Recent visitors to the Bronx Zoo might have noticed a hand-made poster on Boston Road with uppercase red lettering.
It reads: “Black and brown people don’t need affordable housing. We need real home ownership.”
There has long been discussion — and tension — in the world of housing advocacy about how resources should be divided between ownership and rental housing. The debate has been rather one-sided, with rentals seen as more important for affordability, but the case for ownership seems to be gaining strength.
The poster in the Bronx is an example. So is the City Council’s successful push for home-ownership funding to complement the City of Yes. And last year, Council member Selvena Brooks-Powers approved a rezoning on the condition that a low-income rental project be changed to an ownership model.
The main argument for rentals is that people struggling to find housing often lack the down payment and credit score necessary to get a mortgage. Also, renters don’t need to worry about repairs and other unexpected costs of home ownership, which can throw a low-budget household into crisis — and lead to foreclosure.
Low-income families also tend to move more often than high earners. Because buying involves high closing costs, renting is typically better for people who expect to move within 5 or 7 years.
But a low-income household that can buy and keep a home for a decade or a generation usually comes out ahead financially and socially.
A mortgage induces people to build savings — not in cash, but in home equity — that comes in handy down the road. Renters with modest or low earnings typically don’t build a nest egg.
Frequent moves can be jarring to children. Homeownership provides more stability — not just for a household, but for a neighborhood.
The notion that renters don’t take pride in their homes or communities, however, is a dangerous stereotype that homeowners use to block worthy projects. But it’s also true that concentrating low-income rentals in one place leads to bad outcomes.
The paradigm that politicians should seek is diversity of housing types and incomes. That means pushing for condos, co-ops and mixed-income rentals in areas dominated by single-family houses and providing ownership opportunities in places where the default project has been a low-income rental.
Preparation for ownership must begin in high school, with lessons about how credit cards and mortgages work. Personal finance is far more important than calculus.
Economic and housing diversity — which leads to retail diversity — allows low-earners to build social capital, the most valuable commodity in moving up the economic ladder. That’s almost impossible to do in housing restricted to renters earning 30 percent to 60 percent of the area median income.
Programming note: The next Daily Dirt will be published Jan. 2. Happy holidays!
What we’re thinking about: Should real estate show some love to the City Council progressives who saved the City of Yes and have begun to embrace supply as a solution to the housing crisis? Should the industry fund challengers to the chamber’s anti-development, status-quo-loving conservatives? Send your thoughts to eengquist@therealdeal.com.
A thing we’ve learned: One reason that “smart locks” have failed to become standard in multifamily buildings is that landlords and tenants found them to be glitchy — “more trouble and cost than they are worth,” as one Daily Dirt reader said after installing them at many properties. “Until the technology is perfected I would not use them [again].”
Elsewhere…
The Department of Buildings reports that inspections were up this year while OATH violations and worksite injuries were down, “an indicator that the construction industry has greatly improved compliance with city rules and regulations.” Building construction-related injuries are down by 31 percent and fatalities by 14 percent compared with last year.
The North Fork town of Riverhead has 6,500 acres of unprotected farmland, but recently shelved a plan to let farmers sell some to “agritourism” resort developers in exchange for preserving the rest. Now the town is looking for an alternative to generate some development and tax revenue while preserving enough farmland to satisfy homeowners, Newsday reports. One option is to sweeten a town program that allows owners of farmland to sell development rights that can be used to build elsewhere.
SITA, the IT systems integrator for the JFK Airport overhaul, is using space in its Bohemia industrial campus to test new technology for the under-construction Terminal One. The $9.5 billion terminal is part of a $19 billion redevelopment of the airport. The replica terminal on Long Island was built by AECOM Tishman and SITA. One goal is to allow passengers to move through the terminal using facial recognition rather than passports, boarding passes and IDs.
Closing time
Residential: The priciest residential sale Tuesday was $6.6 million for an 8,740-square-foot house at 52 East 64th Street in Lenox Hill. Jed Garfield of Leslie J. Garfield had the listing, which shows an asking price of $13 million.
Commercial: The largest commercial sale of the day was $6.2 million for a 71,024-square-foot industrial property at 25-20 Borden Avenue in Long Island City.
New to the Market: The highest price for a residential property hitting the market was $22 million for a roughly 10,600-square-foot townhouse at 319-321 West 74th Street on the Upper West Side. The Karen Kelley Team at Compass has the listing.
— Matthew Elo