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Housing Conditions and Problems In New York City:
An Analysis of the 1996 Housing and Vacancy Survey


Michael H. Schill and Benjamin P. Scafidi


New York University School of Law
Center For Real Estate and Urban Policy

[See Disclaimer]

Prepared for the Housing '97 conference sponsored by
New York University School of Law
Center for Real Estate and Urban Policy
and the NYC Rent Guidelines Board

New York University
May 14, 1997

Introduction


In 1997, housing issues are at the forefront of policy debates in New York City. The most far-reaching changes to the laws regulating rents in the City in decades have spurred renewed interest in a housing market that has been in a state of perpetual crisis, real or perceived, for much of the twentieth century. This paper is an excerpt from Housing Conditions and Problems In New York City, a chapter in the forthcoming book, Housing and Community Development in New York City: Facing the Future. The book will be published in 1998 by the State University of New York Press. For further information about the other chapters in the book you may contact the New York University School of Law Center For Real Estate and Urban Policy, 40 Washington Square South, Room 411, New York, New York 10012. The Center's phone number is (212) 998-6696.


The current debate over the future of rent regulation in New York City and the recent release of data from the 1996 Housing and Vacancy Survey make an analysis of the New York City housing market both timely and indispensable to the development of public policy. The New York City Housing and Vacancy Survey (HVS), is a survey of over 17,000 housing units periodically conducted by the United States Bureau of the Census. [1] The HVS provides a wealth of current information on the socioeconomic, racial and housing characteristics of New Yorkers. One limitation of the 1996 HVS, however, is that the survey includes income and rent estimates that are somewhat inconsistent with prior years. Because a relatively large proportion of households fail to report their incomes and rents, in 1996, for the first time, the HVS imputed incomes and rents for non-respondent households. [2] All references to income and rent in the text and tables utilize the estimates derived by the Census Bureau, except when we compare incomes, rents and rent burdens in 1996 to prior years. For these longitudinal comparisons, we utilize only the data obtained from people who disclosed this information to the Census Bureau enumerators. A second limitation of the HVS is inherent in that it is a survey based upon a sample of housing units. Therefore the data presented in this paper are subject to sampling and rounding errors and small numbers and proportions, in particular, should be interpreted with caution.

 

Housing In New York City

Describing New York City's housing stock and housing market is an exceedingly complicated undertaking. In most American cities, the housing stock is typically divided into two main tenures: home ownership and renting. Within each of these two groups there is some variation, but for the most part, each tenure is relatively homogenous. Renters typically occupy apartments in multi-family dwellings; homeowners occupy single family detached or semi-detached buildings. In New York City, however, there is considerable differentiation both among and within the two major tenure groups. A majority of rental units are subject to rent regulation; a smaller, yet still substantial proportion of the housing stock is publicly owned. Even the owner- occupied stock is unusual with its substantial stock of condominium and cooperative apartments. Differences in housing conditions, occupancy characteristics and market dynamics exist not only among these different sub-tenures, but also across the City's varied geography. As Table 1 indicates, there are significant differences among the boroughs in terms of the composition of households with Manhattan, Queens and Staten Island having the highest incomes and lowest poverty rates.

Table 1: Household Characteristics by Borough

In this part, we begin with a brief description of the City's aggregate housing stock. We then describe each housing sub-tenure and housing and household characteristics within that sub-tenure. Particular attention is given to the occupant and building characteristics as well as to differences that exist among the City's five boroughs. Unless otherwise stated, all data in this part of the paper are obtained from the 1996 HVS.


The Aggregate Housing Stock

According to Table 2, 2.89 million occupied dwelling units or units vacant and available for occupancy exist in New York City. This number represents a net increase of 154,396 units over the preceding fifteen years (HVS 1991, 1996).

Table 2: New York City Housing Relative to the United States

The recession that hit New York in the early 1990s and subsequent cutbacks in public sector capital spending on housing have significantly slowed additions to New York City's housing stock. The annual number of new completions shrank from a fifteen year high of 14,685 in 1989 to only 5,510 in 1993. By 1995, the number of new completions rebounded slightly to 7,426 and in 1996 the City issued building permits for 8,652 new units of housing. (NYC Rent Guidelines Board 1997).


Tenure and Sub-tenure


Owner-Occupancy


Unlike most other American cities, New York City is overwhelmingly a city of renters. According to the 1993 American Housing Survey, 49.1% of all households in central cities owned the homes in which they lived. In New York, however, as shown in Table 2, only 30% of all housing units were owner-occupied in 1996. Furthermore, rates of owner-occupancy vary dramatically by borough and even within boroughs. In Staten Island, more than three out of every five households own their own homes compared to one in five in the Bronx.


As indicated in Table 3, of the 834,184 housing units occupied by owners 543,304, or approximately two-thirds, were in one or two family homes characterized by the HVS as "conventional" homeowner units. In most other American cities, the next largest category of owner units would be condominium apartments, a form of tenure in which the owner holds individual title to his or her own apartment, but typically shares ownership of common spaces and the land underlying the apartment. In New York City, however, the number of occupied condominium units (44,099) is dwarfed by the number of occupied cooperative apartments (196,146). Unlike the conventional single family or condominium owner, a cooperative apartment "owner" does not own his or her apartment, but instead owns shares in the corporation with title to the unit. The individual owner is legally a tenant of the cooperative corporation. In New York City, an additional 50,634 cooperative owners live in Mitchell-Lama buildings. These buildings were built with state mortgage interest subsidies and have income limitations designed to ensure occupancy by middle income households. The composition of owner units varies across the City's five boroughs. Over three-quarters of all homeowners occupy conventional one or two family homes in Brooklyn, Queens and Staten Island compared to three-fifths in the Bronx and only one in twenty-five in Manhattan.

