Intro 958: Homeownership Financing Requirements

My name is Howard Slatkin, and I am Executive Director of Citizens Housing and Planning Council. Thank you for the opportunity to present testimony today. In short, supporting and expanding affordable opportunities for homeownership in New York City is an important goal, but blunt legislative production quotas would do less to accomplish this than they would to undermine other housing affordability objectives. We urge the Council to take a different approach.

As we all know, homeownership can be a uniquely important vehicle to household stability and wealth building, and the continued escalation of home prices has constricted access to homeownership, creating challenges for younger home seekers and adding another layer of inequity to our longstanding racial wealth gap.

Rising costs have also widened the gap between how much it costs to build new housing and what most households can afford. There are additional factors that make new homeownership housing particularly challenging, in particular the absence of a deep source of federal subsidy akin to the Low Income Housing Tax Credit. Without this type of federal support, each unit of affordable homeownership requires substantially more City subsidy than a unit of low-income rental housing does.

This makes it more difficult to finance affordable homeownership housing. It also means that absent new federal or state resources, a legislative quota for the City to increase its production of new affordable homeownership housing would decrease not only the amount of affordable rental housing we can finance, but also the total amount of affordable housing we can create.

The City’s housing agencies have the task of addressing all dimensions of affordable housing need for people experiencing homelessness, for low-income seniors, for the residents of public housing, and for people aspiring to homeownership with a finite pool of resources. This requires the consideration of tradeoffs. It requires continual evaluation of need and of the merits of individual development proposals, and an ability to adapt to changing conditions. It also requires the management and prioritization of a complex pipeline of projects, each of which can be challenging even without making one closing contingent on the closing of another, otherwise unrelated project. The proposed legislation would impede the City’s ability to do all these things.

While blunt legislative quotas are not a sound solution, it is important to recognize the Council’s legitimate and important role in advancing affordable homeownership and other housing goals. Qualitative or quantitative targets for affordable housing outcomes can be articulated and monitored through the Council’s oversight authority.

A logical place for this to occur would be through the fair housing assessment and plan that will be created pursuant to Local Law 167 of 2023. This bill, one of the Speaker’s signature legislative accomplishments, requires a citywide assessment of long-term affordable housing needs, and the establishment of fair housing goals and strategies and production targets for affordable housing. Indeed, it would make little sense to superimpose a standalone mandate for one category of housing onto what is intended to be a comprehensive strategy for fair housing and affordability.

That fair housing strategy should also address other key mechanisms for promoting homeownership, including downpayment assistance programs and the preservation of existing housing, such as Mitchell-Lama developments. It is also important to sustain funding and support for nonprofit organizations whose mission is to help not only new homeowners but also existing homeowners who wish to stay in and improve their homes, in order to maintain the homeownership we have.

In addition, as the Council considers the City of Yes for Housing Opportunity proposal, it is vital to advance elements of this proposal that support homeowners and expand homeownership opportunities. While the supply of single-family homes cannot be increased in our built-out and land-constrained city, expanding the range of locations where small apartment buildings are allowed can increase accessible homeownership opportunities in neighborhoods throughout the boroughs. And allowing the owner of a small home to rent out a safe, legal unit in their home can provide them with additional income and financial stability, as well as providing a home for another household. This is an important means of addressing racial disparities: CHPC’s research indicates that rental income and basement living space are disproportionately important to Black homeowners.

I’d like to thank the Speaker and other sponsors of the bill for their continued commitment to affordable housing and expanding access to homeownership.

Download CHPC’s full written testimony.