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A socialist newsweekly published in the interests of working people
Vol. 68/No. 30August 17, 2004

lead article
Housing crisis in N.Y. adds to grind on workers
Rents eat up wages; number in shelters up 60% in 3 years
Getty Images/Spencer Platt
Alyza Guzman and her mother in front of their lead-contaminated apartment building in New York, Oct. 22, 2003, during protest against high levels of lead left by landlords. Overcrowded apartments, often with unsanitary conditions, and high rents are widespread.

NEW YORK—Recent government moves, from Mayor Michael Bloomberg’s plan to tighten requirements for homeless workers seeking shelter to the announcement of new cuts in federal rent subsidies, have drawn attention to the broader housing crisis facing working people in this city.

Bloomberg recently announced that his administration plans to implement a new policy to reduce the number of people who are homeless here by two-thirds within five years. A key part of city hall’s “solution” is to be more stringent in using eligibility requirements for those applying for shelter. One method is to try to disqualify more people on the pretext that they have the “option” of doubling up with relatives.

More than 40,000 people in New York City are living in shelters or on the streets, according to the city’s Department of Homeless Services. This represents a 60 percent rise in the number of people in homeless shelters since 2001. The increase coincides with the five-year cutoff period for workers receiving federal welfare payments.

At the same time, the U.S. Department of Housing and Urban Development (HUD) has announced it will cut funding for rent subsidies nationwide this year. In New York the cutbacks will affect many of the 172,000 working-class households that rely on federal rent subsidies, known as Section 8 vouchers.

These government attacks add to the overall housing squeeze that working people face in New York, as landlords continue to jack up rents, taking advantage of the 2.9 percent apartment vacancy rate.

Nor do high rents get us good living conditions. Millions of us live in cramped apartments with crumbling ceilings, water leaks, broken plumbing, and roach and rat infestation, with landlords who refuse to provide adequate services and maintenance. Many immigrant families live doubled or tripled up in apartments and are ripped off by landlords who take advantage of their vulnerable status.

Working people face an increasingly acute housing crisis throughout the country. It is not conjunctural or simply the product of government policies, but a permanent feature of capitalism—in the United States and around the world.

The housing crisis adds to and is fueled by the grinding pressures workers face on their wages and jobs. While the official unemployment rate nationwide is 5.6 percent, in New York City it is 8.5 percent—and nearly 13 percent for Blacks, 10 percent for Latinos, and 29 percent for teenagers.

Real wages have been declining, while the prices of fuel and milk are being pushed up, as are subway and bus fares. One in four city residents lacks health insurance, as medical costs continue to soar.

New York, with a population of 8 million, has 2 million rental units. Two-thirds of us rent apartments or homes, while one-third are homeowners. In the United States as a whole the proportion is the inverse.  
High rents and overcrowding
With land and housing in short supply relative to demand, rents in New York City have reached record levels. The median rent for a rent-stabilized one-bedroom apartment in Manhattan is $1,343 a month, according to the New York Rent Guidelines Board. Even in other boroughs, where rent is lower, such as the Bronx neighborhood where I live, it’s not uncommon to pay $800 a month.

As a result, nearly half of all renter households in New York pay more than 30 percent of their income for rent and utilities. And one out of four households pay more than half of their income in rent.In other cities, such as Boston and Los Angeles, working people face a comparable rent burden. In Boston and Los Angeles, for example, the median proportion spent on rent is 30 percent of income. With a 2.9 percent vacancy rate in New York, of course, it’s not so easy for a working-class family simply to move to another apartment if the rent gets too high. Vacancy is the tightest for the most affordable housing—it’s much easier to find apartments renting for $2,000 or more.

In other words, there is not so much a housing shortage as a shortage of affordable housing.

Given the high rents, overcrowding is on the rise. According to a recent report by the Rent Guidelines Board, more than 11 percent of rental units in the city are considered overcrowded, which is defined as more than one person per room, on average.

Overcrowding is prevalent in heavily immigrant neighborhoods like Corona and Jackson Heights, Queens. Unscrupulous landlords have profited from this situation by building tens of thousands of illegally subdivided apartments in basements, attics, or garages—often deadly firetraps—which they rent out to undocumented workers.

Elizabeth Campos, 30, a Mexican immigrant who lives in El Barrio, told a New York Daily News reporter last November that she, her husband, and three children share a one-bedroom apartment with her sister Alba and her four children. “The place is so small that Alba sleeps on a mattress in the kitchen,” reporter Fernanda Santos wrote.

“The children, between 9 months old and 13, pile up in bunk beds that double as play and study areas. Although every adult in the house works—Campos and her sister are baby-sitters and Campos’s husband is a cook—it is an arrangement they must tolerate to afford the $800 monthly rent,” the Daily News article said.

“We work two, three jobs sometimes, but the money is still not enough,” Campos said.

The overcrowding and unsanitary housing conditions aggravate the health crisis in the most impoverished working-class neighborhoods. Hunt’s Point, a largely Puerto Rican and Dominican neighborhood in the Bronx, has one of the highest asthma rates in the country. More than 30 percent of schoolchildren in that area suffer from asthma. Cockroaches and dust in apartment buildings are allergens that contribute to the asthma, as are pollutants from a nearby waste disposal plant in this industrial district.

