
The majority of the interested homebuyers at UNHP Spanish and English language homebuyer programs have been representative of the community we work in, but according to this blog by Street Easy “Recent data reveals how race and ethnicity alter the path to homeownership in New York City. At each step in the mortgage process, from the initial application to final approval, the numbers point to a progressively less diverse pool of New Yorkers who are successful in securing the financing they need to own a home. For a sizable portion of the city’s black and Hispanic populations, the dream of homeownership may remain a dream deferred.
UNHP has seen an increase in interested buyers who are closer to “mortgage ready",have steady jobs and satisfactory credit. UNHP has the ability to provide free services to those who need to work on credit scores or savings. UNHP provides free financial coaching and group education workshops. Realistically, it is a challenge for moderate income households to buy a home, co-op or condo in NYC. Low and moderate income Bronx households are most likely paying over 50% of their incomes towards rent so consistent savings for a downpayment is difficult. UNHP has seen that when households set homeowership as a goal they are motivated to improve their credit and enhance savings – actions which also help families when they want to move to another rental, need to meet education costs or are planning to retire. Families may also have the opportunities to increase earnings over time. One example from our most recent workshop is Miguel. He has a steady job with the MTA and his wife, who stayed home to care for young children, may be returning to work in the next two years. His credit needs improvement and he would need more savings before he could buy a home. Miguel set a plan to improve his credit and once his wife is working they will have more income to save and put towards the purchase price of a home. Miguel is skilled in construction and open to buying a home that needs repairs. UNHP hopes to continue to work with Miguel towards his goal of homeownership.
What more can be done to help LMI Homeownership?
In a Op-Ed for City Limits, The Center for NYC Neighborhoods questions "what is causing New York housing prices to so dramatically outpace the incomes (and therefore presumed buying power) of the people who live here? Ultimately, New York is not just a desirable place to live, it’s also a desirable place to invest money in housing, We believe that homeownership in New York City should not be the sole privilege of our wealthiest residents and the global one percent, we must take steps to subdue real estate hyper-speculation and promote affordable homeownership.” The CNYC proposes an expansion of down-payment programs, a property flipping tax and the creation of community land trusts.
UNHP supports these CNYC proposals as well as the purchase, renovation and affordable resale of Bronx foreclosed and short sales homes through a subsidized program.