Rising costs threaten future of NYC’s affordable housing, report finds – Gothamist

Report on the Financial Distress of New York’s Affordable Housing Stock and Implications for Sustainable Development Goals

Executive Summary

A recent analysis of New York’s government-funded affordable housing sector reveals a severe financial crisis, characterized by escalating operational costs that threaten the stability of nearly 40,000 apartments. This situation poses a direct challenge to the achievement of several key Sustainable Development Goals (SDGs), particularly SDG 1 (No Poverty), SDG 10 (Reduced Inequalities), and SDG 11 (Sustainable Cities and Communities). The findings underscore the urgent need for policy interventions that ensure the long-term viability of affordable housing without placing additional burdens on low-income tenants, thereby safeguarding progress towards a more sustainable and equitable urban environment.

Analysis of Rising Operational Costs

Key Findings

A study conducted by Enterprise Community Partners and National Equity Fund, examining 428 developments, identified critical financial pressures:

• Overall Expense Increase: Operating expenses have surged by an average of 40% since 2017.
• Insurance Cost Spike: The most significant driver of this increase is property and liability insurance, the cost of which has more than doubled between 2017 and 2024.
• Revenue Decline: Rent collection has decreased by approximately 4% over the same period, resulting in an average revenue loss of $75,000 per building.
• Operational Strain: This combination of rising costs and falling revenue has forced housing providers, nearly two-thirds of whom are non-profit organizations, to defer essential maintenance and consider reducing social services.

Implications for Sustainable Development Goals (SDGs)

Challenges to SDG 11: Sustainable Cities and Communities

The financial instability of the affordable housing stock directly undermines SDG Target 11.1, which aims to ensure access for all to adequate, safe, and affordable housing. The current crisis threatens to:

• Reduce the availability of viable low-income housing.
• Lead to the deterioration of housing quality due to deferred maintenance.
• Destabilize communities that rely on this housing infrastructure.

Impact on SDG 1 (No Poverty) and SDG 10 (Reduced Inequalities)

Affordable housing is a cornerstone of poverty alleviation and inequality reduction. The report’s findings indicate a growing crisis for low-income tenants, who are already struggling financially. Raising rents is considered an untenable solution as it would exacerbate housing instability and deepen poverty, directly conflicting with the principles of SDG 1 and SDG 10.

Relevance to SDG 3 (Good Health and Well-being)

The deferral of maintenance on properties, including repairs to stairwells and remediation of water damage, creates unsafe living conditions. This directly impacts the physical and mental health of residents, compromising progress towards SDG 3, which seeks to ensure healthy lives and promote well-being for all.

Policy Recommendations for a Sustainable Path Forward

Proposed Interventions

The report advocates for solutions that stabilize housing providers financially without burdening tenants. These recommendations align with a multi-faceted approach to achieving the SDGs:

1. Expand Rental Assistance Programs: Bolstering programs like the CityFHEPS voucher and the state’s Housing Access Voucher Program would provide a stable income stream to building owners, directly supporting SDG 1 by ensuring tenants can afford their homes.
2. Increase Funding for Repairs and Renovations: Allocating new city and state funds for capital repairs would improve living conditions, advancing SDG 3 and SDG 11 by making housing safer and more sustainable. This proactive measure also reduces the risk of litigation that drives up insurance costs.
3. Promote Innovative Insurance Models: The state is urged to invest in and support insurance collectives, where landlords pool resources to self-insure. This strategy represents a key partnership (SDG 17) and an institutional innovation (SDG 16) to control the runaway costs threatening the sector.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 1: No Poverty

  The article directly addresses issues affecting “low-income New Yorkers” and the provision of “low-income housing.” It discusses the risk of exacerbating a “homelessness crisis,” which is a direct manifestation of extreme poverty. The focus on rental assistance and keeping housing affordable for the most vulnerable populations connects directly to poverty alleviation efforts.

• SDG 10: Reduced Inequalities

  The core issue is the accessibility of affordable housing for a specific economic group: low-income tenants. By focusing on solutions that do not involve raising rents on these tenants, the article advocates for policies that protect vulnerable groups from economic shocks and reduce the inequality in access to basic services like housing.

• SDG 11: Sustainable Cities and Communities

  This is the most prominent SDG in the article. The entire discussion revolves around the housing crisis in New York City, a major urban area. It tackles the financial viability, safety, and affordability of the city’s housing stock, particularly government-funded apartments, which is central to creating sustainable and inclusive urban environments.

2. What specific targets under those SDGs can be identified based on the article’s content?

1. Target 1.4: Access to basic services

   Under SDG 1, this target aims to ensure that the poor and vulnerable have access to basic services. The article’s discussion of providing affordable housing, rental assistance programs (like CityFHEPS), and subsidies for low-income New Yorkers directly aligns with ensuring access to the fundamental service of shelter.

2. Target 10.2: Promote universal social, economic, and political inclusion

   Under SDG 10, this target focuses on empowering and promoting the inclusion of all, irrespective of economic status. Stable, affordable housing is a prerequisite for social and economic inclusion. The article’s warning against raising rents to avoid a “housing instability crisis” supports this target by aiming to keep low-income individuals securely housed and able to participate in society.

3. Target 11.1: Ensure access for all to adequate, safe and affordable housing

   Under SDG 11, this is the most directly relevant target. The article is centered on the challenge of maintaining “affordable housing” in New York City. It also touches upon the “safe” and “adequate” aspects by mentioning that deferred maintenance leads to the need for “fixing up broken stairwells and water-damaged ceilings” to prevent injuries.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

Yes, the article mentions several quantitative and qualitative indicators that can be used to measure the challenges and progress related to the identified targets.

• Operating Expenses for Affordable Housing

  The article explicitly states that “operating expenses across the statewide portfolio have increased by an average of about 40% since 2017.” This figure serves as a direct indicator of the financial unsustainability and decreasing affordability of the housing stock (relevant to Target 11.1).

• Insurance Premiums

  A specific component of operating costs is highlighted as a key indicator: “Property and liability insurance accounted for the sharpest spike, with the cost more than doubling between 2017 and 2024.” Tracking this cost is crucial for measuring financial pressure on affordable housing providers.

• Rent Collection Rates

  The article notes that “rent collection declined by about 4% over that span, from nearly 95% in 2017 to less than 91% last year.” This is an indicator of tenants’ financial distress and housing instability, reflecting on the affordability challenges for low-income populations (relevant to Targets 1.4 and 11.1).

• State of Housing Repair

  The call for “more funding for repairs and renovations, like fixing up broken stairwells and water-damaged ceilings” implies that the physical condition of buildings is a key concern. The number of units requiring critical maintenance can be used as an indicator to measure progress towards providing “adequate and safe” housing (relevant to Target 11.1).

• Level of Public Funding and Assistance

  The article’s recommendations to “expand existing rental assistance programs” and provide “new city and state funding for repairs” suggest that the amount of government subsidy and the number of households receiving vouchers are key indicators of the effort to ensure housing affordability (relevant to Targets 1.4 and 11.1).

4. Summary Table of SDGs, Targets, and Indicators

Source: gothamist.com