“The combination of tightening rents and diminished safety net programs has precipitated a slow but accelerating deterioration of this ‘naturally occurring’ affordable housing.” 

A rent-stabilized building in the Bronx. (Photo by Adi Talwar)

There are slightly less than 1 million rent stabilized apartments in New York City, of which 780,000 were built before 1974. Most of this older housing is concentrated in the city’s low and moderate-income communities. As reported in the latest (2023) Housing Vacancy Survey (HVS), the city-wide household median income of these pre-1974 apartments is about $60,000 a year. In the Bronx, it’s about $42,500 a year for about 200,000 apartments, predominantly privately owned. 

This older housing is arguably the largest source of affordable housing in the city. Two self-inflicted wounds have affected these properties. 

First, in efforts to curb vacancy decontrol in higher income areas, the 2019 Housing Stability and Tenant Protection Act (HSTPA) put a tourniquet on the cash flows of lower-income buildings—eliminating rent increases on vacancies and sharply narrowing permitted increases to pay for both individual and building-wide capital improvements.

This has made it difficult not only to operate the building amidst rising expenses, e.g., insurance, taxes and utilities, but also to pay for ongoing repairs in these aging buildings. Recent testimony by the Furman Center to the Rent Guidelines Board documented this problem. Furthermore, the rise in interest rates means that as mortgage loans come due, refinancing rates, assuming there are banks offering refinancing, would increase from 3-4 percent to over 6 percent. 

Second, safety net programs designed to help off-set increasing operating and repair costs have frayed. The program known as J-51, which would reduce real estate taxes to help pay for critical repairs, has had its benefits whittled down over the years to the point where they’re insufficient to incentivize meaningful renovations. A second program of low-cost secondary loans (1 percent), often coupled with J-51 for the most distressed buildings, is both underfunded, with processing too complicated and time consuming to be used at a scale that’s needed.

The combination of tightening rents and diminished safety net programs has precipitated a slow, but accelerating deterioration of this “naturally occurring” affordable housing. 

The collapse of Signature Bank was in part caused by defaults on its loans to rent stabilized buildings. The Community Preservation Corporation, partnering with Related Fund Management, has been selected by the FDIC to fix approximately 35,000 units in buildings that had about $5.6 billion of Signature mortgages. Their task is to restructure the properties so they remain affordable by restoring their physical and financial health. In addition to likely obtaining real estate tax abatement from the city, the FDIC will put up the lion’s share of $550 million to help pay for repair and other costs in these buildings.

Signature Bank loan problems are the tip of the iceberg. A survey done by Maverick Real Estate Partners estimates there’s about $50 billion of bank loans secured by properties that have 75 percent or more of rent stabilized apartments. Many of these are located in low and moderate-income neighborhoods. 

Many of these loans are no doubt classified as troubled by the banks and their regulators. Herein lies an opportunity to restore potentially a large number of affordable buildings to physical and financial health.

First, reinvigorate safety net programs in designated low and moderate-income areas: Reinstate as-of-right J-51 real estate tax abatements with updated eligible costs, enhanced to support more extensive building-wide improvements. (Past benefits could be expanded by 150 percent for defined moderate renovation.) This can be coupled with low interest city and state loans, and possibly funds from the Federal Home Loan Bank’s affordable housing program. 

Further investment can be made by existing or new owners. Needed work would include repairs and/or replacement of major building systems, e.g., plumbing, wiring, heating, etc., so that their useful life is extended by at least 30 percent longer than the term of the loan as certified by an approved engineer/architect. Further cash flow would be generated by permitted major capital rent increases, waived in all or in part for eligible seniors as per the Senior Citizen Rent Increase Exemption program. 

In turn, the bank would restructure its debt to a fixed payment, say for 10 or 15 years, adjusted through discounts to produce a positive cash flow both to provide a return to owners, and a cushion to make ongoing repairs, e.g., a ratio of net income to debt payments of 115-120 percent. This combination has a long track record of success in preserving distressed affordable housing. 

Second, to incentivize the banks to undertake such steps, the State Mortgage insurance Fund (MIF), could provide “first loss” insurance to enhance the security of these restructured mortgages. The mortgage insurance would last only as long as the mortgage term. It would not cover the risk of refinancing. All other requirements for mortgage insurance would have to be met, including the above work scope; the loan size consistent with MIF’s loan to value standards; approved repair work equal at minimum to 20 percent of the loan. 

How big might this program be? The MIF’s capital reserves, which set aside one dollar for every five dollars insured, is funded by a .25 percent surcharge on the state’s mortgage recording tax, insurance premiums (.5 percent annual fee on the outstanding balances of multifamily loans), and interest on its capital reserves. 

