For 50 years, UHAB has empowered low- and moderate-income residents to take control of their housing and become homeowners in the buildings where they already live. We turn distressed rental housing into lasting affordable co-ops, and provide comprehensive training and technical assistance to keep these homes healthy and stable for the long term. Over time, UHAB has created 30,000 cooperative homes across the five boroughs, predominantly in formerly redlined neighborhoods where rates of homeownership continue to lag behind the rest of the city.
As first-hand witnesses to the transformative power of homeownership to revitalize neighborhoods and stabilize lives, UHAB is thrilled to see the Council’s interest in bolstering the City’s homeownership efforts. Specifically, we support a focus on preservation and the inclusion of low-income New Yorkers in the homeownership plan. Preservation is the most cost effective way to create and sustain homeownership on a large scale and is also the most impactful approach, reaching deeper levels of affordability and ensuring that low-income New Yorkers have access to the security, empowerment, and intergenerational wealth building that homeownership provides.
The City’s aging and distressed housing stock is a crisis and an opportunity. By investing in homeownership through preservation, we create a pathway for tenants in distressed rental buildings to reclaim their housing as permanently affordable, quality homes. Households living in these conditions are overwhelmingly low-income people of color, systematically excluded from traditional homeownership opportunities. Transforming substandard housing into quality housing, and housing insecurity into homeownership for the communities most in need, accomplishes so many of our shared housing goals and achieves housing justice like few other models do.
Over the last two years, UHAB has received outreach from over 100 tenant associations across the City who are interested in purchasing their rental buildings and transforming them into cooperative homeownership. Increasingly, we are also hearing from building owners looking to offload failing or unprofitable rental housing through tenant purchases. The collapse of Signature Bank has left over 1,000 rent-stabilized buildings at risk of foreclosure, with owners unable to address mortgage arrears and deteriorating conditions. There is overwhelming interest and opportunity for rental-to-homeownership models, and there are pathways to create those opportunities through the City’s existing preservation programs.
- Neighborhood Pillars combines acquisition financing with a participation loan (PLP) to stabilize distressed rental housing where tenants are at risk of displacement. While we are encouraged to see City investment in restarting this program, the need we see on the ground far overwhelms this recent allocation. Moreover, we must ensure that tenants are given the opportunity to petition for homeownership so Pillars can be used to create the homeownership we need.
- Third Party Transfer Program (TPT) allows tenants to petition to become homeowners when their building goes through municipal foreclosure, and is an essential opportunity to create homeownership out of some of the most distressed and neglected housing stock in the City.
- Affordable Neighborhood Cooperative Program (ANCP) creates homeownership for tenants in City-owned Tenant Interim Lease (TIL) buildings, many of whom have been waiting for decades for their building to be developed. Close to 50 years ago, UHAB worked in partnership with the City to create the TIL program and we’ve been disheartened to see buildings languishing in City-ownership and distressed conditions. We applaud HPD’s recent retooling of ANCP, which will allow more buildings to move through the pipeline while encouraging tenant decision-making and setting up co-ops for financial success. Any investment in homeownership should begin with TIL tenants, to ensure the City finally honors its promise of homeownership to them.
As we expand homeownership opportunities through preservation, it is equally important that we invest in the long term sustainability of existing low- and moderate-income homeownership. New York City’s 1,200 HDFC co-ops form a key bloc of stable, affordable homes for 75,000 New Yorkers, predominantly made up of Black and Hispanic families and seniors. The largest share of HDFC co-ops was created from the former in rem housing stock, foreclosed after abandonment and disinvestment amidst New York City’s fiscal crisis. As these buildings converted to affordable co-ops, many received limited scope of rehab and the homeowners have stewarded these buildings for decades, through repair needs and economic uncertainty, with little or no reinvestment and limited access to tenant-based housing benefits.
By contrast, comparable buildings from the same housing stock (former in rem buildings of similar size, condition, and tenancy to HDFCs), which were developed as rental housing through the Neighborhood Redevelopment Program (NRP) and the Neighborhood Entrepreneurs Program (NEP) typically received greater scopes of rehab using Tax Credits and HOME funds, and most have since received at least one—if not two—recapitalizations, at Year 15 and some again at Year 30. Most HDFC co-ops have received no additional City subsidy since their conversion and are long overdue for the same kind of investment that is standard for rental projects. We need to invest in the future of this permanently affordable housing stock to ensure we are not losing a critical homeownership resource as we work to create new ones.
HDFC co-ops across the City are eager to apply for HPD preservation loans like the Green Housing Preservation Program (GHPP) and the Preservation Loan Program (PLP). UHAB is currently assisting over 50 HDFC co-ops in the application, predevelopment, and development stages of these programs to upgrade major building systems and address capital repair needs. In order to meet this demand, greater City funding toward homeownership preservation, including staffing in HPD preservation programs, is a critical need.
At UHAB, we know that deeply affordable homeownership works and low-income families are diligent stewards of their housing. The majority of former renters that became homeowners in the 30,000 cooperative homes that UHAB has helped to create were households with incomes at or below 50% AMI, and the same is true in UHAB’s current development portfolio of 390 units. More broadly, the overall population of HDFC shareholders are low income, at or below 80% AMI.
Through UHAB’s HomeOwnership Lending Program, we have been making loans to low-income purchasers in HDFC co-ops for the last 12 years and have a 100% success rate—not a single new homeowner has defaulted on their loan, and most of our borrowers have incomes below 50% AMI. Deeply affordable homeownership is achievable, successful, and as necessary as ever, as Black New Yorkers are leaving the city en masse and half of New York households cannot afford their major living expenses.
Making homeownership accessible for low and moderate income families makes it possible for New Yorkers of color to gain a crucial economic foothold that combats the racial wealth gap and builds strong communities. Therefore, we oppose the floor of 70% AMI that this bill proposes. Deeply affordable homeownership is critical to build community and intergenerational wealth, especially in neighborhoods with a history of redlining and disinvestment.
New York City is long overdue for a critical investment in homeownership programs and renewed support for existing homeowners. We know the most effective, impactful, and just way to do that is through preservation. The City must create new homeownership through existing HPD preservation programs like Neighborhood Pillars, Third Party Transfer (TPT) and Affordable Neighborhood Cooperative Program (ANCP). In that effort, we must not forget to invest in existing low- to moderate-income homeownership, including affordable cooperatives long overdue for reinvestment. And to make these efforts truly transformative to New Yorkers most impacted by the legacies of redlining and neighborhood disinvestment, we must include deeply affordable homeownership. Impactful change starts with creating and sustaining homeownership through preservation.
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