Social Housing for New York Is on the Table

Free-market housing policies will never generate mass affordable housing — which is why a new bill in New York sponsored by socialist legislators aims to make publicly owned social housing a reality.

Manhattan Plaza apartment building on West 43rd Street in New York City. (Deb Cohn-Orbach / UCG / Universal Images Group via Getty Images)

In the financial capital of the world, in history’s richest society, it is brutally difficult to afford to live. Working people in New York City are being displaced from their homes or thrown out on the street in enormous numbers; with a dearth of public investment in housing, renters pay astronomical sums for apartments whose construction costs have been covered since the Coolidge administration.

Affordable-housing advocates have long insisted that decommodification through publicly owned social housing is the only way out of this crisis. A new bill in the New York State Legislature aims to move in this direction by kick-starting mass development of social housing around the state, a model based around community ownership and permanent affordability.

Housing organizers and tenants’ rights groups in New York are pushing to create the Social Housing Development Authority (SHDA), a statewide agency that would have broad power to build, maintain, and operate new, permanently affordable, environment-forward, democratically controlled housing stock with union jobs. If passed into law, the agency would also be able to convert existing housing from private to public ownership, rehabilitate it, and create management boards led by the tenants who live in those buildings. It could also facilitate tenants’ purchasing their buildings and converting them to co-ops under public stewardship.

The creation of the SHDA would reject New York’s current foxes-building-henhouses model of creating affordable housing, in which the institution and management of a public good is driven only by state subsidy of private profits for megarich real estate developers. Under New York’s current 421-a system, developers receive tax breaks for renting less than a third of the units in new buildings at “affordable” rents. Affordability is defined by the Area Median Income (AMI) of the surrounding community; various rent pricing schemes are allowed under 421-a, but none requires more than 20 percent of units in a building be available to people making less than 70 percent of the AMI. Incredibly, a building is considered to offer affordable housing and eligible for tax breaks if 30 percent of units are offered to households making 130 percent of the AMI.

In New York City, “affordable housing” can require a verifiable six-figure income and charge monthly rents over $3,000. And the affordability requirements are only in place for thirty-five years before becoming deregulated and subject to massive increases. All the while, the remaining 70 percent of units in the building are unregulated and rented at exorbitant rates — and the tax exemptions apply to those units too.

The 421-a program costs New York State almost $2 billion annually in lost tax revenue. As a return on that investment, less than five thousand units of rent-regulated housing were built from 2017 to 2021, with less than two thousand of those targeted for low-income households. Vacancy rates are critically low, and rents continue to climb.

The consequences of this policy failure are massive: the Department of Housing and Urban Development’s 2023 homelessness assessment report found 103,200 people experiencing homelessness in the state of New York, an increase of over forty thousand people from 2007. The number of unhoused people sleeping in New York City shelters has reached numbers not seen since the Great Depression, with a lack of available, affordable housing cited as the primary cause for shelter stays. This outcome is predictable: it’s a zero-sum game between private profits and public benefit, and private corporations providing an affordable public good is an inherent conflict of interest.

The SHDA addresses this. Rather than wait for private developers to satisfy a sufficient profit motive to build housing and then trust them to do the right thing with it, the SHDA would have the power to construct and rent new apartments directly. By centralizing the state’s power to finance, acquire, rezone, and build in a single authority, the SHDA empowers New York to build faster, more efficiently, and more responsively to the needs of communities. Rather than a market-driven focus on short-term profits and flippable value, the SHDA’s position as permanent trustee of the property it develops and acquires will incentivize long-term sustainability, lasting environmental impact, and contracting with union jobs.

State construction will also be able to directly implement green building techniques to adhere to New York’s Climate Leadership and Community Protection Act and All-Electric Buildings Act, while achieving economies of scale to accelerate the adoption and ubiquity of green construction around the state. A study conducted by Hunter College recommends that the new authority start with a $5 billion initial capitalization through appropriation in the New York State budget. Once up and running, it’s expected to carry an annual operating budget of about $75 million (for reference, that’s 12.5 percent of what New York taxpayers are paying for the Buffalo Bills’ new stadium), which would be covered through reinvested rental income from SHDA properties, along with the authority’s power to issue debt to fund new projects via mortgage-backed bonds.

The SHDA would follow a long history of government intervention in New York’s perpetual crisis of housing affordability. Perhaps the most visible around New York City are public housing projects constructed by the New York City Housing Authority (NYCHA). Since its inception in 1935, NYCHA has constructed over 150,000 apartments and currently houses more than half a million New Yorkers, through direct housing in public buildings and rental assistance in private apartments through programs such as Section 8.

At the statewide level, construction of affordable housing for much of the twentieth century was incentivized en masse through the Limited-Profit Housing Companies Act, a law commonly known as the Mitchell-Lama program. This law provided low-interest state-backed loans to private developers to build housing, in exchange for rents set at below-market rates and a 6 percent cap on profits. Participation in the program was slow until the law was modified to allow developers to opt out of the program’s rent regulations after twenty years; construction then boomed, with over one hundred thousand units built around the state.