Over the years, MIF has had substantial untapped capacity as it has returned unused surcharge funds to the state. Going forward the MIF might expand its program to provide the “top loss” insurance, for say 25 percent, for the restructured loans. The City’s Residential Mortgage Insurance program could supplement this effort, potentially creating billions of dollars of additional insurance capacity. This fully aligns with both mortgage insurer’s mission to “encourage investment in underserved areas.”

Will the banks view the cost and time of such restructuring worth moving troubled loans to performing status? It is uncertain. A more likely response for some banks may be to sell these loans at the best price they can get, or go through a lengthy foreclosure—both routes leaving the health of the building to an uncertain fate. Others might see an opportunity to buy discounted debt and work with owners experienced with the public programs to restore the properties to financial and physical health. 

Will the government expand the use of public insurance, and safety net programs to preserve this housing? This must be measured against the cost of inaction, or ineffective action. If public action is taken, it must be credible, best demonstrated by the creation of a simplified processing regimen to encourage broad private participation.

Why is the use of mortgage insurance important? The precipitous changes in HSTPA, undermined widely held assumptions regarding the long-term stability of rental projects. As a result, some banks have stated their intention to cut back on new loan originations for rent regulated housing.

Fixing these properties at any scale must engage the banks who hold these mortgages. A credible program to fix these properties, bolstered by mortgage insurance, may create renewed confidence in the soundness of this housing. Such assurance may be necessary to re-engage skeptical lenders to fund current and future rental projects.

If properly targeted, this program could have significant results in arresting decay, improving tenant living conditions while preserving housing affordability. It would be beneficial not only to residents, but to owners, banks and investors. It highlights the need to fix the problems of the HSTPA, and to reinvigorate safety net programs—two important corrective actions to keep this housing sound and affordable.  

Michael Lappin is the former CEO of the Community Preservation Corporation (1980-2011). During his tenure, CPC financed and/or developed the preservation and building of over 92,000 affordable apartments in New York City. Currently he heads Lappin Associates, providing development and advisory services for affordable housing.

The post Opinion: The Urgency Of Preserving Low- And Moderate-Income Rent Stabilized Housing appeared first on City Limits.

By REBECCA SANTANA AND ELLIOT SPAGAT, Associated Press

WASHINGTON (AP) — A federal judge said Wednesday that an order by President Donald Trump suspending asylum access at the southern border was unlawful, throwing into doubt one of the key pillars of the president’s plan to crack down on migration at the southern border. But he put the ruling on hold for two weeks to give the government time to appeal.

In an order Jan. 20, Trump declared that the situation at the southern border constitutes an invasion of America and that he was “suspending the physical entry” of migrants and their ability to seek asylum until he decides it is over.

U.S. District Judge Randolph Moss in Washington said his order blocking Trump’s policy will take effect July 16, giving the Trump administration time to appeal.

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Moss wrote that neither the Constitution nor immigration law gives the president “an extra-statutory, extra-regulatory regime for repatriating or removing individuals from the United States, without an opportunity to apply for asylum” or other humanitarian protections.

The Homeland Security Department did not immediately respond to a request but an appeal is likely. The president and his aides have repeatedly attacked court rulings that undermine his policies as judicial overreach.

The ruling comes after illegal border crossings have plummeted. The White House said Wednesday that the Border Patrol made 6,070 arrests in June, down 30% from May to set a pace for the lowest annual clip since 1966. On June 28, the Border Patrol made only 137 arrests, a sharp contrast to late 2023, when arrests topped 10,000 on the busiest days.

Arrests dropped sharply when Mexican officials increased enforcement within their own borders in December 2023 and again when then-President Joe Biden introduced severe asylum restrictions in June 2024. They plunged more after Trump became president in January, deploying thousands of troops to the border under declaration of a national emergency

Trump and his allies say the asylum system has been abused. They argue that it draws people who know it will take years to adjudicate their claims in the country’s backlogged immigration courts during which they can work and live in America.

But supporters argue that the right to seek asylum is guaranteed in U.S. law and international commitments — even for those who cross the border illegally. They say that asylum is a vital protection for people fleeing persecution — a protection guaranteed by Congress that even the president doesn’t have the authority to ignore.

People seeking asylum must demonstrate a fear of persecution on a fairly narrow grounds of race, religion, nationality, or by belonging to a particular social or political group.

In the executive order, Trump argued that the Immigration and Nationality Act gives presidents the authority to suspend entry of any group that they find “detrimental to the interests of the United States.”

Groups that work with immigrants — the Arizona-based Florence Project, the El Paso, Texas-based Las Americas Immigrant Advocacy Center and the Texas-based RAICES — filed the lawsuit against the government, arguing that the president was wrong to equate migrants coming to the southern border with an invasion.

And they argued that Trump’s proclamation amounted to the president unilaterally overriding “… the immigration laws Congress enacted for the protection of people who face persecution or torture if removed from the United States.”

But the government argued that because both foreign policy and immigration enforcement fall under the executive branch of government, it was entirely under the president’s authority to declare an invasion.