Table 3: Housing Characteristics of Owners by Sub-tenure

As indicated in Table 4, the values of owner-occupied housing and homes available for sale vary substantially among the City's five boroughs. The highest median value for single family homes is in Manhattan ($1,027,569) with the Bronx having the lowest value ($180,000). Home values in the other three boroughs are much closer to the Bronx than to the unusually expensive Manhattan. Cooperative and condominium values follow similar geographic patterns.

Table 4: Housing Characteristics by Borough

Tables 5 and 9 demonstrate that the median income of homeowners ($48,562), unsurprisingly, is greater than that of tenants ($23,704). Similarly, the median age of homeowners (54 years) is higher than the average for all renters (46 years). Conventional homeowners and Mitchell-Lama owners are older, on average, than owners of condominiums or cooperatives.

Table 5: Occupant Characteristics of Owners by Sub-tenure

The proportion of owner-occupied housing units rose by about two percentage points from 1981 to 1996. This increase is largely attributable to the wave of condominium and cooperative conversions that swept New York in the 1980s. In addition, the City and the New York City Housing Partnership have combined forces to build over 13,000 one or two family homes over the past decade. In 1996, the vacancy rate for owner housing was 2.75%. Manhattan had the highest vacancy rate; Brooklyn and Queens the lowest.

Rental Dwellings

New York City's rental housing stock is divided into a bewildering array of sub-tenures which can usefully be categorized according to the type of regulatory regime they operate under. The sub-tenures include housing subject to rent regulation, housing owned by the government either under the public housing program or as a result of tax foreclosure and housing available in the private rental sector at market rents.

A Description of Six Sub-tenures

In 1942, President Roosevelt signed into law the Emergency Price Control Act which froze rents in most counties of the state (DHCR 1993). With the end of the war and the normalization of the nation's economy, the federal law was allowed to lapse in 1947. In 1951, however, the New York State Legislature enacted a comprehensive rent control ordinance which permitted the City to extend rent control on apartments built before 1947 while providing for decontrol of apartments in one or two-family homes and certain high rent "luxury" apartments. Today, after further decontrol and the enactment of rent stabilization, rent controlled units predominantly consist of (1) units in buildings with three or more apartments which were constructed prior to February 1, 1947 and where the tenant moved in before July 1, 1971, (2) units in buildings with one or two apartments which were constructed before February 1, 1947 and where the current tenant moved in before April 1953 and (3) apartments constructed under certain tax abatement and subsidy programs which have a tenant who moved in before 1976. Over the 15 year period between 1981 and 1996, the number of rent controlled units in New York City declined from 285,555 to only 70,572 apartments or 3.4% of the rental stock.


In 1969, the New York State Legislature enacted the Rent Stabilization Law which provided that all units in buildings with six or more apartments built between 1947 and 1969 would be subject to rent stabilization, a less stringent form of rent regulation than rent control with periodic rent increases. Later statutes included under rent stabilization apartments in buildings with six or more units that were constructed between 1969 and 1974 as well as formerly rent controlled units that are decontrolled. By 1996, the number of rent stabilized apartments in New York City had reached 1,052,300 or just over one-half of all rental units in the City.


Rent regulation also applies to an additional 131,576 apartments in the City that do not formally fall within the purview of rent control or rent stabilization. These units are typically those subsidized by the federal government under the Section 8 construction and rehabilitation programs, apartments built under state-financed limited profit programs and units subject to oversight by the New York City Loft Board. A large number of the units in this sub-tenure are likely owned or managed by nonprofit organizations. In addition to large city-wide nonprofit organizations such as Phipps Houses and the Settlement Housing Fund, approximately 225 community-based nonprofit groups own and manage over 50,000 housing units in the City (Wylde 1997).


Two sizable sub-tenures in New York are distinguished not so much by the form of rent regulation they operate under, but instead by who owns the housing. Since 1937, the New York City Housing Authority (NYCHA) has constructed or otherwise acquired 172,096 units of public housing. The construction of this housing was largely funded by the federal government which continues to provide substantial operating subsidies and modernization grants. In return for this support, NYCHA limits the incomes of successful public housing applicants to 80% of the metropolitan area's median income and charges tenants no more than 30% of their incomes for rent. New York City's public housing stock is, by far, the largest of any city in the nation. Public housing constitutes 8.5% of all rental housing in the City.


In 1996, New York City, itself, owned approximately 25,211 units of housing that was either occupied or available for rent. The City took title to this housing as a result of the failure of former owners to pay real property taxes for at least one year. The legal action through which the City obtained title, an in rem proceeding, gives the housing its common name-- in rem housing. The City's stock of in rem housing has declined in recent years as a result of a variety of initiatives to transfer ownership to tenants, community groups and private entrepreneurs (Braconi 1996). In addition, since 1994, the City has, for the most part, stopped taking title to in rem housing.


