Proposed Housing Cuts would have Significant Impact in the Bronx
The affordable housing crisis extends beyond New York City and proposed federal cuts will hurt low-income families nationwide. Here in the Bronx, cuts would hit especially hard.
At a time of record NYC homelessness, rising rents, heated real estate markets and stagnant wages, any cuts to Section 8, an important rent subsidy for low-income tenants, will exacerbate the problem.
Federally-funded Section 8 rent subsidy funds were instrumental in the rebuilding of the Bronx in the 1980’s and into the 2000’s. Section 8 was part of the overall financial package that allowed existing tenants in occupied apartment buildings to remain in their apartments once a building was renovated. It was (and is) an important tool to keep families housed and improve the condition of multifamily rental properties. In 2016 there were 59,000 Bronx households who depended on Section 8 rent subsidies, now known as Housing Choice Vouchers, to remain in their homes. Qualifying low-income tenants pay 30% of their income towards rent and the Section 8 voucher covers the remainder of the rent up to an established cap. It is costly, but much less expensive than sheltering a low-income family or building new subsided housing that they can afford.
Section 8 federal funding has been dwindling since the sequestration budget in 2013.
Community Development Block Grants (CDBG) are also vital to communities. In NYC, CDBG funds provide support for a number of safety nets programs including Meals on Wheels for the elderly home bound, child care programs, and services for the disabled, mentally ill and teens. CDBG funds are used in NYC to fund code enforcement, the complaint-driven inspection of multifamily buildings by the Department of Housing Preservation and Development. (HPD). According to the UNHP Building Indicator Project, a database that identifies financially and physically distressed multifamily buildings, as of June 2017, there were 889 NYC multifamily properties in physical or financial distress resulting in close to 16,000 households living in substandard living conditions. City inspections ensure the health and safety of tenants, and enforce building codes.
Inspections of multifamily buildings based on tenants complaints ensure the habitability and physical integrity of multifamily buildings. NYC uses CDBG funds to support building inspections and code enforcement. Two children died in this pictured Bronx building due to an unrepaired safety code violation.
The Low-Income Housing Tax Credit (LIHTC) Program is the largest federal subsidy for the development and preservation of affordable housing. Since it was established by the Tax Reform Act of 1986, LIHTC has financed the development and preservation of more than 2.1 million units in over 28,000 developments across the country. (Furman Center) The LIHTC offers tax incentives to bring the private sector into the affordable housing business. Tax reform may reduce the incentives for investment in the LIHTC.
With the possibility of federal tax reform, there is growing uncertainty surrounding the future of LIHTC. The NYU Furman Center recently released a May 2017 report called, The Effects of the Low-Income Housing Tax Credit ( LIHTC), which “explores what we know about who LIHTC serves and what research has shown about the impact of the program.”
Research outlined in the brief includes:
- Almost half of tenants in LIHTC units are extremely low income, with annual household incomes below the federal poverty level (HUD).
- New evidence suggests that LIHTC development revitalizes low-income neighborhoods (Diamond & McQuade).
- There is little evidence that LIHTC developments affect the overall concentration of poverty (Ellen, Horn, & O’Regan).
- Tenants living in LIHTC developments have access to slightly better schools than households receiving other forms of housing assistance (Ellen & Horn).
- Low-income housing development brings with it significant reductions in crime (Freedman & Owens).
The Low Income Housing Tax Credit was instrumental in the early community development days in the Bronx. The passage of 1986 federal legislation creating the Low-Income Housing Tax Credit (LIHTC)—combined with a new housing plan instituted by Mayor Koch—made available a substantial amount of resources to support the purchase and renovation of vacant apartment buildings in the Bronx and NYC. The City provided loan funds and nominal purchase prices; national nonprofits like Local Initiatives Support Corporation (LISC) and Enterprise Community Partners packaged the LIHTC investments; and community housing organizations expanded their work to renovate the vacant buildings and create affordable housing. The LIHTC remains an important financial tool to renovate and create new affordable housing. UNHP used the LIHTC most recently to renovate and ensure the long-term affordability of 119 units of low income housing for senior citizens at Rose Hill Apartments, a project located at the edge of the Fordham University Rosehill Bronx campus.
UNHP joined forces with Rosehill Housing Management to refinance Rose Hill Apartments with rehabilitation funding via the Low Income Housing Tax Credit. The 119 units of low income senior housing are located at the edge of Fordham University’s scenic Rose Hill campus and features green space, outdoor seating, social services and a community room. Pictured above is a festive Fourth of July celebration on the Rose Hill patio
The creation of the Low Income Housing Tax Credit in 1986 bolstered efforts by Bronx community leaders to preserve vacant buildings from demolition and reclaim them for the neighborhood. The renovation of this building, located on Southern Boulevard in the Board 6 Crotona neighborhood, returned 31 units of affordable rental housing and 4 commercial units back to the neighborhood. Over 100 vacant buildings and thousands of units were reclaimed in the northwest Bronx by community-based developers.
One of the themes that emerged from UNHP’s 10 part blog series called “Views from the Northwest Bronx” was that more must be done to stem the flow of homelessness and keep the homeless at home. The demographic charts below demonstrate that Bronx households are particularly vulnerable to homelessness as rents have been rising, incomes have remained stagnant. The Crain’s map shows that over 2,700 entrants into the homeless shelters came from 5 zip codes in the northwest Bronx. The Views from the Northwest presentation shared at our June 2017 affordable housing forum summarizes why both the Bronx and NYC need greater investment in affordable housing.
Over the past 5 years, the median income in the Bronx declined while the median rent continued to rise. In 2011, incomes dropped over 6 percent, inversely during this same period rents rose about 5.5. percent. Affordability is a challenge in the Borough like much of the city. However despite having the lowest asking rents in NYC it is the least affordable borough to the people it currently houses.
This affordability issues can be seen when looking at severe rent burden. 6 of the 10 geographic boundaries (PUMAs or Public Use Microdata Areas which closely line up with community districts in NYC) have over 32% or more households that are paying in excess of 50 percent of income toward housing cost. Over one third of all households in the Bronx are severely rent burdened (pay in excess of 50 percent of income toward rent). Coupled with downward trends in income, people in our borough are struggling to make ends meet and this gap has resulted in doubling up, eviction, and homelessness.
This Crain’s map captures the zip codes where NY homeless families and individuals lived before entering the shelter system. The Mayor is proposing to create 90 new shelters and to shelter people in their “home” neighborhoods. An implication of this policy will be that low-income neighborhoods will receive far more shelters than other, wealthier neighborhoods. In the 5 zip codes where the bulk of our work takes place there were over 2,700 entrants into the shelter system.
Click above for interactive map.