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WSWS : News & Analysis : North America

Housing in New York City: a privilege for the rich

By Fred Mazelis
13 May 1998

The housing crisis for tens of millions of US workers has deepened during the Wall Street boom of the 1990s, according to a report recently released by the Department of Housing and Urban Development.

Reporting on the period from 1991 to 1995, the federal agency found that the number of "very low income" families (defined as those earning less than 50 percent of the median income in their region of the country) who pay 50 percent or more of their income on housing grew by 370,000 to 5.32 million, about one-seventh of those who rent. The number of "low-rent" apartments decreased by 900,000 over this same four-year period.

The HUD report found that the housing crisis was growing even faster in the suburbs than the cities, largely because of job growth in these areas. The majority of these jobs pay only the minimum wage or slightly higher, leaving families with no way to pay rising rents.

New York City remains, in housing as in so many other spheres of social life, the capital of social and economic polarization. The HUD report estimated that 360,000 families in the city fall into the category of those paying 50 percent or more of their income for housing. By conservative estimates, considering the size of many poor and immigrant families, this translates into perhaps 1.5 million people, or more than 20 percent of the city's population.

One segment of the population is doing better than ever, however. The super-rich have seen their share of the wealth skyrocket in recent years, and they are flaunting their status as never before.

The same week that the housing department released its latest figures, the New York Times featured an article on its front page on the construction of a new high-rise condominium tower at 515 Park Avenue, at 60th Street. The 43-story building will contain only 40 apartments. They will sell for between $2 and $12 million. Monthly charges to owners of the apartments will range between $3,900 and $11,643 in addition to the selling price.

The $100 million project is being run by the multi-millionaire Zeckendorf brothers, in partnership with Goldman Sachs and Company. "We are reacting to buyer demand for larger, full-floor apartments-it is an underserved segment in a very, very strong market," said William Zeckendorf.

The "underserved" super-rich will get duplex apartments of up to 6,000 square feet for their millions. They will get 30-foot living rooms, 22-foot bedrooms, libraries and billiard rooms, and marble master bathrooms 10 by 15 feet. The building will have 10 suites on the second floor, only 500 to 600 square feet and without any of the other amenities on the upper floors, just for servants' quarters.

The basement will include 15 climate-controlled private wine cellars. There will be chandeliered lobbies, professional laundry rooms and a caterer's kitchen for specially prepared meals for the millionaires and their guests.

The growing social inequality is manifested not only at the extremes of wealth and poverty. An increasing number of working and middle class people are finding themselves unable to afford decent housing, and New York is among the population centers most affected. In addition to the 20 percent or more of the population which pays at least 50 percent of its income for rent, it is estimated that an equal number pays between 40 and 50 percent. To have sufficient income for basic needs and maintain a moderate standard of living, the rule of thumb is that a family should not spend more than 25 percent of its income on housing. The great majority of workers in New York, not only the poorest 20 percent, do not meet this standard.

Typical rents in Manhattan for apartments coming on the market have risen from $2,400 to $3,000 per month in the last few years. Cooperative one-bedroom apartments, about 800 square feet in size, which were selling for $150,000 two years ago, are now going for $200,000.

Moreover, the problem of zooming housing costs is by no means confined to Manhattan. In Brooklyn neighborhoods such as Fort Greene, Park Slope and Windsor Terrace, and Jackson Heights and Astoria in Queens, rents have also jumped by 30 percent or more. Many landlords demand, in the form of security, that applicants for vacant apartments meet the 25 percent standard, i.e., that they are able to pay one month's rent with one week's pay. A tenant seeking a $2,000 apartment, now considered quite "reasonable" for two bedrooms, would need an annual income of $104,000.

For the millions of workers for whom $1,000 a month, let alone $2,000 or $3,000, is an impossible sum, and who are not fortunate enough to have remained in an apartment for many years under the city's dwindling rent-control and rent-stabilization protection, there are fewer and fewer choices. The New York City Housing Authority, the system of public housing begun during the Depression, maintains 180,000 apartments which house about 10 percent of the city's people. The so-called "projects" are considered relatively successful in comparison to public housing disasters in other cities, as well as the terrible state of private housing that generally prevails in the neighborhoods where housing projects are located. Some 130,000 applicants are on the waiting list for city housing.

Public housing, however, has been devastated by federal, state and local funding cuts. Over the last three years Congress has cut almost $100 million, or about 25 percent, of the housing authority's annual budget for major repairs. Thousands of apartments sit vacant because they need repairs which have been postponed, while 130,000 families wait for apartments and up to 100,000 people remain homeless on the streets of the city. Tens of thousands of people face unsafe conditions as major repairs on roofs and ceilings are postponed.

The condition of New York's public housing is symbolic of the decay of the policy of social reformism which made it possible. During the Gilded Age of a century ago, reformers such as Jacob Riis exposed social misery and campaigned for decent housing. During the Depression, Republican Mayor Fiorello LaGuardia presided, alongside Democrat Franklin Roosevelt in the White House, as the system of public housing was launched. Today another Republican in City Hall and another Democrat in the White House preside over the decay of public housing and a gap between the rich and the vast majority of the population which has never been greater.

See Also:
The man and the guinea pigs: a New York City fable
[28 March 1998]