July 17, 2013

All Around the Media: Signs of the Affordability Crisis

by UNHP

The press has been buzzing with stories about both sides of the affordability crisis lately—rising rents and falling wages. While this is a larger national trend, we are at the forefront of the crisis in the Bronx, and much of the press makes note of this. We took on this issue in our May report, Nowhere to Go: A crisis of affordability in the Bronx.

First up, WNYC has a piece (As Bloomberg Built Affordable Housing, City Became Less Affordable) about how despite the City building thousands of units of affordable housing in the last decade, rising rents and falling wages have decreased affordability for many New Yorkers. The maps on their site match up with those in our report, showing the epicenter of the affordability crisis to be in the Bronx.

“It’s not only that rents are rising; it’s also that a growing part of the population is trying to live in New York City on very modest incomes. According to the city’s own poverty measure, roughly 46 percent of New Yorkers were what is considered “near poor” in 2011. For a family of four, that means earning under $46,000 annually.

With incomes that low, the Furman Center says that nearly a third of New Yorkers were what is called “severely rent burdened” in 2011 - which means they were spending more than half their monthly income on rent.”

Similar to what has happened with rising rents in upper Manhattan pushing many renters into the west Bronx, the New York Times (Gentrifying Into the Shelters) writes about gentrification in Bed-Stuy pushing families into Brownsville. Many of these families eventually become homeless.

“What happens in a scenario like this one is that the poor are not simply competing with wealthier newcomers for limited housing; the poor are competing with one another. Given the west to east progression of gentrification in northern Brooklyn, the study concluded some faction of low-income residents priced out of Bedford-Stuyvesant have presumably moved to Brownsville, an even more depressed neighborhood, thus creating intense competition in a housing market for those least able to engage in it. Brownsville continues to rank among the communities sending the greatest number of families into the shelter system; public housing, despite its high concentration in the neighborhood, only serves a minority of residents.”

Exacerbating the affordability crisis are cuts to safety net programs. An op-ed in the Gotham Gazette (A Tale of Two New Yorks) takes on severe income inequality in New York City and the growth of those living in poverty, comparing the federal rate and the New York City Center for Economic Opportunity (CEO) rate, which adjusts for the higher cost of living here. The op-ed also writes about the impact sequestration is having on the safety net, especially Section 8 vouchers.

“Sequestration has foreclosed on some of New York City’s tools. It visited Section 8 housing cuts on the three agencies issuing vouchers in New York City, meaning 5,000 planned housing vouchers won’t be issued. New York City’s Housing Preservation and Development Department lost $36 million and plans to cut 1,000 vouchers. ‘The real problem is,’ HPD Commissioner Matthew Wambua says, ‘these are our neediest tenants, the ones who cannot even afford the units in our developments.’

He notes 32 percent of HPD’s vouchers go to elderly renters and 44 percent to disabled people. Still, to avoid eliminating even more vouchers Wambua plans to reduce subsidies for many current Section 8 recipients, with reductions to subsidies as high as $400 a month.”

Back to our borough, the New York State Comptroller recently released a report, An Economic Snapshot of the Bronx, which was covered by DNAinfo (Bronx Gains Jobs and People, But Suffers from High Unemployment). Job gains in the Bronx have been more plentiful than many other counties, but they tend to be service sector jobs that pay low wages. So while there are some positive signs, including the living wage jobs promised at the Kingsbridge Armory, the larger trend has been more negative.

“While The Bronx added jobs during the recession, median income plunged by 13.5 percent from a peak in 2007 to $32,058 in 2011 — nearly double the citywide decline rate, according to the report. As income sloped, poverty surged, so that by 2011, 30.4 percent of Bronx residents lived in poverty — the highest such rate in the state or among any urban county in the U.S., the report says… And while average rents are cheaper in The Bronx, because of the lower median income, rent devours a bigger portion of paychecks in The Bronx than in any other borough, the report says.”

Speaking of low wage jobs, the Staten Island Advance (NYC fast food workers testify to what it’s like living on $7.25 an hour—or less) profiles a number of minimum wage workers struggling to pay the rent and make ends meet.

“On average, fast food workers earn between $10,000 and $18,000 a year—and 80 percent reported their pay being ‘stolen’ in some way, including being forced to pay for work expenses that brought their wages below the minimum… workers said they were employed at more than one franchise, but by the same owner—and their hours would be split across separate paychecks to avoid overtime. [Workers] said they had to rely on food stamps, even though they didn’t want to, to pay the bills. ‘Without food stamps I don’t put food on the table, because the money I make is to pay bills,’ Gregroy Reynoso said. ‘We’re not asking to be rich—we’re asking to live.’

Joseph Berrera, 23, has to live with his uncle to get by—and said he won’t accept food stamps, even though his job at KFC pays little each week. ‘I don’t want to depend on public assistance,’ he said. ‘I want to work and I want to earn and I want to get a fair wage so I can survive in the city I live in.’”

The New York Times (Paid via Card, Workers Feel Sting of Fees) also covers low wage workers increasingly being paid through prepaid cards which often carry high fees, resulting in net wages that are below minimum wage.

“The lack of regulation in the payroll card market, while alluring for some of the issuers, can potentially leave cardholders swimming in fees. Take the example of inactivity fees that penalize customers for infrequently using their cards. The Federal Reserve has banned such fees for credit and debit cards, but no protections exist on prepaid cards. Cards used by more than two dozen major retailers have inactivity fees of $7 or more, according to a review of agreements.

Some employees can also be hit with $25 overdraft fees, called ‘balance protection,’ on some of the prepaid cards. Under the Dodd-Frank financial overhaul law, banks with more than $10 billion in assets are barred from levying overdraft fees on customers’ checking accounts.

Many fees are virtually impossible to dodge, some employees say. A Victoria’s Secret employee, Bintou Kamara, for example, said it cost her $1.50 just to transfer money from her Citi payroll card to her checking account.”

Finally, you can watch our Deputy Director, Gregory Lobo Jost, interviewed in this video segment on WPIX Channel 11 News (Why the South Bronx is (still) the hottest up-and-coming NYC location). Again, while there are some positive economic signs throughout the Bronx, the larger economic trends present a huge challenge for our borough and our nation.

Before you get too depressed, here is a reminder of our recommendations from our Nowhere to Go report that show opportunities to create a Bronx (and a world) that works for everyone:

  • Wages must increase, especially in the service sector. Telling people to just get better jobs fails to recognize the reality of the current job market.

  • Move towards less dependence on subsidies. A short term infusion of public funds for permanent housing for the homeless, job creation, and education would decrease reliance on subsidies in the long term.
  • Fund community organizing. Community organizing uses participatory approaches to get local residents involved in the transformation of their neighborhoods. These approaches lead to individual empowerment, more personal responsibility, and community ownership—which are often not as easy to measure, but can catalyze fundamental, systemic transformation.
  • Create and support new economic initiatives. Dynamic initiatives, such as the Bronx Cooperative Development Initiative and the Community Benefits Agreement at the Kingsbridge Armory, can potentially be replicated and expanded to have large scale impact.
  • Always think about the Bronx. In the same way that making community reinvestment work in the Bronx 30 years ago resulted in vibrant neighborhoods across the country, creating policies and structures that work for the Bronx today will translate into livable neighborhoods and thriving communities across our nation in the 21st Century.
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