SEPT 2016: Whether you live in New York City or not, you are probably aware that the real estate market is hot. In recent decades, housing prices have been rising citywide, with some neighborhoods seeing dramatic spikes in housing costs. These spikes are often related to a neighborhood’s geographic location (near water, near midtown, near a shopping district) or amenities (transportation hub, dog run, multiple parks, shorter buildings and more neighborhood appeal) which increase the ‘demand’ for the neighborhood, and drive up the real estate value.
By ‘demand’ I mean two things. First, demand refers to the housing demand of the residents – both new and long-time – who are seeking an affordable home in the city. Second, demand refers to the profit desires of land speculators. Land speculators track housing price fluctuations across the city and buy property(ies) in cheaper markets with the intention of selling the property and cashing in as the cresting wave of spiking real estate properties moves through the neighborhood. This process, known as house flipping, becomes endemic in neighborhoods just on the horizon of spiking real estate values, and these transactions create a meta-demand as land speculators come to compete with one another for properties in the neighborhood.
Both demands work together to drive up real estate prices in the neighborhood. Though increasing costs may be beneficial to stable homeowners, they can be particularly threatening and dangerous for lower income households, many of whom are renters, that may be residing in these neighborhoods. It is no secret that housing affordability is an important factor in perpetuating or preventing homelessness, and that both have serious consequences for mental and physical health and well-being and overall quality of life.
When we think about these shifts in the real estate market, some specific neighborhoods may come to mind: the Lower East Side, Harlem, Crown Heights, or Brooklyn more generally, to name a few. Increasingly the neighborhood of East New York is thrown in this mix.
Similar to the other neighborhoods on the list, both the location and the amenities of East New York have played a role in its increasing demand. East New York is just east of the wave of gentrification moving through Bushwick and Bed-Stuy at the moment, making it seem like the logical next target. Moreover, East New York is home to a number of current and envisioned amenities. An important amenity is access to local and regional transportation: with a number of bus and subway lines running through the neighborhood and an LIRR stop, East New York acts as a hub that provides easy access to neighborhoods throughout Queens and Brooklyn, a straight shot to Manhattan and easy access to regional travel.
In addition, East New York is the first of fifteen neighborhoods identified for rezoning by the De Blasio administration. The rezoning is part of the new housing plan for the city, which combines neighborhood rezoning with a plan for mandatory inclusionary housing (MIH). Basically, certain neighborhoods will be rezoned to allow for taller buildings and more residential and commercial development. The intention is to drive investment into the neighborhood. Investment make the form of developers buying, building, and improving properties/buildings in the neighborhoods and residents and businesses moving in – in sum, demand for the neighborhood will increase. Critics fear this will drive up the value of real estate in the neighborhoods, threatening the ability of lower income households to remain in their homes and neighborhoods. The MIH is the mechanism charged with controlling for this effect. MIH requires all citywide new residential development properties to market 20-30 percent of new households as ‘affordable’.
Critics have identified a number of issues related to this housing plan, all of which together assert one important flaw with the plan – that it ultimately encourages and quickens the gentrification of formerly disinvested neighborhoods that in recent history have been occupied by lower-income and working class communities of color. This understanding is tied to three important shortcomings of the plan:
First, by creating a list of neighborhoods for rezoning, the city also identified fifteen neighborhoods primed for speculative practices. And in fact, recent research suggests that speculation has increased since De Blasio’s announcement of these fifteen neighborhoods. Increased speculation increases the demand for the neighborhood, agitating housing prices further.
Second, though many argue that MIH is a huge improvement in comparison with recent citywide housing plans, critics argue that generally speaking the scale of affordability devised by the administration isn’t deep enough, and doesn’t consider what is affordable from the perspective of long-time residents of these neighborhoods scheduled for rezoning. For example, the scale of affordability is based on the AMI of the entire city, which is considerably higher than the AMI in these neighborhoods. This is compounded by the fact that the majority of affordable units will be created for those who fall near the middle of this scale – around $50,000 – though the need for affordable housing is much higher among households making much less.
This leads many critics to believe that in addition to the anticipated improvements for these communities – more investment, lower crime rates, cleaner streets and parks, more housing, etc – the rezoning will also contribute to the mass displacement of the current community, and really a replacement by wealthier – and probably whiter – community.
This is where our project comes in. We aim to speak with long-time residents in the community to understand their perceptions of and relationship with the neighborhood and how the rezoning or speculation in the neighborhood is affecting their everyday lives. Moreover, we aim to use these narratives to contribute to the debate about housing policy in the city – and more specifically, to advocate for community-centered policy development approach.
Housing New York: A five-borough, 10-year plan. The City of New York, the Administration of Bill de Blasio.
This is an overview of de Blasio’s ten year housing plan
Zoning for Quality and Affordability. Housing New York, NYC Planning:
This is an informational webpage on the NYC Planning website that lays out de Blasio’s plan and intention for rezoning
East New York Neighborhood Plan, NYC Planning:
This the rezoning plan for ENY.
Coalition for Community Advancement. East New York Re-zoning Community Plan. July, 2015.
This is a plan proposed by the Coalition for Community Advancement, which is a collective of community members and leaders from East New York and Cypress Hills that have come together in response to the rezoning that intends to assess and monitor the consequences of the rezoning for the residents of ENY as well as advocate for the community in relation to how the rezoning unfolds in neighborhood.
The Impact of Property Flipping on Homeowners and Renters in Small Buildings. A report by the Center for NYC Neighborhoods. April 18, 2016.
This report examines the spatial distribution of housing flipping in NYC.
What happens to homeless families in Redeveloped East New York? A report by the Institute for Children, Poverty and Homelessness. June 2016
An analysis of how the rezoning and ramped up speculation may be affecting the most vulnerable of ENY
For more on how other communities are addressing the rezoning of their neighbohroods: Check out some of the work being done by grantees of the Neighborhoods First Fund.