Although each of these initiatives constructed mass amounts of affordable housing, they have faced constant undermining from their proximity to the financialized housing market. NYCHA mostly houses New York’s poorest, and as such depends heavily on federal subsidies that are subject to political assault from representatives of the landed elite. After the expiration of rent regulations under the Mitchell-Lama program, private landlords deregulated apartments and immediately jacked up rents as high as possible. Concerns about the displacement of working-class people began immediately — the very displacement that had to be baked into the law to incentivize developers to build the apartments in the first place. Apartments whose rents are stabilized by the Emergency Tenant Protection Act of 1974 are in buildings held by private companies that purchase them explicitly to destabilize them, create artificial scarcity by intentionally leaving stabilized units empty, and lie to tenants about their stabilization status to overcharge rent.

The key element lacking in each of these housing models is their lack of focus on community ownership; availability to a broad resident base with varied incomes; and a guiding principle of permanent, deep affordability, existing wholly outside of the private housing market. These are the distinguishing characteristics of social housing, which, as its name implies, the Social Housing Development Authority would be charged to institute.

To this end, each SHDA building will be controlled by a co-op board or resident association organized and elected by tenants, and the resulting statewide network of communities will be directed by a board made up of SHDA tenants, the state comptroller, and labor and housing advocates appointed by the state legislature. The SHDA will also provide funds, guidance, and support for New York renters to transfer their buildings from private to collective ownership.

The potential benefits of this housing model are various. A massive increase in housing units with legislated, permanent affordability will provide an immediate salve for New York’s severely rent-burdened working class. As time goes on, the democratic process of governance within the SHDA housing model has the potential to build organizing skills and solidarity among its residents. And in a new context of continuous housing stability, with protections from price gouging and profit-driven evictions, workers will be able to dedicate more time and energy toward organization, with more of their winnings at the bargaining table directed toward their own lives rather than lining their landlords’ pockets.

Social housing is not a new concept. Among the most famous and dramatic successes of its implementation in major cities around the world is in Vienna, Austria. Unlike the American rendering of public housing, with its component means-testing and stigma, 80 percent of Viennese residents qualify for the city’s public housing program. This is on top of the city’s widespread rent regulation and universal good-cause eviction laws, akin to those currently advocated in the New York State Legislature by socialist elected officials.

As a result, much of Vienna’s housing stock exists outside the privatized housing market, and prices of rentals will shock American readers: rents in social housing developments can cost tenants less than 10 percent of their pretax income. Compare this to the millstone around the neck of the median New York City renter, at about 36 percent.

While researching her bill to create the SHDA, New York State Assemblymember Emily Gallagher, who represents parts of North Brooklyn, visited Vienna and some of its social housing, and was struck by both the opportunities she saw for improvement of public housing in New York and the stark contrast in the motivations driving each society.

“Almost monthly, we watch somebody lose their home in this district who has lived here for a long time, often lifelong residents who are elderly, who then have nowhere to go,” she told Jacobin. “We [in the United States] don’t think of the city as its people. We think of the people who live in the city as incidental actors who can come or go; it doesn’t matter if they stay because someone else will come and take their place. That is not a healthy way to think about community.”

The mindset a government takes towards its community is reflected in its constituents’ ideas of what is possible within it: “Here we have people dying on the street because they don’t have housing,” Gallagher said. “They have problems [in Vienna], but they’re not life-destroying problems. Here we let things that should be human rights become luxuries.”

Though frustrated with government failure to protect them from preying private developers, New Yorkers still see public investment as the solution to the current crisis. A 2023 Data for Progress poll of likely voters in New York City showed overwhelming support for social housing development and a firm rejection of the private development model. This is in line with growing national popularity of the idea: the Housing Opportunities Commission of Montgomery County, Maryland, has been successful in building and operating apartments at below-market rents in the Washington, DC suburbs, and the Atlanta Housing Authority is pushing to form a public benefit corporation to construct social housing. At the federal level, Minnesota representative Ilhan Omar has introduced the Homes for All Act, which, if passed, would construct twelve million units of permanently affordable housing around the country.

“Affordability” is one of these euphemisms in public discourse which allows profiteers to turn the suffering they generate into an abstraction. When we talk about housing affordability, we are not talking about choosing between two options on a menu. We’re talking about longtime communities being evicted from neighborhoods by someone who has never lived there but stands to make a buck. We’re talking about locking the door to empty apartments while people sleep on the sidewalk outside of them in the winter, because opening the door would devalue an asset in a portfolio. We’re talking about a system in which people work multiple jobs to compete for the privilege to pay their landlord’s mortgage for them, while those landlords collude to keep working people from ever being able to afford to own their own homes.

Creating a social housing authority will not solve these issues overnight, but it will get people off the frozen streets of New York and into persistent, stable developments where communities can start to heal. And when our homes are not a trapdoor that can fall out from under us at any moment, we can afford to be bolder in our other fights: in winning democracy in our workplaces, improving our pay, maintaining our cultural touchstones, and caring for our neighbors in need. When this bleak freeze starts to thaw, and the salt is washed from the streets, and we own the city we built, it will bud anew.