The final sub-tenure of rental housing is unregulated private market housing. All housing that was built in New York City since 1974 without governmental subsidies or tax abatements is free of rent regulation. In addition, most rental units in buildings with less than three apartments and those in buildings with fewer than six apartments that were built after 1947 are part of the unregulated sector. Finally, units that were deregulated over the years such as those with "luxury" rents or those with a change of tenancy in a building that underwent conversion to condominiums or cooperatives are part of the unregulated sector. In most cities, unregulated private market units would constitute the overwhelming majority of the rental housing stock. In New York City, however, the unregulated sector consists of 575,666 units, comprising only 28.4% of all rental housing.


Significant variation exists among the City's five boroughs with respect to the prevalence of sub-tenures. Partly due to its older housing stock and denser building patterns, Manhattan has the greatest proportion of rent regulated housing. In 1996, four-fifths of Manhattan's rental housing stock was subject to rent regulation compared to a city-wide average of 62.2%. Brooklyn, Queens and Staten Island had the lowest proportions of rent regulated housing-- 54.3%, 51.1% and 22.2%, respectively. The Bronx had the City's highest proportions of public housing and in rem housing; Queens had the City's lowest shares of housing in these two categories.

Vacancy Rates

As shown in Table 6, the overall vacancy rate for rental housing in New York City in 1996 was 4.01%. This rate, while below the 5% threshold set forth in state statutes to signal a housing "emergency," nevertheless is substantially higher than the 2.1% level of 1981 as well as the 3.44% vacancy rate of 1993. Of the City's 55 sub-borough areas, 31 experienced increases in vacancy rates between 1993 and 1996. Seventeen (17) sub-borough areas, predominantly in the South Bronx, Central Brooklyn and Manhattan north of 96th Street had 1996 vacancy rates in excess of 5%. The highest vacancy rate existed in the City's stock of in rem housing with almost nine percent of the stock available for rent. Rent stabilized housing had a vacancy rate of 3.57% whereas unregulated rental housing had a significantly higher 5.29% rate of availability. Surprisingly, the number of vacant public housing units increased by over 350% between 1993 and 1996, which translated into a 1996 vacancy rate of 3.75% in public housing.

Table 6: Vacant Units and Vacancy Rates by Sub-tenure, 1993 and 1996

Rental vacancy rates in the Bronx, as depicted in Table 7, increased from 3.99% in 1993 to 5.43% in 1996, giving that borough the highest rental vacancy rate in the city. Rental vacancy rates were below 5% in each of the City's other four boroughs. The tightest market was in Queens with a 3.28% vacancy rate. In absolute terms, the boroughs of Brooklyn and Manhattan had the most rental units available for rent-- 25,937 and 20,185, respectively. The median asking rent for vacant apartments, however, was $619, slightly above the median rent for all apartments in the City.

Table 7: Vacant Units Available for Rent by Borough, 1993 and 1996


Characteristics of the Rental Housing Stock

As might be expected, the age of New York City's housing stock varies with its sub-tenure. As shown in Table 8, just over three quarters of all rent controlled units were built before 1930 compared to only 53% of rent stabilized housing. In rem housing has the highest proportion of pre-1930 dwelling units (85.5%) and public housing, of course, the lowest. Almost one-half of unregulated dwelling units were built before 1930. The age of the City's housing stock also varies by borough. Unsurprisingly, Manhattan has the greatest proportion of pre-1930 housing (58.9%) with Queens and Staten Island having only 24.3% and 6.1%, respectively.

Table 8: Housing Characteristics of Renters by Sub-tenure

As might be expected, Table 8 shows that median contract rents were highest for unregulated apartments ($680) and lowest for public and in rem housing ($225 and $250, respectively). As expected, average rents for rent controlled apartments ($428) were substantially lower than rents for rent stabilized dwellings ($600). Among the City's boroughs, Manhattan, despite its relatively high proportions of rent regulated, public and in rem housing units, had the highest median rents. The median rent in Queens was a close second, followed, in order, by Staten Island, Brooklyn and the Bronx. When only rents in the unregulated market are considered, however, Manhattan's median contract rent of $1,175 is considerably higher than the average Queens rent of $700.


Characteristics of Tenants

Median household income, as shown in Table 9, roughly tracks the average rents of housing in the various sub-tenures. The lowest annual incomes are earned, on average, by public housing tenants ($9,000) and residents of in rem housing ($8,400). Rent controlled tenants earn one and a half the incomes of public housing residents ($13,428), but much less than rent stabilized tenants ($25,350) or occupants of unregulated housing ($30,000). In terms of geographic variation, the median incomes of tenants in Manhattan were the highest ($30,000) followed by those in Queens ($28,500), Staten Island ($28,000), Brooklyn ($20,000) and the Bronx ($16,224).

Table 9: Occupant Characteristics of Renters by Sub-tenure

The poverty rate among renter households in New York City is 26.1%. As might be expected, the highest rates of poverty are experienced by residents of public (52.9%) and in rem (55.3%) housing. The proportion of households in poverty in rent controlled dwellings (28.6%) is greater than for rent stabilization (23.5%) and also greater than for the private unregulated sector (18.6%).


The proportion of households receiving public assistance likewise varies among the sub-tenures although not necessarily in lockstep with median income. Fifty-seven percent of all residents of in rem housing receive public assistance as do 52.9% of public housing tenants. Interestingly, the proportion of households receiving assistance is lowest for rent controlled dwellings. Only 12.6% of rent controlled tenants receive public assistance compared to 16.4% of households in the unregulated rental market and 21.0% in rent stabilized apartments.


