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:
- For tenants, contract rents that exceed 50% of their incomes.
- For owners, housing expenses (including mortgage payments)
that exceed 60% of their incomes.
- For owners or renters, living in buildings which are dilapidated.
- 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.
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