The affordable housing crisis is expected to be one of the most pressing and difficult challenges facing the next mayor. In New York City, 42% of renters are rent-burdened, which means they pay more than 30% of their income toward rent. All of the leading democratic candidates have called for new strategies, but Dianne Morales has gone the farthest by proposing a fundamental shift in how the city views affordable housing development—treating housing as a public good and moving away from projects that are driven by private developers.
It’s an idea known as “social housing,” which is rooted in European models of government subsidized housing that experts say go far beyond the U.S. version of affordable housing by not only addressing cost but also racial segregation and democratic control by residents. The term has gained traction among the left wing of the Democratic Party in recent years; part of the “housing is a human right” movement embraced by national figures like U.S. Senator Bernie Sanders and Congresswoman Alexandria Ocasio-Cortez.
Scott Stringer, another progressive candidate in the race, has also promoted social housing. He has said he would create a new generation of such developments using vacant parcels with either the city or nonprofits as the developers in charge.
But Morales has gone further by making social housing the center of her housing plan—and modeling it after Vienna, where roughly 60% of its 1.8 million residents live in government-subsidized apartments.
“This is the process of us moving forward out of these multiple crises, and actually creating a whole new paradigm for how we exist together in the city, and enable everyone to live in dignity,” Morales told Gothamist.
What is the Viennese model of social housing?
In Vienna, the city buys land and then sells it at an affordable price to a private developer chosen through a competitive selection process. The city retains control over the style of the development. As a critical pre-requisite, the developer must rent half of the new apartments to lower-income residents. The remaining units are generally reserved for moderate-income residents.
Austrian residents earning up to $53,225 a year after taxes are eligible to apply for the subsidized apartments. For context, the country’s median gross annual income is about $31,500, according to a 2018 Huffington Post story. The same story reported that funding for Vienna’s social housing comes from a combination of “income tax, corporate tax and a housing-specific contribution made by all employed citizens.”
Rents, meanwhile, are regulated, with no resident paying more than 25% of their household income for housing. Residents often live in the complexes for decades; they are not required to move out if their income exceeds the initial limits.
Unlike the reputation of U.S. public housing, social housing in Vienna is exceptionally well-designed and maintained, financed in part by the residents themselves and the government. Amenities have included pools, tennis courts, and even on-site schools and nurseries. In some cases, developers incorporate the feedback of future tenants on the planning, design, and construction process.
In 2019, the BBC produced a short documentary on Vienna’s social housing, featuring a tour of Alt-Erlaa, a housing development built 40 years ago and occupied by 10,000 residents.
How would it translate in New York City?
Social housing is not a foreign concept in New York City. Over the last century, the city, with the help of the state and federal government, has developed several models of government-subsidized housing. That includes public housing, which was built beginning in the 1930s under high standards for select white working class families. From 1955 to 1974, the state program known as Mitchell-Lama incentivized the development of middle-class cooperatives and rentals. Co-op City in the Bronx, a more than 15,000-unit complex built in 1968 by a nonprofit developer, is one example of a Mitchell-Lama project. The units at Co-op City have remained affordable to this day, requiring one-time down payments ranging between $22,000 and $36,000, followed by monthly maintenance fees averaging a little over $1,100 a month.
And while not common, New York City is also home to two land trusts, one in Cooper Square and East Harlem. Land trusts are nonprofits that acquire land on which affordable housing is built. The Cooper Square Mutual Housing Association began in 1994 and now has nearly 400 apartments and 20 small businesses. Affordable rents for low-income tenants is assured through long-term government funding.
Under Morales’s vision, the commitment to social housing would begin with rebuilding New York City Housing Authority complexes. More than 400,000 residents live in NYCHA buildings, many of which have become dilapidated over time because of federal disinvestment and mismanagement.
Morales has pledged to spend $2 billion in city dollars annually on NYCHA and press the federal government for $35 billion in additional capital funding. She has also said she would change NYCHA’s management structure by piloting a resident management corporation in each borough that would place decisions in the hands of tenants. And she would end the city’s participation in the federal Rental Assistance Demonstration (RAD) program, which hands over day-to-day management of the buildings to a private developers who would also take on the cost of repairs and collecting rents.
She said she would also align NYCHA’s renovation plan with the energy-efficiency retrofits spelled out in the Green New Deal for Public Housing Act proposed by AOC and Sanders. If passed, the bill would direct $48 billion in capital funding toward NYCHA over 10 years.
Aside from NYCHA, Morales said she would move toward social housing in other ways: by ensuring that all city-owned land would be dedicated to affordable housing, and increasing funding to community land trusts.
Under her plan, the city would prioritize housing low and extremely low-income New Yorkers who make below 30% of the area median income, which is $30,720 for a family of three.
How would it be financed?
Morales has said the city could fund social housing by redirecting the money it already spends on housing. She pointed to the $3 billion spent annually on housing the homeless and the $25 billion in bond financing secured by the New York City Housing Development Corporation that has gone toward building or preserving more than 186,000 affordable housing units since 2003.
She is also banking on state support. One progressive proposal currently on the table in Albany, the Invest in Our New York Act, is seeking to raise $50 billion for affordable housing, education, and healthcare for cities across the state through tax increases on the rich and corporations.
What do housing experts say?
Nicholas Dagen Bloom, an urban planning professor at Hunter College who is the author of the book Affordable Housing in New York, said that although “bold anti-capitalist” visions of housing have been gaining momentum both locally and nationally, the challenge for New York City lies in its execution. A plan to bring social housing would come at a precarious moment in the city’s economy; companies are still undecided about bringing its full workforce back to the office, and the battered real estate industry is projected to see a $2.5 billion shortfall in property tax revenues next year.
“Will there be the financing to pay for the utopia?” Bloom asked.
Aside from cost, the other big obstacle is the city’s scarcity of land coupled with the aversion to density (i.e. height) in many neighborhoods.
In other words, he said, “Show us the sites and how you get this to scale.”
At the same time, Bloom acknowledged that a crisis and recovery period, with its billions of federal dollars designated for housing, might very well be the best time to “push the envelope” and “rethink what makes a good neighborhood.” During the Great Depression, Mayor Fiorello La Guardia and city planners like Robert Moses looked to Europe and the Swiss-French architect Le Corbusier for a blueprint on building large-scale public housing.
“Social housing is bringing this European concept to New York City,” he said, “which is arguably the most European of American cities.”
This story is part of The Big Idea, a series explaining bold and interesting ideas pitched by candidates in the mayor’s race. Listen to WNYC’s All Things Considered for an interview with the reporter about the plan and more news from the campaign trail.