Courtesy New Economy Project
In Brooklyn, New York, tenants mark the one-year anniversary of their rent strike in Crown Heights, October 30, 2022. A bill called the Tenant Opportunity to Purchase Act, or TOPA, could make it possible for them to purchase their building.
In the overheated New York real estate market, public land and dollars are going into two very different housing developments, but only one of them provides an inkling of how to begin to solve the city’s—and the country’s—urban residential affordability crisis.
One development led by Gotham, a for-profit developer, is under way near Brooklyn’s Bushwick Inlet Park. Since the project is on publicly owned land, Gotham was required to “partner” with a nonprofit entity under the assumption that this would help boost the number of affordable homes. Instead, 75 percent of the building’s 900 new units will be market-priced apartments.
Brooklyn’s Broadway Triangle neighborhood is the site of a very different undertaking. This apartment development is also on public land, but in this case, the community-based nonprofit developers steering the project have ensured that all 400 rental units will be available to low- and middle-income renters.
Increasingly, the people who build nonprofit developments like the one in the Broadway Triangle have emerged with new solutions for rent-burdened people who want to remain in the city. Tenants, organizers, and elected officials are pushing to give residents the tools to acquire and manage their own buildings and, by so doing, revitalize a nonprofit housing sector that can beat back the market pressures that send rents soaring.
New York’s apartment vacancy rate is less than 5 percent, and only about 1 percent of apartments are available at below $1,500 per month. The median rent in Manhattan jumped to a new high of $4,175 in March. More than half of New Yorkers who rent are rent-burdened: More than a third of apartment-dwellers spend most of their income on their monthly rents. In December 2022, about 70,000 people were taking refuge in homeless shelters nightly in the city’s main municipal shelter system.
Part of the problem is that over the past three decades, New York City, like most major metropolitan areas, has seen its community-based nonprofit housing, which prioritizes the needs of residents over developers’ profits, take a beating. During its heyday in the late 1980s, only a third of New York’s land and subsidies for affordable housing went to for-profit developers. The rest went to nonprofits and limited-equity cooperatives. Now, 80 percent of these land and subsidy dollars go to for-profit entities.
The roots of the crisis can be traced to New York’s slow fiscal slide that began in the late 1960s and almost led to bankruptcy in the 1970s. City officials brought in the RAND Institute to deal with a massive budget deficit by guiding a disastrous “planned shrinkage” of essential services like firefighting, which was explicitly intended to oust people of color. RAND’s unscrupulous economic modeling ignored the generally accepted metrics for fire-service efficiency and instead began a cruel experiment on neighborhoods like the South Bronx precisely because they were the most in need. Some landlords took this as an opportunity to torch their buildings for insurance money in areas that became notorious for block after block of fire-scarred buildings.
Community land trusts are organizations that wrest parcels of land from for-profit developers and provide tenants with the tools to deliver affordable housing in perpetuity.
These dilapidated and underserved neighborhoods didn’t mean that residents living in them suffered from irredeemable social pathologies. In fact, community-based nonprofits like the South Bronx's Banana Kelly Community Improvement Association and Brooklyn's Los Sures (a group now involved in the Broadway Triangle development) mobilized people in these resilient and inventive communities to fill the void of disinvestment by drawing on their own “sweat equity” to rebuild their neighborhoods, in part by running their own housing.
“The irony has been that these nonprofits stabilized these neighborhoods and once you have a history of stabilization, the gentrifying developers started moving in,” says John Krinsky, a professor of political science at the City College of New York and a founding board member of the New York City Community Land Initiative (NYCCLI, pronounced “nicely”), a coalition of community organizations that promotes the use of community-based nonprofit housing.
One model in particular, the community land trust (CLT), has attracted broad interest. CLTs are community organizations that wrest parcels of land from for-profit developers and provide tenants with the tools to deliver affordable housing in perpetuity as well as green spaces, youth and health centers, and jobs. CLTs separate the ownership of land from the buildings on that land and offer long-term leases to the prospective building owners. Residents can buy or rent units in buildings that provide more affordable options because land often makes up a large part of a home’s value. It also allows the CLT, which generally has residents and community stakeholders on the trust’s board of directors, to enforce price restrictions on residents should they choose to sell their homes.
