New York Politics Could Feel Impact of Home Owners

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The New York Sun

The city’s political calculus could be affected for years to come by a sharp increase in the proportion of its homes that are owner-occupied, experts are saying in the wake of new United States Census figures.

Data to be released today by the U.S. Census Bureau will show that the number of owner-occupied units in the five boroughs increased by about 100,000, or roughly 10%, between 2000 and 2005, to more than 1 million units. Rental occupied units dropped about 4% in that period, to just more than 2 million units.

Despite the jump, the percentage of home-ownership is the lowest of any major city in the country and roughly half of the national average, which shows more than two-thirds of homes are owner-occupied. Traditionally, home-ownership is associated with increased care for the surrounding neighborhood, higher levels of community involvement, and better opportunities for children, housing experts say.

A senior fellow with the Manhattan Institute, Steven Malanga, said a continuing shift toward owning versus renting in New York would catalyze political change.

“Occasionally it has been said that one of the reasons that New York City is so liberal is because it has such a low percentage of home-ownership and a higher percentage of renters,” Mr. Malanga said. “Homeowners tend to have more of a stake in the future of the city, and tend to be more conservative in their politics.”

Mr. Malanga said those policies would include opposition to property taxes, more support for educational reform, and stricter policing to keep neighborhoods safe.

A professor of public affairs at Baruch College, Douglas Muzzio, said the numbers show growth in New York’s “bourgeoisie” and a “stabilizing middle class” that he says is spreading to the outer boroughs.

He said the demographic shift could have “profound policy implications.”

“They don’t like property taxes, they like services. If they are homeowners, they are more likely to have kids and want better schools,” Mr. Muzzio said. “They would be conservative on things like property taxes, but not necessarily on all dimensions of social policy.”

Adding to the evidence of New York’s recent housing boom, the census data show the city’s total housing stock increased by almost 75,000 units over the last five years, to more than 3.2 million.

A professor of urban planning at New York University, Ingrid Gould Ellen, said the majority of the new housing units are likely to be condominiums, as developers have shied away from building rental housing to net better returns.

“The good news is that we think homeownership is a good thing, it is something to strive for, it is part of the ideology of the American dream,” Ms. Ellen said. “On the other hand, we are concerned about the tightness of the rental housing market in New York.”

She said that in the late 1990s, housing prices increased rapidly while rents stayed relatively flat, but now rents are on the rise. The census data released today will show that median gross rents have increased more than 13% since 2000, to $909.

She said market forces are responsible for the recent increase in homeownership and could soon reverse.

“As rents rise, the real estate market will respond, and start building rental housing again,” Ms. Ellen said.

For those that bought into the New York real estate market, the last five years were extremely profitable. The Census data show that real median home values in New York increased 79% during that span, to about $450,000, one of the steepest increases in major cities nationwide.

“It’s great for the people who got into the market. It reflects that people think that the city’s neighborhoods are nicer places to live. They are safer, and the schools are better,” Ms. Ellen said.

She said higher home prices also mean that is it “more difficult for first time homebuyers to break into the market.”

A spokesman for the city’s Department of Housing Preservation and Development, Neill Coleman, said the increase in the total number of housing units and in homeownership are encouraging signs, and that they correspond with trends noted in the city’s most recent housing and vacancy survey.

“From a policy perspective, homeownership is good thing. It is a way for people to invest in their neighborhoods, and for people to build equity and to benefit from the growth of the city,” Mr. Coleman said.

He pointed out that the vacancy rate for rental units has increased slightly since 2000, a sign that more apartments are available but that further units are needed. Mayor Bloomberg has a $7.5 billion plan to build and preserve 165,000 units of affordable housing over 10 years.

“The population of the city is increasing, and it is expected to increase further. The need for more housing is there,” Mr. Coleman said. “Housing units are continuing to grow, but it is important for us to keep pace and close the housing gap.”


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