The surprisingly low proportion of households receiving public assistance in rent controlled apartments may be partly explained by age differences among the various sub-tenures. The mean age of householders in rent controlled housing (65 years) is 23 years higher than the average for tenants of unregulated housing and 21 years more than tenants in rent stabilized dwellings. Average ages for public and in rem housing tenants are 51 and 47, respectively.


Households of different racial and ethnic backgrounds are not distributed evenly throughout the rental sector. As Table 10 indicates, although they constitute only 39.9% of all renters, white households occupy 66% of the City's rent controlled apartments. White households are also overrepresented in rent stabilized apartments, although the magnitude of the discrepancy is much smaller than for rent control. Black households, while under-represented in rent regulated housing, are over-represented in public and in rem housing. Although they constitute only 25.7% of the City's renter households, black households comprise over half of the households living in public and in rem housing. Similar patterns are exhibited by non-Puerto Rican Hispanic households.

Table 10: Race and Immigrant Status of Renters by Sub-tenure


Severe Housing Problems In New York City

Under New York State law, since 1950, housing conditions in New York City have constituted an emergency. In this section, we describe and attempt to quantify, where possible, several housing-related problems. These problems include unaffordable housing and substandard housing conditions. Issues having to do with racial and ethnic disparities in housing outcomes and discrimination are reserved for the final section of this paper.


Micro-data recently made available from the 1996 Housing and Vacancy Survey make it possible to estimate the number of households in New York City who experience one or more "severe" housing problems as well as to examine the households' characteristics, sub-tenures and locations. [3] For the purpose of this analysis, a severe housing problem is defined as any one of the following:

  1. For tenants, contract rents that exceed 50% of their incomes.
  2. For owners, housing expenses (including mortgage payments) that exceed 60% of their incomes.
  3. For owners or renters, living in buildings which are dilapidated.
  4. For owners or renters, living in units which have 5 or more housing maintenance deficiencies.


Severe Housing Quality Problems

A severe housing quality problem is defined to include those households living in a dilapidated building or in a dwelling unit with five or more specified maintenance deficiencies. The Census Bureau characterizes a building as dilapidated if it fails to provide safe and adequate shelter to the occupants. A structure is rated dilapidated if it shows one or more critical defects or a combination of intermediate defects or inadequate original construction (U.S. Census Bureau 1994). The judgment as to whether a building is dilapidated is made by a Census Bureau employee based upon his or her observation of a building. Unlike the dilapidation indicator, maintenance deficiencies are based upon the responses of dwelling unit occupants, themselves. Each occupant is asked whether any of the following maintenance deficiencies exist in his or her unit: (1) heating equipment breakdowns, (2) insufficient heat, (3) rodent infestation, (4) cracks and holes in the walls, ceilings or floors, (5) broken plaster or peeling paint larger than 8 1/2 by 11 inches, (6) toilet breakdowns and (7) water leaks (U.S. Census Bureau 1994).


In 1996, an estimated 147,507 households or 5.3% of all households in New York experienced one or both severe housing quality problems. Consistent with the experience in other American cities, the proportion of the City's housing stock that has severe housing quality problems has declined substantially over the past twenty-five years. Nevertheless, the proportion of households experiencing severe housing quality problems in 1996 increased from 4.4% in 1993. As reported in Table 11, in 1996, approximately one percent of the households in New York (30,164 households) lived in dilapidated buildings. The number of households living in dwelling units that had five or more maintenance deficiencies was more than four times the number in dilapidated buildings (123,772).

Table 11: Severe Housing Problems in New York City, Boroughs and Sub-tenures

The geographic pattern of dilapidation and maintenance deficiencies varied a bit from each other. The largest number of dilapidated buildings was located in the borough of Manhattan followed by Brooklyn and the Bronx. With respect to dwelling units with five or more maintenance deficiencies, Manhattan again had the most units with this problem, with Brooklyn and the Bronx close behind. As a proportion of all buildings or dwelling units in a borough, Manhattan led the way in dilapidation (1.6%), and the Bronx had the highest rate of maintenance deficiencies (7.9%). Queens and Staten Island have far fewer dwelling units that experience severe quality problems than the City's other three boroughs.


In absolute terms, the largest numbers of severe quality problems are located in Central Harlem, East Harlem, Washington Heights, the Lower East Side, Crown Heights and Kingsbridge Heights. As a proportion of total housing units, the highest rates of severe housing quality problems tend to cluster in these same neighborhoods as well as several neighborhoods in the South Bronx and North Crown Heights.


The largest proportion of severe housing quality problems were found in the rent stabilized sector. Approximately one-half of all units in dilapidated buildings and units with 5 or more maintenance deficiencies were rent stabilized. These proportions are not quite as surprising as they appear considering that rent stabilized apartments are the largest of the City's sub-tenures constituting more than a third of all its housing and just over half of all rental housing.


The highest incidence of severe housing quality problems in each sub-tenure is unquestionably found in the City's in rem housing stock. As Table 11 shows, almost 15% of all in rem units were in dilapidated buldings, more than three times the rate of dilapidation in the second highest ranking sub-tenure, other rent regulated housing. With respect to maintenance deficiencies, 19.8% of in rem housing units had severe problems compared to the next highest rate of 6.1% for rent stabilized housing. In the rental sector, the lowest rates of dilapidation and maintenance deficiencies existed in public housing and unregulated units, respectively. When all housing sub-tenures are analyzed, the owner occupied housing sub-tenures exhibited the lowest rates of severe housing quality problems.