The efforts to expand community land trusts in New York crystalized with the introduction of the Community Land Act, a slate of proposals introduced in the city council earlier this year. The act set the table for CLTs and other community-based nonprofits by making it easier for new projects to acquire land. Its backers have marshaled broad support for moving decisively to protect low- and moderate-income New Yorkers from rampant speculation in the city’s notoriously predatory housing market. New York City Comptroller Brad Lander, who supports the legislation, has set a goal of doubling the market share of the city’s nonprofit housing stock, including public housing, from 10 percent to 20 percent.
One key proposal in the Community Land Act is the Community Opportunity to Purchase Act (COPA), which would have a sweeping impact on New York’s real estate market and is just a few votes shy of a veto-proof majority. COPA would give CLTs and other affordable-housing nonprofits first dibs on purchasing land when an owner decides to sell. Private owners of buildings with three or more units that decide to sell their properties must give 180 days prior notice to the Department of Housing Preservation and Development, a city agency. A nonprofit would have 60 days to inform the owner of their intent to place an offer and an additional 60 days to make the offer. During this period, the owner would be barred from accepting any offers from other private entities. New York’s COPA backers continue to work on putting a price tag on their budget ask.
COPA’s timelines would gum up speculators’ ability to quickly flip properties, and the real estate industry has taken notice. COPA opponents like the Real Estate Board of New York have testified that COPA’s timelines are “too long and unworkable” and would unreasonably interfere with the market. They also argued that nonprofits don’t have the capacity to address the scale of the crisis on their own. New York Mayor Eric Adams seems to agree.
The Community Opportunity to Purchase Act, which would have a sweeping impact on New York’s real estate market, is just a few votes shy of a veto-proof majority.
Adams is the first mayor to explicitly include CLTs in a citywide housing plan. But city housing department officials view COPA as overly broad and see it undermining the administration’s own goal of supporting more affordable nonprofit housing by ending the nonprofit-corporate partnerships that the city’s current model of affordable-housing development encourages. But this model, which resembles programs that date back to the mid-1990s and the administration of former mayor Rudy Giuliani, has failed poor New Yorkers, as demonstrated by the two very different outcomes of the “affordable” developments like the Bushwick Inlet Park area project and others in Brooklyn. “A lot of the people who are arguing against these bills, if you scratch the surface of what they are saying, are arguing for the right to speculate,” says NYCCLI’s Krinsky.
(A statewide campaign to pass a similar bill called TOPA, or the Tenant Opportunity to Purchase Act, failed to garner support in the legislature this session. Under TOPA, residents themselves have the first right to purchase their buildings and form a CLT when an owner sells. If the tenants waive their rights, other qualified CLTs and nonprofits are next in line to bid on the buildings.)
There are seven jurisdictions in the U.S. with a COPA or TOPA in place that have served as models for the New York proposals. Washington, D.C., one of the country’s most rapidly gentrifying cities, has had a TOPA program for 40 years. Since 2018, D.C.’s TOPA has helped preserve over 2,100 units of affordable housing. San Francisco, another highly speculative market, has had a COPA program since 2019. City officials invested $37 million for CLT acquisitions of 13 buildings. Over 230 homes were preserved at affordable rates.
D.C. and San Francisco’s experiences show that additional resources for tenant organizing, legal assistance, and capacity-building are necessary to help these groups keep up with the mandated sales timelines of these programs and to support building management and sustainability. These programs give communities the tools to defend against escalating rents and significantly decrease maintenance violations by negligent landlords. Even though this sector represents a relatively small percentage of the market, it can function much like a public option, forcing for-profit entities to offer competitive rates.
Communities taking collective ownership of their own land and housing is one way for tenants and community nonprofits to wrest back control of their neighborhoods from powerful real estate interests. Many New Yorkers have seen their neighborhoods redlined, targeted for “slum clearance,” burned to the ground by greedy landlords, and now, gentrified. “You speak to some 70-year-olds, and they have just been through the wringer,” says NYCCLI’s Krinsky. He wants to see the city step up with funding for nonprofit housing solutions. “The city now says this sector doesn’t have capacity, but it’s because the city deprived it of capacity for 25 years. And if the city makes resources available to it, we can get better affordable-housing outcomes,” he adds.
NYCCLI has been pushing for CLT expansion in New York for a decade, but the current rental crisis has put pressure on city council members to finally put their chips on a viable alternative. There are about 20 new CLTs in the works, and several have already acquired properties.
“We’re certainly in a boom of organizational expansion and attention. We’re not yet in a boom for property acquisition and development” says Krinsky. “That’s what we’re trying to accomplish.”
This article has been updated.