“The determination that the United States is facing an invasion is an unreviewable political question,” the government wrote in one argument.

Spagat reported from San Diego.

By MIKE SCHNEIDER, Associated Press

A South Carolina beach town once nicknamed “Dirty Myrtle” because of its rowdy nightclubs and strip joints has become a magnet for retirees in a nation that continues to age.

The number of residents age 65 years and older in the Myrtle Beach metropolitan area grew by 6.3% last year, making it the fastest-growing metro area for senior citizens in the U.S., according to population estimates the U.S. Census Bureau released last week.

During the 2020s, Myrtle Beach’s senior population has grown by more than 22%, also the fastest rate in the United States this decade. Senior citizens now make up more than a quarter of the around 413,000 residents in metro Myrtle Beach, which once was known for being a budget beach destination.

The community with a mile-long boardwalk and 200-foot Ferris wheel used to attract biker rallies which the city tried to end in the late 2000s because of the noise, traffic and rowdiness. But now the noisy streets have had to make room for quiet diners and pickleball courts.

The sun starts setting near the Springmaid Pier, Feb. 4, 2023, in Myrtle Beach, S.C. (AP Photo/Chris Seward, file)

The COVID-19 pandemic played a role in the area’s senior boom as people in such places as Ohio and New York who had been vacationing for years in Myrtle Beach realized they could retire early or work from home anywhere, said Mark Kruea, a longtime public information officer for Myrtle Beach who is now running to be mayor.

“Many people converted that thought into action,” Kruea said. “The climate’s great, taxes are low, there’s a wealth of opportunities for recreation, dining and shopping.”

A graying United States

The U.S. population age 65 and older rose by 3.1% last year, while the population under age 18 decreased by 0.2%. In the past two decades, seniors have increased from 12.4% to 18% of the U.S. population, while the share of children has dropped from 25% to 21.5%, according to the population estimates.

Maine, Vermont, and Florida were the only three states where older adults outnumbered children as recently as 2020. But four years later, those states were joined by Delaware, Hawaii, Montana, New Hampshire, Oregon, Pennsylvania, Rhode Island and West Virginia.

Maine last year had the oldest median age at 44.8, while Utah’s was the youngest at 32.4.

Groups that saw the most growth

The share of the U.S. population that is Hispanic reached 20% last year for the first time, helped by an annual gain of 1.9 million Hispanics mostly through migration. In pure numbers, the Hispanic population grew the most last year in the New York, Houston and Miami metro areas. When it comes to growth rates, the biggest gains were in smaller metros such as Ocala, Florida; Panama City, Florida; and St. Joseph, Missouri.

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For Black residents whose growth last year was split between migration and natural increase, the biggest gains were in the Houston, New York and Dallas-Fort Worth metro areas in pure numbers. Bozeman, Montana, and Provo, Utah — metro areas with tiny Black populations to start with — were tops in growth rates.

In pure numbers, the New York, Dallas-Fort Worth and Seattle metro areas had the biggest Asian population gains, and the growth came primarily from migration. The largest growth rates were in three metro areas with small Asian populations: Farmington, New Mexico; Bismarck, North Dakota; and Burlington, North Carolina.

The non-Hispanic white population in the United States declined slightly last year, but it grew the most in the Nashville, Tennessee; New York and Charlotte, North Carolina metro areas in pure numbers. The biggest growth rates for the white population were in the Myrtle Beach; Daphne-Fairhope, Alabama; and Wilmington, North Carolina metro areas.

The decline in the white population was driven by deaths outpacing births.

Follow Mike Schneider on the social platform Bluesky: @mikeysid.bsky.social.

Good news for suburban eaters: Chef Thomas Boemer has been named the culinary director for The Wondrous Collective restaurant group.

The group owns more than a dozen restaurants in the Twin Cities area, from Mean Miners street tacos in Eagan and Apple Valley to Minnesota Burger Company in Apple Valley and Farmtown Brew Hall in Farmington.

Boemer, a James Beard Award nominee who was co-owner of Revival, Corner Table and In Bloom, all closed now, is known for his takes on southern cuisine and smoked and wood-fired meats.

The Wondrous Collective owner Tony Donatell announced Boemer’s hire in a news release, which read in part:

“We’ve developed a reputation for bold, boundary-pushing cocktail programs and a talent for building spaces that feel like a celebration of everyday life. But we’ve always known there was more we could do with the food. Today, I’m proud to share that we’ve found the missing piece.”

Boemer has already begun tweaking the menu at The Farmer’s Cellar, a Lakeville cocktail bar, and has just unveiled a full menu refresh at Revolve Hall in Apple Valley. Within that food hall, Boemer has debuted his first new concept for the restaurant group: The Wanderer: Adventure-Inspired Provisions. It’s described as “a fast-casual kitchen built on live-fire, flavor and a love for the road less traveled.”

The Wondrous Collective: wondrouscollective.com

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