Thank you for the long answer. I will investigate this idea of co-op ownership for affordable housing. It seems interesting and I know nothing about it.

good luck for your blog’s new outfit. I’m waiting for it.

clement

We live in an expensive city which traditionally is unfriendly to affordable housing for first time home buyers. Even if you provide cheap land to a developer and build in all sorts of tax incentives, you’ll never overcome the cost of homeownership. And this is where low income families struggle to achieve middle class status.

Raising municipal water/sewer charges, property tax along with the cost of living (food, commute, fuel and utilities) it’s a miracle that a majority of families manage to avoid “Fiscal Foreclosure” [when the cost of ownership grows faster than the income of the property owner]

The right format for affordable housing that should be offered to low income families is Coop homeownership. It allows a family to share in the cost of homeownership while preparing for the larger responsibility of becoming an individual property owner.

It’s important for an urban environment like New York City to plan all the way to bring families into the middle class through the wealth building opportunity that homeownership creates.

If I were an official at NYCHA, I would be drafting plans (even in this market environment) to convert one of the public housing developments (projects) into that form of ownership for the existing tenancy.

One of the residual benefits in doing so would be that those who feel they have a vested stake where they live will utilize the process available to remove the undesirable tenants without contest.

At least we can hope.

It is an interesting and complex post, and it is a follow-up / summary of our discussion the other day.

You’re suggesting that the political push for low-income home-ownership – relayed by Community Based Organizations such as the Development Corporation in Queens – have a responsibility in the foreclosure crisis… You mention the strikingly high number of households in situation of negative equity (the Deutsch Bank study), the unsold homes in Queens built by a local CDC, and the moderately efficient “financial literacy” programs in preventing foreclosures.

Is that you think that housing prices in NYC are just too high for realistic and sustainable low-income home-ownership and that politicians are afraid to tell the truth? is it a fair summary of your post?

A lot of academics I have talked to seem to be going in your direction. They all agree that subprime lending produced equity stripping – yet they argue that in the first place home-ownership has been given an undeserved place among low-income families… so the question becomes: what are the alternative ways for poor households to accumulate wealth in a sustainable fashion?

clement