EXECUTIVE SUMMARY

New York City is in the grip of an affordable housing crisis that threatens to undermine the city’s reputation as a place that welcomes people from every corner of the globe and offers every individual the opportunity to put down roots and contribute to our communities.

Since 2000, the city has lost over 400,000 apartments renting for $1,000 a month or less, with the harshest consequences being felt by working New Yorkers earning less than $40,000 a year.[i] Today, more than 56 percent of New York City renters spend more than one-third of their income on rent, with nearly 30 percent spending more than half their income on rent.[ii] These pressures have contributed to a surging homeless population, with more than 58,000 people living in the City’s shelter system, including more than 23,000 children.

Tackling this crisis will require the City to leverage all its assets, including one that until now has been largely overlooked: the 1,459 vacant properties owned by the City that currently sit unused and undeveloped, as outlined in a recent audit of the Department of Housing Preservation and Development (HPD) by New York City Comptroller Scott M. Stringer. The Comptroller’s Office has also identified 247 persistently tax delinquent properties that could be readily converted into affordable housing with the right tools and focus.

This report uses a first-of-its-kind analysis to assess the potential for converting these underutilized properties into affordable housing, while also outlining a core strategy for realizing this goal: the establishment of a New York City Land Bank.

Land banks are government-created nonprofit corporations designed to convert tax-delinquent and vacant properties into affordable housing or other productive uses. For decades, these banks have been used in cities across the country—from Cleveland and St. Louis to Buffalo and Syracuse—to “reactivate” vacant or underused property for important civic purposes.

For years, New York City’s primary strategy for developing affordable housing on City-owned lots has been to sell the property to a developer in exchange for the developer setting aside a percentage of affordable units for a limited duration. While this model has facilitated the creation of thousands of affordable units, the City loses leverage by transferring title, which weakens its ability to hold developers accountable and negotiate for greater and permanent affordability.

In contrast, a land bank would maintain title to the land—potentially through a community land trust model—and work with non-profit developers to achieve deeper and permanent affordability. Unlike HPD, which has left scores of City-owned lots vacant for a half-century or more, a land bank would have the sole mission of transforming City-owned and tax delinquent properties into affordable housing, enhancing the City’s ability to advance projects in an expeditious manner and enforce affordability thresholds over generations.

Looking just at City-owned, vacant property, this report finds that a land bank could support the development of:

  • 53,116 units of permanently affordable housing located on 1,459 vacant, City-owned properties. Of these, 1,342 are zoned for residential uses as-of-right, while the remaining 117 are manufacturing sites that could be evaluated for rezoning to residential uses.
  • These potential units on City-owned properties span all five boroughs, with the highest numbers in Queens (26,025), Brooklyn (21,570), and The Bronx (2,665).

 

Additionally, a land bank could be used to secure title to hundreds of persistently tax-delinquent, underutilized properties (defined as vacant land or parking lots) throughout the five boroughs, many of which are currently zoned for residential development.

 

This report estimates that a land bank could support the development of:

 

  • 4,159 additional units of affordable housing on 247 persistently tax-delinquent, underutilized properties that the City placed tax liens against and sold to a trust in 2013-2015, all of which are either zoned residential or permit residential development.[iii] Additional properties that become persistently delinquent can be added to the pipeline in coming years.
  • These potential units also span all five boroughs, with the highest numbers in Brooklyn (2,027), The Bronx (965), and Queens (617).

 

For nearly two decades, New York City has sought to recoup money owed by delinquent property owners by selling tax liens to a trust. While this effort has yielded millions of dollars in revenue for the City’s coffers and helped decrease a scofflaw culture, it has done little to address the desperate need of millions of New Yorkers for affordable housing.

 

Specifically, the Office of the Comptroller recommends that the City:

 

  • Pass legislation in the City Council to authorize a New York City Land Bank. Last year, New York City Councilmember Brad Lander filed legislation to create a land bank, which has since garnered nine additional sponsors;[iv]
  • Draft by-laws that allow the land bank to manage properties under a community land trust model in order to ensure permanent affordability on properties acquired by maintaining long-term control of the properties.
  • Begin working with Empire State Development Corporation to prepare a land bank application;
  • Seed the land bank by transferring vacant, city-owned properties and/or redirecting a portion of outstanding tax liens to the land bank, rather than to the existing trust; and
  • Allow the new land bank to manage foreclosure of tax-delinquent properties that are either vacant or underutilized to create a pipeline for affordable housing.

 

While a land bank cannot transform every vacant property, it can be one of the tools used to create permanent, affordable housing in New York City’s neighborhoods.