In terms of building characteristics, severe housing quality problems are less likely to occur in large buildings perhaps because of the higher volume of rents commanded by these buildings, their locations or different styles of management. The dilapidation rate for buildings with one hundred or more units is less than one-third the rate for all buildings; similarly the rate of maintenance deficiencies is much smaller than the city-wide average. Unsurprisingly, the prevalence of severe housing quality problems is greater in low rent dwellings. Compared to the city-wide averages, the rate of dilapidation is almost double for apartments that rent for less than $500 and maintenance deficiencies are almost 1.7 times as likely to occur.


The profile of people living in dwellings with severe housing quality problems is not surprising. As Table 12 demonstrates, over one-third of all households in the City of New York have "very low incomes," defined by the U.S. Department of HUD to be incomes less than half of the median income for the metropolitan area. [4] However, over half of all households living in dilapidated buildings earn very low incomes. Similarly, 61.6% of those living in dwelling units with 5 or more maintenance deficiencies earn very low incomes. Compared to all households in the City, a much higher proportion of households experiencing severe housing quality problems are comprised of single person households with children, persons not in the labor force, recipients of public assistance, persons receiving housing subsidies, and, to a lesser extent, immigrants. [5] One group that is not over-represented in physically substandard dwelling units is elderly households.

Table 12: Severe Housing Problems in New York City, Household Characteristics


Severe Housing Affordability Problems

Determining what proportion of a household's income dedicated to housing-related expenses is too much is of course fraught with difficulties (Stone 1993). With respect to federal housing programs, prior to 1981, renters who paid more than one-quarter of their incomes for rent were considered to have affordability problems; this proportion was subsequently raised by Congress to 30%. For purposes of this paper a severe affordability problem for renters is defined as occurring when a household pays more than half of its gross income on rent. [6] For homeowners, a severe affordability problem is defined as a household paying more than 60% of its gross income on housing-related expenses. [7]


In 1996, an estimated 615,295 households in New York City experienced severe affordability problems. As Table 11 indicates, the lion's share of these households, 525,745, were renters; only 89,550 were homeowners. Expressed as a proportion of all City households, 18.9% had excessively high rent burdens and 3.2% had extremely burdensome homeownership expenses. Although differences in the Census Bureau's methods of imputing incomes and rents for nonrespondents make direct comparisons to 1993 difficult, comparisons based upon actual responses to the HVS suggest that the proportion of renter households experiencing severe affordability problems increased slightly between 1993 and 1996. The number of renter households experiencing a severe affordability problem rose by 1%; among homeowners, however, severe affordability problems declined by approximately 1.5%.


As might be expected given the widely divergent homeownership and renter occupancy rates among the boroughs, the geographic patterns for severe housing affordability problems vary significantly among the two sub-tenures. In absolute terms, the largest numbers of renters with severe affordability problems lived in Brooklyn and Manhattan whereas among homeowners severe housing affordability problems were concentrated in Brooklyn and Queens. The highest rate of severe renter affordability problems was in the Bronx where over one-quarter of all households paid more than half their incomes for rent. Renter affordability problems were least prevalent in Queens (12.5%) and Staten Island (7.5%). However, among homeowners, the rate all households experiencing severe affordability problems was highest in Queens (3.9%) and in Brooklyn (3.4%).


Relatively large clusters of households, in absolute terms, face severe housing affordability problems in the South Bronx; much of Manhattan south of 96th Street as well as Washington Heights; Bedford-Stuyvesant, East New York, Bensonhurst, Flatbush and Sheepshead Bay in Brooklyn; and Forest Hills and Flushing in Queens. Especially high rates of severe housing affordability problems exist in the South Bronx as well as Brooklyn's Bedford-Stuyvesant and East New York neighborhoods. Interestingly, severe affordability problems are not necessarily prevalent in the same neighborhoods as severe housing quality problems.[8] Indeed, the sub-borough area with the greatest number of households experiencing affordability problems is the relatively affluent Upper East Side. [9]


Despite living in dwelling units subject to rent regulation, tenants of rent stabilized buildings experienced the third highest rate of severe housing affordability problems in the City-- 27.6%. The number of people living in rent stabilized apartments who paid more than half of their incomes in rent in 1996 was approximately 290,028, accounting for 55.2% of all tenants with severe affordability problems. The highest rate of households paying more than 50% of their incomes in rent was in in rem housing where 32.2% of tenants experienced severe burdens. The lowest rates of severe housing affordability problems existed among residents of public housing and all owner-occupied sub-tenures.


From the perspective of public policy, excessive housing cost burdens are less problemmatic among relatively affluent households than among the poor. Nevertheless, as Table 12 shows, severe housing affordability problems are overwhelmingly concentrated among very low income New Yorkers. Despite constituting only 37.4% of the City's population, very low income households comprise 94.5% of all renters who pay more than half of their incomes in rent and 71.4% of all homeowners who pay more than 60% for shelter. Just over one-fifth of all renters with severe housing affordability problems are single person households with children, 67% have no one in the labor force, 50% receive public assistance and about one-third receive housing subsidies. More than one-half of all households with severe affordability problems are foreign born.


