Thinking About Sale Prices

As we move through summer, many HDFCs are welcoming new shareholders.  If you and your board have a vacancy to fill in your building, please take some time to think about how you can most appropriately price your units.

Your HDFC exists to provide a long-term affordable homeownership opportunity for a person or family of modest means.  Therefore, it is important to keep your sales price low enough so that it does not exclude a range of people with low incomes.

What’s a fair sales price?  When thinking about sales price, it’s also important to think about monthly charges (oil, heat, gas) and maintenance fees that go along with being a shareholder of your HDFC.  These two elements together make up a shareholder’s total housing cost.  An affordable total housing cost is defined as lower than 30% of the household’s annual income. 

To recap:

  • Sale price + Monthly charges = Total Housing Cost
  • Total Housing Cost should not exceed 30% of household's annual income

Why does the sales price need to be affordable? HDFCs get many benefits for providing affordable housing opportunities, and keeping prices low for shareholders.  HDFCs: are fully rehabbed by the city, pay reduced taxes, get free training and assistance from UHAB and other organizations, and are eligible for a variety of other helpful, money-saving programs. 

In addition, setting affordable sale prices can actually help ensure the financial stability of your building.  When HDFCs set prices too high, shareholders are more likely to default on their maintenance fees and/or mortgage payments.  This can lead to foreclosure on their apartment, conflict within the building, and/or financial problems for the HDFC.

What’s affordable for my neighborhood?  The Center for Urban Pedagogy (CUP) has designed an interactive tool to help your HDFC think about prices and affordability in your neighborhood. CUP’s interactive map lets you instantly view who can afford to live in any neighborhood in New York City.

Visit http://envisioningdevelopment.net/map and use the sliders to see who can afford to live in your neighborhood at various rents.  You can even make a printable map of your neighborhood – complete with useful statistics – to share with your HDFC board!

How can UHAB help? For more information on setting sales prices, to fill vacancies in your HDFC through UHAB’s Market and Match program, or to find out who your coordinator is and how they can advise you, call Emily at (212) 479-3318.