click here to download a copy of the study
Department of Housing Preservation and Development (HPD) Commissioner Shaun Donovan today announced the results of an in-depth survey of the incomes of New Yorkers who moved into units financed by Mayor Michael R. Bloomberg’s historic New Housing Marketplace Plan in Fiscal Year (FY) 2006. The survey shows that in FY2006, 75% of HPD and the Housing Development Corporation’s (HDC) individual programs served low-income families, a larger share than is required by the program guidelines. The percentage of low-income households who moved into their homes slightly exceeded the affordability goals of the New Housing Marketplace Plan which pledges 68% of the units for low-income families and 32% for moderate- and middle-income New Yorkers. The study results, extrapolated to the first four years of the Housing Plan, show that overall, 76% of units have been rented or bought by low-income households, 9% by moderate-income households and 15% by middle-income households. The Mayor’s $7.5 billion plan pledges to finance 165,000 units of affordable housing by 2013, the largest municipal affordable housing plan in the nation’s history.
“Mayor Bloomberg consistently stresses the importance of government accountability and this research is part of HPD’s commitment to ensuring that we are keeping our promises and striking the right balance in providing affordable housing for the many different New Yorkers who need it,” said Commissioner Donovan. “It is very encouraging to see that the housing plan is meeting the income commitments we set and, in fact, serving a larger share of low-income families than is required. We will continue to research our programs to ensure we are providing affordable housing across the income groups in need, from homeless families to artists, cops, teachers, nurses and firefighters. With almost 65,000 units of affordable housing funded through the New Housing Marketplace Plan we are making great progress towards our ambitious affordable housing goals.”
In the 2007 fiscal year that ended June 30th HPD and HDC financed 18,472 units of affordable housing. This represents the highest production number of any year under the Mayor’s New Housing Marketplace Plan and is the greatest number of affordable units financed by the City since Mayor Koch’s housing plan. The City has funded more than 83,000 affordable homes since Mayor Bloomberg took office in 2002, including 64,760 units funded under the New Housing Marketplace Plan.
When the New Housing Marketplace Plan began in July 2003 the Mayor set a goal of 65,000 units of affordable housing over five years. In February 2006, the Mayor more than doubled the plan’s goal to 165,000 units over ten years. Although each HPD and HDC program has income requirements (which are tied, in some cases, to the Federal funding source for the program) that mandate the maximum income levels of families who may be assisted by that program, prior to the Mayor’s Housing Plan it was not known whether the actual incomes of families served were close to the limit or significantly below it. In 2004, HPD began collecting income data on households who had moved into HPD and HDC units during Fiscal Year 2004 (July 2003 until June 2004). The FY2004 Affordability Study found that HPD and HDC programs serve a considerably higher percentage of low-income households than is required by the mandates. HPD has now repeated the study for Fiscal Year 2006.
HPD’s research, conducted by the agency’s Strategic Planning Division, revealed the following key findings:
• In FY2006, three-quarters of HPD and HDC’s individual programs served low-income families, a larger share than is required by the program guidelines. After extrapolating the results of the FY2006 Affordability Study to the actual housing completions in FY2006, the distribution of units across income groups demonstrates that 75% of the households that moved into HPD and HDC units were low-income. The program guidelines for the units completed in FY2006 would suggest that only approximately half of those units should have served low-income families. Low income is defined as families earning less than 80% of the Area Median Income (AMI). Eighty percent of AMI is equivalent to $39,700 for a single person or $56,700 for a family of four.
• Of the low-income households that moved into their homes in FY2006, the majority were extremely low income households, with incomes less than 30% of AMI, equivalent to $14,900 for a single person or $21,250 for a family of four.
• Of the rental units financed in FY2006, 93% of newly-occupied units served households in the low-income categories, while 4% served moderate income families and the remaining 3% served middle-income families.
• Of the homeownership units financed in FY2006, 58% of units were in the lower-income categories, while 42% of units served moderate-income and middle-income households. The number and percentage of homeownership units serving low-income families increased substantially from the FY2004 Affordability Study. Between the two studies, the percentage of homeownership units serving low-income households increased by 23 percentage points, the percentage serving moderate-income households decreased by 21 percentage points, and the number of units serving middle-income households decreased by 2 percentage points. A significant part of the increase in low-income homeownership is due to the City’s Mitchell Lama preservation programs. The Mitchell-Lama Mortgage Restructuring and Repair Loan programs provide attractive refinancing terms for building owners and make grants and low-interest loans available for building repairs and upgrades. In return, the owners agree to remain in the Mitchell Lama program, ensuring continued affordability.
• The incomes of the households who moved into HPD and HDC units varied little within individual programs between FY2004 and FY2006, but where they did vary, programs served more low-income households in FY2006 than in FY2004. In five of the six programs where the income distribution changed by more than 10% a greater proportion of low-income households were served in FY2006. In the sixth program there was a decline (17%) in the number of low-income households that were served.
• Between the FY2004 and FY2006 Affordability Studies, there was some change in the incomes of households who moved into units, with the percentage of middle-income households increasing slightly. While there was some variation between the two studies, this was due not to changes in the affordability levels reached by the individuals programs (which actually indicates a focus on lower income units), but rather by the mix of programs with completions in the two years.
With the decline in the number of City-owned buildings – the in rem stock- which once provided a steady stream of affordable units for HPD to rehabilitate and preserve, HPD has looked to increase the number of new affordable units it constructs. In FY2004, 1,854 completed units relied on the in rem stock. By FY2006, this number had declined by over 500 units even though the total number of completions increased by over 5,000. Because of this shift away from the in rem stock and towards new construction and to homeownership, many of these units are affordable to moderate-income families. Hence the increase in the percent of units that moderate-income families moved into in FY2006. However, many of the changes between the two studies were a result of innovations in HPD policy in its new construction programs to increase the number of units available for low-income households. For example, in the homeownership programs, between the two studies, the percentage of homeownership units serving low-income households increased by 23 percentage points. The results of the survey, and successor surveys, will allow HPD to continue to tailor its programs to the affordable housing needs of New Yorkers.