Severe Housing Problems In New York City

In 1996, 674,598 households or almost a quarter of all households in the City endured one or more severe housing problems. Between 1993 and 1996 the proportion of households experiencing one of more severe housing problems increased by approximately 0.5%. [10] Because the vast majority of severe housing problems concern affordability, the patterns for affordability predominate in Tables 11 and 12. In terms of absolute numbers, Brooklyn and Manhattan have most of the City's severe problems; in relative terms, the highest incidence of severe housing problems is in the Bronx. Similarly, rent stabilized housing has the largest share of severe housing problems although the highest rate, by far, is in in rem housing where over half of the residents pay more than half of their incomes in rent or live in substandard conditions. The lowest rates of severe housing problems exist in owner-occupied housing and in public housing.


Severe housing problems are predominantly the problems of poor New Yorkers. Very low income households constitute 37.4% of New York's population. Nevertheless, almost nine out of ten households that experience one or more severe housing problems earn very low incomes. Among all very low income households, 55.5% have severe housing cost burdens or live in poor quality housing.

 

Conclusion

Housing is critical to the health, well being and prosperity of New York City and its residents. The absence of adequate housing can make it difficult or impossible for families to achieve stability in their lives. At its most elemental, housing or the lack thereof can affect one's health by subjecting people to dangerous or disease-promoting conditions. Where one resides frequently can circumscribe one's opportunities for living in a safe environment, obtaining an adequate education and acquiring gainful employment. Housing can also consume so much of a household's resources as to leave them unable to pay for other necessities such as food or clothing. Excessive housing costs may also limit economic activity in the City, by making it difficult for businesses to attract a skilled workforce at competitive wages.

In many respects, New York City has made important strides over the past two decades in improving its housing. Thousands of units of housing have been rehabilitated through the creative use of government subsidies and partnerships between government, business and community groups. Housing quality, at least as measured by the Census Bureau, is better today than at any time this century. Nevertheless, enormous housing and housing-related problems remain. A significant proportion of New York City's population cannot obtain housing and is forced to live in shelters or temporary accomodations. A much larger share of the population, disproportionately poor, live in decent housing, but pay excessive proportions of their incomes for rent or homeownership costs. Finally, housing market forces, including racial and ethnic discrimination, restrict the ability of many New Yorkers to move to neighborhoods where they would be able to obtain good schools for their children and access to jobs and economic opportunities for their families.

 

Rent Regulation Supplement to

Housing Conditions and Problems In New York City: An Analysis of the 1996 Housing and Vacancy Survey

The 1996 Housing and Vacancy Survey provides the only comprehensive source of information about the characteristics of apartments and tenants of New York City's rent regulated sector. In light of the current debate over the future of rent regulation, this supplement to Housing Conditions and Problems In New York City highlights several points made in the text and introduces additional tables and data concerning rent regulated apartments. Unless explicitly stated, all data presented include the Census Bureau's imputations of incomes and rents for non-respondents. The comparisons are descriptive; tests of statistical significance have not been performed. Furthermore, the results reported are from a survey; therefore they are subject to sampling error. Small numbers or proportions should be interpreted with particular caution. All tables referred to in this supplement can be found in the main paper with the exception of Tables S-1 and S-2, which appear after the supplement.


Rent Stabilized Apartments

A. Stock and Vacancy Rates

1. In 1996, 1,052,300 rent stabilized apartments were occupied or vacant and available for occupancy. The rent stabilized sector constitutes 52% of the City's rental stock. The number of rent stabilized apartments increased by 39,203 apartments or 3.9% between 1993 and 1996 (Table 8).

2. The vacancy rate for rent stabilized apartments in 1996 was 3.57%. This represents an increase from the 1993 vacancy rate of 3.36% (Table 6).

3. The vacancy rate for rent stabilized housing is less than the City-wide vacancy rate (4.01%) as well as the vacancy rate for housing in the private, unregulated rental sector (5.29%) (Table 6).

B. Characteristics of the Stock

1. Rent stabilized apartments, while of more recent vintage than rent controlled apartments, on average, are still relatively old. Just over half of all rent stabilized apartments (53.3%) were built before 1930 compared to the City-wide average for rental apartments of 45.7% (Table 8).

2. Of all of the non-publicly owned rental housing in New York City, rent stabilized apartments have the highest mean average number of maintenance deficiencies (1.55). All rental apartments have an average of 1.37 deficiencies; the average for the unregulated, private sector is 0.89 (Table 8).

3. In terms of severe housing quality problems, with the exception of in rem housing, rent stabilized apartments have the greatest incidence of five or more maintenance deficiencies. 6.1% of all rent stabilized apartments have five or more deficiencies compared to 2.4% of all units in the private, unregulated rental stock (Table 11).

4. The mean average ratio of persons per room for rent stabilized apartments (0.74) is virtually identical to the persons per room ratio for all rental housing in the City (0.70).

5. Rent stabilized apartments are less likely to be located in neighborhoods with boarded up buildings nearby than any other type of rental housing in the City. Only 10.3% of rent stabilized housing units are located in these communities compared to 11.4% for all housing in the City (Table 8).

