Last year, the city lost nearly 3,700 units of affordable housing, or 4% of the stock remaining at the start of the year, according to the report. Nearly all of the units lost were part of the Mitchell-Lama program, which provides affordable housing to moderate- and middle-income families, and all were located in low-market areas of the city, primarily in the Bronx. The 2007 loss was only slightly less than annual losses between 2004 and 2006. Between 1990 and 2007, the city lost 30% of its 119,061 subsidized apartments, and another 19% remain at risk, according to the Community Service Society.
'Predatory equity' smothering affordable housing
The report attributes the losses primarily to the ongoing trend of private equity purchases. Over the last four years, some 90,000 affordable housing units have been bought by private equity investors, most at inflated prices, according to the Partnership to Preserve Affordable Housing. Many go in with the intention of recouping investments by raising rents, but are hindered by regulations limiting rent hikes. Coupled with a slowdown in the housing market, investors and their lenders are now struggling to command adequate rental income.
The result is a flurry of apartment buildings at risk of foreclosure, a process that puts the buildings’ tenants at risk.