What is “Affordable” Housing?

By Teresa Irene Gonzales

On July 21, 2014 Inae Oh published an article at the Huffington Post that discussed the New York City Council approved development of a condominium high-rise at 40 Riverside Boulevard on the Upper West Side of Manhattan. The planned development will provide 218 market-rate condominiums with views of the Hudson River, and access to amenities such as a child area, gym, and swimming pool. 

In order to create a larger footprint and obtain millions in tax breaks through New York City’s Inclusionary Housing Program, Extell, the developer of this project, will also provide 55 affordable housing rental units to moderate- and low-income residents.  The “affordable” rental units will go for $845 for a studio, $908 for a one-bedroom, and $1099 for a two-bedroom. 

Households with incomes that are 60% below New York City’s median income are eligible to apply.  To qualify for these units a family of four will need to make less than $51,540 a year and a single person will need to make less than $36,120 a year.  Tenants in the affordable housing units will not have access to the building’s amenities and will have to enter through a separate door – which from photographs appears to be located in an alleyway. 

This last point is what’s garnered the most criticism towards Extell, the developer, and to a lesser extent  Mayor Bill De Blasio.  This criticism centers on the development’s plan to use two separate entrances,  one for the “Rich” tenants who purchase a market-rate condo, and another “Poor” entrance for the tenants who reside in the affordable housing section. 

Many of the local critics have decried the use of two separate entrances as a heightened and blatant form of class segregation, where the poor are sequestered away from the rich.  This development has also reached national attention, as one Chicago-based news reporter told New York City to “stick it.” 

Although there is widespread outrage over the development, there is little discussion about the definition of what “affordable housing” means in New York City, or elsewhere. Although the U.S. Department of Housing and Urban Development (HUD) defines affordable housing as that which is available for  30% or less than a household’s income – this definition is applied loosely depending on the circumstances and funding entity, or entities, involved in the project.  For instance, funding and tax benefit guidelines differ for the federal government (through HUD), and local municipal governments. 

In New York City, local city-based tax subsidies through the Inclusionary Housing Program require that the development provide “affordable housing, on-site or off-site, principally for low-income households.”  Given that the Inclusionary Housing Program indicates that the affordable housing units may be located “off-site,” Extell claims that the second door provides access to a “separate building” that exists inside of the other building.  Legally, this allows Extell (and other developers) to restrict who has access to various parts of the high-rise developments.  Furthermore, the Extell building on the Upper West Side is considered a “partial inclusionary building.”  This means that it will receive funding if it provides units for low-income, moderate-income, and middle-income households. 

If the “poor door” at this building provides entrance into units that moderate- and middle-income individuals occupy, how then do we define what it means to be poor? And what does this mean for those who cannot afford the “affordable” rents of $805 - $1099 a month?

As UCLA Urban Planning professor Chris Tilly notes, “housing affordability depends crucially on housing income.”  According to HUD, a “family with one full-time worker earning minimum-wage cannot afford the local fair-market rent for a two-bedroom apartment anywhere in the United States.”

That is anywhere in the United States, not just in major metropolitan or coastal areas where housing tends to be more expensive. 

The U.S. median income in 2012 was $53,046 and the New York City median income in 2012 was $57,683.  In Manhattan, where the Extell development is being built, the bottom fifth of residents make $9,681, while the wealthiest earn on average $391,022.  In addition, according to the Coalition for the Homeless, as of April 2014 there were 54,667 homeless people in New York City shelters. 

The separate doors also highlight the absence of a third door, or a third option, for those who fall so far below the poverty line that they cannot afford the “affordable” rents that are touted as bridges for the poor to build social and economic capital. 

The “poor door” may disproportionately affect low-income persons of color and the elderly.  Who else might be systematically excluded from housing in this marketplace? What are the consequences of developing housing only for the well-to-do?