C. Rents and Tenant Incomes

1. The median contract rent for rent stabilized apartments ($600) is actually five dollars higher than the average rent for the City ($595). Rent stabilized rents, on average, are 12% lower than rents in the private, unregulated sector ($680) (Table 8).

2. In all but 6 of the City's sub-borough areas, the median rent stablized rent is lower than the median rent for private, unregulated housing. Especially high disparities (ie. ratios of rent stabilized rents to unregulated rents < 0.75) exist in the Bronx's Riverdale (0.71) and Soundview/Parkchester (0.72); Manhattan's Chelson/Clinton/Midtown (0.73), Stuvesant Town/Turtle Bay (0.69), Upper West Side (0.67), Upper East Side (0.68), and Morningside/Hamilton Heights (0.70); and Bayside/Little Neck (0.73) and Bellerose/Rosedale (0.69) in Queens.

3. The median income of rent stabilized tenants ($25,350) is, on average, somewhat greater than the average for all renters in the City ($23,704), but 16% less than tenants in the private, unregulated rental sector ($30,000) (Table 9).

4. Average rent burdens for rent stabilized tenants are identical to those experienced by all tenants in New York and somewhat greater than for tenants in the private, unregulated rental market. Rent stabilized tenants pay, on average, 28% of their incomes in rent compared to a 26% ratio for the private, unregulated rental market (Table 8).

5. 27.6% of all rent stabilized tenants experience a severe affordability problem, paying over 50% of their incomes in rent. This is higher proportion experiencing a severe affordability problem than exists in the private, unregulated rental sector (Table 11).

6. The tenants in rent stabilized apartments are not extremely affluent. Less than 1.4% of rent stabilized households (13,255 households) earn incomes over $175,000. Fewer than 2% of rent stabilized households (17,316) earn incomes over $150,000. 5.2% of all rent stabilized households (53,238) earn incomes over $100,000.

7. According to the 1996 Housing and Vacancy Survey, an estimated 2,700 rent stabilized tenants or approximately 0.2% of all rent stabilized households earned incomes of $175,000 or more and paid $2,000 or more in rent (Table S-1). These tenants all lived in four of the City's 55 sub-borough areas (in declining order): the Upper East Side, the Upper West Side Greenwich Village, and Stuyvesant Town/Turtle Bay.

D. Household Characteristics

1. Rent stabilized households are less likely than the average New York City tenant household to have a householder over the age of 65. Among rent stabilized households, 13.5% have householders over the age of 65 years compared to a City-wide average of 16.0% for all renter households (Table 9).

2. The average size of a rent stabilized household (2.25 persons) is slightly smaller than the mean average for all renter households (2.37 persons) and households in the private, unregulated rental market (2.66 persons) (Table 9).

3. The poverty rate for rent stabilized tenants (23.5%) is less than the rate for all renter households (26.1%), but greater than the rate for tenants in the unregulated, private rental sector (18.6%) (Table 9).

4. Rent stabilized tenants, on average, have a shorter tenure than all tenant households (8.69 years compared to 9.64 years). On the other hand, their tenure is longer than tenants in the unregulated, private rental market (6.16 years) (Table 9).

5. In contrast to rent control, white tenants are only slightly overrepresented in rent stabilized apartments. 43.4% of all rent stabilized householders are white compared to 39.9% for all renter households in the City. Black households and Non-Puerto Rican Hispanics are underrepresented (Table 10).

Rent Controlled Apartments

A. Stock and Vacancy Rates

1. In 1996, 70,572 rent controlled apartments were occupied. The rent controlled sector constitutes 3.5% of the City's occupied and vacant and available rental stock. The number of rent controlled apartments declined by 31,226 units or 30.7% between 1993 and 1996 (Table 8).

2. Because rent controlled apartments become rent stabilized once they are vacated, there is no vacancy rate for this sector.

B. Characteristics of the Stock

1. Rent controlled apartments are relatively old. 75.9% of rent controlled apartments were built before 1930. This compares with 45.7% of all rental housing and 45.3% of the unregulated, private market housing stock (Table 8).

2. On average, the maintenance of rent controlled apartments is not significantly worse than or better than the City average. The mean number of maintenance deficiencies for rent controlled apartments in 1996 was 1.41 compared to 1.37 for all rental housing in the City. However, the mean number of maintenance deficiencies for the unregulated, private sector apartments is much lower (0.89) (Table 8).

3. Five percent of tenants in rent controlled apartments live in dwellings that have five or more maintenance deficiencies. This is slightly above the proportion for all City households (4.5%) and well above the average for tenants in the unregulated, private sector (2.4%) (Table 11).

4. The mean average ratio of persons per room for rent controlled apartments is 0.47 which is much smaller than the persons per room ratio for all renter households in the City (0.70) as well as for all tenants in the unregulated, private sector (0.69).

5. Rent controlled apartments are more likely to be located in neighborhoods with boarded up buildings nearby. 14.6% of rent controlled apartments are located in these neighborhoods compared to 11.4% for all rental housing in the City (Table 8).

C. Rents and Tenant Incomes

1. As might be expected, the rents of rent controlled apartments are, on average, much lower than the rents of non-publicly owned housing in New York City. The median rent for rent controlled apartments in 1995 was $428 as compared to $595 for all apartments in the City and $680 for the unregulated, private sector (Table 8).

2. The median income of tenants in rent controlled apartments is quite low ($13,428) compared to all renters ($23,704) and tenants in the private, unregulated sector ($30,000) (Table 9).