Does the shortage of housing mean there is no housing construction in New York City? To the contrary. More housing permits were issued last year—some 21,000—than in any year since 1973. But the construction of affordable housing does not come close to meeting the needs of working people—it’s not profitable.

It’s not just working-class tenants who are caught in the housing crunch. Most small homeowners are burdened by mortgage payments and property taxes. They are “owners” in name only, making monthly payments to the bank instead of rent payments to the landlord. Subsidies, lending practices, zoning laws, and tax breaks are all designed to aid the real estate sharks, not workers who own a home.

Today, homeowners in New York City pay 42.5 percent of their income to service their home loans, according to a July 19 article by the Business Wire news service. As a result, the number of home foreclosures is high. In the first half of this year, nearly 3,000 cases were filed in Queens and Brooklyn alone.  
Rent regulation
Over the decades, working people in this city have waged struggles for affordable housing—from mass actions to block evictions in the 1930s to the Harlem rent strikes of 1963-64—that led to rent control and other legislation. At every step the real estate magnates and other capitalists have fiercely opposed such measures—however modest and inadequate—and have succeeded in limiting their scope.

Two-thirds of rental units in New York are subject to some form of rent limits. “Rent control,” which limits the rate of rent increases according to a certain formula, applies to apartments whose tenants have been living there continuously since before 1971, the year a “vacancy decontrol” law was passed. Over the past three decades, the number of rent-controlled apartments has fallen from more than one million to only 59,000 today.

Under “rent stabilization,” which applies to more than one million rental units, landlords can raise rents according to rates fixed yearly by the Rent Guidelines Board. This year, for example, the board set rent increases at 3.5 percent for one-year leases and 6.5 percent for two-year leases.

The guidelines, of course, have plenty of loopholes for landlords to jack the rent up further. The owners of the building where I live, for example, have been trying to get a hefty rent increase approved under the guise of “capital improvements,” although neighbors point out that the general upkeep of this old building does not seem to improve.

In addition, the “balanced” board is rigged in favor of the landlords. Its nine members, appointed by the mayor, officially include two “owner representatives,” two “tenant representatives,” and five representing “the public.” But there is not one worker on the board. The so-called public members are an investment banker, a real estate developer, two lawyers, and an architect. The board is headed by Marvin Markus, a vice president of Goldman Sachs, who is so notorious for rubber-stamping rent hikes that he is known as “Marvin Mark-up.”

Even with rent stabilization, the cost of housing is far beyond the reach of many, especially those who earn incomes below the official poverty line—22 percent of renter households. They rely on Section 8 rent vouchers, under which the tenant pays the landlord 30 percent of the rent and the subsidy covers the rest. It’s worth noting that these federal subsidies were designed to reinforce private, as opposed to public, housing.

More than 172,000 working people currently receive Section 8 vouchers, and the voucher waiting list has another 154,000 households, with an average waiting period of eight years. The waiting list was closed in 1994.  
HUD to cut rent subsidies
HUD is planning to cut $49 million from New York’s Section 8 funding beginning in August.

U.S. Congress has cut $1.6 billion from HUD’s budget for fiscal year 2005. The housing department has passed these cuts on to Section 8 funding.

In anticipation of this move, the New York Housing Authority has frozen the distribution of new vouchers.

On top of that, city officials have begun enforcing a 1998 federal law that denies public housing to unemployed workers unless they perform “community work,” that is, unpaid make-work. This requirement may affect as many as 80,000 out of nearly 420,000 New York residents who live in public housing. The law, cynically named the Quality Housing and Work Responsibility Act, was adopted by the Clinton administration, which modeled that legislation on its 1996 law eliminating “welfare as we know it,” as the former president put it.When the real estate lords decide it’s no longer advantageous to milk profits out of decaying apartment buildings, they drive workers out, tear down the old buildings, and replace them with luxury apartments or commercial real estate, a process dubbed “gentrification.”

In a large apartment complex in downtown Yonkers, north of here, Wigberto Astacio told me, “Gentrification is happening in this city too.” Years ago the tenants in his building were mostly white, middle-class residents, he said. As housing gradually deteriorated, those residents moved out and workers, overwhelmingly Black and Latino, moved in. Many rely on Section 8 to be able to pay the rent, Astacio said.

“Today you can see how the landlords are trying to drive people out,” he said. In the building across the street, the owners pulled out of the HUD subsidy program and doubled the rents—a one-bedroom apartment went from $450 to $950 a month. “Now some apartments are vacant. Next to my building they managed to get the preschool shut down. The realtors hope to drive people out, demolish the buildings, and replace them with expensive housing.  
Increase in homelessness
Public attention has also been focusing on the rapid rise in the number of workers who are homeless. In the early 1980s homelessness became a mass phenomenon in this city for the first time since the Great Depression of the 1930s. It peaked in 1987, and declined sharply in subsequent years, as the city government built new housing and moved in thousands of previously homeless people, reported Shelly Nortz of the Coalition for the Homeless in an August 4 phone interview.

But as a result of the longer-term economic crisis, homelessness again began to rise in the late 1990s. Today there are more than 38,000 people in city shelters—60 percent more than three years ago. The biggest increase in recent years has been in the number of families. There are now 9,000 families with 16,000 children living in the shelters. In addition, there are thousands of people living on the streets.A more detailed look into this problem, including Bloomberg’s plan, will be the subject of an article in next week’s issue.

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