3. Despite relatively low rents, the average rent burdens of tenants in rent controlled apartments are relatively high. Rent controlled tenants, on average, pay 30% of their incomes for rent compared to 28% for all tenants and 26% for tenants in the unregulated, private market (Table 8).

4. 24.8% of all tenants in rent controlled apartments experience a severe affordability problem (ie. they pay more than 50% of their income in rent) (Table 11).

5. Very few rent controlled tenants earn "high" incomes. Fewer than 339 households earn more than $175,000; only 490 households have incomes greater than $150,000. In 1995, 3,136 households or 4.5% of the households living in rent controlled apartments earned over $100,000 (Table S-2).

6. According to the 1996 Housing and Vacancy Survey no rent controlled tenant earned over $175,000 and paid over $1,500 in rent (Table S-1).

D. Household Characteristics

1. Rent controlled tenants are, on average, much older than the average New York tenant. The median age of a rent controlled tenant (65 years) is a full 19 years older than the average for all New York tenants and 23 years older than the average for tenants in the private, unregulated market (Table 9).

2. The average size of rent controlled households (1.65 persons) is much smaller than the average for New York City renters (2.37 persons) (Table 9).

3. The poverty rate for rent controlled tenants (28.6%) is slightly higher than for all renters in the city (26.1%) and much higher than the rate for tenants in the private, unregulated sector (18.6%) (Table 9).

4. Rent controlled tenants have much longer tenures than other tenants in New York. The average number of years of residence (35.59 years) is almost four times the average for all tenants (9.64 years) (Table 9).

5. White households are over-represented in rent controlled housing. Whites constitute 39.9% of all renter households in the City, but they occupy 66.0% of rent controlled apartments. All other racial/ethnic groups are relatively under-represented (Table 10).

Author's Bios


Michael H. Schill is Professor of Law and Urban Planning at New York University and Director of the Center For Real Estate and Urban Policy at the Law School. Benjamin P. Scafidi is a Research Associate at the Center For Real Estate and Urban Policy. The authors would like to thank Antonio Lopez, Justin Segal and Wong Wang for their valuable research assistance. Financial assistance for this paper was provided by the New York City Rent Guidelines Board.


Endnotes

Disclaimer: The findings and characterizations in this paper represent the views of the authors and do not necessarily reflect the views of the New York University School of Law, the Board of Advisors of the Center For Real Estate and Urban Policy or the NYC Rent Guidelines Board.

1. The Housing and Vacancy Survey is conducted by the Census Bureau every three years under contract with the City of New York. The survey is representative of all housing in the city and collects information about the physical characteristics and occupant characteristics of this housing stock.

2. In the HVS, 46.8% of all households failed to disclose their incomes and 6.3% of renter households failed to disclose their monthly contract rents. For the 1996 HVS, the Census Bureau used other demographic information to impute incomes and rents for households in which incomes and/or rents were not reported. The Census Bureau applies their careful imputation techniques in all of its other periodic surveys.

3. The methodology for this analysis of "severe" housing problems is similar although not identical to the "worst case" problem methodology described in U.S. Dep't of HUD (1992).

4. The median income for a family of four in the New York metropolitan area in 1995 as calculated by HUD was $49,100. The metropolitan area, as defined by HUD for purposes of calculating housing subsidies, includes the five counties that comprise the City of New York, as well as Rockland and Putnam counties (U.S. Dep't of HUD, 1995).

5. A household is defined to be an immigrant household if the householder was foreign born and both of his or her parents were foreign born.

6. This benchmark is used by several other housing analysts such as Nelson (1993). Rent, as used in this context, is contract rent.

7. These expenses include property taxes, mortgage payments, insurance and utilities. The 60% threshold was adopted by HUD (1992).

8. The correlation coefficient between the rate of severe affordability problems and severe quality problems is 0.43.

9. Given the high rents in this sub-borough area relative to the rest of the City, there is some question as to whether the choice by households to spend high proportions of their incomes for housing there should be characterized as a problem.

10. To allow a comparison between 1993 and 1996 numbers, only unimputed incomes and rents were used to compute the rates of severe housing problems.

 

References

Blackburn, Anthony J. 1995. Housing New York City: 1993. New York: Department of Housing Preservation and Development.

Braconi, Frank P. 1997. In Re In Rem: Innovation and Expediency in New York's Housing Policy. In Housing and Community Development In New York City: Facing the Future (Michael H. Schill, ed.).

New York City Housing and Vacancy Survey Data Files. 1991,1993, and 1996.

New York City Rent Guidelines Board. 1997. Housing Supply Report.

New York State Division of Housing & Community Renewal. 1993. An Overview of New York State's Rent Regulated Housing. New York: DHCR.

Stone, Michael E. 1993. Shelter Poverty: New Ideas on Housing Affordability. Philadelphia: Temple University Press.

U.S. Department of Commerce, Bureau of the Census. 1994. Housing and Vacancy Survey Data File Documentation.

U.S. Department of Housing and Urban Development. 1992. The Location of Worst Case Needs in the Late 1980s: A Report to Congress. Washington: U.S. Dep't of HUD.

Wylde, Kathryn. 1997. The Contribution of Public-Private Partnerships To New York's Assisted Housing Industry. In Housing and Community Development in New York City: Facing the Future (Michael H. Schill, ed.).

 


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